Charities wait for news on future of Lehman grants

The Almeida Theatre in North London thought its outreach program was on solid financial ground after the Lehman Brothers Foundation Europe pledged 227,850 pounds in 2007 for three years.

Now, with the charity’s parent company Lehman Brothers Holdings Inc. filing for bankruptcy protection and Barclays Plc poised to acquire its North American investment-banking unit, the theatre wonders if the checks will still be in the mail. The Almeida was counting on the gift to cover arts education programs for disadvantaged students in east London schools.

“We don’t know what’s happening at all in that area of the company,” Janine Shalom, the Almeida Theatre’s spokeswoman, said in an interview. “The Almeida’s projects department has worked with many of Lehman’s staff over the last two years, and our thoughts are with them at these difficult times.”

Members of the Lehman Foundation’s golden donor list and those wishing to join it are in a state of limbo as the organization faces an unclear future.

In 2007, the Lehman Foundation and its European offshoot gave about $1.2 million in grants to more than 80 cultural institutions around the world, according to the group’s 2007 global philanthropy report. Gifts that year ranged from a $10,000 check for the Lyric Opera of Chicago to a $100,000 donation to the Tokyo Symphony Orchestra.

Orchestras

Akira Takeuchi, a sales executive with the Tokyo ensemble, said that if the organization can’t get a grant from Lehman next year, it will turn to another sponsor or dig into its own pocket to help pay for a future children’s concert.

Katy Clark, managing director of the Orchestra of St. Luke’s in New York, said it was hoping the Lehman Foundation would step up to the plate again with another $50,000 or similar-sized gift for its arts education program next year. The organization, with a $5.5 million budget, applied to Lehman for a grant this spring to fund the project.

Lehman pledged 300,000 euros ($431,685) to the Opera National de Paris for three years, starting in September. The opera house said it hasn’t yet spoken to the foundation about the status of the grant since the company’s bankruptcy protection filing this week.

“If I were the development director of an arts organization, I would start immediately planning how to make up for a grant it expected from Lehman and look at other potential revenue streams,” said Dwight Burlingame, associate executive director of Indiana University’s Center on Philanthropy, in a phone interview. “Normally, the foundation that is tied directly to a corporation that goes bankrupt also ends up dissolving.”

Lehman Brothers spokesman Mark Lane didn’t return calls from Bloomberg News seeking comment about the foundation’s fate.

Apollo Pledge

Some Lehman grantees, such as the Apollo Theater Foundation Inc., are caught in the middle. The nonprofit group, which runs the entertainment venue in Harlem that helped launch the careers of Billie Holliday, Stevie Wonder and Michael Jackson, is set to receive a total of $1 million from Lehman between 2007 and 2011.

Calls to Apollo Theater President Jonelle Procope about the status of the pledge weren’t returned immediately.

“If the Apollo has a multiyear pledge in place, that could help them secure the money that’s owed to them,” said Doug Bauer, senior vice president of Rockefeller Philanthropy Advisors in New York, in a phone interview. “For those who have pending applications, there is little they can do.”

Some organizations already are seeking other donors and sponsors in case the Lehman Foundation collapses or suspends its grants projects.

Diversifying Donors

“A good philanthropic program, like a good investment program, is heavily diversified,” said Reynold Levy, president of Lincoln Center for the Performing Arts in New York, whose board members and donor base represent dozens of industries ranging from real estate to pharmaceuticals. “That diversity and base we have means that we can withstand the shocks.”

“I was looking for Lehman to become a major donor,” said Marjorie O’Malley, development director for Boston’s Berklee College of Music, which has received grants between $50,000 to $70,000 in the past two years from the foundation to fund music classes for disadvantaged students. “They were just getting to know us, and they saw the value of investing in kids.”

Merry Ivanoff, the development director of the American Ballroom Theater Company in New York, said she’ll increase the number of grant applications this year to about 100. Last year, she mailed out 50 to 75 requests.

The Lehman Foundation gave $20,000 in the past two years to the organization, which offers dance instruction to middle- and high-school students.

“I thought that I would apply next year to Lehman, but now I don’t know,” Ivanoff said in a phone interview. “I think everyone will be working harder to obtain grants because of the economic situation that pervades the country at the moment.”

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