Not Everyone Ready to Welcome Billionaire Back to Philanthropy Circles

The “Come Fly with Me” charity ball is an opulent affair held annually for a different cause.

This time around, the black-tie event at the Hotel del Coronado raised money for the Chadwick Center at Rady Children’s Hospital. The center advocates for kids and their families who’ve experienced abuse, neglect and trauma.

Sitting at a table near the front was T. Denny Sanford, the billionaire implicated in a child pornography probe in 2020.

Less than a year after South Dakota law enforcement concluded its investigation without filing charges, Sanford is back in the local philanthropic spotlight. Some organizations distanced themselves from him while that investigation was still open. The fallout was so intense, National University put its plan to rename the entire institution in his honor on hold.

Other groups are back to publicly celebrating his largesse.

Sanford, who owns a home in La Jolla Shores, will receive UC San Diego’s Lifetime Legacy Award in March for his many donations. In 2022 alone, Sanford pledged $150 million for a new stem cell institute. It builds on previous gifts to establish “new standards of care for a better, healthier world,” said Chancellor Pradeep K. Khosla in a statement.

Once again, scientific institutions are lining up for Sanford’s money. Another recent $70 million donation of his is underwriting a hiring spree at the Sanford Burnham Prebys Medical Discovery Institute for the study of cancer, neurodegenerative disease and computational biology.

“We are very excited for what the future holds — and eager to make contributions in biomedical research that will improve human health,” said Susan Gammon, the institute’s director of communications, in a statement.

Even though South Dakota prosecutors declined to charge Sanford, not everyone was thrilled with his appearance at the charity ball on Feb. 4.

In an email obtained by Voice of San Diego, one of the organizers lamented that Sanford had been forced upon them after executives at the hospital foundation bought him a ticket. The organizer described it as “a point of contention and unbelievable friction,” and even attempted to limit Sanford’s exposure by blocking his access to a VIP reception room the night of the event.

Another guest and donor, Natalie Laub, a physician at the Chadwick Center who specializes in child abuse and teaches at UC San Diego, said her entire table was disturbed by Sanford’s presence and some even walked out. She struggled afterwards with what to tell fellow guests and donors in search of an explanation.

“What would it look like to a victim of abuse?” she asked.

Laub’s husband, Andy, a documentary filmmaker, was also a guest at the charity ball. He described the mood of the evening as weird and the scene as surreal.

Sanford’s relationship with the hospital goes back to at least 2010, when the nonprofit Sanford Health announced a partnership to open a children’s clinic in Oceanside. Sanford is worth an estimated $2 to $3 billion, and he’s pledged to make Sanford Health the primary beneficiary of his estate.

The Chadwick Center executive director did not return requests for comment. Sanford could not be reached for an interview by phone and email and through one of his attorneys. No one answered the door at his La Jolla home in late February.

“Mr. Sanford has regularly attended past Charity Balls and is a long-standing advocate for Rady Children’s,” Ben Metcalf, hospital communications manager, wrote in an email.

The source of Sanford’s income has also been a subject of debate for many years and looms to this day in Minnesota, where he was born. The 87-year-old’s fortune comes from his early construction and chemical businesses, and later his control of a bank specializing in high-interest credit cards marketed to people with bad credit — what some consumer advocates contend is a notch above predatory payday loans.

Where to draw the line is a central tension in the world of philanthropy, and one that nonprofits weigh against their need to raise money and mission to serve as many people as possible. That’s why some have argued that, while the decision to accept a gift ultimately rests at the top, organizations ought to consult with their stakeholders to avoid undermining their own values.

In 2016, Sanford told the Associated Press he wanted his wealth to have a positive impact on children in particular because his own childhood had been rough. His donations to the San Diego Zoo helped build the Denny Sanford Wildlife Explorers Basecamp on the site of the former Children’s Zoo.

Though he earned a national profile donating to causes and political campaigns, a series of ProPublica reports starting in 2020 revealed that South Dakota’s Division of Criminal Investigation had obtained search warrants for Sanford’s email, phone and internet data, and referred a possible child pornography case to federal authorities.

Sanford’s defense, as put forth in court, is that someone else hacked and used his email account. The Argus Leader in Sioux Falls also reported that the probe had expanded to other states, including California and Arizona, where Sanford owned homes.

Beyond that, little is known about the investigation other than that it began with a tip from the National Center for Missing & Exploited Children. When closing the case in May 2022, a South Dakota deputy attorney general told a judge “there are no prosecutable offenses” within his jurisdiction.

One of Sanford’s lawyers at that time, Marty Jackley, is now South Dakota’s attorney general. He previously served in that role from 2009 to 2019 and ran unopposed in November 2022. He assumed office again in January.

A spokesperson for the U.S. Department of Justice declined to comment on whether federal authorities are investigating.

Sanford, in the meantime, has fought the release of search warrant affidavits establishing probable cause for the state’s investigation. Those documents remain under seal until Sanford exhausts his legal remedies. Last year, his legal team petitioned the South Dakota Supreme Court to stop the affidavits from becoming public.