When to say no to charitable funding

Alaina Luxmoore headshot

Alaina Luxmoore

Director of Marketing

September 7, 2021

5 mins

Hands holding a collection of coins with a sign saying 'Make a Change'. Photo by Katt Yukawa on Unsplash

The economics of conservation tech: when the private sector funds purposeful not-for-profit tech projects, is this a win-win or do we risk selling out nature by aligning with those who are the biggest threats to biodiversity?

There are numerous examples of ‘tainted money’ or ‘tainted donors’ and the views are split. One one hand, taking money from nefarious philanthropists is damaging and some even take the Marxist view that any money gained through capitalist practices could be considered tainted.

On the other hand, Salvation Army founder William Booth is famously quoted as saying, “the problem with tainted money is there t’aint enough!” This stance considers that donations get “washed clean” when used for the greater good.

Both stances can be heavily debated, which means that sitting squarely on one side puts nonprofits in a complicated spot.

‘Greenwashing’, coined by environmentalist Jay Westerveld in 1986, describes a business practice where companies market themselves as environmentally friendly instead of actually making changes to the impact they’re making on the environment.
Adjacent to this is the slightly newer mid-2000’s term ‘causewashing’ which covers a broader set of social causes, for example companies donating to Black Lives Matter initiatives yet overlooking employee racism, or appearing to get behind gender equity while having no female representation on their boards. 

For a nonprofit, there are moral and ethical challenges with taking money from a company who isn’t showing any sign of contributing to the cause outside of making a donation, or even worse, is exacerbating the problem that the nonprofit is trying to fix.

The roundtable posited that the ideal position to be in, would be to be so self-sufficient that a nonprofit could choose their funders - but this is far off for small nonprofits or those just starting out, and when the problem is here and real change could happen now.

Not accepting money might mean a WIN on morals, but a LOSE on effectiveness. If a charity such as MĀUI63 were to cease to exist due to lack of funding, and they are doing good in the world, and the corporation gets to continue their harmful business practices regardless, then is it really a win?

If the alternative is a LOSE on morals, but a WIN on effectiveness, then the nonprofit may suffer external or internal criticism because they’re leaning into that which they stand against.

So what would a WIN/WIN look like?

Firstly a nonprofit has to unpack their ethics and operations, and build an assessment framework around these which lays down the hard-nos. If you were the Cancer Society for example, no amount of money from a tobacco company should be accepted.

But outside of each individual organisation's hard nos, they may be able to assess alignment with potential donor companies that have a sustainability roadmap for making positive change by reducing their damaging practices. So there is extra value in these relationships such as the opportunity to affect change inside the corporate and gain leverage in the media to promote awareness of the cause.

Creating a framework for partnership

Our roundtable came up with the following assessment questions for starters to help non-profit managers assess corporate funding and partnerships.

A framework for assessing charitable partnerships

This article first appeared in ‘Connecting for a Better Future: a collection of essays’ in response to the RUSH x AUT Techweek Roundtable Discussions published in September 2021. Read the full whitepaper here.

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