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...

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... 

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...

YESHIVA UNIVERSITY GETS RELIGION

DATELINE: April 14, 2009, Chicago

On January 1, 2009, Janet Frankston Lorin of Bloomberg reported that Ira M. Millstein, the corporate governance guru from Weil, Gotshal, advised Yeshiva University with respect to conflicts of interest and investing with members of the university’s board of trustees.  Millstein Letter Helped Keep Yeshiva Money on Path to Madoff.  Bloombergclaimed to have seen a letter from Millstein in which he said that Yeshiva had “followed procedures adequate to prevent either the appearance or the reality of a conflict of interest.”  According to Bloomberg, this cleared the way for the fateful investment in J. Ezra Merkin’s fund that invested its funds with Bernie Madoff.  Merkin served on Yeshiva’s investment committee.  In his letter, Millstein reportedly said, “There is no reason why the board or its committees should institute a blanket rule prohibiting members (or major donors) from doing business with Yeshiva.”  We previously pointed out that there are plenty of reasons for a blanket prohibition.

Another Wall Street corporate law firm, Sullivan & Cromwell, have now given their own verdict on Millstein’s advice.  As is typical, Sullivan & Cromwell was retained following the revelation that Yeshiva University lost somewhere around $110 million in the Madoff scandal—cash-out-of-pocket was somewhere around $14 million.  There charge was to develop governance policies that met the gold standard.  Sometime around the end of March, the Yeshiva board of trustees adopted a new conflicts-of-interest policy which was developed with the assistance of Sullivan & Cromwell.  Noach Lerman, Board of Trustees Adopts New Rules to Limit Conflict of Interests, Yeshiva Commentator (April 1, 2009).  The policy...

FINALLY

DATELINE: April 5, 2009, Chicago

Over the last eight months we have watched closely the developments that keep rocking our financial system and Corporate America.  We have been fascinated by the one-sided debate over executive compensation.  We were particularly impressed by the letter in the New York Times from Jake DeSantis, an AIG executive vice-president, who tendered his resignation and committed to give his bonus to charity.  It wasn’t the gesture toward charity that impressed us.  It was the fact that...

NONPROFIT PRESIDENT MAY HAVE STUCK THE PROVERBIAL FORK INTO SEVERAL BOARD MEMBERS BEFORE THEY WERE COMPLETELY DONE

DATELINE: February 24, 2009, Chicago

I heard how you was kickin' up some capers
When I was off in Kansas City Mo.
I heard some things you couldn't print in papers
From fellers who been talkin' like they know!
       All Er Nuthin' from Oklahoma, Rogers and Hammerstein

Well there is one big difference between the Oklahoma judiciary and New Jersey’s judiciary.  Years passed and $80 million in legal fees and other costs were incurred to resolve the Robertson Family dispute with Princeton University.  In Oklahoma, it takes about a...

FEED THE CHILDREN, NOT THE LAWYERS AND EGOS

DATELINE: February 23, 2009, Chicago

Nolan Clay of the Oklahoman reported last week that there is a nasty dispute brewing over control of Feed the Children, an Oklahoma-based charity that raised close to $1 billion in its 2007 fiscal year.  Its founder, Larry Jones and its board chairman, Dwight Powers replaced five of the board’s members in December 2008.  ‘Feed the Children’ Fight Brews (Feb. 21, 2009).  The directors were replaced by five prominent pastors, according to a short statement released by the attorney for Jones or Feed the Children.  It is not clear  from the details reported in the story whether the attorney represents Jones or Feed the Children.

The ousted directors contend that their removal violated...

SLUSH FUNDS: KEEP MONEY AWAY FROM CHARITIES CONTROLLED BY POLITICIANS AND THEIR CRONIES

DATELINE: February 12, 2009, Chicago

Yesterday we heard a local Chicago radio personality claim that other states and cities don’t have anywhere near the level of political corruption as Illinois and Chicago.  As Chicagoans who have watched how business is done in Chicago and Illinois during the last fifteen years, we understand his point.  You may have seen Gov Blago on the View or Letterman, but you have no idea how deep the corruption runs around here.  The Chicago Sun-Times is the paper of record when it comes to chronicling the investigations and arrests.  The Sun-Times regularly does full-page spreads mapping the connections between the parties.  Yet, Roe Conn, the afternoon drive-time talker, is wrong.  There is plenty of corruption to go around.  Detroit, Newark, Baltimore, New York, San Diego, Philadelphia, and other major Americans are not immune, as recent headlines have demonstrated.  Our attention was drawn to Philadelphia with the trial of Vincent Fumo now in full bloom. 

We’ve been following Fumo’s shenanigans for years.  We even have a Google alert set for him.  We seem to receive an alert every day.  You know the former Pennsylvania State Senator is in trouble.  Prosecutors have waited at least five years, but this week they got their opportunity to...