How Does the Donald Sterling Scandal Affect Nonprofits?

SterlingShortly after NBA Commissioner Adam Silver announced league sanctions against LA Clippers owner Donald Sterling for his recorded racist comments, UCLA announced that it was terminating its agreement with the Donald T. Sterling Charitable Foundation that would have brought the university $3 million in research funds. The Foundation had agreed to provide the money over seven years to support kidney research. It had contributed $425,000 so far, which UCLA has said it will return.

University spokeswoman Carol Stogsdill explained: “Mr. Sterling’s divisive and hurtful comments demonstrate that he does not share UCLA’s core values as a public university that fosters diversity, inclusion, and respect.”

Some of the other charities to which the Sterling Foundation has donated have similarly refused additional funding or are giving back donations, but others are keeping the money. TMZ checked with some of the foundation’s recipients and reported, for example, that A Place Called Home (a program for high-risk teens) is keeping $30,000 of a promised $100,000 that it has already received, but is rejecting the balance.

The American Diabetes Association’s Los Angeles office is keeping all $25,000 of the donation it received, reportedly saying “The sad reality is that without donations like Mr. Sterling’s, we can’t help the people that we do.” While Goodwill Southern California is giving back the $25,000 of a promised $100,000 it has already received and is refusing the balance.

Do you think charities should accept “tainted” donations?

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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