KC Art Institute on thin ice with donor lawsuit
The Kansas City Star
When someone makes a pledge in a charitable capital campaign, is it a contract or just a promise to try?
That’s what seems to be at issue in a dispute between the Kansas City Art Institute and Larry and Kristina Dodge, the California couple who pledged $5 million to construct a new building on campus.
The building is up, bearing the names of the donors. But the school has received only $1 million so far, and has gone to court to secure the remainder.
Larry and Kristina Dodge, meanwhile, have run into legal and financial difficulties and say they are unable to pay. Based on the saga described in this Kansas City Star story, it does sound as though the art institute is suing to squeeze blood from a stone. Larry Jones, former CEO of American Sterling Bank in Sugar Creek and a key figure in several other businesses, has been fined for alleged unethical dealings and banned from banking for life. The couple is heavily in debt on multiple fronts.
It doesn’t sound as though the art institute should have seen this coming. At the time they agreed to become a lynchpin in the school’s capital campaign, Larry and Kristina Dodge were enjoying accolades for their philanthropy. They had recently giving $20 million to Chapman University in California, which is where the Dodges are residing.
Things happen, however. And when they do, does a respected institution such as the art institute want to sue a donor? Seems like that might have a chilling effect on the next fund-raising drive.
Here’s what Andrew Mytelka, an editor at the Chronicle of Philanthropy, told The Star’s Matt Campbell:
It doesn’t happen much, and when it does happen the institutions tend to do their utmost to keep it under wraps because this can only be bad for them, both showing that they had a pledge that was not fulfilled and that they were willing to take a donor to court. I think it’s a deterrent to future donors.
Or maybe not too much. The art institute has a loyal clientele, and Larry and Kristina Dodge were newcomers.
While the Dodges were forthcoming with their side of the story for The Star’s article, the art institute provided only a terse statement. As with most disputes, there undoubtedly is more than meets the eye.