March 19, 2018

As tax reform threatens philanthropic giving, Wadsworth CEO focuses on audience development, donor retention

Photos | Bill Morgan
Photos | Bill Morgan
As Thomas Loughman enters his third year as CEO of the Wadsworth Atheneum, he says philanthropy remains the key to the Hartford art museum’s future.
Wadsworth has tried to stay current with cultural trends, like incorporating interactive technology into exhibits.

During his first two years as CEO of the Wadsworth Atheneum, Thomas Loughman says he's been pleased by steady support from corporations and individuals and by the Hartford museum's ability to draw visitors.

But what he's most excited about lately is that several major construction projects surrounding the country's oldest art museum have wrapped over the past 16 months, which has made visiting Wadsworth a smoother experience.

He said he hopes the opening of UConn's adjacent Hartford campus last summer, connecting to Front Street and its accessible parking garage, as well as the reopening of Atheneum Square North and a renovated Travelers plaza, translates into more visitors.

"It's like night and day," Loughman said during a recent interview as he strolled the museum's galleries. "Now construction is the exception not the rule in the neighborhood."

Since Loughman arrived in early 2016, Wadsworth's attendance numbers and admissions revenue have remained above 2014-2015 levels. He had the benefit of starting the job shortly after the museum completed a five-year, $35 million renovation project.

Membership revenues, however, continue to trend downward, hitting a decade-low of about $312,000 last year.

Loughman says he's not sweating the membership dollars — they represent, after all, less than 4 percent of the museum's total 2017 revenues.

What he and many other museums, nonprofits and charities are concerned about, is the future of individual philanthropy.

The federal tax overhaul passed by Congress late last year doubled the individual standard deduction, reducing the incentive to itemize — which is how many people claim their charitable contributions.

Loughman traveled to Washington, D.C., twice in the run-up to the law's passage to share his concerns and tell lawmakers how individual donations represent approximately 75 percent of the philanthropic money Wadsworth receives each year.

"I told our delegation that last year, 4,000 individuals or households gave us money, and 3,500 of those gave fewer than $1,000. So that's an incredibly broad base of support," Loughman said. "And if those $500, $600, or $50 donations don't matter as much to someone, it's of concern."

Contributions to Wadsworth in 2015, as it prepared to open its renovated galleries, grew to nearly $16 million, according to the museum's annual report. Annual giving has since fallen to just under $4 million in each of the past two years.

Loughman said that simply represents a return to more normal giving levels, following a surge of contributions related to the renovations and capital expenditures.

"In terms of operating dollars, we've been pretty consistent and solid," he said.

That includes corporate giving.

"We have solid reliable annual commitments from the major employers across Connecticut," he said. "I've found those relationships to be quite solid."

The museum, which has a $99 million endowment, received its largest-ever donation in 2013, a $9.6 million bequest from the estate of Charles Schwartz, a Connecticut resident and art collector who died in 1995. Schwartz's family requested the money be used to acquire 18th-century English and European art.

Wadsworth learned not long ago that it was on deck to receive an anonymous "mid-seven-figure" bequest from a donor. Loughman wouldn't reveal further details.

He called the pending donation "forever money," because it will be funneled into investments that provide a chunk of Wadsworth's operating budget each year.

"It's a perpetual fund for the benefit of the general operations of the museum," he said.

Changed neighborhood

It's too soon to tell what impact federal tax reform might have on Wadsworth's financial outlook, so for now, Loughman said he and his 73-employee team remain focused on membership renewals, and prospecting for new members and donors through a direct-mail campaign and other outreach efforts.

They've created a database of key corporate contacts at the 100 largest area companies through which the museum hopes to build up its "employee engagement" programs.

A number of large employers have corporate memberships that allow their workers to attend free of charge. The employee engagement efforts aim to take those relationships a step further.

Wadsworth, for example, is hoping to design custom tours or events for employee groups focused on particular topics.

Perhaps most important to Wadsworth's mission, Loughman has focused on exhibiting fine art and increasing access to it.

Nearly 3,000 Hartford households have registered for his signature "Wadsworth Welcome" program, which provides free admission to city residents.

Special exhibits also receive top attention.

"They're the catalyst for many, many visits, and often for first-time visits," he said.

Loughman said he also wants to leverage the benefits of a surrounding neighborhood that looks very different and much busier than it did just five years ago.

The arrival of UConn has invigorated Prospect Street, which runs along the backside of the Wadsworth. Loughman has made a point of trying to present the museum's best face to the newly bustling street.

The museum recently dressed up its UConn-facing facade with fresh signage, including a portrait of a bemused-looking Daniel Wadsworth stationed in a second-floor window.

"Instead of this being the side of the building with the garbage cans, it should be the side of the building that's welcoming, and something that incites curiosity," Loughman said.

Wadsworth also invested nearly $100,000 to renovate its restaurant. The renamed Untitled (2017) Café reopened in September and is run by Mills Restaurant Group, which operates six other restaurants in the area, including the nearby Republic at the Linden.

Loughman also said Wadsworth is in talks with UConn to provide classroom space for its arts administration master's degree program, currently in Storrs.

The collaboration would require renovating a second-floor storage area. Loughman said the space could be ready sometime during the upcoming academic year.

UConn spokeswoman Stephanie Reitz declined to comment on any potential arrangement.

"While we're not in a position to talk publicly about the conversations, we're grateful to the Wadsworth and the many other institutions in downtown Hartford whose support is helping make the campus such a vibrant, successful place," Reitz said.

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