0.6 Chapter four: the turning tide, 1960-1982  (Page 12/14)

It is difficult to understand how the Society could have continued to pursue its bold and aggressive expansion without articulating a plan for how such a pro­gram would be financed. In the reports of the president in the 1970s, Goelet expressed the Society's need for money, but without a strong sense of urgency. In 1971, in his first annual report, Goelet wrote that "expenses have gone up ap­preciably, despite careful management and stringent economies. Endowment income hasn't kept up. ... We must find additional support." In the early 1970s, steps were taken to try to address the growing financial problem, but they were small ones: for example, raising the dues for members by $5 and adding new classes to the membership structure. Such initiatives were of symbolic importance in the 1960s, when the Society was running surpluses; in the 1970s, however, the Society was in need of substantial sums of money, and these actions had little chance of providing them.

As the 1970s progressed and the Society's financial situation continued to de­teriorate, it seems clear in retrospect that the Society's move to a total return spend­ing policy came to be regarded by the board more as a way of increasing spendable income than as a way of maximizing the growth of its investment port­folio. It is almost as if spending realized capital gains was seen as the solution to the Society's budget woes. In 1973, Goelet wrote: "Despite having gone to a 'total return on capital' approach to income from endowment, we end the year with a substantial deficit and it is clear that we must generate additional financial sup­port in the years ahead."

The following year, as budgets were being prepared that projected a $300,000 deficit, one trustee, in a letter of protest accompanying his contribution for the year, wrote: "Having voted with misgivings for the increase in the budget recom­mended by the finance committee, I feel an obligation to contribute toward it, par­ticularly as the percentage of capital formula for expenditure has become inadequate to the point of being unrealistic."

Meanwhile, Goelet, in his understated fashion, described the fiscal dilemma in the 1974 annual report: "Economic factors, including inflation, necessitated a further large operating deficit. We must now appeal for financial help to our friends, [to] the community at large, and to whatever sources may be helpful. I feel confident, however, that with the strong continuing support of the Trustees and the staff, in addition to our loyal supporters, we will be able to cope with our financial difficulties." The aforementioned projected deficit, $300,000 for 1975, was controversial and a subject of debate among the Society's trustees. In the end, it was "the general feeling of [the board]that it would be most unfortu­nate to lose the present momentum of the Society by cutting back activities prior to making a determined effort to raise money to meet the deficit."

One place the Society immediately turned for additional support was to its own board of trustees. In an internal memorandum written in response to a specific request from Goelet, the cumulative ten-year cash contributions of the members of the Society's board were listed. This report revealed that although one might criticize Goelet's skills as a fundraiser and communicator, one could not question his commitment to the Society as a donor. By far the greatest contribu­tor to the Society was Goelet himself. He had given approximately $95,000 between 1965 and 1975. The second most generous trustee was C. Otto von Kienbusch, who had contributed $23,500. No other trustee had cumulatively given more than $10,000 over the ten-year period. The total contributions of the group of sixteen trustees listed was $ 173,400, meaning that Goelet (55 percent) and von Kienbusch (14 percent) accounted for 69 percent of the total. For the ten-year period, the average cumulative contribution of the other fourteen trustees was approximately $3,900, or $390 per trustee, per year. The prospects for closing a $300,000 gap from annual gifts by the trustees seemed slim; however, the drive for gifts during 1975 was highly successful. Gifts, grants, and contributions received during the year amounted to $319,479, compared to just $99,000 in 1974. These funds went a long way toward eliminating the Society's deficit for 1975. Unfortu­nately, that level of giving could not be sustained, and contributions dropped back to their historic levels in the following years. The Society's struggles to balance its operating budget worsened in the late 1970s.