Philadelphia Orchestra receives largest gift in its history
The donors wish to remain anonymous.
In its most resounding sign of renewal since emerging from bankruptcy several years ago, the Philadelphia Orchestra has received the largest gift in its history: $55 million.
The donation, by a couple wishing to remain anonymous, places $50 million into the orchestra’s endowment plus $5 million for general operating costs.
“This is a wonderful lead gift for what will become an endowment campaign, and it’s just a wonderful act of generosity,” said orchestra board chairman Richard B. Worley, adding that the gift caused him to feel “overwhelming gratitude. This is very huge.”
“I think this is just a major vote of confidence in [music director] Yannick [Nézet-Séguin] and the musicians of the orchestra,” said orchestra president and CEO Matías Tarnopolsky, “and it really is about the orchestra having great wind in our sails and enjoying what I think is a golden age.”
The $50 million boost to the endowment is exactly the scale of gift the orchestra has long sought as the cornerstone of a new endowment campaign. Endowment is money kept in perpetuity, kicking off investment income each year used to offset operating costs. For decades, the Philadelphia Orchestra’s endowment has been smaller than some of its peer groups’ across the country.
Orchestra violinist William Polk, chair of the musician members’ committee, said the orchestra’s historically undercapitalized endowment meant that the organization has been “punching above our weight,” and that this new gift “feels like some validation of what we feel going on, which is the orchestra being in a good place. We feel it on stage.”
The $55 million question
Who are these mysterious donors? The orchestra’s leadership isn’t saying.
Worley would say that the orchestra had spoken with the donors over a number of years; that this was not their first donation to the orchestra; and that discussions over the details of this especially large one had begun about two months ago. The donors’ wish for their identity to not be made public, he said, stemmed from a desire for privacy and the fact that they did not need “personal recognition for happiness in life.”
Their motive for giving?
“I think that they value very highly what I would call the civilizing influence of art and culture on our society. Art and culture is something that they highly value and want to help sustain,” he said.
Gifts of this size are unusual for orchestras. The $55 million gift is the largest in dollar terms the Philadelphia Orchestra has ever received, though an Annenberg Foundation donation of $50 million in 2003 would be considered larger on an inflation-adjusted basis (nearly $70 million).
The new gift has already been paid to the orchestra, and comes with no conditions for spending it on specific activities, said Worley (who is also a member of The Inquirer’s corporate board). It is being paid through the Silicon Valley Community Foundation, which manages donor-advised funds for some of the country’s wealthiest individuals and is based in Mountain View, Calif.
A gift of $50 million to the orchestra’s endowment provides it with an additional $2.75 million each year to augment ticket income and annual giving to cover an operating budget that will be $50 million this year.
With the new gift, the current market value of the orchestra’s endowment is about $192 million (with an additional $20 million for the Academy of Music, which it owns).
Faith in the future
Although a gift of $55 million signals faith in the future, Worley said that it isn’t the first sign of confidence in the organization post-bankruptcy, “since the fact that we have managed to balance our budget every year has also built confidence.”
But the budget has often been balanced through bequests left to the orchestra. The majority of a $4.7 million bequest from local music teacher Jane Kesson, for instance, helped to balance the budgets in 2017 and 2018. In the future, Worley said, the orchestra would like to steer those gifts into its endowment.
While the orchestra has not been engaged in a formal public endowment campaign in recent years, it has raised $20.4 million for endowment since 2012, when it exited bankruptcy.
No specific dollar goal for the coming endowment drive has been finalized, said Worley, adding that the intention would be for the goal to be a “stretch objective but within the realm of achievability.”
And as munificent as this new gift is, the orchestra still has serious money ahead to be raised.
“It’s a very meaningful event in the orchestra’s history, and it doesn’t lessen our need for the audience to support the orchestra,” said Worley. “We still need to achieve greater levels of support from our audience to have reliably balanced budgets. This is a hugely important step but it’s not the final step in the long-term journey to financial stability.”
Said Tarnopolsky: “Let’s hope this inspires more and soon.”