30 Million Arsht Center Gift Must Be Just The Beginning
Written by Michael Lewis on January 17, 2008
By Michael Lewis
Kudos to Adrienne Arsht for putting her money where her heart is and handing over $30 million to the county’s performing arts center.
Let’s hope this primes the pump — a very large bit of priming, to be sure — to speed the flow of private funds to what’s now the Arsht Center, which cannot long count on government subsidies to keep it alive and vibrant.
The county approved construction of the two-building center with the express stipulation that no county funds would ever pay operating losses to keep the center open. That pledge lasted precisely as long as it took to open the center, which for this year budgeted losses of more than $10 million above what its minuscule endowment could support.
To this point, the county has been charitable to a fault, opening its tax-receipt wallet several times as losses mounted. But as a declining economy constricts tax receipts, and as taxpayers simultaneously move to limit local governments’ abilities to get at those taxes, it is clear that reliance on government goodwill is a chancy proposition indeed.
Enter now stage left Ms. Arsht, a transplant to Miami who has embraced good civic causes and, with her sale of TotalBank, which she owned and chaired, has the funds to do as she wishes.
Thank goodness she wishes to do good.
She infuses $20 million more into the center — $10 million that was coming from Carnival Corp. was washed out as it let her take the naming rights — which will supplement the center’s endowment by about $12 million.
Sounds great. As the center’s press release puts it, "It is expected funds from the Arsht gift donated in years two and three will add to working capital and complete funding of the center’s $16 million endowment, giving the center long-term financial security."
Unfortunately, nothing could be further from the truth. A decade ago, when the dollar was still worth a dollar and not just a fraction of the Canadian dollar, let alone the Euro, the center’s foundation promised to have a $21 million endowment available before the center opened — due to be in 2001. Interest from that level of endowment would have provided about $1 million or so a year to help balance the center’s budget.
Now, a decade later, we’re looking at finally reaching a $16 million endowment that might provide $800,000 or so a year to cover losses. That just won’t cut it when the center begins a budget season planning a deficit near $10 million.
So, generous and wonderful as the Arsht gift is — and it truly is a massive gift compared with what often passes for philanthropy in Miami — it must be only the beginning.
When this newspaper in December asked Lawrence Wilker, new interim president and CEO, how much endowment the center needs, he said, "There is no limit to the amount of endowment that an institution could benefit from. I wonder whether endowments are really possible in this day and age."
He went on to say, "…you’re really talking about raising $100 million before it becomes really significant, to be able to provide annual subsidies to do what you need to do." And he added, "Most institutions like the Carnival Center are supported either directly or indirectly by government or through some kind of hotel/motel tax or sin tax…"
Unfortunately for the center, the chance of a new tax or permanent government support from general revenues is about as great as the likelihood of the Florida Marlins deciding to build a new ballpark out of their own pocketbooks.
Thus, the example of Adrienne Arsht is all the more important. When the native of Wilmington, DE, became chairman of TotalBank in 1996, she told us that she adjudged Miami one of the great world-class cities. "That’s really what I found from the day I started to come down here and live in a hotel. It is such an exciting community, something I haven’t felt anywhere else."
She went on from there to civic activism, charitable involvement and business success — and now to a new level of cultural philanthropy.
She has shown that we can break the curse that has plagued fundraising in the arts here: that people who come here from elsewhere give money and collections back where they came from, not in Miami.
We need more like her to step up in support of culture here, not just the brick-and-mortar of massive halls but even more importantly the artistic life that those halls can house. Because without great artistic talent — and much of that must be locally based, which is the reason we built the Arsht Center in the first place — all we would have would be sterile buildings.
Raising arts funding is indeed an uphill struggle. Adrienne Arsht has helped mightily in climbing that hill. Surely her involvement will not end there — she’ll be urging others to add their might to the good fight.
Because Mr. Wilker is right: without at least $100 million in the bank, the Arsht Center will be on perpetually shaky ground, and government can’t always be counted on in the penny pinch.