Here's a new donor psychographic profile for your consideration: the prodigal donor. And it goes like this.
A person grows up out East or in the Midwest, and all Horace Greeley-like, moves out to Hollywood and makes his millions. He donates generously to nearby Southern California institutions. He even gets a medical school named in his honor.
Time passes and a subtle shift emerges. The donor sets his sights back east to the Motherland, leaving commentators to wonder if this shift may, in fact, be a substantial or even permanent one.
David Geffen's most recent gift to yet another beloved hometown New York City institution fits neatly into this profile, and if the past is any indication, expect more of it in the future.
The Museum of Modern Art announced it received a new $100 million gift from Geffen in support of its ambitious renovation and expansion efforts in Midtown Manhattan. Geffen, of course, grew up in Brooklyn and found fame in Los Angeles, and the gift comes on the heels of last year's $100 million gift to the Lincoln Center for the Performing Arts toward the renovation of what is now David Geffen Hall.
Needless to say, Mr. Geffen, to quote another hometown hero, is in a "New York State of Mind." But beyond this obvious point, what can we take away from this news?
For starters, both gifts support highly ambitious capital expenditure projects. And they don't get much more ambitious than what the MoMA has in store. The project, earmarked at $400 million plus another $40 million for renovations, adds 50,000 square feet of gallery space.
According to the museum’s director, Glenn Lowry, the goal is to raise enough money to cover those costs, plus funds to cover museum operations "while we are under construction, and to raise as much as money as possible for the endowment," which stands at $929 million without the Geffen gift.
Geffen's pledge is the largest yet to the campaign.
Add it all up, and it becomes obvious that despite the risks, the high-stakes game of mind-blowingly expensive capital projects continues to pay dividends for select institutions (emphasis added; we'll get to that in a second).
Needless to say, we've devoted a lot of ink to the massive amounts of cash swishing around the coffers of major museums lately. These highly expensive renovation projects secure splashy donations, but they also pose substantial downstream financial risks. (To that end, we noticed that while the MoMA's announcement talked about real-time construction and renovation costs, they didn't mention five- to ten-year ongoing maintenance costs.)
But guess what? Museums don't care. It's apparently the only game in town. And as long as there are donors like Geffen willing to shell out $100 million—much to the chagrin of "effective altruism" proponents—why should they care?
As we say in the hallways of IP: Hate the game, not the player.
Actually, on second thought, some museums do care. Take the neighboring Metropolitan Museum of Art. While the MoMA gets to bask in the bounty of Geffen's gift—possibly even swimming Scrooge McDuck coin vats—the Met is in far worse shape by comparison.
The New York Times cites two culprits for the Met's misfortunes. One—while other museums are flexing their contemporary art holdings, the Met is still playing catch-up. Two, and most tellingly, at least for our purposes:
The focus on building its Modern and contemporary capacity has also siphoned energy and resources away from the Met’s Fifth Avenue flagship. The museum has had to be concerned with fund-raising for Met Breuer, to cover that location’s $17 million annual operating expenses over the course of an eight-year lease as well as an estimated $15 million renovation of the building.
(We'd like to take this opportunity to note a strange coincidence. The last time we wrote about the Met, it was in a post entitled "Feeding the Beast: Do Top Art Museums Have an Unsustainable Funding Model?" Just sayin'.)
Obviously, museums believe you have to spend money to make money, but at some point, organizations like the Met that find themselves in a capital expense hole need to stop digging—figuratively and literally. And so the Met said it would also suspend the design work on its new wing until money had been raised for the project.
We bring all this up simply to state the obvious. No big gift—particularly from someone like Geffen to a huge museum in New York City—exists in a vacuum.
All of which brings us back to Brooklyn's prodigal son.
Will Geffen's biggest gifts continue to focus on his hometown and its big and brash arts organizations? Given his impressive one-two punch over the past year—$200 million to the Lincoln Center (which, by the way, wasn't without its own road bumps) and the MoMA—we don't see why this trend won't continue. Lord knows there's demand.
After his gift to the Lincoln Center, Geffen was asked to reflect on this subtle shift back to the Big Apple. Ever the Brooklynite, he eschewed any West Coast, New Age-y introspection.
"I’m a New Yorker," he said. "What can I tell you?"