Urban Lights at LACMA. Credit: Jeremy via Flickr (CC BY 2.0)According to the Wall Street Journal, the brains behind the Powerball lottery frequently tweak its formula to alter the chances of winning. The most recent change occurred in October of 2015, when the odds of winning decreased to one and 292 million from one in 175 million.
Of course, people keep buying tickets. Why? Simple. Because earlier this year, a Florida couple won the historic $1.58 billion jackpot.
And it's this same psychology, we argue, that undergirds the world of high-stakes fundraising across the arts world.
Organizations like the Los Angeles County Museum of Art realize that trying to raise $600 million or more for an ambitious modernism building is a risky proposition. But now, having received two major donations, fundraisers are breathing easier. Seemingly against all odds, their big bet is paying off.
Before looking at the donors behind these gifts, let's first get a handle on the project itself. According to the Los Angeles Times, if completed, the new building "would rank as one of the most important works of architecture to be built in Los Angeles since Frank Gehry's Walt Disney Concert Hall opened in 2003."
If all goes according to plan, construction will begin in 2018 and be completed in 2023. Local leaders see the Peter Zumthor-designed building as "critical to lifting LACMA to the top ranks of the world's art museums." In short, the building is another classic case of the Bilboa Effect in action—a high-stakes capital investment that may (or may not, depending on the extent of unforeseen downstream costs) pay the anticipated dividends.
Donors love these projects. In the case of the LACMA, the two donors in question are Elaine Wynn and A. Jerrold Perenchio. The former, who pledged $50 million, is one of the world's top art collectors and museum co-chair. The latter is the former chairman of Univision. He promised $25 million. Taken in tandem, it's the largest monetary donation in the museum's history.
Perenchio said he normally donates anonymously, but came forward because he wants to encourage others to chip in. "The old buildings are that—they're old buildings. Great art has to have a great place to be displayed," he said, adding that the new building is important for the city and that he is "optimistic and bullish" that the museum will reach its goal.
Previous estimates had pegged the building at $650 million, but the museum said on Wednesday that the projected cost now stands at $600 million. The Los Angeles County Board of Supervisors previously approved $125 million for the project.
Needless to say, these gifts weren't a sure thing. LACMA director Michael Govan admitted the project faced a great deal of skepticism at the beginning. But now the tide seems to have turned, proving yet again that nothing soothes the soul like $75 million.
And so, despite living 3,000 miles apart, donors like Elaine Wynn and A. Jerrold Perenchio aren't really much different than folks like David Geffen. They understand the risks associated with such ambitious capital expenses. The know that the odds for success, while better than one in 292 million, certainly aren't guaranteed. And they realize that at some point, donors may throw up their hands and say, "Enough already."
But despite being aware of these risks, they open their checkbooks anyway.
It reminds us of the old saying—silghtly modifed for our purposes—for the New York Lottery: "All you need is $600 million dollars and dream."