Lifting the lid on reputation laundering through philanthropy

Back in 2020, ACDC began compiling a database of donations by post-Soviet oligarchs to leading charitable institutions in the United States. Our findings, though incomplete due to the limited information available, were surprising.

Between them over twenty years, seven oligarchs connected to interference in U.S. politics had donated around $400 million to more than 200 of the most prestigious nonprofit institutions in the U.S.. The list of recipients covers the gauntlet: from prestigious think tanks like the Brookings Institution and the Council on Foreign Relations, to world-renowned universities such as Harvard and the University of Southern California, to cultural icons such as the New York’s Museum of Modern Art (MOMA) and the Kennedy Center in Washington D.C.

When we first published these findings in Foreign Policy in October 2020, the reaction was honestly fairly muted. But, in the wake of Russia’s illegal and unprovoked invasion of Ukraine, the entire issue of oligarchs’ influence in the U.S. and elsewhere has taken on new significance. In the past few months, more than a dozen media outlets have used our data in their reporting and, in the new climate sparked by the war in Ukraine, journalists are boldly naming names.

(Click here for a list of reporting using our data analysis)

The database contains a list of around 150 of Russia’s wealthiest people, to which we’ve added legal entities such as charities, foundations and corporations controlled by the same individuals. As well as journalists, it is also available to nonprofit organizations interested in using it for due diligence on prospective givers.

As we recently explained to the Donor Search podcast, nonprofits need to be aware of the objectives of oligarchic philanthropic donors. In addition to bringing oligarchs into contact with the influential and powerful, philanthropy makes it easier to suppress critical news and scrutiny: threats of legal action for unfavorable coverage carry more weight when the plaintiff can claim to be an upstanding member of society. In that sense, reputation laundering is a press freedom issue, and nonprofits can be used as a pawn in a bigger game. Especially for larger institutions, accepting donations from controversial figures sets a precedent that greatly influences smaller institutions with fewer resources to run their own checks.

There are three key things that nonprofits can do to limit their exposure to oligarchic reputation laundering:

1. Ensure that development teams are aware of how donations and associated access may be instrumentalized for malign purposes.
2. Conduct the fullest due diligence on new donors possible, bearing in mind that new information may have come to light since previous donations to other institutions.
3. Respond proactively when new information about donors comes to light. This can include severing ties, reviewing due diligence practices and contributing to compensation of victims.

We’ve recently discussed our findings with U.S. government officials and legislators. In those conversations, we’ve stressed the need for transparency solutions that don’t put additional regulatory burden on donors, but rather make the government responsible for collecting information about large gifts from foreign individuals, as they already do in higher education.

For more information, see our Reputation Laundering focus area.