Charity Governance

INDEXING INVESTMENT PORTFOLIOS IS A COMING TREND: SOMETIMES SIMPLER IS BETTER

DATELINE: June 23, 2009, Chicago

College, university, and other endowments certainly have taken a hit during the last year.  We all know the numbers—25% to 40% declines in value.  We all know the consequences—insufficient cash flows, inability to access principal due to lock-ups, possible UBIT as a result of borrowings, and shortfalls in program funding.

But what should really be bothering investment committees is the fact that...

WHO IS REALLY RUNNING THE NEW YORK CITY OPERA?

DATELINE: June 21, 2009, Chicago

Robin Pogrebin of the New York Times did a bang-up job this past week when she reported on the New York City Opera’s perilous financial condition.  City Opera Tries to Hold Off the Ultimate Finale (June 17, 2009).  Her in-depth article deserves to be read by everyone who is interested in nonprofit governance.  

Quite the Mess.  The New York City Opera is in a financial mess. Pogrebin reports that the company’s endowment has dropped from $57 million in 2003 to...

THERE IS NO FREE LUNCH: ART INSTITUTE PROPOSAL FOR FREE ADMISSION IS A MISTAKE

DATELINE: May 27, 2009, Chicago

Sandra Guy of the Chicago Sun-Times is reporting today that the Art Institute of Chicago is considering the elimination of its admission fee.  In Free, No Fee at the Art Institute?

We had the good fortune to visit the Art Institute’s new modern wing on opening day.  Admission was free, as it was for the next six days.  Admission to the second largest art museum in the country then was to return to $18 ($16 for city residents).  That number had been reduced from $20 following vocal objections to a raise in admission fees that was tied to the opening of the new wing.  

Now Art Institute Director James Cuno is proposing that admission be eliminated, restoring the pre-2006 status quo.  The Sun-Times reports that the board has been playing with the idea for the last six to eight months.  The plan would be for the Art Institute to raise $250 million in permanent endowment.  The income from the fund would then be used to fund free admission.

We are sure that many populists will applaud the proposal, but adoption of this proposal would be... 

NONPROFITS WITH FOREIGN BANK ACCOUNTS SHOULD FILE FBAR IF THEY DON’T WANT TO BE FUBAR

DATELINE:  May 10, 2009, Chicago

We just got back from the ABA Tax Section meeting in Washington, D.C. where we spent many hours ensconced deep in the bowels of the Hyatt Regency.  No air, no light.  What a way to spend two days.

We did hear a number of interesting presentations.  Most notably, three of the presentations covered something called FBAR.  Be forewarned, tax-exempt entities should be worried about FBAR, and sooner than latter.  The critical filing deadline, which is independent of the filing deadline for the Form 990, is...

STALIN'S COMMITTEE TO SAVE DEMOCRACY: THE INTERIM REPORT ON THE FUTURE OF THE ROSE MUSEUM COMMITTEE

DATELINE: May 5, 2009, Chicago

As reported earlier this week, we attended a panel discussion on Saturday featuring Michael Rush, the soon-to-be ex-director of Brandeis’s Rose Museum.  Rush’s contract expires next month and there are no plans to renew it, according to Rush and others.  David Itzkoff, Criticism of Interim Report on Brandeis Art Museum, N.Y. Times (May 4, 2009).

The panel discussion at Chicago’s Artropolis focused on the problems of the Rose and other museums in difficult economic times.  You may recall that on January 26 of this year Brandeis’s board of trustees announced their decision to close the Rose Museum and sell some 6,000 works of art with the hope of bringing in $350 million in needed cash.  The trustees' secretive deliberations resulted in a public uproar, forcing Brandeis to reverse course, at least in its public statements.  Plans for the sale have been put on hold and there are claims that the museum will remain open or be repositioned.  

Brandeis constituted a committee (the "Committee") to explore the future of the Rose, aptly named the Future of the Rose Committee.  On April 30, 2009, the Committee...

TALKING PAST THOSE WHO WERE ABSENT: A PANEL DISCUSSION ABOUT BRANDEIS’S ROSE MUSEUM

DATELINE: May 3, 2009, Chicago

Yesterday we attended Artropolis, the annual international art show, now held at Chicago’s Merchandise Mart.  As in past years, we came to see the art, but this year we were intrigued by one of the panel discussions.  Entitled Museums on the Line: Cutbacks, Closures and Opportunities, the panel included (i) Michael Rush, director of the Rose Museum of Art at Brandeis University; (ii) Anthony Hirschel, director of the Smart Museum at the University of Chicago; (iii) Mary Lucier, an American installation and video artist whose works have been exhibited at the San Francisco Museum of Modern Art (1995), the Los Angeles Museum of Contemporary Art (1988), Whitney Museum (1986), and many others.  Heather Pesanti, a curator at the Buffalo’s Albert-Knox Art Gallery, was an unscheduled but welcome addition to the panel.

The discussion was both fascinating and enlightening, but the panel’s composition was...

RECENT LEGISLATIVE PROPOSALS ARE A MISTAKE: AUDITS SERVE IMPORTANT FUNCTIONS FOR SMALL AND MID-SIZE NONPROFITS

DATELINE:  April 28, 2009, Chicago

We are big fans of the National Council of Nonprofits (NCP).  We particularly like their monthly newsletter, but we disagree with their apparent belief that raising the dollar threshold for nonprofit audits required by regulators is a good thing.  In its April Newsletter, NCP reports that Maryland Governor Martin O’Malley signed into law legislation...

A BAD BOY CLAUSE WON’T DO A BANKRUPT MUSUEM MUCH GOOD

DATELINE: April 3, 2009, Chicago

Stuart Pfeifer of the Los Angeles Times is reporting another sad story about a nonprofit that relied too heavily on a pledge that will most likely go unpaid.  Donor’s Legal Troubles May Force Museum into Bankruptcy.  The Children’s Museum of Los Angeles was relying on a $10 million pledge from one Bruce F. Friedman that he made last year.  The museum’s new facility was completed in 2007 so the pledge apparently was not for construction costs.  It appears that it was to be used to purchase exhibits and cover operating costs.

Unfortunately for the museum, the SEC recently filed a...

CHICAGO ALDERMAN EDWARD BURKE SHOULD GET REAL: HE’S IN A TIZZY OVER THE ART INSTITUTE’S NEW ADMISSION FEE

DATELINE: March 18, 2009, Chicago

Chicago Alderman Edward M. Burke, the head of the Chicago City Council’s Finance Committee, is in a populist tizzy.  Fran Spielman, If Museum Prices Go Up, Water Should Be Shut Off, Chicago Sun-Times (Mar. 18, 2009).  The Art Institute of Chicago is about to open its new wing—a major, major expansion that will have people from around the world coming to Chicago to see the architecture (Renzo Piano) and the collection.  As we have come to expect, when a museum opens a major, major new wing (264,000 square feet at a cost of $280 million), admission prices go up.  The Art Institute announced a week or so ago that the price would jump from the current $12 base rate...

THOU SHALL NOT INVEST AN ENDOWMENT’S ASSETS BASED ON LOCKER ROOM TALK: SENATOR GRASSLEY SPEAKS

DATELINE: March 12, 2009, Chicago

On Tuesday, Senator Charles Grassley, ranking member of the Senate Finance Committee, spoke at some sort of conference or event sponsored by a Washington, D.C. law firm.  His remarks are up on his Web site and they largely cover ground that Senator Grassley has sown before.  There, however, is...