Donald Sterling, Philanthropist: What To Do With His Donations?

Transcript

ARUN RATH, HOST:

So if NBA Commissioner Adam Silver has his way and forces Donald Sterling to sell the L.A. Clippers, it will only add to Sterling's already immense wealth. According to Forbes Magazine, Sterling is worth almost $2 billion. And over the years he's used that fortune to donate to a number of causes. Those charities and institutions now have a tough decision - use Sterling's money to fund their good works for return it and cut ties with a controversial figure.

The NAACP says it will return money it got from Sterling and the head of a Los Angeles chapter has resigned over his connections with Sterling. UCLA also says it has canceled a $3 million donation, money that was to fund kidney research. The university said that Sterling does not share UCLA's core values. Stacy Palmer is the editor of The Chronicle of Philanthropy. She says UCLA's decision is actually very unusual.

STACY PALMER: Usually when nonprofits give the money back it's because somebody has gone to jail for insider trading or something like that. So they've been convicted of a crime. But this is one of the few cases where we've actually seen somebody whose comments caused the return of a donation. So it's a pretty stunning thing in the world of philanthropy.

RATH: Can you think of any other time where something that someone has said as opposed to doing something criminal has resulted in this kind of a thing?

PALMER: We've been looking through our records, and we can't find anything like that. So it's possible it's happened somewhere, but usually it's because of some of the actions that a person has taken in the rest of their lives, not just a statement like that. So clearly, this was such hurtful language that the institution realized it had to do something. And the speed with which they took action was really shocking. Usually nonprofits don't move that fast.

RATH: Ah. Now, you don't have to look too far back in history to find some really generous philanthropists who were vocal racists, had possible ties to Nazis, all kinds of potentially nasty things. Are standards, are they different now?

PALMER: I think this is a sign that people are looking in a very different way because this money that was given didn't have anything to do with, you know, political views in any kind of way. It was for kidney research.

So to put those two things together, I think we're starting to see more consciousness in the world of nonprofits to think about their image this way. But clearly, there are a lot of people who use philanthropy to improve their reputations. And nonprofits always have to think about whether they want to be part of that or not.

RATH: Well, you know, that's something that in the Sterling situation that L.A. NAACP has basically been accused of helping him launder his reputation in that way, that they've taken money from him - they're returning it now, but he has a history of lawsuits involving racial discrimination against him.

PALMER: That one is a much trickier situation because clearly, his views and other kinds of things really went counter to the group's mission. And what most organizations do when they're accepting a gift is they do a lot of research on the donor, and they're very complicated gift agreements. This has all become a very lawyered kind of world where everybody agrees to various things.

So usually you don't even see people getting into any agreements that they're going to have to get out of later.

RATH: Do you think there's a new precedent now, post-Donald Sterling that charities are going to be much more careful about their sources of funding?

PALMER: I think they've always been watching the sources and looking at what purpose before they accept the gift. But I think they're going to come under pressure from outsiders to follow UCLA's lead. So I think that's where they're going to have to rethink their policies. And donors may not be as happy about giving if they think they're money is going to be given back.

So that could put nonprofits in a difficult situation. And right now raising money is pretty hard. The economy is still sputtering, so nobody wants to turn a gift away.

RATH: Stacy Palmer is the editor of The Chronicle of Philanthropy. She joined us from Rhode Island Public Radio in Providence. Stacy, thank you.

PALMER: Thank you. Transcript provided by NPR, Copyright NPR.