Charity Governance

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...

CAN’T EVEN PREDICT THE FUTURE FIVE YEARS OUT: SALVATION ARMY SHOULD HAVE GONE TO COURT

DATELINE: June 15, 2009, Chicago

Over the years, we have examined a number of restricted gifts.  While we always acknowledge the right of donors to make the gifts, we also have always questioned whether such gifts are wise.  Donors are lousy at predicting the future, as we have seen time and again.  Stephanie Strom offers up Exhibit A in Plan for Dozens of Salvation Army Centers Falters (June 14, 2009).

Joan Kroc, the widow of Ray, the founder of McDonald’s, left $1.8 billion to the Salvation Army at her death in 2003.  The Salvation was instructed to go on a spending and building spree.  Kroc required the Salvation Army to build...

HOW DELICIOUS: A LAWSUIT AGAINST THE RONALD REAGAN PRESIDENTIAL FOUNDATION OVER DONOR INTENT

DATELINE: May 4, 2009, Chicago

We try not to side with conservatives or liberals in this blog.  We just call them as we see them.  We, however, have been annoyed by the conservative movement’s attempt to turn donor intent into a left-right issue.   We suspect that the conservatives have adopted that position because they believe most colleges and universities have a decidedly liberal bent.  The result has been repeated assertions that colleges and universities knowingly violate donor intent, with the implication being that they do so to pursue their liberal agendas.  At least that is the subtext of much of what we have read.

In our view, the issue has always been about the straightjacket that donors put nonprofits in when they try to tell them how to run the institution and then die.  As time passes, the institution is faced with legal restrictions that by any objective measure no longer make sense because circumstances have changed in ways that donors never foresaw.  We don’t have a solution to the problem, but we recognize it as an inevitable problem that cuts across the political and philosophical spectrum.  That is why we find the lawsuit filed by Richard Sills in the New York State lower court on November 25, 2008 both...

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... 

BRANDEIS UNIVERSITY IS ON THE RIGHT SIDE OF DISPUTE WITH DONOR’S DESCENDANT

DATELINE: May 12, 2009, Chicago

One thing is for sure, Brandies general counsel Judith R. Sizer is certainly earning her salary this year.  Sumner Kalman, the great nephew of Julius Kalman, has filed suit in Suffolk County probate court in Boston claiming that Brandeis is not honoring the terms of a gift made by Julius Kalman circa 1956.  John Hechinger, Brandeis Plan to Raze Building Sparks Donor Suit, Wall Street Journal (May 13, 2009). At the time, Brandeis built a science building and named it after Mr. Kalman, who bequeathed the funds for the building.

As happens with the passage of time, the building...

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 RECURRING PROBLEM: DONOR ALLEGEDLY FAILS TO SATISFY PLEDGE IN TOUGH ECONOMY

DATELINE:  April 27, 2009, Chicago

We certainly have enjoyed many events at Jazz at Lincoln Center (JLC), including  Marcus Roberts multiple times (at Dizzy’s and the Allen Room), a Gil Evans tribute in the concert hall, and most recently Roseanne Cash and Rodney Crowell in the Allen Room.  You certainly can’t beat the views and the music ain’t bad either, which is why we were sad to read in today’s New York Post that JLC’s board is  suing a member of its board...

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...

MADOFF REPERCUSSIONS: A DONOR SPEAKS TO YESHIVA UNIVERSITY

DATELINE: January 8, 2008, Chicago

The Madoff scandal will have many repercussions.  One is reflected in the letter reproduced below from Andrew L. Sole,  a managing member of Esopus Creek Advisers, a hedge fund.  Mr. Sole is an alum of Benjamin N. Cardozo School of Law.  Cardozo is part of Yeshiva University.  

In his letter, Sole calls for the resignation of Yeshiva's board of trustee. Sole is not your ordinary alum.  According to the letter he made a multi-year...

THE ROBERTSON FAMILY TAKES A PAGE OUT OF HILLARY CLINTON’S PLAYBOOK

DATELINE: December 11, 2008, New York City

When we learned yesterday from CNBC that the Robertson Family lawsuit against Princeton University had settled, we jumped on a plane to the East Coast so that we could bask in the zeitgeist.  Our conclusion after learning the terms of the settlement:  The Robertson Family took a page out of Hillary Clinton’s playbook.  First, spend a fortune kicking the...