Dirty Money: From Rockefeller to Koch

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In fact, the controversy at Catholic University strongly echoes another that broke at the turn of the last century and that first catapulted that debate into public prominence. It began in March 1905 with the announcement of a contribution of $100,000 by John D. Rockefeller to the American Board of Commissioners for Foreign Missions, the missionary arm of the Congregational Church. Rockefeller, the Standard Oil magnate whose ruthless pursuit of corporate consolidation was matched by his embrace of a homely Christian piety, was at the time one of the richest and most hated men in America. And so, when news of the gift spread, a faction within the denomination quickly rose up to denounce it and insist that the American Board return the money.

The faction was led by a Congregational minister from Columbus, Ohio, named Washington Gladden, who a decade before had targeted a Rockefeller gift to the University of Chicago by railing against “tainted money.” Now the phrase became the protesters’ watchword. Standard Oil, they declared, “stands before the public under repeated and recent formidable indictment in specific terms for methods which are morally iniquitous and socially destructive.” In order for the Church to serve as a “moral educator,” and to “arouse the moral reprobation of the general conscience” against its grossest offenders, it must “stand entirely clear of any implication in the evil it is set to condemn.” The acceptance of a gift from John D. Rockefeller compromised this obligation, for it involved the Board “in a relationship implying honor toward the donor.”

A committee assigned by the American Board to consider the issue defended the decision to accept Rockefeller’s donation. “For almost a century the Board has received gifts from every quarter in America, Christian and non-Christian alike. Into our treasury have also come offerings from Mahommedans, Parsees, Hindus, Buddhists and African savages,” they stated, placing the staid, Baptist corporate titan in rather exotic company. “In receiving gifts from these varied sources the Board has in no degree and in no way passed judgment on the business, religion, character or life of the donors.” Then they lay down their guiding principle, around which much of the ensuing controversy hinged. “[O]ur responsibility begins with the receipt of a gift; it then becomes our trust for which we are to be held responsible.”

Debates about “tainted money” were by no means a modern phenomenon. The Old Testament, for instance, warns against the acceptance of offerings from unclean hands—“Thou shalt not bring the hire of a whore…into the house of the Lord thy God for any vow” (Deu. 23:18)—and the rabbinic literature contains a number of debates about how to extend that injunction to everyday practice.

In the more recent past, during the antebellum period, American denominations had argued over whether to accept financial contributions from slaveholding congregants. But the topic had not received sustained attention in the United States till the rise of industrial fortunes at the end of the 19th century and the corresponding emergence of large-scale benefactions. Philanthropy became not just a resource for the public to exploit but a problem for the public to solve. As one writer noted in 1912, the time had finally arrived to look the gift horse squarely in the mouth, since you never knew if “the gift horse’s mouth may carry glanders or cholera.”

During the spring months of 1905, as the “tainted money affair” raged on, nearly every single major American religious leader, and many secular luminaries, weighed in. Some questioned Rockefeller’s moral right to the money he donated, based on his nefarious business practices. Just as a church wouldn’t accept the loot of a highway robber, it shouldn’t take in the booty of an industrial brigand. Others did not deny Rockefeller’s right to give away his fortune, but insisted that a religious institutions’ responsibility to superintend public morals trumped any particular good his gifts could accomplish.

The protest also sparked an increasingly sophisticated discussion of the power wielded by benefactors. Some had focused on whether Rockefeller’s gift came with explicit strings attached. But others pointed out that philanthropy could exert a more subtle pull. Not only would a code of “gentlemanly ethics” prohibit recipients from biting the hand that fed them, but the promise of prospective gifts would exert its own silencing effect, leading institutions away from taking positions that might alienate future benefactors.

The defenders of the American Board put forward a whole host of justifications for accepting Rockefeller’s money. They argued that it made little sense to assign religious institutions the responsibility of judging the business practices of potential benefactors, a task for which they were technically ill-equipped. Others insisted that the good done with a donation removed any taint. There was also a more legalistic interpretation of the controversy. As long as Rockefeller had a legal right to the money he offered, it was the fiduciary obligation of the members of the American Board to accept a gift designated for the trust’s intended beneficiaries. A pastor of a Sioux City church took this principle even further. “If the devil himself should give me $1,000,000 to use in the Lord’s business, I’d take it and use it,” he declared. Still yet another, more radical faction aligned with the American Board’s decision from an entirely different perspective. It made little sense to reject Rockefeller’s donation, they maintained, since the action would hold out a few selected individuals for censure, when it was the entire corporate system that should be indicted. Marking some money as tainted encouraged the view that the rest was clean.

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Benjamin Soskis is a fellow at the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University. He is the co-author of The Battle Hymn of the Republic: A Biography of the Song that Marches On.

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