"the only thing wrong with tainted money is there tain't enough of it"

The title comes from the Grantsmanship Center News by way of Mike Burns raising the question "when is tainted money "keepable"?

The topic comes up because of Phil Munger's letter to the Anchorage Symphony about tonight's (in Anchorage it should be happening as I start to write) concert underwritten by Exxon/Mobil and the Association's custom of asking the audience to applaud the donors. Phil felt that since Exxon hasn't paid the plaintiffs in the 1989 oil spill case and that the final arguments are going before the Supreme Court this week, that rather than applaud, they should ask the audience to observe a moment of silence for those plaintiffs who have died waiting for their settlements. [Note: Munger isn't just some crank off the streets. He's a professor of music at UAA who has composed a number of serious musical pieces, at least one of which, I believe, the Anchorage Symphony Orchestra has premiered.]


The letter Munger got back said, "While some organizations exist to engage political and economic issues, that is not the Anchorage Symphony Orchestra's mission."

It was also my intent when I started this blog to stay out of political issues. However, it became clear to me that to say nothing was to support the status quo. To accept Exxon's money and then to ask the audience to applaud Exxon is a political act whether the Orchestra wishes to acknowledge that or not.

The question then is whether there is anything wrong in that. First, is the money 'tainted.' Second, must all tainted money be declined?

Looking for guidelines on this topic was interesting. I couldn't find much in the way of guidelines for declining charitable contributions.


Jewish law has thoughtful guidelines for giving charity.

The Talmud describes these different levels of tzedakah, and Rambam organized them into a list. The levels of charity, from the least meritorious to the most meritorious, are:

1. Giving begrudgingly
2. Giving less that you should, but giving it cheerfully.
3. Giving after being asked
4. Giving before being asked
5. Giving when you do not know the recipient's identity, but the recipient knows your identity
6. Giving when you know the recipient's identity, but the recipient doesn't know your identity
7. Giving when neither party knows the other's identity
8. Enabling the recipient to become self-reliant

These guidelines really were developed for individuals, not corporations. They suggest that the most meritorious giving is when the giver doesn't know who gets the money and the receiver doesn't know where the money comes from. And the money helps move the recipient to self-reliance. So, ideally, Exxon-Mobile would have, under this standard, given money to a third party who would give the money to the Orchestra without the Orchestra knowing the source or Exxon knowing who got it. And it would be given in such a way that it would help the Orchestra become self sufficient.

Of course, this is a high standard. Orchestra board members and donors would all tell you very little money would be donated on those terms. But that also means that they aren't doing it simply to be good citizens and because they believe in the orchestra. If they want their name on it, it means Exxon's (and others who give) purpose is to be seen as an organization that supports the community. The intent is to improve its image. And there is nothing wrong with that.

But what guidance is there for organizations for evaluating whether money is 'tainted' or not? It's hard to find.

Politicians decline money, or give it back, if they think accepting it would lose them votes. From MSNBC

Jack Abramoff has already pled guilty and many politicians, including President Bush, are rushing to return money linked to the disgraced former lobbyist.

The decision is made, not on moral grounds, but practical grounds.

Ethics of receiving organ donations revolves around whether donors risk their lives because of their poverty to the benefit of wealthy receivers. This is a clear moral decision that is in opposition to market rules - let the buyer and seller make their own deal. Of course, the ideal market assumes the buyer and seller have an equal ability to walk away from the deal.

Department of Interior has a list of prohibited sources of donations
D. Prohibited Sources

1. Departmental agencies, or employees on behalf of their agencies, should not accept (or solicit or accept under a cooperative Foundation program) donations from persons and entities who:

(a) Have litigation pending with, or have or are seeking to obtain a contract, lease, grant or other business, benefit or assistance from the agency that would receive the donation.

(b) Conduct operations or activities that are regulated by the agency that would receive the donation.

(c) Appear to be offering a gift with the expectation of obtaining advantage or preference in dealing with the Department or any of its agencies.

These are really conflict of interest issues, concerned with whether the donations affect agency decision making or appear to, not with whether the money is tainted.

This is similar to the James Beard Foundation Code of Ethics which discusses donors' rights and discusses avoiding donations from suppliers and others with business with the Foundation that might bias business decisions. But they don't talk about dealing with tainted money.


Blind trusts are one option so that one does not know where the money is coming from. Here's a Maryland ruling about a judge setting up a blind trust for his legal defense. But once again, here the purpose is to avoid bias or compelling donors to give, not with whether the money is tainted.

The one article I found that dealt directly with the question of accepting tainted money was again using Jewish law, discussing the Marc Rich pardon case. Rabbi Chaim Steinmetz identifies three problematic aspects of receiving charity from questionable sources:

1. Accepting Charity from Disreputable Figures
2. Charity With Ulterior Motives
3. Speaking on Behalf of a Donor: Corruption or Advocacy?

The Orchestra, like most non-profits, needs money. Large corporations have lots of money. So the Orchestra has to wrestle with the question of whether they should take money from an organization that first soiled Alaska with the biggest oil spill we have ever had, and second, has fought the court judgments for almost 20 years, leaving plaintiffs without the payments the courts ruled for them. Of course, Exxon has every right to take this to the Supreme Court. And I'm sure there are people on the Orchestra board who are fully supportive of Exxon's actions in Alaska.

You could make a good argument for accepting the money, even money from someone with a disreputable past. If someone has amassed a great fortune, through questionable means, should they not be allowed to try to make some amends by giving it away later on.? But if that is what they are doing, the charity receiving the money could set conditions for accepting it. According to the Jewish guidelines it would be better to give it away anonymously. Without the recipient even knowing where it came from.

Ideally this would be a blind trust for donors so that they don't know where the money went and the receivers don't know where it came from. And gifts that make the non-profits more independent of future donations would be the best.

But Exxon doesn't fit into the reformed sinner category. They plea before the Supreme Court this coming week, I believe, to appeal the judgment made in the oil spill nearly 20 years ago. Even the State of Alaska and several living former governors have briefs in opposing Exxon on this

One story that explains corporate giving as honest interest in improving the communities where they live. And I'm sure there are Exxon employees who believe this story. It's in their moral interest to believe they work for a good, ethical company. But just like large corporations want politicians to need lots of money so that they can have influence on them, having financially starved non-profits makes it possible for large corporations to launder their reputations, cheaply.

And at the Anchorage Symphony Orchestra washing away oily memories comes pretty cheap. To get into the Maestro's Circle, the highest level of donor according to their website costs a mere $1500 or more. Even I could afford that if I really, really loved classical music. In contrast, the Anchorage Opera has four levels above that:

Sustainers ($2,500-$4,999)

Benefactors ($5,000-$7,499)

Guarantors ($7,500-$9,999)

Founders ($10,000+)

Now Exxon's 2007 after tax profits were about $40 Billion. Let's say they kicked in $40,000 (I'm guessing it might not be that much, but it's easier to calculate. Someone making $100,000 before taxes, if I calculated this right, would have to donate 10 cents to donate an equivalent percent of their income. [We're working with a lot of zeros here and it's late, so someone check the math.]

Do we applaud those who worked hard last year and gave ten cents to the Orchestra, the same percentage of his net profit that Exxon gave?

A lot of people have complained about how Anderson, Kott, and Kohring took money from lobbyists in return for favors. All three have said, in their own defense, "The money didn't change how I voted or what I did. I already believed in these causes." But most of us know it was wrong.

And we've all (except Ray Metcalfe) winked and nodded at the money our Congressional delegation has brought home. And we know that it is no coincidence that Exxon is getting itself applauded at the Atwood Center the same week it is announcing "a new project to develop and produce hydrocarbon resources from the Point Thomson field on the Alaska North Slope" and just before the US Supreme Court will hear its appeal on the Prince William Sound oil spill.

So it seems that Munger is asking the Orchestra to ask itself what they are willing to do to get Exxon's money? He didn't ask them to give it back. He only asked that they not have people applaud Exxon this week in Alaska. But hey, I've got a dime I'm willing to contribute, that's a larger percent of my income than Exxon's donation was of its income. Will you read my name and ask for applause for me too?

From Sunset to Amnesty International to Ramin to Charity Navigator

Shot this sunset pic walking home from the University locker room, where I had to empty my locker before the new semester. Got home and got the mail. No, we don't have Sunday delivery, just forgot it yesterday.




In the mail was a donation request from Amnesty International. Which reminded me that there are people around the world sitting in prison because they said or did things, that we, in the U.S., take (or used to take) for granted. While I can enjoy the sunset, I thought about Ramin whom I met in Goa. Ramin was in an Iranian prison for four months in 2006 - without a view of the sunset. I wrote a long post about our conversations, but he aked that I not post it since he still has to face trial in Tehran this year. I mentioned him in an earlier post, that you can read here. There's a link at the previous post to more information about him. I also won't post his picture until he says it's ok.

So, now that I've asked you all to send stamps to India in the previous post, I'll also request you think of those less fortunate than you and do a little something to help them out. Being a political prisoner is one of the grimmest situations. (Yes, I know there are other equally grim situations, so we needn't waste time arguing over what is the grimmest.) You could be in isolation, you don't know how long you will be there, you don't know if your family even know where you are or even that you are alive. Your whole world is controlled and dominated by your captors. Amnesty International works to find out who is imprisoned and to get word to them that the world knows they are there. Also to pressure governments to get them out of prison and until they are out, to treat them more humanely. Their site also shows they do a lot more. And for those Americans who go to the site and get upset about their Guantanamo Bay campaigns, just remember that the Chinese, the Burmese, the Sudanese all react similarly when outsiders point out their flaws. Except, of course, for the victims and their families.

And I've talked about giving to charity smartly and mentioned Charity Navigator in an earlier post. Amnesty International got an overall rating from Navigator of 49.43, which sounded pretty low, but then I looked at how they did their ratings and the specific numbers for Amnesty. Amnesty got two stars ** out of four possible. Two stars means "Needs Improvement: Meets or nearly meets industry standards but underperforms most charities in its Cause." But since 50 points is the cutoff for three stars, Amnesty was just .57 points from *** which is "Good: Exceeds or meets industry standards and performs as well as or better than most charities in its Cause." The highest rated charity got 69.53 (The American Friends of I.D.C). **** (over 60 points) means "Exceptional: Exceeds industry standards and outperforms most charities in its Cause" Amnesty did well on administrative costs (2.9%), but their fundraising costs (20.6%) lost them points in the ratings. The cutoff for fundraising is 20%. Had they raised another $1,366,700, (they did raise $40,612,588), they would have gotten a few more points and been in the 'good' category.

Charity Navigator's ratings. according to their site, are based exclusively on IRS Forms 990. There is no evaluation of how well the charities carry out their missions. Amnesty did win the Nobel Prize, so they have been pretty carefully scrutinized. I haven't investigated Charity Navigator the way they investigate charities.. Their website is extremely transparent. They tell you their exact methodology for rating. They also acknowledge that they are just one source of information that you need when donating to charity. They do give points differently to different kinds of organizations, based on various factors, But they don't seem to evaluate whether, say, a charity has one or two major regular donors, thus keeping down their fundraising to almost nothing. They also don't consider whether staff get health benefits. A charity that gives health benefits will clearly have a lower administrative efficiency (on Navigator's scale) than one that doesn't. (Thanks Monica for that point.)

But when you donate, visiting Charity Navigator will make you a far more sophistifated and effective donor. So go there now so you can bookmark the site. There are lots and lots of interesting things there. Here's their list (I've only copied the headings, not the explanations) of:

Top 10 Best Practices of Savvy Donors

1. Be Proactive In Your Giving
2. Hang Up The Phone / Eliminate The Middleman
3. Be Careful Of Imposters and Sound-Alike Names cover the difference.
4. Confirm 501(c) (3) Status
5. Check The Charity's Commitment To Donor's Rights
6. Obtain Copies Of Its Financial Records
7. Review Executive Compensation
8. Start A Dialogue To Investigate Its Programmatic Results
9. Concentrate Your Giving
10. Share Your Intentions And Make A Long-Term Commitment


The ten best practices of Savvy Donors (above) is at the top of their Tips list which also includes:

6 Questions To Ask Charities Before Donating
Tips For Older Donors
What To Do When A Charity Calls
How To Stop Solicitations By Mail
Protecting Yourself From Online Scams
Tips For Giving In Times Of Crisis
Evaluating Charities Not Currently Rated by Charity Navigator
Tax Benefits of Giving
Guide To Donating Your Car
Guide to Donating Noncash Items
Guide To Volunteering
Guide To Giving In The Workplace
Giving Statistics
A Donor's Bill of Rights
Giving Calculator

Blood Diamonds - Give a cow not a diamond

After talking earlier this week about how difficult it is to explicate the links between events in the US and events in other countries, I saw Blood Diamonds. Certainly movies can get one closer to other realities quicker than most other media, and while it still isn't the same as actually being there, this movie makes both the beauty of Africa and the horror of anarchy much more real than reading about these things in the newspaper. Or even seeing short clips on tv. Here, the movie is trying to connect the buying of diamonds in the US with the kidnapping of child soldiers and the weapons that cause such massive violence. Anyone can find fault with details in the movie - DiCaprio certainly manages to run through flying bullets without getting hit through most of the movie - but what was important to me was the whole general sense of what is going on in parts of Africa. (It is also important to recognize that as bad as the violence is, it doesn't represent Africa any more than the murders portrayed in television cop shows represent the US.)

Add this movie to Hotel Rwanda and The Constant Gardner and we have a trio of powerful films showing the links between the worst of Africa and the Western world. In Hotel Rwanda, the links aren't quite so obvious. While the pull-out of the UN troops plays a major role, the role of the colonial heritage in setting up conditions ripe for violence is not as obvious. Constant Gardner does clearly show the Western drug company using Africans to test their drugs in drug trials that would never be allowed in the West. Tsotsi is another film for people wanting to get a sense of Africa.

But how does one respond to all this?
1. One can simply block it out of one's mind on leaving the theater, or at least some people can.
2. Or one can throw up one's hands and say, "There's nothing I can do."
3. Or one can become more conscious of the links between the violence and Africa and Western exploitation of Africa's natural resources - like the oil in Nigeria. Then join organizations that fight these things.
4. Or one can just write a check to one of the many, many organizations that work to improve the lives and living conditions for people in places like Sierra Leone where the events of the movie took place.


The picture above is DiCaprio at the SOS orphanage in Mozambique where some of the actors were recruited.

Another such organization is Doctors Without Borders. which gives medical assistance in war zones.

Before you give to any charity, though, you should check it out at a site like
Charity Navigator which evaluates a charity's efficiency and effectiveness.

You can give directly to an organization, or you can make donations as gifts in the name of someone you love. It's a great way to teach children about the world and about helping other people. Heifer International makes it pretty easy for kids to understand. At Heifer you can give a cow or rabbits or other animals for a family to raise. They'll send you a card for you to send to the person in whose name you donated. So give your love a cow or a goat instead of diamonds this year.


I would also note that the film does a good job of portraying what happens when government fails. Good government tends to be invisible. We enjoy the benefits - clean water, good roads, regulators that keep banks honest and enforce safety standards in the workplace - without even realizing that government is what makes them possible. It is only when they screw up - when potholes don't get filled, or when hurricane victims don't get rescued - that we realize government's role. So we often get a distorted picture of government as ineffective, because we only notice it when it is. It's invisible most of the time, because it works. Movies like this one remind us what happens when law and order are not upheld. It isn't a pretty picture.