The Go211 Life Rolls On Expression Session presented by
Disaboom at the 2008 Honda US Open of Surfing presented by Hurley - this might
be the longest title for an event I have ever helped coordinate. It was also an event where I fulfilled a
life-long dream and was able to guest announce a professional sporting event,
but that is another story for another time.
Naming opportunities have been a significant part of revenue
enhancing opportunities for both for corporate and nonprofit communities. One of the places where naming is most
recognizable today is with professional sports stadiums. The history of naming in honor of the donor
dates back over a century. While it is
up for debate, the first named stadium dates back to 1912, which is Fenway Park
in Boston, believed to be named for Fenway Realty (owned by John Taylor, who
also owned the Red Sox at that time) but it is argued that it was named Fenway
because the stadium was built in the Back Bay Fens neighborhood. Perhaps the most recognizable stadium name,
Wrigley Field dates back to 1926, named for William Wrigley, the founder of
Wrigley's Gum. An interesting story
dating back to 1953 is that the Busch family initially wanted to name the
stadium in St. Louis, Budweiser Stadium; however, the MLB Commissioner rejected
that proposal at that time. They instead
named it after August Busch, the founder and it became known as Busch
Stadium. After the stadium naming, the
Budweiser Company released a new line called Busch Beer.
Traditionally, as all these names are still applied to
stadiums today, places named in honor of people were set in perpetuity. Corporate naming rights for stadiums is a
fairly new concept; however, those often have time boundaries associated with
them. Historically, nonprofit donations
for naming opportunities were often believed to be in perpetuity, but recently
a decision by the Lincoln Center to rename Avery Fisher Hall has challenged the
concept of perpetuity. In 1973, Avery
Fisher made a $10M gift for the naming rights in perpetuity. Since that time, the theater has become
outdated and very much in need of repair.
The Lincoln Center now faced a challenge of how to renovate the theater
that had limited ability to leverage revenue without potentially insulting Mr.
Fisher's family. Mr. Fisher's family and
the Lincoln Center came together on an agreement to withdraw the Fisher name
yet also honor their father's memory.
In the end, the Lincoln Center paid $15M to the Fisher
family and included additional opportunities for recognition. While it may seem perplexing that the Lincoln
Center would pay out $15M on a $10M gift, when doing projections for inflation
(approximately 4.15% annually) Mr. Fisher's gift would be valued at
approximately $55M today. I applaud the
Lincoln Center and the Fisher Family for finding an amicable resolution to this
challenge.
This situation has now raised the question for many
fundraisers as to whether they can offer a naming opportunity to be in
perpetuity. In accounting for inflation
and the needs for renovations, many naming opportunities now include
"Sunset" clauses which allow for the naming rights to expire and
families that made the initial gift to have the opportunity for first right of
refusal. Surprisingly, most donors have
been very receptive to these sunset clauses as they are aware of the need to
infuse these organizations with funds. The
ability to generate news funds will guarantee that the donor's passion and
impact can continue. Donors have
realized that while their gift today may have great value, the value of that
gift will not be the same in the future. To limit the ability of the
organization to raise addition funds (after a fair amount of time) would
actually counter the purpose of their initial gift, which was an investment in
the future of the organization they supported.
We now live in a world where naming rights to honor someone,
while admirable, creates challenges to fiscal responsibility. Naming opportunities will continue to be
critical in providing ways for nonprofits to infuse their organization with
significant amounts of capital; however, in doing so, they must carefully weigh
the amount the naming opportunity should cost.
The newest challenge with sunset clauses is that nonprofits now need to
play the role of actuary and try to predict when the next capital campaign may
need to occur or when the value of a gift today will need to be infused with
more dollars in the future to maintain its impact.
As a fundraiser it is a challenge to not only focus on the
dollars needed to succeed today, but to also make projections of what dollars
will be needed for success in the future.
Not only to focus on the capital campaign today, but to predict when the
next capital campaign will occur and provide sunset clauses that will be
meaningful to the donor, yet beneficial to all parties involved.
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| Goblet Knot - resembles an ornate chalice |
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