As the "#MeToo" movement continues to shed a public light on sexual harassment across a wide variety of industries, it has become clear that the charitable sector is not immune from similar abuses. In recent months, a variety of boldface names in the nonprofit world—international NGOs, think tanks, and more—have found themselves embroiled in sexual harassment and abuse scandals at a variety of levels, from field staff all the way up to senior leadership.

Funders, including individual donors and private foundations, are increasingly being forced to grapple with allegations of sexual harassment at grantee organizations. There is a growing ability (and willingness) by stakeholders, victims' groups, and the general public to track down funders of these organizations to demand action or accountability, and funders who fail to act forcefully can risk their own reputational damage. Moreover, if grantees do not appropriately address sexual harassment issues, funders' philanthropic dollars may not be used effectively for their intended charitable purposes or could even be seen as supporting a toxic workplace environment.

Given these risks, what proactive steps should funders consider?

  • Reconsider the diligence process: Many funders are adding diligence on sexual harassment prevention and policies to their normal pre-award processes; where grantee policies or procedures are lacking, funders can either require improvements or refuse funding altogether. What policies and procedures does the grantee have in place to report and address allegations of harassment or misconduct? What training does the grantee require of its management and staff, both to reduce the prevalence of sexual harassment and to make sure that reporting/grievance mechanisms are understood? Some cities and states, such as California and New York, require employers to maintain certain harassment policies and conduct annual training; are grantees in compliance with all local and state laws? Finally, does the grantee have a history of harassment complaints, lawsuits, or settlements?
  • Update grant agreements: Funders are increasingly reviewing grant agreements to consider whether they contain appropriate mechanisms to address grantee sexual harassment issues and to protect the funder's reputation and funds. What type of reporting does the funder receive about sexual harassment allegations or settlements, and what additional information can be demanded (particularly in the event of public allegations)? Can funding be withheld, terminated, or refunded if the funder determines that the grant programs or the funder's reputation is at risk? Can grant funds be used for sexual harassment settlements (particularly in the case of "general support" grants)? Can the funder withdraw naming rights or otherwise publicly disassociate itself from the grantee?
  • Be prepared for a crisis: While funders should not re-investigate or second-guess all governance or personnel decisions, they can play an active role in encouraging grantees—and grantee boards of directors—to be thorough and proactive in addressing sexual harassment issues. When should grantee boards launch an independent investigation of misconduct? What is the "tone at the top" with respect to allegations? What type of policy or process improvements should organizations initiate in response to allegations or scandals?

Through clear expectations and requirements, funders can help to ensure that grantees have proper policies, procedures, and practices in place to try and prevent sexual harassment in the workplace, and to promptly and thoroughly address problems when they arise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.