Posted on February 6, 2013

Legacy Gifts Prove to Be a Problem for Some Institutions

Faced with shrinking budgets, some arts institutions are struggling to cope with the restrictions placed on legacy gifts by donors who have long since passed away, the New York Times reports.

While honoring donor intent is a cardinal rule in philanthropy, exceptions have been made when a museum's existence is at stake. In Denver, for example, the Clyfford Still Museum was forced to overlook the wishes of Patricia Still, who donated twenty-four hundred pieces of her husband Clyfford's art on the condition that the city build a museum to house his work and never sell or lend out any of the art, after contributions for the project slowed to a trickle in 2011, six years after her death. The city eventually sought court permission to sell four of Still's paintings to keep the project alive.

At the same time, many high-net-worth donors are adamant in their defense of the concept. And some experts argue that the uncertainty surrounding anything that is supposed to last forever is behind the efforts of some philanthropists to limit the lifespan of their foundations. "Any perpetual foundation is going to be liable to drift," said James Pierson, president of the William E. Simon Foundation and the former executive director of the conservative John M. Olin Foundation, which closed its doors in 2005. "Donor intent cannot realistically be guaranteed beyond a generation."

Still, institutions continue to grapple with restrictions attached to certain gifts. The Brooklyn Museum, for instance, is spending more than $250,000 a year to store artwork it received from New York City philanthropist Col. Michael Friedsam in 1932 — even though 229 of the 926 pieces are not of museum quality — because the gift was made on the condition that the museum agreed to never break up the collection.

"A respect for donor intent is essential for philanthropic integrity," Philanthropy Roundtable president Adam Meyerson told the Times. "[However, you're] not serving donor intent if you go bankrupt."