Philadelphia Orchestra’s bankruptcy could mean forfeiture of $50 million gift

Posted on: May 23, 2011

In Sunday’s (5/22) Philadelphia Inquirer, Peter Dobrin writes, “When Leonore Annenberg, widow of billionaire publisher Walter Annenberg, decided to give $50 million to the endowment of the Philadelphia Orchestra, she created a donor agreement stipulating in great detail how the money should be handled, and how the investment proceeds could be spent. The 2003 gift, the largest in the orchestra’s history, remains the keystone in the group’s endowment, contributing up to several million dollars a year to the budget. But turning over $50 million wasn’t the end of the Annenberg Foundation’s relationship with the orchestra. Although Leonore Annenberg died in 2009, the 12-page agreement bearing her signature remains in effect, and among the controls it outlines is a startling stipulation: The foundation may ask for the money back if the orchestra files for bankruptcy. The Philadelphia Orchestra Association filed for reorganization last month, unleashing fears that the Annenberg Foundation will try to reverse its munificence. … Several observers close to the situation, who declined to be identified, said they could not predict whether the $1.7 billion Annenberg Foundation would try to recall the balance of the donation—a gift made, to a large extent, based on the warmth between Leonore Annenberg and former orchestra music director Christoph Eschenbach.”

Posted May 23, 2011