How Do We Decide Who To Accept Money From?

I’m excited to announce that the Yakezie Writing Contest Framework is now up on Yakezie.com!  Several hours were spent this past rainy weekend formulating the plan and putting everything down in writing.  Thanks to many suggestions from friends, family, and Members, we’ve now got the framework down for one of the most important initiatives of the Yakezie Network.  Our goal is to not only provide financial assistance for youth in financial need, but also provide mentoring as well.

If we can combine the act of doing and giving, there’s no doubt in my mind we can make a bigger positive impact in the scholarship winner’s life.

100% PASS THROUGH RATE

100% of all our donations will go to a deserving individual every single month.  We will start with a minimum of $500 a month for the next six months, and hopefully increase the monthly scholarship to $1,000 a month forever.  A 100% donor-to-recipient pass-through rate is especially important as I’m constantly disappointed in the low pass-through rate of some organizations.  If you donate $1 for example, did you know that often times 50 cents to 75 cents is eaten up by overhead?  Just like big government, it’s so inefficient!

SPONSORSHIP OF YAKEZIE.COM

What we’ve decided to introduce is a Corporate Sponsorship opportunity for Yakezie.com and the Yakezie Scholarship where organizations can choose to be the main Yakezie Scholarship sponsor of the month, in which case we will name that month’s scholarship after the sponsor i.e. the “Amazon Yakezie Scholarship.”  Alternatively, for those corporates who wish to be supporters but not main sponsors, we offer them an opportunity to participate and support Yakezie.com in a smaller way.  We’ll recognize their contributions in a Sponsor Post and mention them on the submissions page and so forth.

The idea is that we give sponsors an opportunity to directly support Yakezie.com and at the same time, support the Yakezie Network’s initiatives of giving back to the community.  Goodness knows we’ve spent hundreds and hundreds of hours to try and make Yakezie work.

THE DILEMMA

It’s only been several hours since the post, and we’re pleased by the response of the blogging and advertising community.  What we’re somewhat conflicted with is whether or not to accept sponsors whose products we’re not familiar with, or who we don’t endorse?  At the end of the day, sponsors are an integral part of the online community, and if we are to donate the money to someone in need, doesn’t that justify our doubts?

Imagine a year from now, you receive a large $5,000 donation from a gang who is notorious for making money illegally e.g people trafficking and drugs.  The gang leader tells you that he believes in the Yakezie Scholarship and its commitment to helping children from lower income communities succeed.  He tells you that if he had some financial assistance and a mentor, maybe he wouldn’t have ended up on his current path.  Maybe he could have fulfilled his lifelong dream of becoming a doctor.  Alas, there is no way out for him as he knows too much.

Let’s say the winning applicant is a courageous boy with cancer, whose parents can no longer afford to pay for his hospital bills because the insurance company has stopped payment.  Someday we will have universal health insurance, but not this day.  The boy just needs a couple more night’s stay and medical treatment for his chances of survival to skyrocket from 50% to 85%.  The cost of this extended stay is $5,000.  Do we accept the gangster’s money in order to help save this boy’s life?  Or, do we let the boy die because we take the moral high ground?

The example I provide is for illustrative purposes, but the dilemma is the same.  If we are redistributing wealth from those who voluntarily want us to redistribute their wealth to someone in need through a scholarship, who are we to deny them?  Please share your thoughts!

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Everyday Tips says

    That is a tough dilemma Sam. Maybe it will depend on the ‘availability’ of sponsors. If there are people pounding down the door from familiar, upstanding organizations, then maybe we can be more selective.

    Obviously illegal would be out of the question no matter what, but I can’t imagine that ever really coming into play. Maybe we could put together a research team to really get to know each willing sponsor? I would be willing to do that for sure.

    I will say this. If the pool was dry and we had no other choice than to provide money from payday loans to someone in need, I would still consider it.

    • Financial Samurai says

      That’s the point i’m trying to make here though….. let’s say you were dying in the hospital bed, and a criminal who obtained money illegally said s/he would foot your bill. Would you rather die, or accept the money?

      I hope the pool is large enough so that we can be selective in our sponsors as well. It is my sincere wish. Need the you and the team to help spread the word. Thanks.

  2. Elle says

    Honestly I can give a cut and dry answer for sponsorships. My suggestion is having the Yakezie vote on it it. We’re evaluating scholars; evaluating donors can work too.

    • Financial Samurai says

      I guess we can do that. I hope people are responsive enough to vote quickly as we should try and get sponsors before each launch.

      But voting is also not perfect, as we see in every single election known to man. Does 51% win over 49%? That still means 49% are unhappy. Now you see the dilemma.

  3. Tim @ Faith and Finance says

    Whether you are a Christian or not, the proverbs found in the Bible are an excellent source of wisdom and this proverb comes to mind regarding the dilemma.

    Proverbs 16:8
    Better is a little with righteousness than great income with injustice.

    Could you obtain donations from people with questionable businesses (dare I say: gambling, pornography, abortion, etc etc)? The answer is: sure you could. Would it seem like you’re passing up FREE MONEY for people in need because you denied the sponsors – yes, it would seem like that.

    I know you we can argue about the questionable sources and spend all day classifying them under ‘righteousness’ or ‘injustice.’ People have differing views, so one might accept a source easier than another person.

    If you have personal convictions about a certain source, I think you shouldn’t have any reservation to politely deny the source/sponsor. If there happens to be an approved sponsor that Yakezie members feel uncomfortable about – they should be able to approach you with the reasons why it should be reconsidered as a sponsor.

    If the scholarship program is done in a way that aligns with the wisdom found in this proverb, I think it’ll have great success long run. Sure, it’ll seem like free money is going out the window, but I think it’ll have a better acceptance rate from readers, scholarship recipients, sponsors, and media if it is built on contributions that do not come from questionable sources.

    • Financial Samurai says

      Good thoughts. Yes, hopefully ideally we can align sponsors who are ‘righteous” and who we whole heartedly support.

      We may even have single person sponsors, ie “John Doe Yakezie Scholarship”….. hopefully John Doe is a righteous person, but how do we know for sure?

      I feel sorry for this boy in my example… another strike against him.

  4. Kevin @ Thousandaire.com says

    To me it’s simple. Was the money obtained legally? If so, then accept it. In my opinion, the only way a charitable organization shouldn’t accept money is if the money doesn’t truly belong to the person giving it.

    If CondomsToGo or SexySexToysAndMovies runs a legitimate business and wants to give $5,000 to help someone who needs financial assistance, I don’t see why you wouldn’t accept it.

    That being said, in your example, I don’t think I could take the money because it’s truly not the gangster’s money to give. Taking money from someone else and giving it to charity isn’t a good deed; that’s stealing.

    • Financial Samurai says

      Got it. Yes, I agree with the legality of things. What if we don’t know for sure whether the gangster’s money was earned legally or illegally though, just a suspicion? We didn’t take the money from someone else against their will, perhaps the gangster did… or maybe not.

      But, in this case, and with your conclusion, we let the boy die. It’s a tough pill to swallow for me.

      • BD says

        The boy doesn’t have to die. He can go to St. Jude’s Children’s Research Hospital, where they will treat him for free, no insurance needed. :)

        There are always options out there.

  5. Forest says

    Damn that is a dilemma! Does the gangsta want his contribution advertised? I still buy Nestle and Coke products occassionally and they are both crooks…. People let that selfish sod Bono do charity work still, so I guess as long as the money is simply a gift then take it, save one life at least.

    • Financial Samurai says

      Nestle or Coke! You bring up a great point. Sugar is a massive killer in modern day society. Sugar causes a lot of disease, which ultimately leads to death. However, maybe not and Nestle and Coke are certainly not evil organizations.

      What’s up with Bono?

  6. Eric says

    Like many others, I think it has to go on a case per case basis. I am always torn on payday loan advertising on my personal site, but I do enjoy their money. It is the same here. We have to, as a group, decide if a sponosor is too questionable for the majority to feel comfortable.

    • Financial Samurai says

      Hopefully as word gets out, there will be a higher selection of corporate sponsor choices going forward. Home Depot or Loews sponsoring Extreme Home Makeover is a no brainer for example. One of the banks, sports companies are no brainers as well.

  7. Dave says

    Very generous and noble thing of you to start scholarship!

    I believe you should accept the money because that way at least someone will get the help he badly needs. However this situation is highly hypothetical.

  8. Investor Junkie says

    Ok here is one… payday loan companies. I personally won’t accept them on my site. More because it doesn’t fit the culture and my audience, than question their viability of a business. The better question is does the advertiser fit the culture of the organization.

    • Financial Samurai says

      Well, what if you decided to give all your pd loan revenue to someone who needed it? Everyone has a choice to accept or deny money… but once you choose to just give it away, it’s not really totally up to you anymore, is it?

  9. Darwin's Money says

    Awesome concept; love “sharing the wealth”. Nice touch. Interesting concept on accepting from the bad guys. Depending on the severity of a situation and who it is giving, would dictate my decision. Accepting money from Al Queda so I can put in a swimming pool? Never. Accepting money from a drug dealer to save my kid’s life? Of course. Depends on the priority.

  10. Charlie says

    I love what you’re going to do with the Yakezie Scholarship – that’s so awesome. My advice isn’t brilliant or unique but I’ve found usually works out for the best – go with your gut. If something seems off, it probably is. You could always do some months without a corporate sponsor by using member and reader donations too. Those months could be smaller scholarships – it may seem small but even $50 or $100 can go a long way for many people.

    • Financial Samurai says

      Yes, I agree. However, we made it a pledge to donate $500/month minimum, and that is what we are going to do. Clients are coming out of the woodwork, and I don’t think it’s up to us to deny them if our responsibility is to give it away to someone in need.

  11. Steve Jobs says

    I agree that this was great news helping and sponsoring one kid’s education a great good deed that every man could do. In terms of accepting money from the donors, well, that’s quite hard to answer though taking and accepting money will benefit more scholars. In that case, I think if that will happen, it is not offensive to take this gangster money to save a life, anyway his intention is good. It just so happen that what he is trying to donate for help came out from an illegal way of earning money.

  12. youngandthrifty says

    Yeahhh scholarship time!

    Tough question- agree that its not black and white. I say hold another fundraiser to see if we can raise $5000 from more moral means and announce that we will be taking money from questionable sources if the $5000 isn’t raised because this boy was such a great applicant and so deserving of life and a chance for a cure. :)

    • Financial Samurai says

      I think once we hopefully read the essays (if any come in), we will be moved and our answers will be to accept the gangster’s money and then some to redistribute to the deserving candidates.

  13. Fool says

    Congrats on the launch of the scholarship!
    Although I am conflicted with the example dilemma, in general I echo previous comments about accepting donations from any source as long as it is legal.

  14. The Financial Blogger says

    Since you are using the money for a very honorable cause, I wouldn’t mind where the money come from. You are not responsible for the act of other people. You are only responsible of your own. Therefore, if you receive 5K, what really matters is what you will do with the 5K, not where it is coming from.

    In fact, you never really know where the money come from. For example, you could receive 5K from a very reputable individual with a legal company etc, etc, etc. But what if this honorable citizen beats up his wife when he comes back from work? You will never know but the 5K you have receive will help people anyway ;-).

    So take the money and make a good use of it. Refusing money won’t make it disappear. The guy will only put the 5K somewhere else and you will be punishing the kid with cancer for nothing.

  15. Invest It Wisely says

    I think you answered your own question, Sam: “Or, do we let the boy die because we take the moral high ground?” How could possibly letting someone die be the moral high ground? That is a self-contradictory statement, and I agree with TFB above.

  16. Credit Cards in Canada says

    The money is for charity and a good cause so the source it not really important. But it’s also important that you knowingly don’t affiliate yourself or an organization that you shouldn’t be affiliating with.
    I am sure there are enough of sources, organization and individuals to generate the desired funds without depending on some whom you wouldnt rather affiliate with.

    Bottom line is that every cent that you can garner is great because it goes for a great cause.

  17. Mark says

    I think that you cannot take money from places that you know derive their income from illegal sources. If you don’t know, that’s one thing. If you do ,that’s a completely different story.

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