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A lot has been written on whether donations of tainted money should be accepted. The money is tainted either because it is ill-gotten or because the donor is ethically challenged (e.g., sexual predator, history of illegal activities, etc.). Agreement is not universal. I would like to find a halachic source with clear guidance. In particular, answers to:

  1. If the donated money saves lives (hospitals, medical research, etc.), should it be automatically accepted?

  2. If the donated money does not save lives (synagogues, yeshivot, etc.), should it be returned or unilaterally redirected to a purpose that saves lives?

  3. If the money must be returned, should it be returned to the donor, to its rightful owners if they can be identified, or to the authorities?

  4. Shouldn't the donor be allowed to perform the mitzvah of tzedakah, with or without teshuvah?

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    Rb Moshe Feinstein implies that if accepting the money implies that you agree with either the ill gotten manner in which the money was earned or with the anti-Torah behaviour of the donor then it is assur to accept this money because of the issur of chanuphah (flattery). – The GRAPKE May 5 at 12:05
  • Can you clarify what you're looking for? You write that "A lot has been written" about this. Obviously "Agreement is not universal", it rarely is in Judaism, so what do you expect in an answer? Presumably, each authority would say that their writings are correct and should be followed. – Salmononius2 May 5 at 13:13
  • @TheGRAPKE Source? – IsraelReader May 5 at 13:28
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    @IsraelReader See שו"ת אגרות משה או"ח ב' סימן נ"א – The GRAPKE May 5 at 14:03
  • @TheGRAPKE Thank you. My understanding of R' Moshe’s words, is that if you don’t explicitly condone his earning money in a non-kosher manner, and you also don't mention his anti-Torah behavior (ex. merely saying that he's a very generous person, and his charity is very helpful to the community), then there is no transgression of "Chanufah" involved here. – IsraelReader May 5 at 15:05
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R Shimon Taub in The laws of tzedakah and maaser addresses your first question

If a Jew who deliberately transgresses major mitzvot (e.g., Shabbos) wants to give tzedakah to poor people, one may accept his donation. It is questionable if tzedakah may be accepted from such a Jew for a shul but it has become a custom to do so for a shul or yeshiva.

Based on that, the answers to your first two questions is that one can accept the money.

Regarding your third question, R Ephraim Zalman Galinski in his book Right on the money, pp. 192ff discusses donations from a thief and brings the SA CM 369:4 (his translation)

People who are known to be thieves, and all of their monies are stolen monies, etc... one may not benefit from them.

R Galinski explains that, if funds were received from an individual who stole them, as long as the original owners never gave up hope of recovering their money, it is forbidden to use these donations [and they have to return the money]. Of course, it is possible the thief might have other financial resources coming from honest activities which could provide a leniency with regard to institutions who received donations from him.

Since we see above that, in many cases, the money can be accepted, the fourth question becomes less relevant.

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  • Thanks! On question 3, you "have to return the money". My question was: to whom? The donor? The wronged individuals? The authorities? Also, question 4 is relevant in cases where you "may not" accept the money. – Maurice Mizrahi May 5 at 16:54
  • If the money is stolen, it follows the laws of lost and found. If you find an object and can't identify the owner, you announce the loss, wait for the owner to identify the loss and keep the money until someone comes. If the money has no simanim, e.g., if the sum is not in itself significant, or if you believe the owner has given up finding it, you can use it. So as you write, you have to return it to the owners if they can be rightfully identified – mbloch May 5 at 17:57
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In Egypt a case was discussed about donations from unsavory sources. In the end Moreinu Shim'on ruled that they could accept donations even for sifrei torot as long as you remove potential stumbling blocks from the donations, such as not allowing names to be inscribed on objects that may remind others of their sins.

"R. Raphael Aaron ben Shimon, Nehar Mitzrayim (Alexandria, 1908), vol. 1, p. 12a, discusses a case where not only did the prostitute donate a parochet, but she also inscribed her name into it in golden letters. As R. Raphael notes, this is especially problematic since if allowed then people praying in synagogue would see her name staring down upon them and this would invariably lead to improper thoughts. (He adds that this particular prostitute had been with a lot of the young Jewish men.) Therefore, he ruled that the parochet could not be used and any gifts from prostitutes to the synagogue could not have their names on it. He also mentions a prostitute who donated a sefer Torah to the synagogue (!), and this was accepted on the condition that her name not appear on it.."

Source: https://seforimblog.com/2014/08/the-pew-report-and-orthodox-community/

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