Late last year, Lincoln Center—a nonprofit organization that is meant to use its money to bring cultural programming to New York City—paid the heirs of Avery Fisher an eye-popping $15 million. Fisher was a philanthropist who believed in supporting the arts in New York and who even donated $10 million to Lincoln Center in 1973. So what was going on here? It makes sense for philanthropists to give millions of dollars to nonprofits, but why would nonprofits turn around and give millions of dollars to their former donors?
The answer is that Lincoln Center had put Fisher’s name on what used to be called Philharmonic Hall, and Fisher’s family had threatened to sue if his name was ever removed. Lincoln Center, however, really, really wanted to be able to change the name of Avery Fisher Hall. So the nonprofit paid up: For $15 million, it got the ability to change the name to anything it liked.
And why would Lincoln Center want to do that? Well, it hoped to spend $500 million on a massive revamp of the facility, and, as Alexander Podkul puts it, “raising a half-billion dollars without the leverage of negotiating naming rights is implausible and impractical.”
With its $15 million payment to the Fisher family, Lincoln Center was saying something very depressing about its donor base and about the state of cultural philanthropy writ large—that raising millions of dollars is now routinely transactionalized in return for donors seeing their names stamped on buildings. Worse, by choosing to pay the Fisher family that sum, Lincoln Center was suggesting that if it couldn’t dangle the naming carrot in front of a well-heeled individual donor, then the amount of money that person would be willing to give would fall by more than $15 million.
So, what kind of person is vain and shallow enough to raise his donation to Lincoln Center by more than $15 million, if only that results in him getting his name on the building? I mean, you’d need to be some kind of self-aggrandizing Hollywood billionaire or someth ...
O, hai, David Geffen. I shoulda guessed.
David Geffen is an old hand at this kind of stunt. Back in 1983, the Museum of Contemporary Art in Los Angeles opened a temporary exhibition space in Little Tokyo and gave it the wonderful name of the Temporary Contemporary. The space was so perfect for showing large-scale art, and became so beloved so quickly, that MOCA soon extended its lease for 50 years. But the Temporary Contemporary, so-called, didn’t last nearly that long. That’s because in 1996, David Geffen donated $5 million to MOCA—and in return, the Temporary Contemporary was rechristened with the horrible and clunky moniker the Geffen Contemporary at MOCA.
Of course, the Geffen Contemporary is not the only building adorned with David Geffen’s name. There’s the David Geffen School of Medicine at UCLA. There’s the Geffen Playhouse. Even God’s Love We Deliver had to rename its building in downtown New York the David Geffen Building after he donated $1 million for renovations. And now there’s going to be a David Geffen Hall in New York, too.
Geffen is donating $100 million to Lincoln Center, payable in eight annual installments. The cost of renovating the hall is estimated at $500 million (not including the $15 million going to the Fishers), and the new hall is scheduled to open in 2021—which means that Geffen’s gift won’t even be fully paid out by the time the work is completed.
I completely believe that Lincoln Center was right when it made its $15 million bet, and that Geffen’s $100 million gift was entirely a function of the accompanying naming rights. Geffen has never shown any philanthropic interest in classical music until now, and it’s entirely possible that absent the opportunity to see this building renamed after himself, Geffen would have given Lincoln Center absolutely nothing.
What’s interesting about much of the “naming opportunity” deals being done these days is that the big donations are not coming from longtime board members who have demonstrated commitments to their organizations. Because those donors are going to give their money anyway, there’s not much marginal value in putting their names on buildings, even if they end up giving more money than the people who do get memorialized.
Instead, organizations with grand buildings in big cities—organizations like Lincoln Center or the New York Public Library—are essentially monetizing those buildings in much the same way as sports teams sell the naming rights to their stadiums.
The difference, of course, is that when Barclays pays hundreds of millions of dollars for the right to put its name on a basketball arena in Brooklyn, it's doing so in the interest of unabashed self-glorification. (Why is the Geffen donation coming slowly, over eight years? One possible reason is that Geffen wants to be able to deduct it all against income, and he isn’t sure he can make that much income in a single year.)*
So in an obviously transactional case like this, in which Geffen is paying money to have his name on a building, there’s every reason to say that some large part of the donation should not be tax-deductible. Geffen is spending money on something of benefit to himself. And just like some part of a gala ticket is not tax-deductible (the bit that pays for the gala, rather than the pure donation), it makes sense for some part of a naming deal to not be tax-deductible either.
Geffen is even insisting that his name remain on the building long after he’s dead and couldn’t care one way or the other. He says that his insistence on perpetuity is “appropriate”—but perpetuities are never appropriate. (There are very good reasons for having a rule against perpetuities, many of which can be gleaned by watching The Descendants.) Philanthropy is a way to make the world a better place; it’s not (or it should never be, in any case) a way to try to shape the world in your image long after you are dead.
So let’s not rush to applaud Geffen for his generosity. He’s already pledged to give his money away; now that he’s made that decision, it seems as though he’s trying to get as much personal glory out of doing so as possible. That’s not admirable. In fact, it’s a little bit sad and pathetic.
*Correction, March 6, 2015: This article originally misstated that when Barclays paid hundreds of millions of dollars for naming rights to a stadium, that money wasn’t tax-deductible. It would have been tax-deductible as a business expense. (Return.)