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Museums and Cultural Institutions:
To Accept or Not to Accept, That Is the Question

June 5, 2019  | by George Suttles

Industry Knowledge

In the last few months, high profile nonprofit institutions have come under intense scrutiny for ethical dilemmas pertaining to the stewardship of resources meant to support mission. In a three-part series of thought pieces, the Commonfund Institute will contemplate ever evolving ethical considerations among nonprofit institutions pulled right from current events. This is Part One in the series.

“No amount of charity in spending such fortunes can compensate in any way for the misconduct in acquiring them,” Theodore Roosevelt said after John D. Rockefeller proposed starting a foundation in 1909.

Recently, the Metropolitan Museum of Art announced it would no longer take donations from members of the Sackler family, the ultra-high net worth family that owns the large pharmaceutical company responsible for Oxycontin. The United States is currently in the throes of a national opioid crisis impacting millions of people across the county. Certain members of the Sackler family have been accused of suppressing knowledge of the addictive properties of the drug while still producing and promoting its use. In a statement from a New York Times report, Daniel H. Weiss, the President of the Met said, “On occasion, we feel it’s necessary to step away from gifts that are not in the public interest.”

Furthermore, New York State, in its civil complaint filed earlier this year against members of the Sackler Family noted “The Sacklers used their ill-gotten wealth to cover up their misconduct with a philanthropic campaign intending to whitewash their decades-long success in profiting at New Yorker’s expense.”

Although public scrutiny of trustees and politically driven protests of museums are not new, a mainstream museum or cultural institution outright refusing to accept a gift that is deemed misaligned with its values is exceptional. For many nonprofit boards, whether a community-based organization, a college, or a museum, philanthropic gifts— especially if they are connected to an influential patron or board member— are encouraged, coveted, and help to achieve the mission of the organization, supplying much needed resources to support operations. With that said, social media and the current socio-political climate have magnified scrutiny and increased the importance of ethical considerations of stewardship.

While gifts have historically been a way for the ultra-wealthy to accrue goodwill and reputational capital, today institutions that accept these gifts can be perceived as complicit if the donor is found to have engaged in bad behavior. Paying attention to how, and from whom, resources flow in to support the institution is the responsibility of the board as good and ethical stewards. Similar to how divestment and socially responsible investing focus on mitigating negative social impacts and promoting the positive ones in investment portfolios, vetting high profile and influential donors through an ethical lens is an important risk management consideration. From a governance standpoint, it becomes especially important when investment choices or the actions of a substantial and influential donor worsens or deepens the problem a nonprofit institution is trying to solve.

Cultural institutions are important actors in the promotion of cultural understanding, dialogue and diversity, and the transmission of culture and values to future generations. This is a noble and lofty calling, and for boards of trustees stewarding these institutional missions, it is time to consider ethical governance frameworks that serve as a lens and litmus test for any mission-related activities.

Is the duty of care, loyalty, and obedience to the material objects that make up the institution? To the donors? To the investment portfolio? Or to the mission that the institution espouses and works to advance? Given the recent controversies, cultural institutions should have processes in place to consider any person or investment allowed to support and fund the mission as an important expression of values.

 

End notes:
New York Times, 5/9/2019, Money, Ethics Art: Can Museums Police Themselves?
Stanford Social Innovation Review, 3/22/2017, Civic Engagement: Why Cultural Institutions Must Lead the Way
New York Times, 4/26/19, Notre-Dame Donation Backlash Raises Debate: What’s Worthy of Philanthropy?
New York Times, 5/15/2019, The Met Will Turn Down Sackler Money Amid Fury Over the Opioid Crisis

Authors

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George Suttles supports Commonfund’s educational, market research, and professional development activities as Director of Research of Commonfund Institute. He also serves as a member of the Commonfund Diversity and Inclusion Office. Prior to joining Commonfund, George was a Program Officer at the John A. Hartford Foundation, an independent, national private foundation focused on improving care for older adults. Before joining the foundation, he was a Vice President, Senior Philanthropic Relationship Manager at U.S. Trust/Bank of America. In this role he worked with private and institutional clients on issues related to best practices in strategic grantmaking. Throughout his career, George has supported the philanthropic activities of leading nonprofits with a focus on healthcare and related missions. He is also a member of numerous nonprofit boards, including Odyssey House, Drive Change, and the Support Center for Nonprofit Management. Currently, he is on the Adjunct Faculty at the New York University (NYU) School of Professional Studies. George received a B.A. from Wesleyan University, an M.A. in Philanthropic Studies from Indiana University Lilly Family School of Philanthropy (IUPUI) and an M.P.A.  from Baruch CUNY School of Public Affairs.
George Suttles
Director of Research
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Disclaimer

Information, opinions, or commentary concerning the financial markets, economic conditions, or other topical subject matter are prepared, written, or created prior to printing and do not reflect current, up-to-date, market or economic conditions. Commonfund disclaims any responsibility to update such information, opinions, or commentary. To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated in this material. Forecasts of experts inevitably differ. Views attributed to third parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Managers who may or may not subscribe to the views expressed in this material make investment decisions for funds maintained by Commonfund or its affiliates. The views presented in this material may not be relied upon as an indication of trading intent on behalf of any Commonfund fund, or of any Commonfund manager. Market and investment views of third parties presented in this material do not necessarily reflect the views of Commonfund and Commonfund disclaims any responsibility to present its views on the subjects covered in statements by third parties. Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund fund. Such statements are also not intended as recommendations by any Commonfund entity or employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information. Past performance is not indicative of future results. For more information please refer to Important Disclosures.