Blog Post, Fundraising, Strategy & Implementation

What’s in a Name? Lots of Money!

March 20, 2015

When electronics magnate Avery Fisher donated $10.5 million in 1973 for renovations to Philharmonic Hall at Lincoln Center, the building was named for him—and he expected his name to be there for perpetuity. He certainly could never have anticipated his family getting the entire sum back, plus another $5 million, to relinquish the naming rights so a new investor with deeper pockets could enter the picture. But that’s exactly what happened. Only this time, it cost $100 million for the new donor, entertainment mogul and philanthropist David Geffen, to get his name on the legendary concert hall. And yes, that sum buys in perpetuity.

Fisher died in 1994 and his three children assumed his legacy. Several years ago, Lincoln Center administrators first approached them about renaming Avery Fisher Hall after a new donor. At the time the family threatened legal action. But times change, and the Fisher family has now accepted a $15 million payment in return for allowing the name’s removal.

The situation has elicited much discussion in the world of philanthropy. To some people, the payback looks as if the Fisher family took back their original gift. To others, it seems crass to remove Fisher’s name from the building barely 20 years after his death. Still others ask: How does it make sense for a nonprofit organization to give a donation back to the donor? In this situation, as in many others, the bottom line rules. Renovating the concert hall will cost an estimated $500 million, and the Lincoln Center leadership believes the $100 million Geffen donation is a great way to jumpstart the campaign.

So what’s in a name? This question is a difficult one to answer for arts organizations, universities, medical centers, and other institutions needing to raise large sums of money for needed renovations, upgrades, and new facilities. A generation ago philanthropists donated money to improve society, for the satisfaction of giving to a good cause. Recognition wasn’t a primary goal and much philanthropy was done quietly.

Today’s approach is more transactional. Large donations—for sports facilities, libraries, hospitals, performance venues, dormitories, or museums—are routinely rewarded with naming. NYU Langone Medical Center was named for Home Depot donor Ken Langone after he donated $100 million (to follow the first $100 million he donated anonymously a few years before that). The venerable New York Public Library took on a donor’s name following a $100 million gift, to the outrage of some New Yorkers. And many universities change the names of their buildings in response to large donations.

Interestingly, many of today’s super-sized philanthropic gifts given in exchange for naming are not coming from board members or longtime supporters of an organization. Geffen is originally from New York but makes his home in California, and does not seem to have a deep love of classical music or particularly close ties to Lincoln Center.

In a rapidly changing world, the renaming trend is expected to continue. Major institutions, whether they are museums, libraries, or concert halls, need higher and higher levels of capitalization to maintain their place at the top. Yet at a time when government budget cuts are the norm, there is less and less public support for such institutions.

Also, as anyone who’s ever done a renovation knows, improvements don’t last forever. Avery Fisher Hall’s acoustics, paid for by his generous gift, were once considered state-of-the-art. But by today’s standards they are quite outdated and need to be brought up to speed. And that takes quite a bit of philanthropy.