Looking a Gift Horse in the Mouth: Should We Ask Where Philanthropic Donations Come From?

For centuries now, ill-gotten wealth has been donated for social good – as well as social acceptability.

Listen to this article:

Philanthropy, meaning altruistic giving for the love of mankind, is one of humanity’s nobler instincts. At the same time, it has ever been a way of legitimising and whitewashing ill-begotten wealth, and of acquiring status and a place in history through the benefactions.

Private philanthropy has never been bigger than at present (one estimate puts it at around $10.3 billion globally in May 2020), nor perhaps more controversial. But perhaps for the first time, the searchlight of research and public debate is on the ethics of philanthropy, at least in the West if not yet in India. It is the consequence of a reassessment of history, especially colonialism, through the lens of contemporary political correctness, which has focused attention on evils of colonialism, such as racism and the slave and the opium trades, which underlay many a fortune.

Movements such as Black Lives Matter and Me Too have added to the anger. Even recent donations from fortunes made from unethical, immoral or criminal activities such as the illegal drug trade, sexual exploitation, land grabbing from native populations and adversely impacting on environment or public health are being scrutinised and condemned.

The brunt of the attack against controversial donors is being faced by prominent institutions, especially of education and the arts, which have memorialised such donors by naming buildings or scholarships after them or by erecting their statues. The latter in particular have faced public anger, with statues of slave traders and hated colonialists like Cecil Rhodes being defaced or toppled, and guilty institutions being named and shamed.

Debates in the UK and US

As recently as November 2021, a controversy over ethical donations erupted in England, over the six-million-pound donation to Oxford University from the Alexander Charitable Trust, set up from the fortune made by Sir Oswald Mosley, leader of the British Union of Fascists and a known anti-Semite, to set up the Alexander Mosely  Professor of Biophysics Fund. Money from the Trust was also accepted by St Peters and Lady Margaret Hall colleges. The university was accused of moral failure when the acceptance of the donation became known. Amongst the critics were not only Jewish students and the Oxford Jewish Society, but also major philanthropists and four British Nobel laureates, who urged the university to reconsider accepting the donation and naming anything with the Mosley name. There was also a demand for government regulation of such donations.

While rejecting such a demand, a minister said that while “universities should consider the ethical and reputational risks of accepting funding from controversial donors”, the government would not be considering regulation of fund raising.

An edit of the same date in The Daily Telegraph commented on the difference between the somewhat lukewarm controversy over this donation with the earlier bitter dispute over whether Oxford should have accepted donations related to Cecil Rhodes, the colonial administrator and mining magnate, though this money was accepted before Rhodes became controversial.

Also read: Are Philanthropic Acts Driven by the Human Desire to Cheat Death?

At the time, Oxford’s Oriel College had erected a statue of Cecil Rhodes after he left them 100,000 pounds – about 12.5 million pounds in today’s money. After the controversy erupted in 2020, the college’s governing body voted in favour of removing the statue. A commission was set up to review the matter. The majority of the members supported the removal. However, the statue was not removed by the college, citing difficult legal and planning processes. To appease the critics, it installed a plaque near the statue describing Rhodes as a “committed British colonialist” who exploited the “peoples of southern Africa”.

Noting the silence till date, a critical article in The Daily Telegraph commented on the “long and ignoble academic tradition of universities taking money from questionable sources”. A 2017 Telegraph investigation identified dozens of cases where the UK’s leading universities had accepted sponsorship  from regimes such as Saudi Arabia, Qatar and Kuwait, accused of links to terrorism or human rights violations, without any protest. In 2020 it was revealed that Jesus College, Cambridge had accepted 200,000 pounds from the Chinese state and even from the Chinese company Huawei, and there had been no furore.

Some universities have attempted damage control by making gestures of giving back to the country/community affected. For instance, in 2019 the University of Glasgow announced an agreement with the University of the West Indies to pay 20 million pounds in reparations to fund a joint Centre for Development Research to atone  for its historical links to the transatlantic slave trade. But this is one of a few isolated efforts.

In the UK, sensitivities to appear ethical run high, and the desire to cut any connections with donors whose fortunes were tainted due to slavery or other such connections has extended to unimaginable lengths. For instance the National Gallery of England, on examination, connected a significant part of its collection and some of its most famous artists and donors, including works of Thomas Gainsborough donated by William Wordsworth, to questionable sources of funds. Apparently, the sitters of one of Gainsborough’s portraits had made fortunes from the slavery trade. As for Wordsworth,  he was on the list because his sister’s rented cottage  was leased by a slave owner. The same newspaper report remarked that “casting the historic slavery net as wide as this ensures that hardly anyone can be free of some links, however remote”.

Institutions on the other side of the Atlantic accepting questionable donations have not escaped attacks either. Exposed by author Patrick Radden Keef, the most severe outcry has been against the Sackler family which has been a major donor to many cultural and educational institutions, amongst them Harvard  and Oxford Universities, the Tate Galleries in Britain, the Victoria and Albert Museum, The New York Metropolitan Museum, and the Guggenheim museums in New York, the Smithsonian in Washington, DC, the Louvre in Paris, and the Royal Academy of Arts in London. There are also Sackler schools, institutes, libraries or centres at Tufts, Oxford, Cambridge, Columbia, Tel Aviv and several other universities, and a Sackler lecture at Princeton University.

The reason for the attack is that the Sackler fortune was made from a drug called Oxycontin, an opioid derivative, made by their firm Purdue Pharma, which led to an opioid epidemic caused by an addiction to the drug. It caused many activists to urge the recipients of the donations to remove the Sackler name from their buildings and programmes. Some institutions have announced that they will remove the name or accept no further donations from the family. Harvard, however, has refused to remove the name from the Arthur M. Sackler Museum on the ground that his family had sold their interest in the company before the drug was developed, and because Dr Arthur Sackler died before Oxycontin was developed.

Also read: Is Mandated Philanthropy Doing Indian Society Any Good?

Like, the Sackler family, the sex offender Jeffrey Epstein was a major donor to many university programmes, even after his conviction for sex crimes. After it emerged that the director of the MIT Media Lab was aware of Epstein’s misdeeds and took steps to solicit donations while hiding their source, he resigned. MIT and Harvard  both initiated reviews of donations by Epstein but the MIT review concluded that since MIT had no policy or processes for handling controversial donors in place at the time, the decision to accept Epstein’s post-conviction donations cannot be judged to be a policy violation.

India’s own Jamsetjee Jeejeebhoy

In India, perhaps the most noted and publicly known case  of a major philanthropist who made his money from a questionable source is that of Jamsetjee Jeejeebhoy, who however is still much revered. The source of funds has not as yet bothered either the recipients or the public, and his statue still stands unharmed in a prominent place in Mumbai. The source of Jeejeebhoy’s fortune was the opium trade with China. The British had got the Chinese hopelessly addicted to opium, as a way of making up the huge deficit they had with China on account of tea imports. The opium was grown in and exported from India.  The man who enabled the trade from India was Jeejeebhoy.

According to his biographer historian J.R.P. Mody, by 1820, when he was 40, Jejeebhoy had allegedly made more than Rs 2 crore. He was already one of the richest men in the entire country, having concentrated on accumulating wealth in the first half of his life. The next half he devoted to giving it away in philanthropy. His donations were prolific. Mody calculates that Jejeebhoy would have donated 2,450,00 pounds over the course of his life. In current terms, that would be around 10 million pounds or Rs 100 crore. He paid two-thirds of the entire cost of the Pune waterworks, and founded the Sir JJ School of Art and JJ Hospital, to which he eventually donated both land and a large sum of money. His wife, Avabai, single-handedly paid for the entire construction of the Mahim causeway that connects the island of Mahim to Bandra.

However, according to Mody, it was not pure altruism which motivated him, but a desire to gain status and favours from the rulers. Jeejeebhoy used his philanthropy to forge bonds with the British in order to reach his  ultimate goal of  getting the hereditary title of Baronet, in which he succeeded. First he became a JP, and then the first Indian to be knighted. But not content, he mounted a secret publicity campaign to be given a hereditary title. In 1857, Queen Victoria named him the first Baronet of Bombay.

Jeejeebhoy’s is a classic case of wrong means for good ends. His philanthropy, institution-building and public works improved countless lives, though its source lay in unethical means. Jeejeebhoy was by no means unique at the time. There were many other merchants who donated their fortunes made through the opium trade, or by other questionable methods, to public institutions.

Also read: Why Warren Buffett Is a Model for His Billionaire Peers

It is not only historical donors who have derived fortunes through questionable means. Contemporary fortunes have also been made by unethical dealings. David Callahan’s The Givers: Wealth, Power, and Philanthropy in a New Gilded Age examines how today’s American philanthropists or super rich have made the money which they have pledged to give to charity. As an instance, he mentions that executives of Google and Facebook “have both engaged in elaborate tax avoidance schemes using offshore subsidiaries”. Another super rich philanthropist, James Simons, was recently outed in the Paradise Papers for sheltering $8 billion in Bermuda.

In India too, several philanthropists have made their fortunes through influence peddling to get policies in their favour, cornering of commodities or tax evasion. Politicians, businessmen and others cynically use philanthropy and foundations to cover a host of malpractices like profiteering from education, and to get institutions named after them.

It is not only the sources of fortunes which are questionable and violative of ethics, but also practices of donors. Callahan, in the above mentioned book, mentions the lack of transparency in foundations and the secrecy that defines the philanthropic world. Foundation leaders, according to him, are a cloistered elite. While they expect their beneficiaries to be transparent about the use of the money, of the top 80 American foundations, only 26 post detailed information about their current grant making on public databases. Callahan further notes that the colossal fortunes of Mark Zuckerberg and Laurene Powell Jobs are being disbursed not via foundations but through their own limited liability corporations, which are hardly transparent. In India too, many of the large foundations offer no financial information in their annual reports.

Unfortunately there is hardly any debate in India about the ethics of philanthropy. If at all, the debate has been sidetracked to irresponsible CSR, which is not dealt with here due to constraints of space.

The examples of unethical philanthropy raise several questions, amongst them of ends and means – whether good ends justify use of questionable means or, as M.K. Gandhi maintained, means to an end are as important as the ends. The history of philanthropy is one of unethical means used for good purposes.

The big philanthropists, starting from the robber barons like Carnegie and Rockefeller, and Jamsetjee Jeejeebhoy, G.D. Birla and others in India, to modern tobacco companies like ITC, have all had an enormous influence not only on other philanthropists but on their societies too, bringing change for the better. So is their contribution to be written off because the way the money made was unethical , or can the tainted money be recycled and made white if put to good use? If Dawood and Company today made munificent donations to prominent institutions or set up new charitable institutions, would we – or should we – accept the money and honour him? Where does one draw the line?

Secondly, many of the historical donations were made in a particular historical context, when the behaviour represented by the donors was acceptable. Do we, in a different time and context, with different standards and values, condemn their altruistic behaviour and remove their names from institutional history or public memory?

Thirdly, for how long should the money remain tainted? Is it not better to use tainted money for a good purpose  rather than let it remain with the donor to be used unproductively?

Moreover, are the recipients in a position to refuse the money from a controversial donor, considering the paucity of funds for non-profit causes?

Finally, is government regulation of donations desirable or necessary, as demanded in the case of the donation to Oxford University?

Even after much debate there is no finite answer, since the balance between the good done by the money  and the influence of the undesirable means cannot be measured. Nevertheless, beneficiaries should be aware, to the extent possible, of a breach of ethics by a donor and give serious consideration as to whether it is compatible with their own vision and mission.

Pushpa Sundar is the author of The Changing Face of Indian Philanthropy (OUP) and other books.