Meet the Aggressive Research Firms That Help Charities Say No to Dirty Money

For decades, the Sackler family bestowed tens of millions of dollars on hallowed universities and museums in the United States, the U.K., Europe, and Asia. 

Their philanthropy extended to Harvard, Yale, Princeton, Peking University, the Metropolitan Museum of Art, the Guggenheim Museum, the American Museum of Natural History, the Louvre, the British Museum, the Tate, the Victoria and Albert Museum, and the Serpentine, to name a few. As recognition for the billionaire pharmaceutical clan’s largesse, their name was plastered on galleries, wings, and rooms housing valuable artworks and artifacts—until, that is, information about the source of one branch’s wealth came to light: They owned and operated Purdue Pharma, maker of Oxycontin, the highly addictive supernova painkiller regarded as the kick-starter of the opioid crisis, which has claimed the lives of almost a million people in the U.S. 

When the media caught wind of the connection, activists erupted, appalled that sites of art, culture, and higher learning would take what they considered to be blood money. Most memorable were the demonstrations led by artist Nan Goldin, where pill bottles were strewn down the iconic spiral ramp of the Guggenheim and prescription slips littered the floor of the Sackler Wing at the Met, home of the ancient Egyptian Temple of Dendur. As pressure mounted, these prestigious institutions were forced to address the tainted funds. The Louvre caved first, removing the dynasty’s name from the Sackler Wing of Oriental Antiquities. Soon after, the V&A, the Met, the Guggenheim, and others followed suit. 

The very public renunciation sent shock waves through the world of philanthropy, and both donors and institutions reeled. Though benefactor scandals were not unheard of, there’d never been a reckoning quite like this one. In the past, it had been easy for museums, universities, and other nonprofits to turn a blind eye to the origins of their funding. The prevailing mindset was: If the cause was worthy, did it really matter where the money came from? But attitudes were changing, and respected institutions suddenly faced unprecedented scrutiny and challenges to their fundraising practices, as scandal after scandal made headlines: Jeffrey Epstein, Harvey Weinstein, Varsity Blues, Sam Bankman-Fried, Bill Cosby, and even fallen cycling hero Lance Armstrong, who sat on the board of the Aspen Art Museum. Suddenly, trustees needed to concern themselves with not only the size of a donor’s check but also whether the signature on it would end up sullying the institution’s name. 

Enter a new class of due-diligence companies. Though prospect vetting has been part of fundraisers’ duties for a while, investigating people willing to give an organization money has never been so comprehensive. It’s typically those signing the checks who’ve enlisted consultants to tell them exactly where, how, and by whom their hard-earned cash should be spent. Now, these firms are flipping the script by assisting museums, universities, and other nonprofits in putting donors under a microscope, trawling their pasts for everything from criminal connections to money laundering to legal compliance—and even gray areas such as political associations and distasteful, if legitimate, business interests. 

When Dan Secretan launched Xapien back in 2018, he thought its primary focus would be in financial services thanks to his background in financial crime, including anti-money laundering, know-your-customer, and transaction monitoring. Having worked with banks that frequently dug into their clients’ histories, Secretan knew there was a need. But after doing some market tests and speaking to a friend—the head of due diligence at Cambridge University, who recognized a gap—he quickly saw the potential to apply his expertise to the philanthropy sector. Xapien, which uses an A.I. tool that gathers background research on individuals, can provide valuable data in a matter of minutes. It’s based on large-scale investigation platforms for law enforcement, which one of Secretan’s partners, Shaun O’Mahony, had been building. “They’ve been using open-source intelligence to understand people for many years,” says Secretan, who took a bet on this branch of A.I. when it was in its infancy. 

In the past, prospect research was a laborious task that required scouring libraries and public records. As the internet grew, information became more available, bringing with it an enormous bank of data. But for many, vetting the source behind each and every donation just wasn’t financially feasible; while anyone can do a Google search, it can be both limiting and overwhelming. “The information is out there, but it’s very hard to find it, distill it, and make use out of it,” says Secretan. “We wanted to take all the research and knowledge but apply it with a commercial lens to organizations, charities, and universities—because everybody needs to know who their third parties are.” Today, Xapien’s clients include the University of Pennsylvania, Tufts University, the University of Michigan, and, in the U.K., King’s College London and the University of Manchester. 

Ten years ago, you could accept a gift from a shady person and you could turn a blind eye. 

– David Garcia, director of non-profits at Altrata

Penn began using Xapien in 2023 after hearing about it from another university. Kathleen Martino, a senior prospect analyst at the Ivy League school, says that although the technology isn’t foolproof—it does better with Western-sounding names, for example, than Asian or Arabic ones—Xapien has made her research both faster and more thorough. She describes it as a one-stop shop. 

“The wonderful thing about Xapien is it’s doing a function that we used to have to do step-by-step,” she explains. Rather than searching everything separately—lists of sanctioned individuals, criminal records, the subject’s charitable foundations, and such—Martino can pull together a comprehensive report with Xapien, which she then hands off to a development officer. At that point, if there are red flags, “there is actually a committee process that senior leadership and potentially even legal get involved in where it will be discussed as to what is the reputational risk to the university.” Take into account that Penn does such checks not only on donors but also on nominees for boards, adviserships, and the like, and it becomes apparent what a heavy lift it can be. 

“If a university says, ‘We are going to look at everyone we partner or work with,’ it takes a lot of work,” says David Garcia, director of non-profits at Altrata, parent company of Wealth-X, which services nonprofits and commercial businesses alike. “We’ll outsource it for you,” he says, adding that instead of A.I., the data is mined by a comprehensive team of researchers. 

Wealth-X launched 14 years ago with three people out of a WeWork; it now has some 4 million profiles of wealthy individuals in its database. During Garcia’s decade-long stint advising companies, he claims to have helped avert countless PR nightmares. He remembers taking meetings with clients in Washington, D.C., who were intent on naming Elizabeth Holmes from Theranos to their board of directors. The fraud scandal that sent her to prison had yet to break, but Garcia’s team had already raised red flags as doubts about the tech had emerged. “There was a certain period where everyone in D.C. was saying, ‘We want to have her on the board,’ ” says Garcia. “She [had been] on the cover of all these magazines, she was a viral person, so everyone wanted to get in on that. They’re the flavor of the month,” he adds, but “when you look a little deeper, it gets murky.” 

Garcia was able to advise his clients against engaging with Holmes. Others weren’t so savvy: The Harvard Medical School Board of Fellows reportedly rushed through its nominating process to offer her a seat. The morning of her first board meeting, The Wall Street Journal’s exposé of Theranos’s business practices broke. 

Ironically, on the same trip when Garcia helped the clients dodge the Holmes bullet, he saw someone removing a Sackler plaque from a building. “Ten years ago, you could accept a gift from a shady person and you could turn a blind eye,” he says. “There wasn’t [a lot of ] activism.” 

Beyond reputational harm, dabbling with unsavory donors can mean losing out on future funding. “If you’re associated with someone who is controversial or has legal issues, which is happening so much more today, your big donors could stop donating,” Garcia says. Or, maybe worse, “your other donors could push back, and your leadership could come under pressure from the press.” 

After Florida A&M University prematurely publicized a mammoth $237.75 million donation—the largest in any HBCU’s history—and it subsequently failed to materialize, the university president resigned under a cloud, as did the vice president for advancement. A third-party investigation found that staff felt pressured to ignore red flags. Eager for the game-changing gift, the president, Larry Robinson, is said to have told them “not to mess this up.” The report didn’t mince words about the allegedly less-than-altruistic motives of the donor, a hemp farmer named Gregory Gerami who’d previously withdrawn an eight-figure pledge to another school: Being associated with an institution of higher learning conveys a sheen of trustworthiness and credibility. 

There’s also the issue of money spent making the scandal go away. “That’s where I think the due diligence of looking into who your donors are is also important,” says Austin Vogt, prospect researcher for Mercy for Animals, a Xapien client. Crisis-management PR can create a huge financial strain on organizations. “You may be accepting money, but then you would have to spend money after the fact,” says Vogt. 

Garcia has seen many instances in which, much like what happened with the Sackler family, donations have been given back or plaques have been removed from walls. Ideally, the institution has all the facts before depositing the check. He cites the example of a wealthy family from Asia who wanted to donate to an American campus in exchange for naming a building after a family member. Tasked by the university to delve deeper, Wealth-X found that the family was linked to fraud some 50 years prior, which was enough to convince the school to pass. “If you’re super-prominent, like an Ivy, you are under so much scrutiny,” says Garcia. 

Reputationally challenged donors have always been around, but in the 21st century, fundraisers increasingly must also contend with deep-fake donors. One Wealth-X client, Garcia says, was recently approached by someone who wanted to give a six-figure sum to a nonprofit that supports people in need of food and shelter. After some preliminary research, the client grew concerned the offer was too good to be true and enlisted Wealth-X, which determined that a photograph the donor sent of himself with the King of Spain was fake. “The real photo has a different person in it,” says Garcia, explaining that the faux donor was either photoshopped in or created by A.I. So why would someone manufacture a fake philanthropist? According to Garcia, either they were just messing around or they were attempting to launder money. “There’s not a lot of history of money laundering with not-for-profits, but you could give a big gift and then pull it back, and then it’s clean, right?” 

A nonprofit also risks embarrassment if it accepts money from an entity that doesn’t align with its cause. “On the corporate side, we do have certain industries with whom we will not work,” says Luciana Bonifacio, chief development officer at Save the Children. “We would not engage with a tobacco company, right? So [there have been] situations like that, when we have turned donations away.” When it comes to individuals, it gets a bit murkier, and Bonifacio doesn’t think the same lens can be applied: Can you hold someone accountable if they were once a senior executive for a company that runs counter to your mission, or if they pooled a stock fund where the questionable company is just 1 percent of their entire portfolio? While the well-known charity doesn’t have the capacity to comb through every donation, it will vet benefactors making significant contributions or who will be visible supporters. For the most part, Bonifacio says, donations come from high-net-worth individuals who sincerely want to add value to an organization with a strong and positive purpose. 

Good intentions aren’t necessarily enough to salvage a relationship. Greg Ratliff, senior vice president of advisory services at Rockefeller Philanthropy Advisors, which counsels individuals as well as foundations, says the group turned away a donor who wanted to create an anti-vaccination project at the height of Covid. Even when he worked at the Gates Foundation, he says, some organizations declined the mega-funder’s checks if they couldn’t agree on direction. 

I think there’s a need for conversation rather than canceling. How do we have a conversation with the funder?

– Danielle Oristian York, president of 21/64

Museums and universities tend to have broader aims and constituencies than issue-focused nonprofits. Even so, in recent years, more and more donors and board members have been targeted. At the Museum of Modern Art, private-equity magnate Leon Black decided not to stand for reelection as board chair after coming under fire for his ties to Jeffrey Epstein, the financier and convicted sex offender, but remains on the board. Warren B. Kanders resigned as vice chair of the Whitney Museum after repeated protests over his ownership of Safariland, a company that produces tear-gas canisters and other supplies used by the military and law enforcement. After Harvey Weinstein was outed as a serial sexual assaulter—but before he was criminally convicted—the University of Southern California bowed to backlash and rejected a $5 million pledge from the Hollywood power broker to create an endowment for female filmmakers. 

Aaron Horvath, a sociologist and research scholar at the Stanford Center on Philanthropy and Civil Society, points to the case of Jeffrey Epstein, who tried to evade publicity—but maintain prestigious ties to M.I.T.—by being listed as Anonymous on the roster of donors. “If you look at the Epstein gift to the M.I.T Media Lab, it raises a lot of questions about who we are taking money from,” he says. “I think people are more conscious of that now. There’s a broader critique going on in society about philanthropy, and I think that’s getting carried into the university. Places that might previously have skated by without much attention are now realizing: We should probably draw up policy for how we’re going to deal with this kind of thing, or who we’re going to take money from. Stanford just kind of has its hat in its hand and is open to lots of philanthropy,” he adds. “There [are] serious questions to be raised about that.” 

With donations becoming something of a minefield, more benefactors are seeking counsel. In order to mitigate any bad run-ins for her clients, Danielle Oristian York, executive director and president of 21/64, a company that advises multigenerational philanthropists, encourages them to find organizations that align with their values and to be clear on what their mission and vision are. “We call it their philanthropic identity,” she says. 

It’s an important starting point, because not every situation is black-and-white. “I think there’s a need for conversation rather than canceling,” she adds. “How do we have a conversation with the funder to understand their perspective and intention?” Even if an organization does not initially condone a donor’s business record, there could be room to make a positive impact. In the past few years, she has also noticed a willingness from young givers to be more mindful in their philanthropic choices. “The way that wealth was created in previous generations can be seen as tainted or bad,” she says. “With new stewardship or leadership, generational wealth is now being repurposed for good.” 

The same can be said for corporate foundations, where ethics can be nuanced. “We often work with corporations that are interested in addressing challenges in their supply chain and in their production process,” says Ratliff, from Rockefeller Philanthropy Advisors. He points to the Tiffany & Co. Foundation, an organization that puts a lot of focus on land reclamation by restoring sites the company has damaged. “They’ve created amazingly beautiful parks around the world, but it’s in acknowledgement of what mining does and that the raw material for their goods and services are mined.” 

Though much of the demand for consultants such as Xapien and Wealth-X may be motivated by the instinct for self-preservation, the simple act of vetting more benefactors, no matter how small their contributions, not only weeds out dirty donors but potentially gains more from the clean ones. Prospect research helps paint a better picture of the donor all-around—their hobbies, how much they’ve given to various causes, their liquid assets. “[You] might not think twice about that $25 donation, but in reality, they may be a very lucrative business owner or they may come from a very wealthy family,” says Vogt. “That $25 may actually turn into $25,000 or $250,000 or $2 million down the road.” 

And it’s not just donees that benefit from all this scrutiny. For potential donors, being put under a microscope at the outset means they can minimize the risk of being embarrassed down the line. Because there are few things more humiliating than watching your name being chiseled off the walls of an illustrious institution. 

With additional reporting by Mark Ellwood 

Lead illustration: Boston Courthouse: Michael Dwyer/AP; Armstrong: Alexandre Marchi/Gamma-Rapho/Getty Images; Weinstein: Julia Nikhinson/Getty Images; Holmes: Jessica Rinaldi/ The Boston Globe/Getty Images; Cosby: Brendan Smialowski/Getty Images; Huffman and Macy: Joseph Prezioso/AFP/Getty Images; Oxy Dollars: Erik McGregor/Lightrocket/Getty Images; Protestors: Michael A. McCoy for the Washington Post/Getty Images; USC Pennant: Patrick T. Fallon for the Washington Post/Getty Images; Bankman-Fried: Michael M. Santiago/Getty Images; Epstein and Met: Getty Images