Why is this interesting? - The Sackler Edition

On the Sackler family, philanthropy, and reputation laundering

Colin and I have a habit of emailing interesting people and asking them to breakfast. In 2010 we did just that with Felix Salmon (FMS from here on out), whose blog we had been reading for years. His reply, reprinted here without his permission, was “I'm not a big breakfast person, mornings are always when I'm at my most hectic and grumpy... any chance of a non-breakfast meet?” So we opted for drinks at The Crosby Hotel and became fast friends. His email, Axios Edge, comes out every Sunday covers the biggest business and finance stories of the coming week. Plus it always has great charts. You should subscribe. - Noah (NRB)

Felix here. If you’ve been to the Metropolitan Museum in New York, you’ve probably been to the Temple of Dendur, a magnificent gift from Egypt to the United States that’s housed in its own custom addition. The building (designed in 1978 by Kevin Roche, who died in March) is named the Sackler Wing, in honor of the family that helped pay for a large chunk of the costs. On Wednesday, the Met said that it would accept no more gifts from the Sacklers, or at least from the branch of the family that became dynastically wealthy by creating the current opioid crisis. In doing so, it follows the lead of the Tate, the Guggenheim, and other institutions. The National Portrait Gallery, in London, even decided to give up £1 million that the Sacklers had previously promised them.

Why is this interesting?

There are two different views of what’s going on here. The first is the “dirty money” theory. The Sacklers made their billions by profiteering off death and misery, and it’s simply unethical to accept money thus tainted.

The second is the “anti reputation laundering” theory. This theory sees the Sacklers’ gifts as attempts to redeem their reputation through philanthropy. While museums are ostensibly in the art business, they’re also in the business of bestowing cultural cachet onto insecure social climbers. It’s easy to imagine how the Sacklers might have loved the way in which their name will be associated in perpetuity with a magnificent temple from the first century BCE — and how that early philanthropic win led to the Sackler name appearing on many more museums globally.

Under this theory, the gift itself is not problematic. The bad people have less money, the good people have more money, what’s not to like. What’s problematic is rather the transactional nature of the philanthropy — the fact that the Sacklers want and expect something in return for their cash. If a museum were to publicly accept Sackler money today, that action would send a loud message that the Sacklers remain socially acceptable in the highest echelons of polite society — a message that I’m sure the Sacklers would be very grateful for, and willing to pay a lot for. Just like Anthony Scaramucci was happy to shell out big bucks to receive (I’m not making this up) the Hedge Funds Care Award for Caring.

I’m more sympathetic to the second theory here. Museums should do nothing to rehabilitate the reputation of the Sacklers, who are very bad people. If by accepting the Sacklers’ money an institution in any way launders that reputation, then it should not accept the money. If the Sacklers were genuinely motivated only by the purest philanthropic desires, they could just donate their millions anonymously. (One very easy way: Give the money to a Donor Advised Fund, and then ask the DAF to give the money to the museum anonymously. All DAFs will do this, and it’s not only legal, it’s tax-deductible, too.)

Of course they’re not motivated by the purest desires and they won’t donate anonymously. To refuse a public Sackler gift is to refuse all Sackler gifts, because in the world of the Sacklers, all gifts are public. If the general public more easily groks the “dirty money” theory (which I think they do), it makes sense for museum leaders to run with it.

The overarching heuristic: The richer and more powerful the donors, the more strings that will be attached to their gifts. Even in the world of non-profits, there’s no such thing as a free lunch. (FMS)

Framework of the Day:

My mom first introduced me to this systems change framework, as it’s come to some prominence in the world of educational change. Over the last year I’ve thought about it a lot as it relates to driving technology change and adoption in large organizations. It’s been top of mind again and wanted to share it. (NRB)

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Thanks for reading,

Noah (NRB) & Colin (CJN) & Felix (FMS)