When Donors Have Too Much Power

I have spent the last 30 years helping arts organizations build their fundraising operations. I believe strongly that the future of the arts depends on attracting more–not less–private support. And I appreciate that building a successful fundraising operation requires the organization to give something back to the donor: This might be access to special events, to artists, to institutional leaders, and even seats on the board in the right circumstances.

This has been a point of great concern for the art institutions outside of the United States that are beginning to build their own fundraising campaigns. As their governments reduce funding, they know they must start raising from private donors, but many arts managers in Europe, for example, are concerned that wealthy individuals or corporate leaders will exert undue influence if they become patrons.

When asked about this concern, I have always answered that American donors learn that they cannot affect the programming decisions of the arts institutions they support. They are free to give or not to give, but they cannot demand that specific works be performed. This, of course, requires staff and board leadership to be firm about the rights and the limits of power of their major donors.

And, in most cases, I do believe that arts institutions do a good job of restricting the power of specific donors.

But I have observed over the past 10 years, as the need for major donors has grown, that when one donor provides a substantial percentage of total money raised, too many beneficiary organizations are ceding far too much authority to that donor.

I have observed one donor who provided huge support to a performing arts organization but who walked away when he did not get his way on every decision–from who served on the board to who was named Artistic Director. When he left the organization, literally one half of its annual contributions left as well; not surprisingly, this organization is now struggling mightily just to survive.

In another instance I have observed a major donor who provided huge support to another arts institution turn the decision about the family’s philanthropy to a relative. The relative did not have the same passionate interest in this institution, which must now radically rethink its future.

And in a third instance I have observed a major donor who tried to force an institution to engage a specific person as Chairman and withdrew their massive support when the organization was not willing to do so.

In each of these cases, the arts institutions complained bitterly about their fates but, truth be told, they were complicit in their situations. One cannot allow one donor to control the activities of the organization. Board and staff leadership must be willing to set boundaries, even for their mega-donors. And, despite everyone’s wish to find an angel, arts institutions must recognize that having a group of major donors is far healthier and safer than having one donor who provides a disproportionate amount of support.
Source: Huff Post

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