Earlier this spring, I looked at organizations that are welcoming billionaire T. Denny Sanford back into the fold after a South Dakota court declined to press charges against him pertaining to a 2019 child pornography investigation. Sanford’s seeming rehabilitation — in the eyes of some — raises the evergreen question: Why do organizations accept gifts after the donor was ensnared in a squalid controversy or convicted of a serious crime?
While many variables go into the calculus, the most obvious (and cynical) reason is that organizations really need the money. Or, if we’re to put a finer point on it, recipients convince themselves that the “good” the money will accomplish outweighs the “bad,” which can include public relations headaches and the risk of antagonizing other donors. Anyone attuned to the harsh realities of modern-day fundraising recognizes this unspoken Faustian bargain, but it isn’t often that someone openly admits to it.
This is why I find Bard College President Leon Botstein’s defense for meeting with Jeffrey Epstein — after the infamous financier’s 2008 conviction for solicitation of prostitution involving a minor — so illuminating. By articulating what leaders think when they’re sitting across the table from a (purported) billionaire, Botstein, whose relationship with Epstein has been documented in the New York Times and the Wall Street Journal, shows how the impulse to forgive, a propensity for dispassionate judgment and realpolitik can factor into the cost-benefit analysis that goes into big-donor fundraising. In his comments on Epstein in the Times and the Journal, I found Botstein’s logic mostly dubious, but I begrudgingly appreciated his willingness to say what other leaders keep to themselves. (Reached by email for comment on this piece, Botstein declined through Bard’s communications office.)
On May 17, the story took another surprising twist when the Journal reported that Botstein received $150,000 in consulting fees in 2016 from a foundation created by Epstein called Gratitude America. Responding to the disclosure in the Times, Botstein confirmed the payment while noting that “the contract was signed by someone else” and that Epstein’s name did not appear on his records. Botstein said he donated the money as part of a $1 million gift he gave to Bard that year.
Botstein’s claim he didn’t know the money came from Epstein underscores the importance of engaging in rigorous due diligence, especially when payments involve entities with nondescript names like Gratitude America. The 2016 payment also has no direct bearing on Botstein’s multifaceted rationale for repeatedly meeting with Epstein back in the early- to mid-2010s. To get a better understanding of Botstein’s thinking at that time, let’s set the stage by looking at Bard’s precarious financial situation in the run-up to receiving two unsolicited Epstein gifts 12 years ago.
Bard on the brink
The story begins with the 2008 financial crisis, which hit private liberal arts schools particularly hard. Endowments took a beating as the markets tanked, forcing schools to hike tuition, lay off workers and attempt to plug the gaps with donations from their relatively small alumni bases. (Bard’s undergraduate enrollment has traditionally hovered below 2,000.)
By 2011, Bard’s endowment stood at a meager $200 million, although the school’s prospects brightened when, in that same year, it received a $60 million challenge gift from George Soros’ Open Society Foundations.
It was also in 2011 that Epstein made two unsolicited donations to Bard “totaling $75,000 and 66 laptops,” according to Mark Primoff, assistant vice president of Bard communications. Though Epstein had already been convicted in the 2008 prostitution case, had served a lenient sentence, and was very much a registered sex offender, that didn’t put off Bard and Botstein. “If you looked up Jeffrey Epstein online in 2012, you would see what we all saw,” Botstein told the New York Times in a 2019 interview. He seemed “like an ex-con who had done well on Wall Street.” Botstein followed up on that initial gift and met with Epstein about two-dozen times over four years. Nonetheless, Epstein “gave no further donations beyond those given in 2011,” Primoff said.
In 2016, Moody’s downgraded Bard’s credit. “The ongoing depletion of liquidity and increased exposure to bank agreements heightens the prospects for a liquidity crisis in the absence of extraordinary donor support,” read the agency’s credit opinion.
“People don’t understand what the job is”
The points Botstein has raised in defense of his meetings with Epstein touch on some of our theories regarding why leaders “forgive, forget and receive.” The first is, well, forgiveness. Botstein appears to have been ready to give Epstein the benefit of the doubt back in 2011 and 2012.
“We looked him up, and he was a convicted felon for a sex crime. We believe in rehabilitation,” Botstein said in a Wall Street Journal piece published in late April. (The Bard Prison Initiative runs college-in-prison programs and works with formerly incarcerated students.) That said, college officials weren’t taking any chances. “Because of his previous record,” Botstein added, “we had security ready. He did not have any free access to anybody.”
If it seems odd to contemplate welcoming a potential major donor with muscle ready at hand should he try something, see also this comment by Botstein in a May 5 New York Times story by Vimal Patel, which further underscores the degree to which a donor’s toxicity is in the eye of the beholder. “We had no idea, the public record had no indication, that he was anything more than an ordinary — if you could say such a thing — sex offender who had been convicted and went to jail,” Botstein said. Knowing what he knows now (presumably referring to Epstein’s later arrest for sex trafficking of minors, which preceded his suicide), Botstein said he would not accept Epstein’s money, were he alive, calling him a “monster” and “truly evil man.”
Most consequentially, Botstein seems to have concluded that Epstein’s support would advance the then-struggling school’s liberal arts mission. Rich people can be an unsavory bunch, but if their money can provide scholarships, prevent layoffs or replenish cash reserves, then that’s the chance you have to take, or so the logic goes. “People don’t understand what the job is,” Botstein told Patel. “You cannot pick and choose, because among the very rich is a higher percentage of unpleasant and not very attractive people. Capitalism is a rough system.”
Pretzel logic
The thing is, that’s not really true at all. For starters, of course you can “pick and choose” who to accept money from, and to suggest otherwise does a disservice to leaders who steer clear of toxic donors because they follow the institution’s gift acceptance policy or something just feels off. Moreover, leaders who choose poorly have recourse — many nonprofits that accepted Epstein’s money subsequently returned it or donated it after his death to groups that support victims of sex trafficking and assault.
I was also perplexed by Botstein’s commentary regarding capitalism in the above quote. He seems to imply that the system encourages or obliges rich people to do nasty things, and we have to accept their ill-gotten support because that’s how the world works. But the issue isn’t whether Epstein got rich by running a shady money management firm (which he did). Nor is it about things like spreading climate change misinformation, waving away concerns about how a product adversely affected its customers, or engaging in anticompetitive business practices — all of which could potentially make a donor toxic in the minds of some. No, Epstein was particularly toxic due to the nature of his crimes, not the source of his wealth. It has nothing to do with capitalism.
Botstein’s characterization of Epstein as an “ordinary” sex offender or his musings on the “very rich” and the scourges of capitalism, however unconvincing or discursive, underscore how people contort themselves into pretzels to justify cultivating toxic donors when “I didn’t want the school I love to go bankrupt” would have sufficed.
Of course, Botstein wasn’t the only individual who engaged in tortured logical gymnastics when it came to Jeffrey Epstein. Other universities took post-conviction Epstein cash while luminaries sought him out, including former CIA Director William Burns (“the director did not know anything about him, other than that he was introduced as an expert in the financial services sector,” a spokesperson said), former Harvard President Lawrence Summers, and, of course, Bill Gates, whose dinners with Epstein “didn’t result in what he purported and I cut them off.” The lesson? Never underestimate the human mind’s capacity for rationalization.
Philanthropy’s “forever chemicals”
Botstein did not enjoy his fraught pursuit of Epstein. He told the Times’ Patel, “That is a humiliating experience to go back over and over and over. We’re completely at the mercy of the very wealthy.” Again, readers may roll their eyes at Botstein’s penchant for hyperbole, but his take also has a kernel of truth to it.
In 2021, the school finally found deliverance in a $500 million challenge grant from Soros to kickstart a $1 billion endowment drive. “When this endowment drive is complete, Bard will have a $1 billion endowment, which will ensure its pioneering mission and its academic excellence for the future,” Botstein said in a statement. Two years later, Standard & Poor’s raised Bard’s bond rating to “investment grade, with a positive outlook,” and specifically cited its “fundraising success, particularly for its endowment,” according to the school’s press release.
While Bard’s financial troubles are a distant memory, Botstein now finds himself defending decade-old meetings with a man who died almost four years ago. It’s another reminder that we call a donation “toxic” for a reason — it can contaminate the surrounding atmosphere long after it’s served its purpose.
All of which brings me back to T. Denny Sanford. In late March, his lawyers appeared before the South Dakota Supreme Court arguing that the documents relating to the 2019 child pornography investigation should remain sealed. “If the court unseals the documents,” I wrote at the time, “the fallout from potentially damaging revelations will force organizational leaders to get back on the ‘to-return-or-not-to-return’ merry-go-round.”
In late April, the records were unsealed. I won’t go into the sordid details, but I can see why Sanford’s lawyers — who, according to ProPublica’s Robert Faturechi, claimed “other people had access to Sanford’s electronic devices”— fought to keep them under wraps. I also suspect that nonprofit leaders who hoped to put the ordeal behind them will be disappointed. Setting aside the contents of the documents, news of which I can only imagine made its way to leaders’ inboxes, Faturechi wrote that “the status of a federal investigation into the matter remains unclear.”
Looks like it may indeed be time for Sanford’s recipients to fire up that merry-go-round, and probably to keep Bard and Botstein’s continuing struggles with the specter of Epstein well in mind.