Betty and Edward Marcus Foundation Exits the Philanthropic Stage: An Omen of Things to Come?

Back in September, we learned that the Dallas-based Betty and Edward Marcus Foundation made a multimillion-dollar donation to the Contemporary Austin. The gift will help transform the museum into an "unparalleled outdoor/indoor arts destination" by funding new installations, an endowment for art conservation, and visual arts education.

It was a classic good news/bad news scenario. The good news is obvious: An innovative museum will be getting needed funds to support its transformation into one of the premier art centers in Texas. The bad news: It's the last gift to be bestowed by the Betty and Edward Marcus Foundation.

A cursory glance at the foundation's website and press release reveals no explicit reason for getting "out of the game." We do know two things, however. One is that the Marcus Foundation has supported close to two dozen arts organizations since its inception in 1984. This could perhaps be a case of simply calling it a day. And secondly, the foundation went out with a bang. By seeking to support the most "visionary" arts organization in Texas, the gift will completely transform Contemporary Austin in scope and mission. Furthermore, the museum's 12-acre site will include the Betty and Edward Marcus Sculpture Park in recognition of the gift. Apparently "everything is bigger in Texas," and this gift is no different.

But the foundation's exit from the philanthropic stage also raises three important questions. One, why do foundations close their wallets? Two, is the Marcus Foundation's exit symptomatic of a larger trend? And three, are arts organizations the ones that suffer most when philanthropists stop giving?

To the first question, the answer invariably depends on the organization. Unless the organization explicitly states its rationale, any theorizing (including ours regarding the Betty and Edward Marcus Foundation) is conjecture. To the second, the answer is "no." We know that philanthropic giving has held steady since the Great Recession of 2000, although the funding is going to a smaller amount of recipients.

The third question, meanwhile, is predicated on the theory that in times of financial uncertainty, big donors shift dollars away from the arts and toward social services to meet unfunded demand. (For example, see the recent gift by former hedge fund manager John Arnold to fund Head Start during the government shutdown.) However, the Foundation Center analyzed charitable giving figures from 2000 to 2005 and found that despite the economic downturn, funding to the arts remained steady, hovering between 13% and 15% of all grant dollars throughout this period.

Bottom line: The Betty and Edward Marcus Foundation exits the stage having left an indelible mark on the great state of Texas. And it's thankfully not representative of a larger, more alarming trend.