The following is a reprint of an article that appeared in The Podium, the e-newsletter of Symphony Services International on 5 December 2011. I was living in the South at the time.
I asked one Chair why he donates. Charles
Metcalf is chair of Opera New Jersey, which is based in the beautiful university
town of Princeton (once home to Thomas Mann and Albert Einstein), nestled
between the larger cities of New York and Philadelphia.
You
have only to walk a few blocks in many places in the US to get a sense of the
scale of philanthropy here. Just pick a city. In Charleston, for example,
within a five-minute walk, you can pass the Karpeles Manuscript Museum, Charles
P. Darby Children’s Research Center, and Stiles and Virginia Harper Student
Services Center...In Savannah, you can stand inside the Richard and Judy
Eckburg Atrium, the impressive entranceway to the Jepson Center, one of the Telfair
Museums of Art. Philanthropy is pervasive. Sponsorship also is part of life. Is
everything sponsored? The ‘please turn off your cellphone’ message before the
curtain at San Diego Opera is sponsored by the Sycuan Casino, that is: a
business run by a Native American tribe, the Sycuan Band of the Kumeyaay
Nation.
 |
| The Karpeles Manuscript Museum, Charleston |
But
I’m going to focus here on private giving, which is on the rise and about to
take over from corporations as the biggest source of donation. In 2010,
according to Giving USA’s Annual
Report, 81% of US giving came from individuals, 14% from foundations. In
Australia also, as Brook Turner reported in The
Australian Financial Review (20 June 2011): ‘Individuals and foundations
are poised to overtake companies as the biggest supporters of major arts companies...’
With
businessman Harold Mitchell commissioned by Australia’s Federal Government to review private sector support for the arts in April 2011, it may be interesting to consider how philanthropy works in the United
States. They’ve been doing it a lot longer and on a much larger scale than
Australia. Are there any lessons for Australians in their experience?
In
many respects, Australia and the US have similar ideas about charity. Our ideas
of charitable behaviour stem from similar notions of social improvement. In both
countries, funnily enough, our definitions of charitable activities can be
referred back to a 1601 parliamentary statute brought in to redress ‘the Misemployment of Landes Goodes and Stockes of Money heretofore given
to Charitable Uses.’ Back then those charitable uses included ‘Releife of aged
impotent and poore people, ...Schooles of Learninge...’, even ‘Mariages of
poore Maides’. And
both Australia and the US believe you should get a tax deduction for a
charitable gift. Over the years both countries have refined what is
a charity for tax-deductible purposes, what in the US is termed a 501(c)(3)
company after the subsection of the US tax code that defines recognised
recipients.
It’s always been easy to include organisations that
deal in health and welfare in such lists. It has often been harder to include
the arts. But the
US list is more generous. It includes such organisations as: mutual ditch or irrigation companies ‘if 85 percent or more of
the income consists of amounts collected from members for the sole purpose of
meeting losses and expenses’ or ‘cemetery companies...’ - and it has
long specified literary pursuits for example.
The other big differences are that in the US you can also earn income
from your gift - and recognition is okay.
Perhaps
Americans have a broader list of tax-deductible charities because they want to encourage
individuals rather than the federal government to support social endeavour.
Australia, of course, is different. One of the most intriguing conversations I’ve
had in the US was with a Tea Party supporter who said he would move to
Australia ‘if this dang country keeps going the way it’s going.’ I had to tell
him that while he enjoyed his time in Sydney and the Barrier Reef, most Australians
tolerate, welcome, even seek a higher level of government assistance.
Or,
well, did once. Private support is on the rise, and is bound to be a greater
source of funding in the future. Is it safe to rely on yet? According to
Valerie Wilder, in The Australian Ballet’s public submission to the Mitchell
Report: ‘If the recent flurry of press articles on philanthropy in Australia is
to be believed, high net worth individuals in this country are not yet
contributing at anywhere near capacity’.
Perhaps
it is time to offer some of the benefits that US companies are allowed to offer
- and advertise. Check out the Met’s website. With an
organisation like the Metropolitan Opera you can be acknowledged, earn income
and receive a tax deduction at the same time. It’s all explained to you there,
on a webpage. Perhaps a Charitable Lead Trust is what you want. As the Met’s
site says:
Assets are placed into a charitable
lead trust and the trust makes annual payments to the Metropolitan Opera for a specified term of years, often
10 to 15. After that, the assets are
returned either to you or to your individual beneficiaries. These trusts are an excellent way to transfer appreciating
property (preferably income-producing) to beneficiaries
while supporting the Metropolitan Opera. They are a particularly effective means of reducing, or possibly
eliminating, the estate and/or gift tax on the eventual
transfer of these assets to your beneficiaries...
Or,
is a Charitable Remainder Trust more your caper? You can click on the Gift
Calculator. If you want simply to give, the Met’s site will tell you exactly
what you get for your nominated amount, including assistance with ticket
exchanges and seating improvements, donor recognition, and attendance at
exclusive receptions, general rehearsals, closed rehearsals and even private
coaching sessions with singers. As well, the Met’s website will tell you what
portion of your gift, given these benefits, is not available for a Tax
deduction.
In
2010, the Metropolitan Opera broke fundraising records. They made $182 million in
contributions, a 50% increase on the previous year. It could be credited to the
broadening of their donor base through their live broadcasts into cinemas
around the country, or individuals ‘stepping up to the plate’. I wonder if it
also has something to do with the clarity of their website.
It
does seem that philanthropic giving in the US is not as altruistic as in
Australia (although there are donors who eschew benefits), but with their
ability to attract more people US organisations have more potential to create a
community around their artform. If you give in the US you also have a chance to
make your mark as a stakeholder. At a certain level of giving, you gain entry
to the board. One organisation quoted me $5000 as the price of board
membership. I immediately thought, ‘I could become a player here.’
--
Of
course it’s all hard work. Fundraising
is more than half of what a US CEO does. The million dollar donors want to talk
to him or her. And then there are the huge Development departments, the
engine rooms of the organisation, ‘where the energy comes from,’ says Anne
Midgette, music critic for The Washington
Post, ‘where the income of these organisations is pursued with a lot of
muscle.’
Some
orchestras in the US, such as the Boston Symphony Orchestra, are wholly reliant
on themselves to raise their funds. How does the pressure fall on the
individual employee? Barbara Hanson is Major Gifts Officer at the
Boston Symphony Orchestra, with specific responsibility for Tanglewood, the
BSO’s summer home in western Massachusetts.
 |
| Seiji Ozawa Hall, at Tanglewood |
A
big part of looking after donors is making them feel welcome. Says Hanson, ‘All
of our overseers and our trustees have a staff person who is their contact. I
have my own list. Basically “I’m your girl”. If these donors have ticketing or
other requests, for example, ‘I don’t handle their requests myself. I can’t get
in and print out a ticket, but I will go into the box office and sit with the
box office manager because they will leave their requests with me and that sort
of thing. And I get to know people very well. It’s so unbelievably stimulating
and exhausting - and exciting.’
Part
of looking after donors for Hanson involves travel. A great many Tanglewood
supporters come from New York or northern New Jersey (about two hours’ drive
away). ‘In fact, I go to New York for a short period of time every month. I go
to Florida in March usually for about a week and see supporters who are
wintering down there. I mean lunches and dinners with people, or coffee, or
just catch up. We work around an event or two. The Pops goes down every other
year and we go with them and see folks and just maintain contact. They might
ask, “How’s the season going in Boston? Is anything new coming up for
Tanglewood?’ I fill them in if they ask about specific things. And then the
same goes for New York. It’s having a presence because certainly they don’t
forget about Tanglewood in the winter time but it’s very different once they go
back to those lives because also a lot of our supporters are Metropolitan Opera
supporters.’
So
it’s getting to know your own list of donors and trustees. But how do you,
tactfully, work out their giving potential?
‘Well
we have a research person on staff, so we try and find out someone’s capacities
because, you know, it’s funny. I’ve never asked anyone for a million dollars
but there are people who if you asked them for a million they might just keel
over and land on the floor. And there are others who, even if they didn’t have
that capacity, would be very flattered you would think that they did. So that’s
where the relationships come in, getting to know people, finding out how much
an institution means to them. You want to know how to approach someone when
you’re going to ask them for a big gift because you don’t want to leave money
on the table and you don’t want to insult someone. As I’ve been told from the
very beginning, when you’re talking to someone about a gift it should never
come as a surprise.’
And,
says Mi Ryung Roman, Director of Development at New York-based Orpheus Chamber
Orchestra, ‘Every board member has an expectation that they’re either going to
give or find people - “give or get”. Your most important relationship is with the
board and knowing who they are and what they do.’
--
But
why do people give? Deborah R. Card, Executive Director of the Seattle
Symphony, once said, ‘People almost never give just because they have the spare
cash and they need a place to stash it’. There is a range of reasons for
philanthropic giving. For some, it’s the benefits. ‘At Tanglewood,’ says
Hanson, ‘we give the benefit of parking and ticketing.’ But, she concedes,
there are some who decline benefits. They don’t come to Donor Dinners, for
example. Orpheus Chamber Orchestra offers ‘side by sides’. ‘We can offer our
top donors the chance to sit onstage next to a musician during a rehearsal, so
they can be in it and feel what it’s like,’ says Mi Ryung Roman. ‘Orpheus has
the advantage of offering unique opportunities, being a chamber orchestra.’
A
lot of the motivation can be summarised as ‘the experience of feeling
involved’. So, do donors need the tax breaks? Yes, says music critic, Anne
Midgette, pointing out that ‘tax breaks are the state subsidy in America’.
‘I
think without a tax break people would be less ready to give $10 million. It’s
hard to say because I can’t speak for the super-rich. But I also think
motivations are never one-sided. There’s always a complex network of: because
your name goes on the building, because it feels good to be a patron to your
community, because you get a tax break. You know - win-win. The tax break is
not the major reason. It is a reason.
It is part of the constellation of perks that make people happy to do it.’
 |
| Production shot from Opera New Jersey's 2010 production of Carmen. Photograph: Jeff Reader |
‘I
basically give some kind of donation to any arts organisation where I’m a
regular subscriber,’ he says. His General Director, Richard Russell,
interjects: ‘One board member at an organisation I used to work for said to me
they came to the board because they were interested intellectually about learning
how an arts company runs. That was something they wanted to do in their
retirement. There’s a social caché of being on the board of Metropolitan Opera
that we can’t duplicate here, but luckily we have board members who are
committed to seeing opera in this area’.
People
with enough money to give and the wherewithal to make it work for them - I
could imagine a great generative potential for an organisation embracing
knowledgeable people who know where to place their money. But what about the
dominant personality?
Charles
Metcalf: ‘There’s a sense in which you don’t want to be a one-dominant donor
place. It can get a bit despotic. But sometimes it’s a dominant donor,
sometimes it’s someone who’s been the director for 35 years.’ He and Richard
chuckle. Richard explains, ‘There’s
a great interest in Gilbert and Sullivan in the Princeton area and Chuck
doesn’t have a great love for that work.’ And this time Metcalf interjects:
‘But I support it.’
What
about the people who just have ‘spare cash’? Anne Midgette offers a cautionary
tale about a donor she spoke to some years ago. ‘I asked her, “What conductors
do you like?” And she said, “Oh honestly, you know to me it’s all just
beautiful music.” And I thought, “It’s so much like a function of a social
place.” I mean, that’s what orchestras have to worry about. The next generation
coming up does care about what kind
of music they’re hearing.’
Which
must mean it’s going to become harder to extract money. I imagine it already is.
I talked to a woman from Minneapolis who was going to New York precisely to
raise funds for an organisation she’d started. We both talked about the ‘ask’
and how difficult that might be. At what moment do you say, ‘So, the reason I’m
here is...?’
But
this doesn’t seem to faze the Development people I’ve spoken to. Says Barbara
Hanson: ‘I mean I’m a development person. People know what that means. If I’m
spending a lot of time with them or having pointed conversations with them
about their philanthropy, eventually it’s going to come to “Will you give us
this, or can we talk about a long-term gift or that sort of thing?” And I’ve had
people say, “We both know what this conversation is about. Why don’t you come
to the point?” To me that’s wonderful. It’s called “thank you!”’
Says
Richard Russell: ‘there is a continuum from single ticket buyers to subscribers
who then become donors. So the idea is to capitalise upon their interest to
begin with. You’re not trying cultivate people who are not already attached to
the organisation, or at least have no interest.’
Mi
Ryung Roman: ‘I think the most fun part of my job is it feels like matchmaking.
It often makes the “ask” not a scary thing to do. It takes a lot of research
and conversation and learning about someone beyond their obvious association.
Let’s say you’re a subscriber: do you love music enough to have your kids learn
it? Was your own upbringing around music? Do you support other performing arts
organisations? I personally have a musical background, but it’s the art of
relationships management that counts. The artform speaks for itself.’
--
Or
does it? Does this mean donors and board members who will push the orchestra
beyond its standard and arguably petrifying repertoire and make it a living
institution in the 21st century, an attractive proposition for the
next generation of donors? I spoke to Jesse Rosen, President and CEO of the League
of American Orchestras, the advocacy and research organisation for orchestras in
the United States: ‘I think in some sense having a large proportion of private support
has an energising effect. Your donors and patrons are not just people who give money,
but people with perspective and points of view and varying strains of thought
and belief. So they have some sway and some influence over direction. They’re
voices in the orchestral organisation and arguably through that process
orchestras have an accountability to them that keeps orchestras connected to
current, contemporary thinking. The other side of this though, which will be
contradictory but I think that both things are true, is that the absence of
government subsidy means that orchestras operate with an extremely narrow
margin for risk, and every program has to meet very stringent revenue targets.
Room for experimentation is really quite limited.’
So
how diverse are their ‘strains of thought’? There is Midgette’s ‘to me it’s all
just beautiful music’ type of donor. But Rosen and I spoke at length about the
Cleveland Orchestra’s expansion to Miami, where the orchestra has its own Miami
board and donors. ‘The driver for Cleveland going to Miami was the erosion of
the population base and wealth in Cleveland itself; its capacity to support an
orchestra at the level to which it’s been supported, and they went into a
market with no professional orchestra’.
But
it seems the Miami venture has had an effect on repertoire and outreach. Says Rosen:
‘What Cleveland realised is that if they were going to be successful in Miami,
that they had to build relationships there, not just funding relationships but
really make themselves part of the community. So their residencies in Miami are
quite extensive in terms of teaching masterclasses, public symposia,
partnerships with schools and other organisations. They’ve appointed a
conductor with a specialty or special knowledge and experience with Latin
American repertoire [Costa Rican Giancarlo Guerrero, who conducted the West
Australian Symphony Orchestra in May 2011]. So they have in fact planted
themselves there as though they want to stick around and it’s led the musicians
and management both to really increase their connection to the Cleveland
community.’
This
sets up an inspirational image of an imaginative orchestra operating with a
flexible and knowledgeable board and set of donors to respond skilfully to a
unique set of circumstances. What if, like Hollywood, the boards and donors
(think of them as ‘producers’) were knowledgeable peddlers of the product,
drawing on deeper and deeper knowledge of the greater society they were
beginning to incorporate? But there have been and continue to be risks with
philanthropy.
You
have to be sensitive, observes Mi Ryung Roman, aware of the demands on New
York’s much-requested donors. ‘There are high-profile individuals who are hit
up by every organisation in town.’ And there are many calls on their interests.
‘Someone says, “I give the bulk of my charitable giving to Dana-Farber [the
Cancer Institute]”,’ says Barbara Hanson. ‘I’m going to argue with that?!’ Charles
Metcalf chooses his words carefully: ‘What would be a risk for me in giving to
the arts is a substantial weakening of the social and health protection network
of the less well-to-do; the pressure will be on me to divert.’
Perhaps
the biggest risk is the decline amongst the current giving age-group. ‘It’s not
presumed,’ says Jesse Rosen, ‘that as wealth transfers from one generation to
the next that the coming generations will be placing the same priority on
giving to the orchestra and the ballet, the opera, etc...’
You
still get instances like the anonymous donor who matched every dollar individually
donated to Orpheus Chamber Orchestra’s Project 440 composer commissioning
project. ‘But,’ says Anne Midgette, ‘it’s many organisations’ goal to break
away from “heroic giving”,’ which she defines as the sort of donor who will
pull out the cheque book when an organisation is a million dollars short and
say, ‘Alright, one more time’.
I
mention to her a May 7th San Francisco
Chronicle article in which David Gockley, General Director of the San
Francisco Opera, worried about relying so heavily on 11 top donors, and said,
‘What we need to do is for each wealthy donor, to find 10 people who are
interested in opera and get them to give one-tenth of what their parents gave.’
Midgette:
‘But I think you’re going to have to find a hundred people who’ll give
$100,000. I say over and over there’s so much emphasis on education and getting
young people into the orchestras. What they need to be doing is cultivating
people between 40 and 50. That’s the generation that they’re going to lose and
that’s the generation that’s poised to be donors.’
And
they’ve got to make those people feel that they belong because ‘Orchestras have
not done a lot to make their audiences feel like they belong in other ways. You
know, there’s that whole format of the orchestra concert. You must behave in a certain
way if you don’t want to look stupid. You must sit silently. You’ll often have
music played at you that you don’t really like or want to hear. It’s a very
oddly antagonistic relationship to the audience and so gaining entrée into a
club that feels exclusive and a little bit scary is probably well worth the
price. I think the biggest threat is that the billionaires of tomorrow are not
going to have the same incentive to donate as the billionaires of today. And
yet classical music is relatively cheap. I remember talking to a philanthropist
in California, a young woman who got into commissioning music, saying “It’s so
cheap. I can’t buy art like this but I can make all of these symphonies...”’
--
Giving,
of course, is meant to be America’s redistribution of wealth. Even so
unsentimental a businessman as Cornelius Vanderbilt, one of the fathers of
American capitalism, donated his flagship to the Union in 1862 and then, after
the Civil War was over, endowed a university in the South as part of his own
personal contribution to Reconstruction. In a sense, you are obliged to donate. ‘From those to whom
much is given, much is expected,’ Rose Kennedy is supposed to have drummed into
her children. Anti-governmentalism is an oft-observed feature of American life,
but it doesn’t necessarily translate into anti-society, and most Americans
acknowledge that there is something they should be doing for their country. But is there
anything my interviewees would want government to be doing?
Some
envy Australia’s level of government support. When I ask Richard Russell if he thinks
there would be any disadvantages to 37% support, he thinks hard for a minute.
‘I’m struggling to find a “con”.’ Finally, he says, ‘I think you’re obviously
subject to political patronage if that’s the case.’ Australians would probably
advise that this is no more problematic than the influence of big donors or longstanding
music directors. Opera New Jersey does say however that the 5% they get from
the state legitimises them to a helpful degree. Says Charles Metcalf; ‘If you
get government funding, that is a good housekeeping seal of approval that
channels donors to you, or has the potential to do that.’
Jesse
Rosen sees some practical benefits in holding onto the sort of data collection
and analysis and advocacy that the National Endowment for the Arts is capable
of. Anne Midgette is a little more caustic about calls for more government support.
‘Well everyone in America likes to pontificate about how the government should
support us. It’s never going to happen. What would I like to see? I’d like to
see more dynamic art. I’d like to see less timidity. Nobody’s going to want to
go to classical music if it’s “white bread”.’
What
most would probably not want is for
President Obama to cap the Charitable Gift Deduction, a prospect that was
raised again this year when the White House jobs plan was presented to a
joint session of congress. Senate Democrats proposed acceptable alternative
ways to fund the package, but some Not-for-Profits (or, rather, 501(c)(3)s to
give them their US name) are still nervous about a measure the president has
mentioned several times.
--
You
get a sense from studying US philanthropy that when the system works, it works
well. But even though Australia’s Productivity Commission said in January 2010:
‘[the reason] governments provide subsidies to the private sector rather than
simply increasing state provision is that it can result in better targeting of
resources’, I do see holes. A system based on individuals’ predilections is not
necessarily a wholistic approach. What happens if you have a disease that
doesn’t pique the interest of someone who can pay for the research? I think of the
‘Adopt a Highway’ movement. Around America you see signs acknowledging the
people who have subsidised a tract of road – the Central Coast Republican
Party, Employees of Hearst’s Castle, North Malibu Hair Salon... But you
probably should ask if the interstate highway system could have been built this
way. Who provides the overview?
Philanthropy
probably won’t replace government involvement in Australia (at least for a long
while to come), but it certainly provides a high level of vibrancy in the United
States. And hey, on just about every block in America, it’s part of the daily
streetscape.
Gordon
Kalton Williams
©
2011
Further reading:
Metropolitan
Opera’s donor page
Acknowledgements:
I’d like to thank Robert Clarke for his advice on this article. This article first appeared in The Podium, the e-newsletter of Symphony Services International, 5 Dec 2011.
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