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Rutgers Business Review

Vol. 5, No. 2

159

Dirty Money: Some Ethical Questions

About Donating to Charity

Joanne B. Ciulla

Rutgers University

Abstract

This article is a thought piece designed to generate questions about the

reciprocal relationship between a gift giver and receiver. Examples about

charitable giving to Notre Dame Cathedral, the Metropolitan Museum of Art,

and the Missionaries of Charity illustrate how the ethics of giving are tied to

the ethics of the individual or organizational donors, and the reasons why they

give. It concludes by drawing from these examples a few questions for

businesses to consider about charitable donations.

Introduction

In the late 12

century, the Bishop of Paris was busy raising money to

build Notre Dame Cathedral. The guilds had been generous. Many of them

donated money for stained glass windows, which, as part of the deal, would

feature scenes about their trades. One day, a group of prostitutes visited the

Bishop and, in the spirit of a guild, told him they wanted to donate money

for a window (albeit, not one depicting their trade).

At that moment, the

Bishop grappled with the same sort of awkward ethical problem that charities

and non-profits

still face today. Should they accept dirty money earned by

"sinful" individuals engaged in a "sinful business"? However, the flip side of

this question is also worth our consideration: Are church windows the best

place for the prostitutes to make charitable donations? These two questions

are central to the relationship between donors and beneficiaries because the

ethics of the giver and receiver are intertwined. This essay is a thought piece

that uses individual cases to tease out some ethical questions for businesses

to think about when they donate to a charity.

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160 Rutgers Business Review Summer 2020

Dirty Money

The reputational fallout of non-profits that accept dirty money is often

prominent in the news. In the US, businesses and individuals have long used

charitable donations to polish their image and sell products.

Whom to take

money from is tricky, especially in cases where the money starts clean but

later turns out to be dirty because a donor or business does or has done

something unethical or illegal. For example, the Metropolitan Museum of Art

accepted millions from the Sackler Family and named a wing of its museum

after them. Yet, when it learned about the complicity of the Sacklers and their

company, Purdue Pharma, in the opioid crisis, the Met turned down all future

donations from them. A spokesman said, "We feel it's necessary to step away

from gifts that are not in the public interest."

The Met's statement is an odd

one since a gift to the Met benefits the public. It also indirectly benefits the

Sacklers, in terms of public esteem and other intangible psychological and

social benefits. What the Met spokesman may have also meant was that it is

not in the Met's interest to take the money because it would tarnish its image

to the public and perhaps impair future fundraising efforts. Furthermore, if

the Met accepted future Sackler donations, the museum would tie itself to

the Sacklers’ wrongdoing. However, notice how this works in both directions.

If the Sacklers offered money to the Met today, there is a sense in which they

would link the Met to their dirty money, which may seem okay for them but

not the Met.

Reciprocity and the Meaning of a Gift

Except in cases of anonymity, there is no such thing as a free gift. When

an individual or a business gives money to a charity, they engage in an explicit

or implicit exchange. In our example, the guilds donated a window, but they

also got good PR from it. The prostitutes probably hoped their gift would

curry favor with God and or the Church. When corporations or other groups

donate to non-profits, they usually do so because they want to contribute to

society and create a positive image of their organization for employees and

other stakeholders. While most give with good intentions, the standard of

pure altruism may be too high. Businesses and individuals usually get

something from giving. At a minimum, it makes them feel good. Implicit or

explicit reciprocity does not necessarily make a gift unethical. However, the

ethics of giving and receiving depends on what that reciprocity means and

entails for both parties.

In his classic work The Gift, anthropologist Marcel Mauss examines the

positive and negative cultural meanings of gifts. He begins with an old

Scandinavian poem that says: “A present always expects one in return,” and

“The miser always fears presents.”

In other words, gifts create obligations,

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which is why we hate getting a present from someone we do not like. On the

positive side, Mauss argues that gifts help create social bonds, so a free gift

that expects nothing in return does not foster social solidarity. When

recipients turn down a donation, they reject affiliation with a donor and

whatever tangible and intangible benefits the donor might get from the gift.

The nature of reciprocation is not always explicit, like putting the donor's

name on the building. It is often social as when donors enhance their

reputation by being connected with a good cause or use the gift to advertise

their wealth and power. When the Met turned down Sackler money, they also

rejected the Sacklers and their unethical behavior.

The Whos and Whats of Giving

The meaning of a gift, especially a large one, is open to public

interpretation and comment. To illustrate, let us return to what is now an

iconic part of France’s cultural heritage, Notre Dame Cathedral. On April 5,

2019, a fire tore through the structure, destroying its spire, roof, and some of

the walls. Two hours after the blaze, Bernard Arnault, head of LVMH, a

luxury brand company, pledged 200 million euros for repairs. Soon after that,

the cosmetic company L'Oréal and the energy company Total pitched in

another 100 million euros each. In three days, a handful of France's wealthiest

companies had pledged 600 million euros to restore the cathedral.

Surprisingly, some elements of the public and social media responded to

their generosity with scorn. One commentator wrote, “at the time of the fire,

you could hardly move because of cashmere-clad concern.”

Another said,

“Just imagine if billionaires cared as much about human people.”

(In

fairness, these donors also contribute to charities that help people.) Unlike

the Sackler case, the adverse reaction did not concern the ethics of Arnault

or the other companies. It was about the growing concentration of wealth in

society and the resentment of billionaire benefactors.

Whether this backlash

is fair or not, it shows how large donations draw attention to donors’ wealth

and their control over how to allocate it. In some social and historical

contexts, large gifts require public justification.

Donations from Scoundrels

So far, we have looked at examples of giving to churches and museums,

not organizations that help the poor and disadvantaged. Here there might be

less criticism of large donations from wealthy individuals and businesses,

unless they have done something unethical or illegal. Remember the story of

Robin Hood, who stole from the rich to give to the poor? The way he got the

money was illegal, but he used it for good causes. One could argue that if

charities are too picky about the origin of their money, they will fail in their

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162 Rutgers Business Review Summer 2020

obligations to the needy. Nonetheless, the short-term benefit of a Robin

Hood donation may well affect a charity’s ability to raise money and aid the

poor in the future.

The Albanian nun and Catholic saint, Mother Teresa, was head of one of

the few charities that could get away with accepting dirty money. Her large

charitable organization, Missionaries of Charity, took care of "the poorest of

the poor" around the world. Investigative journalist Christopher Hitchens

discovered that Mother Teresa had collected money from a long list of

scoundrels. They included the publisher Robert Maxwell, who squandered

his company’s pension funds and defrauded banks;

the wife of the Haitian

tyrant and kleptocrat, Michele Bennett Duvalier;

and Charles Keating of the

Keating Five fame. Keating used his bank, Lincoln Savings and Loan, to dupe

investors and bribe politicians. His nefarious dealings resulted in the savings

and loan crisis, which at the time necessitated the most massive bank bailout

in US history.

As a conservative fundamentalist, Keating may have been looking for

salvation when he donated some of the $252 million of stolen money to

Mother Teresa's organization, and he almost got it. In 1992, before Keating

was sentenced to 10 years in prison, Mother Teresa asked judge Lance Ito to

pardon him. In her letter, she argued that Keating was not an evil person

because he gave money to the poor. She then implored the judge “to do what

Jesus would do.”

In response to her letter, the prosecutor, Paul Turley, wrote

back, “Jesus would promptly and unhesitatingly return the stolen property to

its rightful owners.”

He went on to say that Keating was unrepentant

because he refused to take responsibility for his actions and blamed others

for the bank crisis. Mother Teresa never returned the money because, as in

the Met case, she didn’t know the money was dirty when she took it, so she

thought she was justified in keeping it. Unlike the Sackler case, Mother

Teresa did not sever her relationship with Keating. If anything, she seemed

to draw closer to him by pleading his case, even when he was unrepentant.

This last point takes us back to the Bishop of Paris who, before declining

the prostitutes’ donation, consulted with a Canon Law expert named Thomas

of Chobham. Chobham opined, “it is possible to repent of practicing

prostitution for the purpose of giving alms.”

In other words, it is okay for

the Church to receive ill-gotten gains as long as the donor admits guilt, is

genuinely sorry, and stops engaging in sinful activities. This principle is still

relevant today. Sometimes the money gained from punitive settlements is

donated to worthy causes. For example, Oracle’s Larry Ellison agreed to settle

his insider trading suit by paying $100 million to charity.

Note here the

difference between paying an indulgence (which might have been what the

prostitute and Keating were doing) and Ellison’s penance (even if we do not

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know if he was sorry). Indulgences were a kind of bribe for forgiveness or a

lighter penalty that will lead to the salvation of a soul or, in today’s terms, a

reputation. In contrast, penance is part of justice, in that it is restitution or

compensation for doing something wrong.

Ethical Questions for Business from Notre Dame, Billionaires, and

Scoundrels

This essay has examined the reciprocal relationship between the giver and

the receiver. The examples show how the ethics of the donor affects the

recipient and, in some cases, perceptions of the recipient's ethics.

Philosopher Immanuel Kant said that all ethical acts must be done from a

“good will.” By that, he meant that the moral principle behind the intent of

an action is what makes it ethical.

A good will is especially important in gift-

giving. The overarching lesson from these examples is that donors should be

honest with themselves about what they implicitly or explicitly hope to gain

from their contributions. Most businesses that engage in some form of

charitable giving see it as a win-win proposition. While the examples in this

paper are about individuals, they raise some ethical questions that businesses

might consider when they donate to a charity or non-profit.

1. The Prostitutes of Notre Dame: Is there a logical fit between the

nature of the business and its values with the recipient’s goals and

values? Is there any way that what the business does contradicts the

values of the charity or makes it look hypocritical?

2. The Billionaires of Notre Dame: How will the public receive the

donation? Does the social, political, and economic context of the gift

(such as a time of growing economic inequality) require an

explanation or justification of the contribution?

3. Mother Teresa and Charles Keating: Is a business donating to a charity

to improve its reputation or gain favor because it operates in ethically

questionable ways such as dishonest business practices, dangerous

products, etc.?

4. Larry Ellison’s fine: Is the business donating to a charity or non-profit

to compensate for past harms? If so, has it gone through a public

process of admitting guilt, correcting its behavior, and taking

responsibility for them?

Some may find this discussion of giving cynical. After all, giving to charity

is admirable, and it usually brings out the best in people and organizations.

However, this does not mean we can ignore the reciprocal relationship that

comes with giving. The donor and the receiver are connected, which makes

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164 Rutgers Business Review Summer 2020

the ethics of giving inseparable from the ethics of receiving. Individuals and

businesses have to think carefully about why they donate to a charity and

make sure that what makes giving good for them is not potentially bad for

the recipient.

Author

Joanne B. Ciulla is Professor of Leadership

Ethics and Director of the Institute for

Ethical Leadership at Rutgers Business School. She has written extensively on

leadership ethics and business ethics. With a B.A., M.A. and Ph.D. in philosophy,

Ciulla grounds her interdisciplinary research on ethics in philosophy and the

humanities. She is best known as a pioneer in the field of leadership ethics. Ciulla

has received lifetime achievement awards for scholarship from the Society for

Business Ethics, the International Leadership Association, and the Network of

Leadership Scholars (Academy of Management). Her most recent book is The

Search for Ethics in Leadership, Business, and Beyond (Eminent Voices in Business

Ethics Series, Springer, late 2020).

email: [email protected]

Endnotes

1. Le Goff, J. (1982). Time, work, and culture in the Middle Ages (A. Goldhammer, Trans.).

Chicago: University of Chicago Press.

2. There is a legal difference between a charity and a non-profit in the US and some other

countries. For this paper, I will use both terms to describe organizations that take

donations to support things like religious organizations, social welfare, or some public

good such as cultural institutions.

3. Wulfson, M. (2001). The ethics of corporate social responsibility and philanthropic

ventures. Journal of Business Ethics, 29, 135-145.

4. Harris, E.A. (2019, March 15). The Met will turn down Sackler money amid fury over the

opioid crisis. The New York Times.

5. Mauss, M. (1990). The gift (Halls, W. D., Trans.). New York: W. W. Norton.

6. Chakrabortty, A. (2019, July 18). The lesson from the ruins of Notre Dame. The Guardian.

7. Ibid.

8. Shannon, J. (2019, April 19). Cathedral donations draw high-profile backlash. USA Today.

9. Williams, O. (2019, April 17). Why Notre Dame donations are provoking a backlash

against billionaires. Forbes.

10. Cohen, R. (1991, December 20). Maxwell’s empire: How it grew, how it fell – A special

report; charming the big bankers out of billions. The New York Times.

11. Luzer, D. (2017, May 3). The lives of dictators’ wives. Pacific Standard.

12. Hitchens, C. (1997). The missionary position: Mother Teresa in theory and practice.

London: Verso.

13. Gonzalez, H. (2015, July 18). Mother Teresa accepted donations from convicted felon

(and refused to return the funds) [Blog post]. Missionaries of Charity.

14. Ibid.

15. Le Goff, J. (1982). Time, work, and culture in the Middle Ages (A. Goldhammer, Trans.).

Chicago: University of Chicago Press.

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16. Glater, J.D. (2005, September 12). Oracle’s chief in agreement to settle insider trading

lawsuit. The New York Times.

17. Kant, I. (1993). Grounding for the metaphysics of morals (J.W. Ellington, Trans.).

Indianapolis, IN: Hackett.