Podcast: Speaking of Quality: Wealth Management Insights with Hank Smith
Season 1 Episode 5: Charitable Giving and You (Part 2)
Host: Hank Smith, Director, Head of Investment Strategy at Haverford Trust
Guest: Eric Pryor & Jane Allsopp, Pennsylvania Academy of Fine Arts

Title: Charitable Giving and You (Part 2)

Description:

In the second and final part of the Charitable Giving & You series on Speaking of Quality: Wealth Management Insights, host Hank Smith continues the conversation on how donors can maximize their philanthropic impact. This time, he is joined by Eric Pryor, President and CEO, and Jane Allsopp, Chief Development Officer of Pennsylvania Academy of Fine Arts (PAFA). Hank asks Eric and Jane about the benefits of charitable giving for organizations like PAFA, the challenges they face in fundraising, and the types of donations they are seeing. Additionally, Jane provides insight on the organization’s preference for restricted or unrestricted giving, and the importance of developing relationships with donors. The podcast concludes with a discussion on what’s next for PAFA. Tune in for valuable insights on best practices for donors supporting a nonprofit.

To learn more about The Haverford Trust Company, please visit https://haverfordquality.com/

Maxine Cuffe: You’re listening to Speaking of Quality, Wealth Management Insights with Hank Smith, a podcast by the Haverford Trust Company, on Speaking of Quality, Hank chats with authors, influencers, and wealth management experts to bring a sense of clarity and calm to the complexity and stress of personal finance. And now, here’s your host, Hank Smith.

Hank Smith:  Hello and Welcome to Speaking of Quality, Wealth Management Insights. I’m your host Hank Smith, Director, and Head of investment strategy at the Haverford Trust Company.

On this podcast we’ll explore topics ranging from quality investing, retirement resilience, stock market trends, estate planning, behavioral psychology, and more. This episode is the second and final part of our short series on charitable giving, and how to make the most impact with their philanthropic donations.

On our first episode of this series, Rebecca Moffett president of Vanguard Charitable, provided insight on donor advised funds and how you can maximize your charitable gifts.

Joining me today is Eric Pryor, President, and CEO of the Pennsylvania Academy of Fine Arts, known informally as PAFA, and Jane Allsop Chief Development Officer at PAFA. Full disclosure, I was a trustee of PAFA for nearly 20 years and currently an emeritus trustee, as well, the Haverford Trust Company has been a longtime investment manager for PAFA’s endowment. Eric, welcome. Can you tell us a little bit about the history of PAFA? For those in the audience that may have never heard of the Pennsylvania Academy of Fine Arts, and what you’re doing today, with this organization?

Eric Pryor: Well, first, let me thank you, Hank, for your many years of support here at PAFA, and giving this opportunity to address your audience. We were founded in 1805 by a group of artists, civic leaders, and business leaders. And at that time, essentially, they looked and felt like they wanted America to have its artistic and cultural identity. And so, in part of their look to make their thoughts around making that a reality, was creating this institution. So, they created this institution and it was interesting, a lot of people think of PAFA because, you know, found in 1805, and you know, just how many years ago that was a think of it from an historical context. But we were at the heart of contemporary art when we were founded, because at that time, and for many years after that, the artists that they were working with, were the contemporary artists of that day. That’s a little bit and so we are a museum, we have a substantial collection. But we’re also a school where we teach art, it wasn’t always a college. We do lifelong learning through continuing education. We’ve done certificate programs. So, we basically serve people of all ages, giving them opportunities to make art and learn about heart through art appreciation.

Hank Smith: Eric, let’s jump right into this. How does charitable giving benefit organizations like PAFA? And what are some of the challenges you face in fundraising?

Eric Pryor: I mean, charitable giving, I mean, when you look at a nonprofit, in similar to for profit, you want to diversity in your revenue streams. And charitable giving is essentially a revenue stream to a nonprofit, you can do earned income and fee-based things and then the primary avenues of your charitable giving, you have institutional giving, which is typically could be a foundation, it could be a corporate foundation, it could be a foundation that was created by someone like the Ford Foundation. So, you have that institutional giving where you apply for the grant for a specific area. And then you also have individual giving. Individual giving typically, it could be you know, somebody’s grandmother sending in a $10 annual gift, or it could be someone who has developed a family foundation in which they’re really giving hundreds of thousands of dollars or even more. So those are important.Both of those are really investment in the mission of the organization. So, for us they’re investing in our ability to bring arts programming to people of all ages. It allows us to give scholarships to students.It may be at the college level also scholarships or to pay for programs for K to sixth grade students as well as middle and high school students, as well as it allows us to do family programming and programming in the museum wherewe may be bringing people in, whether it’s for lectures or talks, or performances in the galleries.

Hank Smith: And as a nonprofit PAFA has two very unique events, the student art show in the spring. And then the Bacchanal celebration, which is a live and silent wine auction. Again, full disclosure, the Haverford Trust Company has been the lead sponsor of Bacchanal since its inception of the event 24 years ago. Tell us a little bit about those events because no other organization could do something like that.

 Eric Pryor: Well, the annual student exhibition is what is it? Jane has 122 years?

Jane Allsopp: Yes, 100. This is it’s 122 year. So, it’s the longest standing student art show of its kind, I believe, in America.

Eric Pryor: And essentially, it’s made up of students who are either at this point, they’re graduating with their MFA or their BFA. But they’re there in that final year of that aspect of their study. And they get a certain amount of space, and they get to exhibit their work. And the great thing about that show is for the person who comes and wants to potentially collect art, because these are artists at the very beginning of their artistic journey and career out moving into the professional ranks as artists, oftentimes they can find works at good prices, at price points that they can afford. So, it’s good for them. For the artists, it’s great because the proceeds, part of the proceeds go to the artist and for them to be able to earn a little money from their work. And then the part of it that goes stays with the institution essentially helps to provide scholarships for future students. So it’s a it’s a win win.

Hank Smith:  And that is open to the public for about two weeks. Am I correct?

Jane Allsopp: Three weeks, where we have the preview party on May 11. This year, which is a ticketed event. And then the exhibition is on view, I believe, May 12, through June third or fourth.

Hank Smith: I would encourage anyone to if you haven’t been to this, to come by it really is something to see the variety of art and really, really good works that these students have put on display, some of which they price so high, that that’s a signal. They don’t want to sell it. They know what’s good, and they want to keep it. Jane turning to you for a moment. Can you tell us the difference between restricted and unrestricted giving and what your preference is? And maybe give us a couple? A couple of examples?

Jane Allsopp: Absolutely. So unrestricted giving is sometimes called operating support. It’s gifts that come into your organization without any restriction. And as Eric said, investing in the mission. So, the great thing about those gifts is it offers the institution the flexibility to do the things it needs most at that moment when the gifts come in. So sometimes paying for electricity, or the behind-the-scenes things that keep the engines moving in a nonprofit and restricted giving comes in with a specific intent or purpose by the donor. So, for instance, at PAFA, people may elect to support a specific exhibition. So, their gift goes directly to support the exhibition, or our education programs. Perhaps it is a gift for our endowment, so it goes permanently into our endowment for a specific purpose that the donor intends, and then that gift helps the institution in perpetuity. So, there are a number of ways people can invest in unrestricted giving at any institution, you could be a member at PAFA, you could make an annual gift. So, we welcome all gifts, I will say, while we don’t have a preference per se, unrestricted giving is really a gift you can give to the institution because it does give them that flexibility. But at the end of the day, what we hope we’re doing is matchmaking. In essence, that the donor feels really good about the gift they’re making at your institution and it’s going to a purpose they support. And oftentimes you will find people that make restricted gifts are supporting the institution in a number of ways – they might attend Bacchanal and they might be a member. So, it’s not mutually exclusive. Sometimes people participate in in many giving channels.

Hank Smith: We in a previous podcast with Rebecca Moffett, president of Vanguard Charitable, she told us some of the trends now in donor advised funds are shifting more toward unrestricted giving, and which is very, very beneficial to organizations. Are you seeing that at PAFA?

Jane Allsopp: Not yet. I mean, I would say it’s a mix here. I would say it’s really a mix. We’d love to see more of that. And donor advised funds are very interesting to nonprofits too. It’s just such a whole growing arena for support. But there I’ve seen other articles to about some major philanthropist wanting to pick institutions and make unrestricted gifts to give the organization the ability to put it to where they want to put it like Mackenzie Bezos, her giving has been unrestricted in large, wonderful surprises for those nonprofits.

Hank Smith: How does PAFA contribute to promoting diversity and inclusivity in the arts? And what impact has that had on the under resourced communities PAFA serves?

Eric Pryor: I would say that a large part of that is, and it’s interesting conversation said earlier, around equity and access. If you look at it, we can look at children, for example, K to 12. If you look at the Philadelphia public schools, the arts, in many cases almost nonexistent for those children. Typically, if I take you out to a well-resourced district, or private schools, art is a major part of it. And we were meeting earlier with someone who was a corporate leader. And one of the things that came up was this whole idea that much of the skills that one will use and for children later on in their lives are 21st century skills, like creative problem solving, critical thinking, mastering collaboration, and communication, and how important these skills which are skills that you develop through the arts. So, I would say that’s probably one of the most important things that we do is making certain that people from diverse communities have access to honing this type of training in their lives, and then, of course, in our own hiring practices. And when we bring people on board to make certain that we are looking at people from diverse backgrounds, and making certain that we’re reaching out to try to make certain that we can have a diverse staff mix.

Hank Smith: So, I imagine financial aid, and scholarships are critical for PAFA. What percentage of students receive financial aid? And how does that compare to other similar organizations?

Jane Allsopp: I think that nearly all of our students are receiving aid in some form, merit or scholarship. And additionally, through the annual student exhibition, they have the opportunity to receive prizes and awards, which is another way that helps launch their careers. I think the association that we belong to ACAD, which is the Arts and Design colleges, they state that at least 70% of the students are receiving some form of aid.

Hank Smith: So, it is reality, many if not all, artists are starving artists. But they get they get a good head start by getting that scholarship and some of that financial support at PAFA.  Can you speak to some success stories particularly impactful examples of charitable giving a PAFA. And Jane during your time as Chief Development Officer, can you tell our audience of a time when your organization has been the recipient of unexpected gifts? And what was that impact like?

Jane Allsopp: Well, I will say there are many impactful gifts that come to pass. Some of them obviously predate Eric and I because we’re relatively new to the organization. One of the most interesting things to me are planned gifts where somebody who loves your institution in their lifetime, perhaps they’ve been a member for 20 or 30 years. And they’ve left some sort of bequest in there to your organization. So, we have had that time and time again, or it’s an alumnus who can do more with their estate plans, and they could in their lifetime. So, we had a household member a couple of years ago who left an unrestricted gift, which we placed in the endowment several $100,000. And before our time, one of the most impactful scholarships, travel scholarship, was from a long time docent. So a woman who was a docent and volunteered for many many years created an endowment for scholarships which has allowed many students to travel throughout the world. And this is a rich tradition at PAFA where we have these endowed travel scholarships, which help further their practice. So, we love those surprises. But what we really would love is if people also let us know in their lifetime so that we can celebrate them while they’re here, and you know, really engage with them while they’re here.

Eric Pryor: One of the most interesting sort of out of nowhere, situations or what appeared to be out of nowhere, was when the person who was over the estate of John Rodin and saw something around the I want to say it was either the Tanner exhibition or the Norman Lewis exhibition, and was really taken by it in a very positive way and was inspired and reached out to PAFA  because they saw what we were doing in turn terms of really showcasing that was it was a Tanner was it the Tanner exhibition, Jane?

Jane Allsopp: It was the Norman Lewis exhibition and I believe, yes, the executor, the artist John Rodin’s estate, it caught his eye and what he what caught his eye was how we told the story of an artist that really deserved their due. And PAFA has a history of really celebrating and elevating artists that are due some recognition. So that gift was not only the collection, which we will keep the majority of and distribute part of, but also an endowed gift and a gift to name our performing arts center or Art Center, I should say,

Eric Pryor: It hits multiple areas, it hits, you know, in terms of I think one of the areas when we think about diversity is PAFA has been at the lead in terms of diversifying its  collection in really has a collection of art that really is representative of who we are as a nation. So, when you look at the works, with the gender diversity of women artists, PAFA is ahead of the curve, ahead of most of our peers in that space, as well as BIPOC artists and black artists.

Hank Smith: That kind of leads to the next question about the balance between accepting art donations, allocating funds for art acquisitions at PAFA? And how do you prioritize this, these different forms of art acquisitions, to build and maintain your diverse collection?

Eric Pryor: Well, one of the things we it’s important to us and we trust is we have an amazing curatorial team and the curatorial team along with our registrar and archivists, they really have a sense of what we have in our collection. And one of the most important things with a collection is that you’re able to tell various stories through the artwork and put those works together to create these narratives around the artwork. And so, one of the things that they’re always looking at is one of the languages we’ll use it, where there might be holes in the collection, where there may be areas where we are not as strong. And so, they prioritize those areas. So, what you don’t want to do is somebody to say, say they have an incredible work, and doesn’t matter who the artist is but we make, let’s say we are already flush with that person’s work andother works like that, to just take that on, more than likely it would pretty much go in storage, you really may not see it as much and it takes money to care for art. A lot of people don’t realize the storage costs, the conservation costs, what it takes to care for that work. It’s, it’s not inexpensive. So, you’ve got to be very selective and understand where your needs are, and be strategic in making certain that you’re bringing works on that really are filling those holes in the collection and rounding it out where you can really and for us We’re an American Art Museum, so, for us, it’s about telling the story of American art. So, if somebody were to say, hey, we want to give you, you know, works that are from, you know, some other parts of the world, I have my great, you know, traditional African art collection, you know, it’s not what we do, it doesn’t mean that that work isn’t amazing. But it just really may not necessarily fit in the story that we were, we’re telling.

Hank Smith: So, I imagine that over two centuries of collecting artwork, the majority of that work is a below ground in storage, never to see the light of the day, which is probably true for many organizations like PAFA.

Eric Pryor: We have probably, what over 17,000 objects, works of art. When we did Making American artists, there were 103 works in that show, am I correct? I think I’m correct. And if you looked at the time, we had also gift deeds up. So maybe there were another 200 or 300. So, at any given time, we probably have the capacity of having upwards of  when you look at all our galleries 500 plus works of art. But that’s, you know, so that rotates.

Jane Allsopp: And some of them have to rotate because they’re light sensitive. So, a lot of our works or works on paper, so they’re very light sensitive. But the one thing I would add about our collection, which I think is unique, and I think you were sort of speaking to this, Hank, which is that it’s hard for museums to compete now in the art market for certain artwork.

So, getting gifts directly from collectors is a really valuable resource. And we have to be judicious as Eric said about what we accept, but because we have this history of successfully sharing collections it’s attracted other like-minded collectors, who know that we do a good job in presenting it and caring for it and that it fits within the story we’re trying to tell.

Hank Smith: It is your job, Jane, but it’s also I imagine, Eric, a big part of your job is developing and maintaining long term relationships. I know you, Eric, you’ve run the organization, but you must work very closely with Jane in in that aspect of developing relationships.

Eric Pryor: Interestingly enough, those relationships, they happen through our development team, but they actually also happen through curatorial. Because oftentimes when people have collections, and they’re thinking about because, you know, it’s interesting in a lot of people when they initially collected like, Okay, I am going to get this and I’ll have it for my kids. And what they realized as they get older, is oftentimes their kids are not interested in what they’re interested in. Even though that collection may be a significant collection, that’s important. And once they start having that realization, they start thinking about the legacy of what happens with my collection. And oftentimes, at that point, they will engage someone like Dr. Anna Marley, or Dr. Brittany Webb, our curators. So oftentimes, people will reach out to, they typically think to reach out to the curator about their collection before they actually would reach out to the development office.

Hank Smith: Jane, how does someone get involved with PAFA?

Jane Allsopp: Well, there are a number of ways. I mean, one of the things that we talk a lot about at PAFA is because we have so much to offer to the community, people can get involved by becoming a member, a donor attending an event. Sometimes people get involved because a board member or friend has brought them to PAFA. But the other there are a number of other ways people can enjoy PAFA as a continuing education student, by attending our public programs, so we see it as sort of a whole suite of ways you can derive enjoyment and profit and also have a relationship that supports the institution. So, we have public programs and continuing ed, we have a great membership program and, and giving programs for upper level donors. But honestly, we also are discovering people through other relationships, they have, you know, faculty members have relationships and things like that. So we’re open to any and all introductions, and we’re trying to meet as many people as we can to get them engaged.

Social media, I think is a good way to test the waters when you’re interested in a nonprofit, maybe before you make the leap. Because it’s a great way to find out about and it’s harder for us in the development world to forge a personal connection. But I think for people that are looking for organizations they might want to be supportive of that’s a really good way to find out the personality and the work they’re doing.

Hank Smith: That’s fantastic. Finally, Eric, what’s next for Pennsylvania Academy of Fine Arts?

Eric Pryor: Wow, what’s next? I would say one of the things and Jane touched on it with continuing education, isthis whole idea of lifelong learning through the arts. So, one of the things that we really are looking at is making certain that there are opportunities for people to engage in studio work or learning about doing art, from the youngest to grade school kids to high school kids to college, through young adults through older adults to retirees.

So, one of the things we’re going to be doing is reinvigorating our certificate program, we’re finding that a lot of people are coming back to art. Sometimes you have millennials that, you know, maybe they did a major in college, it really, you know, so super practical and pay the bills, and then they start working that 40 hour a week gig and realize, oh, my God, I haven’t, they don’t see themselves doing that for the rest of their life.

So, part of what we want to do is for them who want to come back and kick off an art practice, because it was something that always they got enjoyment from and wanted to do to someone who just wants to do it because they want to relax, and it makes them feel better. So that certificate and continuing education and lifelong learning is important. And then the other piece of it, I would say, is really positioning the museum. We at PAFA have one of the top three American art collections in the world, here at PAFA. And with that, we’re able to tell a story of American art that’s unique that remove things from chronology and put things together based on genre, putting artworks together and putting them in dialogue.

Works like Charles Wilson Peel the artists in his museum and Joan Brown self-portrait, two Pills Washington and James Brantley, self portrait of him coming back from the Vietnam War. These are things that I think are extremely exciting. We also see ourselves becoming much more rooted in development of an artists in residence program where we will work with more contemporary artists, because we’ve always had a foothold in helping artists develop their creative practice. And we’ve been doing it but it’s been more with college aged kids. But there’s still a need out there also to be able to work with, with professional emerging artists. So those are just a couple of things. And then also, of course, we’re looking to do more, call it hybrid or online type experiences where we can serve people that are here in Philadelphia, as well as in other parts of the country or even the world for that matter.

Hank Smith: And I would just have, I would encourage anyone that has not been to PAFA to see the collection, please do you are going to be more than pleasantly surprised. It’s a, it makes for a wonderful morning, or a wonderful afternoon, it is truly an exceptional collection.

Thank you, Eric and Jane for joining us today and sharing your insights on charitable giving and your wonderful organization. If our listeners wanted to learn more about PAFA, how would they contact you?

Jane Allsopp: First, they can check the website for all of the programs and things we mentioned, which is www.PAFA.org. Or feel free to drop me an email, Jallsopp@pafa.org and sign up for our online newsletter, follow us on social media. And think about coming to the annual student exhibition in May.

Hank Smith: Well, I think that’s a great start and end. Thank you very much.

Jane: Thank you.

Hank Smith: Thank you. And to our listeners.  Thank you for listening to this special two-part series of Speaking of Quality Wealth Management Insights. For more information about PAFA please visit www.PAFA.org.

Until next time, I’m Hank Smith, stay bullish.

Maxine Cuffe: Thanks for listening to this episode of Speaking of Quality, Wealth Management Insights with Hank Smith. To hear future episodes of speaking of quality, please subscribe on Apple Podcasts, Spotify, Google podcasts, or wherever you listen to podcasts. To learn more about the habit for Trust Company, please visit www.haverfordquality.com.

This podcast is provided as general commentary and market overview and should not be relied upon as research a forecast or investment advice and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt an investment strategy any opinions expressed are as of the date this podcast was recorded and may change at any time. And are the opinions of that commentator not Haverford’s, any opinion or information provided are believed by Haverford to be reliable at the time of this podcast recording, but are not necessarily all inclusive or guaranteed for accuracy. Before making any financial decisions, please consult with an investment professional.