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| Best Practices: Philanthropy |
Saving a Spendthrift
Matthew Schuerman
08/01/2005
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Indeed,
trustees promised they would keep donations in a trust and not touch the money
until they were certain they could afford the new season. Donors were shown the
season’s lineup—solid, no-frills repertory fare that would also sell tickets—and
the budget, which promised a $100,000 surplus by the end of the year. “We were
completely transparent with everybody,” Aebig says.
TOP VIEW
Cultural institutions around the country, hit hard in the last boom-and-bust
cycle, are actively searching for philanthropic saviors. In most cases, a
nonprofit on the brink of disaster needs a strategic makeover along with the
bailout. |
The theater’s trustees
have emerged from the crisis chastened and full of renewed purpose. Now each
trustee is expected to host one evening a season for which he or she invites a
group of 40 to 60 colleagues to a play, arranges a reception beforehand and
gives the guests a tour of the place at intermission. John Siegler, who
succeeded Janeway as president at the end of her term in January, invites the
local Princeton alumni club, of which he is also president. At least a handful
of these folks, it is hoped, will return for another play or as subscribers or,
even better, as patrons.
“The big push, when I interview and recruit for the
board, is, ‘You have to work here if you want to be on the board, but you have
to work so it’s fun,’ ” says Siegler, a managing partner at Capital Run, a
boutique investment bank in Seattle. “I think that most people involved in the
theater in the old days probably knew each other anyway. They grew up with each
other. It was a kind of club. Now it’s all about bringing new people
in.”
ACT’s experience is not unusual. Chances are, unless fraud or
embezzlement is involved, any financial misstep of this magnitude points to the
board. Perhaps they did not demand quarterly financial statements on paper, or
perhaps they did not understand their responsibilities to raise money. Unpaid
board members are often dozing at the helm when a nonprofit founders on
financial shoals.
Charities are commonly vexed by finding board members with
just the right mix of qualities: ample time to devote to the board; a passion
strong enough for the institution’s mission to make one a good ambassador and
willing donor; and a business sense shrewd enough to look out for the
institution’s long-term interests. ACT does not consider itself a turnaround
story yet, but it has overcome its biggest obstacle—denial—and brought most of
its donors along.
Conditional Angel
The Taylor family’s rescue
of the St. Louis Symphony Orchestra has  become almost legendary, but it was not
without demands that the organization get its financial house in order. For
three decades the board had dipped into what little endowment the orchestra had
in order to balance the budget. Finally, five years ago, an outside consultant,
Henry Fogel, told the board it had to change its ways. So trustees went out
looking for a “transformational gift” to establish an endowment large enough
that its proceeds could sufficiently supplement annual giving and ticket sales.
The Taylors came through with a grant that would have to be matched with
other contributions. They had not had any particularly strong ties to the
symphony—they were not even season ticket holders. But Virginia Weldon, the
orchestra’s chair at the time, made the pitch to Jack’s son, Andy, whom she knew
from having served together on a corporate board, and over the following months
the idea germinated and finally flowered.
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