A campaign led by Hugh McColl and conducted in secrecy for nearly two years has raised $34 million in pledges to underwrite Charlotte’s cultural sector.
Some of the region’s most prominent arts organizations, including the long-struggling Charlotte Symphony Orchestra, will be beneficiaries of Thrive campaign grants aimed at shoring up their financial foundations.
Quietly launched in summer 2012, Thrive’s initial goal was providing financial stability for the symphony, which has posted deficits for years. McColl, former Bank of America CEO and a longtime supporter of the symphony, has come to the orchestra’s rescue in the past.
Under McColl’s leadership, Thrive soon exceeded expectations – Bank of America alone pledged $10 million. Encouraged, organizers set a goal at $45 million and broadened the scope to include other key organizations. Thrive is designed to pay out over a decade, some of it in matching grants that challenge organizations to raise money to get money.
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Organizers said they are confident that by year’s end, pledges will be in place for the fund’s remaining $11million.
“In order to have a great city, you have to have great arts and professional sports,” McColl told the Observer. “I got it in my head that we’ve got to do something about it.”
McColl said the fund’s major donors, a group that includes prominent citizens, major companies and philanthropic groups, will form a committee in early 2015 to decide what organizations should get grants and what performance standards they would need to meet. Administered by the Foundation for the Carolinas with input from the Arts & Science Council, Thrive is expected to address needs of the city’s foremost cultural groups such as the uptown museums and the opera, ballet and symphony.
Already, the symphony – with an annual budget of $9.5 million, about two-thirds of which come from donations – has begun to receive payouts from the fund. In Thrive’s first year (the 2013 fiscal year), the symphony was given $2.25 million as an unrestricted gift and has been promised $2 million for this year if it balances its budget. Additionally, it can receive up to $250,000 in a matching grant if it increases donations from foundations and families.
So far, the Thrive money has gone to operational costs, said Robert Stickler, symphony president. Among symphony challenges is that its endowment is only $5 million, he said. Similar orchestras around the country have endowments of about $14 million, he said, “and even that would be too small.”
An infusion from the Thrive campaign has allowed the orchestra to continue performing and meeting its educational goals, Stickler said. “Without the money,” he said, “I don’t know how we’d be able to continue.”
Started out quietly
Fundraising for Thrive was in a “quiet phase” for more than a year, said Scott Provancher, the former ASC president who is a consultant for nonprofit fundraising and is assisting on the drive.
“It’s the most money I’ve ever raised without telling anyone about it,” he said.
There were a number of reasons for keeping a low profile, including that McColl’s fundraising was so effective that it quickly outpaced development of a strategy to spend the money, Provancher said. Also, there were business conditions affecting major donors – Bank of America was shy about publicity as it worked through a series of legal issues with regulators and Duke Energy was involved in a merger with Progress Energy.
At the same time, a task force organized by the ASC was studying ways to help underwrite cultural organizations, stricken by declines in workplace giving and cuts in government support.
Among key recommendations made by the Cultural Life Task Force when it released its report in June was that government support be increased by $3.5 million annually and that groups needed to build cash reserves and endowments so they could stand on their own.
It also recommended that the private sector needed to step in with at least $2.5 million a year for a decade to help organizations develop fundraising strategies.
“This is the personification of that recommendation,” said Michael Marsicano, president of the Foundation for the Carolinas. In addition to helping stabilize key organizations, the Thrive campaign demonstrates a major investment by the private sector that may help persuade the city and county to increase support, he said.
One goal for the Thrive fund is to help raise endowments so groups can live off the proceeds like trust fund kids. “If we’re successful and the city and county come to the party,” McColl said, “each group will raise their own endowment and we’ll be there.”
Marsicano said foundational giving is a hallmark of cities with more established charitable cultures. “One can argue,” he said, “we are maturing in our philanthropic landscape.”
Erosion of support
McColl said one reason he launched the campaign was the rapid decline of philanthropy in Charlotte, whose twin tent poles were assailed during the recession as Wachovia bank failed and Bank of America found itself retrenching amid layoffs.
“Charlotte lost its two rich uncles,” said McColl, influential in guiding the city’s growth for decades and establishing it as the nation’s No. 2 banking hub.
For decades, the ASC, founded in 1958, has fed Charlotte’s arts organizations largely through its annual workplace giving campaign. Of the 60 united arts funds established in the nation (by comparison, there are about 4,000 United Ways), the ASC went on to become one of the most effective.
At its peak, the ASC had the highest per capita donation rate in the country. It was driven by the competing jets of cash from Bank of America and First Union/Wachovia, which in some years conducted the two biggest workplace giving campaigns in the country.
Fortunes in reversal
But since the recession pounded Charlotte in 2008, the ASC campaign has fallen to $6.5 million from $11.6 million, a 44 percent plunge. City and county funding for the arts has fallen by 25 percent to $6.2 million in the same period.
Workplace giving had already begun a decline in Charlotte and other cities but the trend was accelerated by the recession, which hit the financial services sector disproportionately hard.
“Charlotte is a great city that didn’t happen by accident,” McColl said. “This is a major thing for our city. We’ve got great arts and we need to keep them.”
Provancher said the drive has been engineered so it would not detract from other initiatives, but it would reap a separate stream of donations. “So far the conversations we’ve had with companies that have pledged is that we’re really looking for new net dollars, not looking to take money from what they might be doing for the ASC or the Mint. That’s not the spirit of what we’re trying to accomplish.”
Need for culture
In addition to the overall quality of life that museums and groups such as the symphony bring to a city, McColl said, such amenities are vital to attracting industry and a vibrant workforce.
“If you told me in my 20s I’d ever go to the Charlotte Ballet, I’d laugh at you,” McColl said. “But now I go, and I see, pound for pound, some of the best athletes in the city.”
Among those backing the Thrive campaign was one McColl friend who wasn’t even solicited.
McColl said he was having lunch with Carolina Panthers owner Jerry Richardson one day and he briefly mentioned his campaign and how it was going. Next day, Richardson’s secretary called and said, “Mr. Richardson wants to pledge $2.5 million.”
Said McColl: “I didn’t even ask him.”