How should a nonprofit react when a benefactor becomes involved in scandal?

Rendering of Foisie Innovation Studio and Residence Hall at WPI.
Rendering of Foisie Innovation Studio and Residence Hall at WPI.

The news is full of examples where economic need and overworked fundraising staff lead a nonprofit to accept a gift too quickly.

One story making big headlines is that of Robert Foisie and his $40 million dollar gift to his alma mater the Worcester Polytechnic Institute (WPI).

Mr. Foisie’s ex-wife alleged in a Federal lawsuit that Robert hid money in overseas accounts during their divorce settlement. She claims he later transferred money from a Swiss account to the Worcester Polytechnic Institute.  As the story continues to unfold, Mr. Foisie is also reportedly being investigated by the FBI for wire fraud and is negotiating with the IRS over claims of tax evasion.  The very public nature of this scandal hangs a dark cloud over WPI.

Having clear policies for what types of major gifts your organization will accept, and how they will be accepted, are critical to averting risky donations and handling tainted donors. Well defined and up-to-date gift acceptance policies should include a Moral Clause and procedures for removing a donor’s name in certain situations.