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...

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...

JUDGE DOGGEDLY DETERMINES HELMSLEY'S INTENT: NO BARK, NO BITE

DATELINE: February 26, 2009, Chicago

 

Stephanie Strom of the New York Times reports today that what was a potentially interesting court case involving the late Leona Helmsley’s charitable trust came to a rather undramatic end in Judge Troy K.Weber’s Manhattan courtroom.  Not All of Helmsley’s Trust Has to Go to Dogs.  It had been widely reported that Helmsley’s will had left billions of dollars to a charitable trust that provided that the money would be used for animals.  Given Helmsley’s reputation as an...

A DISPASSIONATE LOOK AT THE LEGAL ISSUES FACING BRANDEIS UNIVERSITY

DATELINE: January 30, 2009, Chicago

Earlier this week, Brandeis University announced it was closing the Rose Art Museum.  The museum's renowned collection of contemporary art was to be sold, with the hope that the sale would produce hundreds of millions of funds that could be added to the university’s quasi-endowment.  One legal expert declared that the university had no idea of the size of the can of worms that it had opened when it announced the closing of the Rose.  The university has since backed away from the decision to sell the collection, but the university still contends that it will close the museum.  The question remains:  What will happen to the valuable collection, particularly given that the original proposal was percipitated by the university's financial crisis?

We alrady have received calls and e-mails about the decision from...

THE COMING REALIGNMENT WILL BE POETRY TO OUR EARS: LESSONS FOR INVESTMENT COMMITTEES

DATELINE: January 21, 2009, Chicago

Ian Wilhelm of the Chronicle of Philanthropy caught our eye earlier this week with an article about how the economy is impacting the Geraldine R. Dodge Foundation.  Investment Losses Force Foundation to Cancel Poetry Festival (Jan. 16, 2009).  Yes, another article on how the economy is screwing up a charity's well-intentioned plans.  The Dodge Foundation is focused on poetry.  We suspect that charities with that focus are few and far between.  We further suspect most are undercapitalized.  Not the Dodge Foundation.  It started 2008 with $305 million in assets, but ended it with...

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...

THE LOS ANGELES MUSEUM OF CONTEMPORARY ART: THE BOARD'S ROLE IN A RECESSION

DATELINE: November 25, 2008, Chicago

We have been following the reports that Los Angeles Museum of Contemporary Art is facing serious financial difficulties.  Edward Wyatt of the New York Times reported on November 20 that MOCA’s endowment has dropped to less than $10 million, which represents one of its lowest levels since MOCA was founded in 1979.  Endowment Drying Up, A Museum Seeks Help.  According to Wyatt, the museum has cut its budget by 10% and is closing more than half of its exhibition space for a six-month period.  The museum is rumored to be in merger talks with the Los Angeles County Museum of Art, according to an article appearing in the Los Angeles Times.  Suzanne Muchnic and Diane Haithman, Arts Leaders Rally Around MOCA, Nov. 21, 2008.  Philanthropist Eli Broad has even offered a $30 million grant, but is conditioning it on some sort of match.  Eli Broad, Saving MOCA: Philanthropist Eli Broad Says His Foundation Will Give $30 Million if Others Will Come Forward to Help, Los Angeles Times (Nov. 21, 2008).

Normally we wouldn’t expect art critics to have much to say about nonprofit governance, but Christopher Knight of the Los Angeles Times authored an open letter to MOCA’s board of trustees shortly after word of MOCA’s financial woes surfaced.  An Open Letter to MOCA’s Board of Trustees, Nov. 20, 2008.  For a guy who looks at paintings all day, he sure...

MISSISSIPPI SUPREME COURT OFFERS LESSON TO DONORS: THE VALUE OF GIFT-OVERS

DATELINE: November 25, 2008, Chicago

The Mississippi Supreme Court recently settled  a dispute between the Mississippi University for Women (University) and its alumnae association, the Mississippi University for Women Alumnae Association (AA).  The dispute grew out a mandate from the Mississippi State Institutions of Higher Learning (IHL) that all public universities enter into operating agreements with affiliated entities.  Alumni associations are considered to be affiliated for purposes of the mandate.

Under the agreement negotiated between the University and AA, the University had the right to appoint members to the committee that nominated individuals for AA board membership.  The president of the University did not...