An embarrassment of riches

Most of us roll our eyes at lottery winners who say they can’t “handle” their good fortune. But what about when an institution blows it? What would you do if someone gave your museum a billion dollars? Even a paltry $50 million? Just like in those lotto ads, it could happen. But would such a sum solve all your problems, or just create more?

Large donations can have a downside. Or so the Salvation Army, National Public Radio, and Poetry magazine have learned. All three share similar stories of remarkable goodwill. Now they also share a big problem.

The estate of Joan Kroc, widow of McDonald’s founder Ray Kroc, recently donated us$1.5 billion to the Salvation Army. Half is earmarked for construction, the rest becomes an endowment to help support the operating costs of new buildings. A nice gesture, but one that has created a huge fundraising headache. The donation is forcing the Sally Ann to raise us$65 million to us$70 million per year on top of its annual fundraising goal of approximately us$1 billion. Remarkably, the organization admits it has no idea on how to move forward other than “a national campaign”—fundraising’s knee-jerk reaction. Mrs. Kroc hoped her gift would stimulate further giving. It would have been nice if the gift included a provision to help the Salvation Army become more adept at planning.

As I write this, National Public Radio is learning if its loyal listeners will continue to give to a “rich” organization—all because of a us$200 million gift from the Kroc estate. To date, NPR and PBS have benefited from subtly encouraging people to believe that when they donate to a public station they are supporting local programming. The opposite is true. NPR was the recipient of the Kroc gift, not the network’s 750 member stations that pay for programming. But the story was incorrectly reported that NPR’s fundraising drives were a thing of the past. Were provisions for marketing part of the endowment?

Until the tiny, 90-year-old journal Poetry received a us$100 million dollar gift from the heiress to the Eli Lilly pharmaceutical fortune, in late 2001, it flew beneath the radar: a staff of four working on an annual budget of less than $700,000 per year in a room borrowed from Chicago’s Newberry library. The publication was poor, but happy. Now “the distractions of money,” commented Robert Frank in the Wall Street Journal, “are creeping into Poetry.” Recently ensconced in a large suite of offices in a glitzy corporate tower, harmony has been replaced by discord: assertive board members determined to focus on this opportunity as “a business start-up.” Ruth Lilly hoped her gift would help promote her favorite literary form, but Poetry’s new direction is, allegedly, boycotting differing voices, including minority poets. Poetry’s identity change made life so uncomfortable for the editor who had nurtured it for 20 years that he resigned. Many are asking whether the magazine will even survive.

Philanthropists want to fix troubled organizations, but do they consider the potential impact of their investment? Money can have a transformative power. If the brand is weak, it can be amazingly destructive. Sizeable donations need to be well thought out and established in a way that helps the recipient organization learn how to support itself, and not just become obnoxious, nouveau riche organizations with cash to burn.

Philanthropists might make great and lasting impacts if they insisted their charges learn how to make meaningful changes to their marketing. Most charitable organizations need help to be innovative. Nonprofits need money to help them acquire know-how as much as money for new buildings and programs.

Unfortunately, a sudden windfall can send good decision-making flying out the window. Ken Carbone, president of a New York City-based brand identity firm, contends that museum directors’ leadership qualities often evaporate in the presence of celebrity. The fame of a donor can be one distraction, but there’s also the architect’s celebrity. Unfortunately, a director’s quest for the “right brand” often means a building with a signature design. The ego boost that comes from working with a famous architect leads, in turn, to compromises that—ironically—undermine the brand. Who’s running the show?

Museum directors need to be more thoughtful about the strategic impact of their relationship with philanthropists on their brand identity. A gift is a legacy, a building block in the brand’s foundation. Once the block is in place, you continue to build, but you don’t destroy the foundation. Donors, not architects, are the true “institution builders.” If museum leaders don’t understand the requirements of brand building, or if they can be expected to fawn in the presence of celebrity, then donors will have to assume greater responsibility for directing how their legacy is maintained.

If the promise of the institution is to be fulfilled, museums need to be as innovative in their thinking about communicating with their audience as they are at building beautiful facilities or adding to their collections. Marketing communication strategy should be part of any major donation’s grand “design.” Museums must learn that when an organizational life-changing event comes along, the “big” projects must share the space with the “little” projects that, despite their size, leverage longer-term organizational promotion and stability.
(Originally published in Muse (Canadian Museum Association), May-June 2004)

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