Congratulations, you have come to a point where you need to decide what matters to you more - your beliefs or money. If your department accepted funding from someone you disagree with, then you are always free to quit in protest. This way, you will not have to accept money from someone who you feel is abhorrent, and you will act in accordance with your beliefs.
You can donate an amount commensurate with the donor's contribution to your salary (a rough computation would be the donor's contribution divided by the department's overall budget), which is in my opinion the most noble option.
You can also advocate with your department chair, dean, and provost to reject the donation. This is very unlikely to succeed (since administrators love money more than almost anything). You can campaign with faculty, staff and students, to get them to pressure the administration to reject the donation. This would also probably come at a personal cost.
Simply removing the donor's name is an empty gesture, unlikely to sway anyone and do nothing except make you feel a bit better about "doing something" or "sticking it to the man". It's also, as @Ben suggests, a bit hypocritical - you are accepting the donor's money after all (either directly or indirectly).
As researchers we often need to decide whether to accept funding from X. Unfortunately, having enough money to fund universities often correlates with some skeletons in one's closet. You can choose to accept this as a reality of research, and try and do the best things you can with the funding you were given. You can also choose to reject it (I, for one, will never accept funding from certain financial institutions that openly support terrorist activities/drug dealers; some people don't accept DoD/DARPA funding), but understand that it will come at a cost.
Besides being hypocritical and childish, ignoring funding sources most likely violates funding acknowledgments rules/department regulations. For example, when writing official letters on behalf of the university, such as reference letters, you will need to do so using the department's letterhead, and changing it is not allowed.