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A Controversial Gift to St. Michael’s

Case Study on Ethical Decision Making

(PSPA 3002: Ethics in Public Leadership) St. Michael’s Hospital is a large, nonprofit health care facility located in an impoverished, high-crime neighborhood in the city of Metropolis. Most of the people served by St. Michael’s are low-income residents from the local area. Victims of violent crime seek urgent care in the Emergency Department (ED) each night. The hospital also sees a disproportionate number of pregnant women who cannot afford regular prenatal care. As a nonprofit hospital serving a poor and vulnerable population, St. Michael’s relies on charitable giving to help meet its budget needs. Government funding and patient fees never provide enough to meet hospital expenses. The hospital struggles every year just to keep its doors open, and has been unable to expand services in ways that hospital staff believe could better serve their clientele. For years, doctors and nurses have been pushing the idea of a free clinic that would provide prenatal care to local women, help prevent maternal health problems, and save the lives of mothers and their babies. Despite the appeal of this idea, fund-raising to start a clinic has not been successful. Things have changed since Mr. Wes Smith heard about the clinic idea. Mr. Smith, a prominent wealthy businessman in Metropolis, is also the good friend of two members of the St. Michael’s Board of Trustees, Rick Moynihan and Tom Johnston. Although Mr. Smith has been a regular donor to St. Michael’s, he has never given more than a few thousand dollars each year. When Mr. Johnston mentioned the idea of the prenatal clinic after church services one Sunday, Mr. Smith felt called upon to do something more. The very next day he phoned the St. Michael’s Development Office and offered to give $10 million to establish a free clinic. The development professional was so astounded that she promised to name the clinic in his honor. As word of the offer has spread throughout the hospital, not everyone is thrilled. Some people are overjoyed that this crucial need can finally be met. Others worry that accepting this donation is ethically problematic, and might cause problems for St. Michael’s once the gift is made public. The ethical concern with the gift is that Mr. Smith made his fortune as founder and chief executive officer (CEO) of the nation’s largest manufacturer of handguns, and he recently testified in Congress defending the constitutional right to bear arms. Those who object to Mr. Smith’s donation question the wisdom of accepting “gun money,” especially when the hospital deals daily with the deadly consequences of gun violence. Mr. Smith’s supporters counter that his gift is inspired solely by his heartfelt belief in giving all mothers and babies the chance for a healthy birth. They believe that since he made his money legally it should not matter what his company manufactures. Mr. Moynihan and Mr. Johnston are shocked about the objections to what they see as an incredibly generous offer from their friend. They point out that Mr. Smith has been giving money to the hospital for years without anybody raising an eyebrow. Additionally, they

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also have revealed that they both have been longtime investors in Mr. Smith’s gun company. Does this suggest that their own gifts to the hospital should be questioned? The debate over Mr. Smith’s offer is so heated that the Board of Trustees has called a special meeting to discuss ethical concerns and decide whether to accept the $10 million donation. As an ethics consultant, they have asked you to give them some advice on the ethical issues and decision-making steps they should use to consider the donation.