The complexities of modern philanthropy and naming rights
We’ll send you a myFT Daily Digest email rounding up the latest Sandy Weill news every morning.
In the US sitcom, Curb Your Enthusiasm, in which writer and comedian Larry David plays a socially clumsy version of himself, our hero is honoured for his donation to a local museum. Except that, alongside the “Larry David Wing”, a second wing funded by an anonymous donor is also being inaugurated, and guests are cooing over the modesty of the other benefactor.
“Now it looks like I did mine for the credit, as opposed to ‘Mr Wonderful Anonymous’,” David huffs.
The scene comes to mind because the social and reputational complexities of modern philanthropy, and the fraught issue of naming rights, have come up in real life in upstate New York, in a situation of such awkwardness that it could have been conjured up by Larry David himself.
The famous protagonist in this case is Joan Weill, wife of Sandy Weill, the retired banker who created Citigroup from the merger of Citicorp and Travelers Group. Mrs Weill is a long-time supporter of Paul Smith’s, a small private college in the beautiful Adirondack Park, and a sponsor of its ambitious expansion into four-year degrees. However, the school community objected to a plan to rename it Joan Weill-Paul Smith’s College in return for a further $20m gift.
Naming buildings, professorial chairs or scholarships after their donors is one thing; tampering with a historic name is quite another. Mrs Weill was roundly criticised for asking for such a thing. A court agreed, saying it violated the terms of the Smith family’s founding gift some 70 years ago.
One might have expected Mrs Weill to content herself with some other commemoration in return for her gift. Instead, she withdrew it, provoking vilification. Her commitment to Paul Smith’s was attacked as shallow and selfish; her right to call herself a philanthropist questioned if her donations came with strings.
Mrs Weill gave no immediate public response to the criticism and did not return a message I left with the Weill family foundation. Paul Smith’s has also been declining to answer questions on why she walked away, citing the confidentiality of the negotiations.
The contrarian in me wanted to write a defence of Mrs Weill, if not on moral grounds then at least on practical ones. Naming rights, after all, are negotiated like a business deal, a formal agreement complete with contractual obligations on both sides. If Mrs Weill’s $20m cheque bounced, no one would expect Paul Smith’s to keep her name above the door. It should work the other way, too.
I wondered whether there might also be a market-based argument. Educational institutions have developed a sophisticated and very lucrative system for the monetisation of ego. Mrs Weill’s withdrawal keeps that market mechanism intact.
Mike Kosnitzky, a partner at law firm Boies, Schiller & Flexner in Miami, has drafted a fair few of these deals for clients. “Valuing naming rights is a lot like valuing artwork: a matter of precedent and of what the market will bear,” he says. “What the Harvards, Cornells and Yales negotiate for their rights is tracked by others.”
To the extent that there is similar scrutiny on donations at less well-known colleges, we have all just learnt that $20m is not the right price for rebranding Paul Smith’s. That is a useful market lesson, but it does not answer the question of whether Mrs Weill should gift the money anyway. Arguably, donating $20m without strings would now be doubly generous, resetting the bar so that future donors would need to chip in more.
Christopher Oechsli, president of The Atlantic Philanthropies, the organisation that is giving away an $8bn fortune from Duty Free Shoppers co-founder Chuck Feeney, has tussled with the question of naming rights before — and his conclusions are also not especially supportive of Joan Weill. Feeney’s name is not on any building or institution.
An Atlantic study found that naming rights and publicity surrounding grants can be of value to the recipient, Oechsli says. “When you lend your name to something, it is an imprimatur. The name is a brand and it can be a positive thing for recipients to point to a specific major donor as an example of why they are worthy of grants from others.”
However, leaving one’s name off a building or a programme can be of even more value, he says. That way, the institution can still sell the naming rights to someone else. Ultimately, it seems defenders of the Weills are left with what Kosnitzky calls “the golden rule: it’s their money”.
“My attitude is that the rich are different,” he says. “They view their name as part of history, they are thinking about issues of legacy. The Weill name is important; it’s historic.”
Get alerts on Sandy Weill when a new story is published