Arts Groups Fret About Financial Woes of Corporate Donors

With Wall Street in turmoil and many large companies facing mergers, bankruptcy, or other hurdles, those in the arts community are increasingly nervous about how mounting economic woes will affect corporate donations, the Washington Post reports.

Charitable giving to arts groups — 13 percent of total corporate giving in 2006, according to the Giving USA Foundation — has always been the low-hanging fruit for companies looking to cut costs. Moreover, when companies merge, the generosity of the combined entity rarely equals the sum of its once independent parts. A spokesperson for Bank of America, which has agreed to acquire Merrill Lynch, said the future of Merrill's philanthropy has yet to be decided, although in the past Bank of America has honored the existing philanthropic commitments of companies it has acquired. Similarly, future giving by Lehman Brothers, which declared bankruptcy earlier this week, is also uncertain, as what happens to its philanthropic foundation, like everything else about the company, is now a matter for the courts.

"You're talking about what could be a very sharp, two-edged sword," said Arnold Lehman, director of the Brooklyn Museum. "We've already seen some diminishment in the amount of corporate support in recent years, and now it could affect those shareholders whose generosity depended on income and capital gains. Everyone might start to feel a little poorer."

Despite these concerns — and the prospect of more turmoil ahead — arts groups are not panicking. Gifts from corporations comprise one of the smaller segments of giving to the arts — according to the National Endowment for the Arts, corporations accounted for only 3 percent of contributed income to the arts in 2005 — and it will take a few months, if not longer, for Wall Street's problems to affect the budgets and schedules of arts groups. Others point out that while corporations typically reduce their giving for the arts in tough times, art patrons tend to remain loyal to the organizations they support. Bernard Gersten, who runs the Lincoln Center Theater, remembers big crowds turning out for "Anything Goes," a musical set during the Depression, after the stock market crash of 1987 and says he expects the house to remain packed for "South Pacific," the company's current production.

"The sky hasn't fallen," he mused. "It's just the humidity has increased."

Segal, David. Trescott, Jacqueline. “Arts Groups Fret the Woes of Big Donors.” Washington Post 9/18/08.

Primary Subject: Arts and Culture
Secondary Subject(s): Economic Crisis
Location(s): National

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