Giving Compass' Take:

• Terri Lynn Helge describes various companies, universities, and nonprofit organizations that have trouble cutting ties with funders who may have questionable ties or backgrounds.

• How should nonprofits approach this conundrum?  

• Read more about the tainted money problem in philanthropy.

The activist group Prescription Addiction Intervention Now, or PAIN, is organizing protests across the country at museums like the Metropolitan Museum of Art’s Sackler wing in New York City, Washington’s Arthur M. Sackler Gallery and the Harvard Art Museums.

These protesters aim to pressure the Sackler family, which amassed a fortune after founding Purdue Pharma – the drugmaker that launched the opioid industry.

As they hurl pill bottles, shout slogans and wave banners, PAIN’s activists are demanding that these institutions scrub the Sackler name from their walls. And they vow to keep the pressure up until the Sackler family and the company that made those billions pay for the cost of fighting opioid addiction.

This campaign is one of the latest examples of how charities can get into trouble when their donors are accused of morally reprehensible behavior. When these scandals strike, charities face a dilemma – keep the money given by the now-tarnished donor or return the tainted funds. But returning the funds may be easier said than done.

Once the funds are given, they become committed to charitable use. Returning that money just because the donor’s reputation is now sullied may get the charity in trouble with state regulators. Charities can have the most trouble distancing themselves from tainted donors when they grant a major giver naming rights: that is, name programs or buildings after them.

To avoid that kind of headache, naming rights agreements may include what is known as “morals provisions,” arrangements that let charities remove donors’ names from buildings, endowed fellowships or scholarships or return donated funds following allegations of or convictions for immoral or illegal behavior.

Read the full article about charities and their tainted money by Terri Lynn Helge at The Conversation.