Major Rochester recipients of Eastman Kodak Co. donations are thinking the unthinkable: a world without Kodak gifts.
For many local cultural and social service groups, the photography giant was the most generous donor. Still reeling from the 2008 Wall Street plunge, they were stunned last week by Kodak’s Chapter 11 bankruptcy filing.
Now they face a real prospect of zero donations — at least while Kodak reorganizes.
These organizations will feel the damage in different ways, depending on how much they received in recent years. Kodak’s largest gifts went to major building or renovation projects throughout Monroe County.
In 2010, it contributed $1 million for Rochester Institute of Technology’s Golisano Institute of Sustainability, said RIT spokesman Bob Finnerty. Since its inception, RIT had received a total of $61 million from Kodak.
The Eastman School of Music received a $10 million gift in 2008 to renovate its concert hall at 60 Gibbs St., now called Kodak Hall at Eastman Theatre.
And in the mid-1980s, Kodak gave George Eastman House an endowment gift worth more than $17 million for capital improvements and collections care.
“Over the past few decades, Kodak’s support has totaled millions of dollars,” said Michelle Kraft, a spokeswoman for United Way of Greater Rochester. “We hope that it will re-emerge from its restructuring with a new strength and resolve.”
Kodak’s spectacular gifts continued Eastman’s own tradition of building and supporting Rochester’s cultural institutions. But today, most area cultural groups see its philanthropic clout quite differently.
“Kodak’s donations have gradually declined in recent years, because of their financial strains,” said Sarah Lentini, president of the Arts & Cultural Council for Greater Rochester. “But they were generous, even at more modest levels.”
Kodak leaders haven’t yet offered specifics on its future philanthropy.
“In the long term, reorganization is about making us a healthy and vibrant enterprise — one that could again continue our long tradition of supporting our communities,” they said in a statement. “During this process, however, we will be making some difficult choices and that includes a suspension of corporate philanthropy.”
They didn’t clarify whether a decision already has been made to halt gifts for now. Their community affairs team, however, has started looking for ways to provide non-cash support.
“We received words of encouragement and understanding from many organizations that we’ve supported,” they added in the statement.
That assertion was borne out in recent interviews with several nonprofit leaders. They said they recognized Kodak’s plight and its possible effects for their own budgets.
“We’ve got to be incredibly appreciative, knowing what they’ve gone through,” said Philip Lentini, vice president for business development and strategic marketing at Rochester Museum & Science Center. “In fact, they recently dug a little deeper and came up with an extra $7,500 for our exhibit about Sept. 11, 2001.”
Ruby Lockhart, executive director of Garth Fagan Dance, echoed that sentiment.
“They’ve been very generous to us when they could,” she said. “We were very surprised to get anything at all last year, given their circumstances.”
Both organizations have seen their Kodak donations decline markedly.
“Our all-time high was a $50,000 Kodak donation in 1984,” said Phillip Lentini. “There was a significant drop in the early 1990s to $40,000, then $30,000 from the mid-1990s to 2001. For the last six years, it has been $20,000.”
In 2002, Kodak gave Garth Fagan Dance a three-year grant of $125,000 for producing new works. Over the past three years, its annual gifts declined from $20,000 to $5,000. Lockhart emphasized that Garth Fagan Dance never based its budget on Kodak’s gifts, and could absorb the loss if they stopped.
“Since the loss of Kodak’s film business, it was clear to us that we would be impacted,” she said.
Geva Theatre Center has received much larger Kodak gifts — typically $25,000 to $30,000 — and is now trimming its 2012-2013 budget to compensate for their anticipated loss.
“We just lost one of our biggest philanthropic supporters,” said Tom Parrish, executive director of the theater at 75 Woodbury Blvd. “Now we’ll have a big hole in our budget.”
He didn’t know which programs might have to be cut, or whether other donors would come to Geva’s rescue. Kodak’s biggest gift to Geva came in 1985, when it donated $250,000 to renovate the former Naval Armory that the theater occupies. It also gave $50,000 in 2003 to Geva’s 25th anniversary campaign.
George Eastman House also is a longtime recipient of Kodak’s largesse, because the museum celebrates the legacy of Kodak’s founder. The landmark at 900 East Ave. includes Eastman’s mansion and an international photography museum.
In 2010, it received $391,485 from Kodak — $200,000 in cash and the rest in donated artifacts. Its leaders wouldn’t comment on Kodak’s bankruptcy and its possible repercussions. “We’re giving zero interviews out of respect for Kodak,” they said in a statement. But they and other Kodak beneficiaries could have reason for concern. Generally speaking, corporate pledges and donations are not legally enforceable during Chapter 11 bankruptcy proceedings.
A Rochester bankruptcy expert said that Kodak’s Chapter 11 status puts significant new restrictions on its charitable giving.
“In many ways, Kodak’s world in Chapter 11 is now going to be viewed through the eyes of its creditors,” said John Ninfo, a retired judge for the U.S. Bankruptcy Court for the Western District of New York. “The creditors essentially own the company and their main concern is, ‘How am I going to get paid?'”
Kodak’s charitable pledges could be dealt with in several ways, Ninfo said. If Kodak paid a legally enforceable pledge within 90 days before filing bankruptcy, it could be considered “a preferential payment.” That means it could be collected by the bankruptcy court and put back into the bankruptcy estate to pay creditors.
But if Kodak hasn’t yet paid an outstanding pledge, the beneficiary might want to start saying prayers soon.
“Is the bankruptcy court likely to let Kodak pay it? Probably not,” said Ninfo. “Not unless it can be shown that the donation is an important part of its business plan or could somehow produce income for Kodak.”
Nationwide, nonprofits have seen their donations dwindle since stocks fell in 2008 and early 2009.
But Rochester may be more dependent on corporate giving than other communities.
“Historically, Kodak would declare its amount and other companies would know what their fair share was going to be, following Kodak’s lead,” said Jennifer Leonard, president of the Rochester Area Community Foundation. “These days, nobody expects them to be a giving leader. But Kodak should feel nothing but good for its philanthropy in the long run. We hope they can restructure into a company that can be once again a generous corporate citizen.”
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