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Tainted Money and Charity

Do 501(c)(3)s Have a Right to Refuse a Gift?

University of Illinois at Springfield

This article examines the right of a 501(c)(3) organization to refuse an unrestricted cash donation, concluding that such right is generally illusory. If a charity disagrees with the donor on a moral issue, it may see nothing improper in turning away a would-be benefactor. When this occurs in the context of a 501(c)(3) organization, its exempt purpose requires looking beyond the conscience of the individuals making the decision. Specifically, the question of the organization's moral right to turn away funding occurs in the context of its pursuit of a legally sanctioned purpose. The organization's agreement with the IRS in seeking tax-exempt status produces a fiduciary responsibility with its stakeholders. These include donors, potential recipients of the organization's goods or services, taxpayers, and the government. Viewed from this perspective, turning down a gift, it is argued, is comparable to mismanagement in squandering scarce resources.

Key Words: dirty money • exempt purpose • Major Barbara • moral currency • refuse gift • tainted gift

Nonprofit and Voluntary Sector Quarterly, Vol. 37, No. 4, 743-755 (2008)
DOI: 10.1177/0899764008324319


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