GIVING GREEN: Marijuana is legal in Colorado, but not in the eyes of the federal government. Should Colorado nonprofits take contributions from cannabis companies?

Author:Siebrase, Jamie
Position:NONPROFIT REPORT
 
FREE EXCERPT

According to the Colorado Nonprofit Association's 2016 year-end survey, only 6 percent of nonprofits polled had accepted contributions from cannabis companies--but two-thirds of those organizations said they'd consider accepting a donation in 201 7.

"It's a time of shifting norms," says Renny Fagan, CEO of the Colorado Nonprofit Association. As the billion-dollar marijuana industry matures into a mainstream enterprise, cannabis business owners are showing Colorado they're interested in social responsibility, too.

And Colorado's nonprofits could use the cash. The state is home to more than 20,000 public charities, all competing for limited funds. So why aren't nonprofits jumping at the opportunity to go green?

There's one bright-line rule to consider first: "If a nonprofit receives federal funds through a contract or grant, that contract or grant probably prohibits a violation of federal law as a condition of receiving funds," Fagan says, noting that federally funded nonprofits should not accept marijuana money.

But plenty of nonprofits don't run on federal dollars--and for these organizations, the decision to accept pot company donations requires a multifaceted assessment.

"If you take this money, there are two vulnerabilities," says attorney Tom Downey, shareholder at Ireland Stapleton. He points first to criminal law, which you're technically violating if you promote a marijuana retailer, by aiding and abetting in the commission of a crime. On the civil side, nonprofits have a license--a 501(c)(3)--giving them authority to treat money differently than a corporation. That status can be revoked for a number of reasons--including committing a federal crime.

Don't panic yet. As Downey puts it, "The legal line never ends, but the enforcement line is drawn wherever the enforcer chooses to draw it." The federal government has followed a policy of non-enforcement for the past eight years, stating clearly that it won't enforce federal marijuana laws against nonprofits as long as the nonprofits are complying with state marijuana laws.

A policy isn't law, though, and it can be changed anytime. "We think this will be the same under the current administration, but of course there is no certainty," Downey says, adding that the risks of criminal prosecution and 501(c)(3) revocation are "pretty remote."

The analysis for nonprofits that aren't federally funded, then, is wrapped up in mission. "It really comes down to how a gift fits with their donor base...

To continue reading

FREE SIGN UP