A Study in Contrasts: Why Do Some Capital Projects Succeed While Others Struggle?

In this, our most recent installment of "A Tale of Two Museums," I'd like to highlight the striking contrast between two institutions that have been generating news as of late.

First, there is the Denver Art Museum (DAM), which announced that Anna and John J. Sie have pledged $12 million to support the construction of a new welcome center as part of its North Building revitalization project. On the other hand, there's news out of New York, where Thomas P. Campbell resigned as director and chief executive officer of the besieged Metropolitan Museum of Art.

For those looking to extract a larger meaning from the contrast—namely, evidence that the balance of power is shifting away from large, lumbering "legacy" institutions in places like New York and toward vibrant, younger cities out West—they have a lot of material to work with.

While the DAM has been raking in the donations in a city whose "slow and steady emergence as a preeminent American arts city" was documented in this Inside Philanthropy post from about a year ago, Campbell, back in January, announced that the Met would delay plans for a $600 million southwest wing dedicated to modern and contemporary art.

What's more, Campbell's announcement came around the same time I cited a recent piece in Apollo Magazine where Adrian Ellis noted that national grantmakers are "edging politely but firmly away" from "legacy" institutions in New York City that cannot "demonstrate a significant contribution to solving or soothing specific social or economic traumas."

I'll save a deeper analysis on Campbell's departure for another day, but the consensus across the arts philanthropy world can be summed up accordingly: Institutions like the Met—which has the distinction of being the largest art museum in the Western Hemisphere—still cling to a classical 19th-century model in a 21st-century digital world, while brethren like the DAM, vying for dollars in a far less competitive philanthropic environment and unburdened by the need to play contemporary art catch-up, can operate in a nimbler, more responsive manner.

Which brings me back to the Anna and John J. Sie gift. The museum's ambitious $150 million plan is fraught with the same kinds of risks we see in any huge capital project. In fact, I looked at the project in greater detail last December when Board chairman and philanthropist J. Landis “Lanny” Martin and his wife Sharon gave a $25 million gift to the museum for the renovation.

At the time, museum Director Christoph Heinrich declined to say how much of the $150 million has been raised or exactly where fundraisers are looking for the rest of it. As was the case in December, the North Building project remains in the design phase, and plans call for construction to begin by the end of 2017, with project completion by the building’s 50th anniversary in 2021. 

John Sie is a longtime supporter of the DAM, serving on the museum’s board of trustees since 2002, and the Sie family and its foundation have contributed to many museum initiatives, most notably the Frederic C. Hamilton Building Capital Campaign and the Annual Fund Leadership Campaign,.

Contrast this deep institutional support with the fact that the now-delayed Met project couldn't quite scrounge up that transformative lead gift. (Indeed, when asked whether the wing’s delay was the result of an inability to come up with a major lead gift, Campbell said at the time, "We’re very confident about raising funds for this project when the time comes.")

Of course, none of this suggests that the DAM will enjoy entirely smooth sailing as it progresses toward its $150 million goal. Nor are such splashy projects relegated only to New York City; the Los Angeles County Museums of Art's massive $600 million capital campaign, for example, is appealing for funds in a uniquely glutted art philanthropy market. 

But the DAM's string of success does underscore very different structural realities confronting museums that have committed to high-risk capital projects—East vs. West, "big" vs. (relatively) "small" city, young vs. old. Then there's the money itself. If you're a donor, which spooks you more? A $150 million capital project in an uncrowded city like Denver, or a $600 million capital project in New York or L.A., cities with a museum on every block?

One final point, here. Campbell's announced departure from the Met comes a few weeks after the announced departure of Matthew Van Besien, president of the New York Philharmonic, an organization also mired in its own massive capital project—a $500 million gut renovation of David Geffen Hall. Both recent executive departures underscore yet another risk factor that rarely makes its way into planners' cost-benefit analyses: how human capital risk can complicate an already precarious project.