The harmful impact of ‘toxic donations’ on philanthropic endeavours

Making a donation to a charity is a relatively straightforward endeavour. A cause is selected, a general – sometimes regular – modest donation is made, and the buck stops there (so to speak). Major philanthropic donations are somewhat more complicated, however. With philanthropy involving a more long-term relationship between donor and institution and the two often becoming publicly entwined, one party’s actions – be them good or bad – can cast a shadow on the other’s reputation. A 2019 article explores the new world of ‘toxic donations’ and the relationship between donor and institution.

Anonymity and philanthropy don’t often go hand in hand, with the prominent naming of buildings or sites often being an integral part of philanthropic endeavours. As well as the potential conflict that comes with paying for one’s name on a building, the donor’s reputation comes under intense inspection. Philanthropic causes are those which put good back into the world, and contribute towards a more positive society, so it’s reasonable that the expectations of those people funding these causes is that they uphold the same ethics. If a donor is then caught up in a public scandal, the integrity of the cause can be questioned as a result. Whether it is right or not, the public reputations of each are unavoidably linked.

The term ‘toxic donation’ is a loaded one. Unpacking it, there are at least two ways in which this could be interpreted: a donation made by a donor who then turns toxic in the public image, consequently souring the reputation of the institution; or a donation made as a thinly veiled attempt to recover an already damaged public reputation. To avoid – where possible – being subject to ‘toxic donations’, institutions now take measures to get to know their prospective donors as well as possible, before any donations take place. Their identity, personal and business connections are just a few areas that are inspected, and understanding where a donor’s money has come from is increasingly being scrutinised as well.

While the increased inquiry into donors’ reputations may be inconvenient and may seem like a temporary invasion of privacy, they prove beneficial to not only the institution, but also the donor, in the long run. The avoidance of public scandal ensures that the institution’s reputation is safe from damage, but also ensures that no donor can do harm to another. In the end, honesty and integrity are paramount, and this level of scrutiny and transparency will ultimately benefit all concerned, and will allow institutions to focus on delivering their goals.