Skip to main content

AGB Blog

The Price of Perpetuity: Has the Renaming of Avery Fisher Hall Changed the Naming Rights Game?

The Price of Perpetuity: Has the Renaming of Avery Fisher Hall Changed the Naming Rights Game?

Last year, colleges and universities raised over $34 billion in private support. The vast majority of that figure were major gifts—many of which came with naming rights. Ideally, naming rights demonstrate the importance of philanthropy and honor the generosity, commitment, and, in some cases, vision of donors.

In March, Lincoln Center announced that Avery Fisher Hall would be renamed Geffen Hall. The Fisher name was conferred in perpetuity for a $10.5 million gift made in 1973. Forty years later, the hall is in need of a$300 million update. The original donor is deceased, but heirs have been known to litigate to enforce the terms of ancestral gifts. To create a new naming opportunity, Lincoln Center paid the children of Avery Fisher $15 million in a deal that allowed the facility to be renamed.

One lesson for college and university boards is clear: Make sure your gift agreements and naming policies specify the duration of naming rights (and include provisions should original donor stipulations become impossible, impractical, or imprudent). Beyond serving as a cautionary tale about the potential future costs of perpetual commitments, Lincoln’s Center’s payment to the Avery Fisher family has been seen as demonstrating that naming rights, which the IRS currently treats as lacking tangible value, are, in this case, actually worth $15 million.

Writing in the New York Times, Fordham law professor Linda Sugin convincingly argues, “congress should design the charitable deduction to favor a time limit on naming rights” and “authorize a tax deduction on the relinquishment of naming rights.” Writing in Forbes, Peter Reilly makes a similar argument that naming rights should reduce the deductible portion of a gift, just like season tickets or a chicken dinner. In Washington, proposals to limit charitable deductions are typically motivated by the need to raise revenue in legislation that cut taxes elsewhere. Both Suginmarch and Reilly, however, make the case that rethinking the deductibility of naming rights could both rationalize the tax code and create incentives for future philanthropy.

Want more information about the difference between restricted gifts, unrestricted gifts, and endowment funds?  Watch the AGBU video, Fundraising and Stewardship, with Dave Bahlmann, president emeritus of the Ball State University Foundation.

Photo credit of a brightly lit Avery Fisher/Geffen Hall goes to Flickr and user Mangus.

Help
Close

Help

Click here to chat with the member concierge
Close

Help