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What Happens When Naming Rights Go Wrong?

With hundreds of millions of dollars at stake, famous donors and prestigious organizations tread carefully in their philanthropic pursuits

Last summer, a small upstate New York college became the site of a philanthropic firestorm when former Citigroup CEO Sandy Weill and his wife, Joan, revoked a promised $20 million donation. Considering the big-name donors and high financial stakes, what could possibly cause such a deal to go bust? 

It’s all in a name. The Weills’ is on Cornell medical school, as well as a recital space at Carnegie Hall and a building at the University of Michigan. They made their gift to Paul Smith’s College with the caveat that the institution be called the Joan Weill–Paul Smith’s College. However, a court ruled that request conflicted with the school’s charter and was subsequently denied. While the figure represented more than half of Paul Smith’s annual budget, it paled in comparison with the $600 million the Weills have given Cornell over the years. If the brouhaha over a relatively small gift seems surprising, it’s testimony to the emotions involved in one of philanthropy’s oldest inducements.

American philanthropists have seen their names on buildings since the days of John Harvard. The names of New York City’s early titans of industry echo daily in museums (the Whitney, the Frick and the Morgan Library), cultural centers (Carnegie Hall) and neighborhoods (Astoria). But as institutions see their needs grow and require new infusions of wealth, more and more often, offering new opportunities for naming or renaming can become a thorny affair.

Paul Smith’s wasn’t the only nonprofit embroiled in a 2015 naming controversy. The family of the late electronics mogul Avery Fisher threatened to sue Lincoln Center over the removal of his name from a famed auditorium, which was promised to him after a 1973 donation. After discreetly offering up the rights to the hall, the center landed a $100 million gift from entertainment executive David Geffen to jump-start a renovation that’s estimated to cost $500 million; Geffen’s name went up in the fall. That Fisher’s name lasted a hardly perpetual 42 years complicates what “forever” means when it comes to philanthropy—and, perhaps more importantly, what it’s worth.  

The Geffen gift prompted lifted eyebrows upon the announcement that he held naming rights in perpetuity. The detail surprised many, given the Fisher-family fallout, and raises the question of what might happen down the line if a future large-scale renovation requires fund-raising. Recent years have seen the negotiations behind similar deals yield rights that expire after a set span of time or, in some cases, after the death of the donor’s last grandchild. When oil magnate David Koch’s name went on Lincoln Center’s New York State Theater after a 2008 gift of $100 million, he agreed it could be removed after a period of 50 years. Many assumed the Geffen contract would follow similar terms. The New York Post suggested that Blackstone’s Stephen Schwarzman (after whom the New York Public Library’s main branch was named in 2008) had flirted with funding the renovations but was only interested if perpetuity was on offer. Others objected to naming rights even being on the table for a gift that represented only a fifth of the project’s total cost and questioned whether Geffen’s commitment to Lincoln Center represented much more than a status boost. 

Mount Sinai had its own tangle with donors in November, after a tense meeting to inform members of the Roosevelt family that, owing to a 2013 merger, Roosevelt Hospital would henceforth be known as Mount Sinai West. Andrew Emlen Roosevelt, whose relative James H. Roosevelt left
his estate to fund the hospital’s creation in 1871, told the New York Times, “It was one of those moments when you go in expecting one thing and what you get back is so completely different that your ability to fundamentally process what’s happening is nonexistent. You’re in shock.”

Contentious though it might be, naming isn’t going anywhere anytime soon. In 2015, Northwestern University tacked a name onto its previously un-monikered law school after getting a check for $100 million (the largest gift ever to any law school) from Chicago’s J.B. and M.K. Pritzker, while Harvard University nailed down the largest gift in its history, a $400 million donation from hedge funder John Paulson. His name now graces the School of Engineering and Applied Sciences. 

While these gifts represent substantial injections of capital, the publicity surrounding their namings and the power of the endorsement typically help spur a chain of follow-up pledges. (Denizens of Silicon Valley, where relationships with tech bigwigs are as valuable a commodity as any, might think about taking their checks to the University of California San Francisco Medical Center, which has christened buildings for both superstar angel investor Ron Conway and Salesforce CEO Marc Benioff.) When financier Henry Kravis and his wife Marie-Josée gave $100 million to Rockefeller University last year, it resulted in the Marie-Josée and Henry R. Kravis Research Building, an expansive state-of-the-art facility currently underway on Manhattan’s FDR Drive. 

The donation was part of a campaign by the school (an institution for postgraduate biomedical research study that itself bears the name of a famous benefactor) on the back of two $75 million gifts, given by David Rockefeller, grandson of its founder, and the Stavros Niarchos Foundation. Those gifts legitimized the campaign and initiated a wave of giving. “That sent a message: Hey, this project is really launched,” explains Maren Imhoff, Rockefeller’s senior vice president of development. “Then Henry and Marie-Josée Kravis came onboard with a wonderful commitment of $100 million dollars. Just to show you that these naming gifts make a difference, we then had two other trustees come in with gifts, one of $10 million and another of $5 million, very shortly after the Kravises made their commitment. This momentum takes over and people really want to get onboard with the project.”

The cost of seeing your name in bronze can vary. While $20 million might be enough to rename a small institution like Paul Smith’s College, $150 million at Yale only landed Schwarzman a campus center. For a new building or renovation at a high-profile institution, one commonly cited figure stands at 25 percent of the construction costs. 

While many institutions do discreetly shop around naming rights with a specific price tag attached, a major naming gift frequently comes as part of a long-standing relationship between both sides. For charitable heavyweight Eli Broad, who with his wife, Edythe, funded the recently opened Los Angeles art museum The Broad, the decision to name or not to name is very specific to the project. 

“It depends on what we are doing. First, we view our philanthropy as investments, not charity,” he says. “We invest in creating new or improving existing institutions, whether they be in the areas of science, the arts or education. Depending on the size of the investment and the potential impact of the institution we are helping to create or improve, we often want our name attached to that institution.” And naming doesn’t always mean an ego boost for the giver, but can function as a memorial, as with the Michael Bloomberg–endowed Charlotte R. Bloomberg Children’s Center at the Johns Hopkins Hospital, dedicated to the billionaire former New York mayor’s late mother.

At the same time that naming gifts allow institutions to grow, they also come with a legal and public-relations risk that has become larger in recent years. Institutions like Ohio’s Central State University, New York University and Berklee College of Music have removed disgraced comedian Bill Cosby’s name from buildings and programs, while Princeton University is now facing calls to remove former President Woodrow Wilson’s name from its famed school of public policy, citing his history of racism. 

High-level institutions are taking careful notes on the Cosby charitable fallout. “I think that nonprofit organizations and their boards are much more careful now,” says philanthropic advisor Melissa Berman. She cautions that donors should have their own exit strategy in case causes become controversial, like in the disastrous case of football coach and convicted serial child molester Jerry Sandusky’s children’s charity, The Second Mile. “What is this individual’s reputation, and how do we construct something in a grant agreement that protects the nonprofit in case it turned out that this person is exposed in a way that can’t be predicted for the kind of activity that really makes them extremely inappropriate to have their name on something?”

From Weill to Cosby, these incidents reflect the impossibility of foreseeing certain events, which may be more unpredictable or nuanced than the words on a contract. “What does ‘perpetuity’ mean when you put somebody’s name on a building?” asks Berman. “Buildings don’t last forever. Some people find that extremely immoral. They feel that you should accept somebody’s name on a facility forever, regardless of what happens. But in real life, it’s very difficult to make that kind of commitment.”