Cleveland charities weather billionaire donor's boycott

By M.R. KROPKO, AP Business Writer

CLEVELAND (AP) - Some of the city's nonprofit organizations faced an uncertain future when billionaire philanthropist Peter B. Lewis stopped making donations locally because he was unhappy with Case Western Reserve University's board of trustees.

Nearly six months later, organizations that might have benefited from Lewis' financial support are holding their own, and the university's new president is quietly working to resolve the situation.

Lewis announced in June that he was stopping charitable contributions in Cleveland because he believed the private university was poorly managed and its national academic stature fell short of its potential. He hoped his boycott would force a change in the university's board.

If local groups have felt the crunch, they haven't contacted two major charitable support groups in Cleveland, the Gund Foundation and the Cleveland Foundation, the groups' leaders said.

"The pain is spread, I'm sure," said David Bergholz, executive director of the Gund Foundation, adding that most groups are unlikely to talk about it for fear of damaging their future relationship with Lewis. "No grant seeker in their right mind is going to let on too much."

Lewis, 70, chairman of the suburban Cleveland-based insurance company Progressive Corp., is well known for his giving, especially to the arts.

Over the past few years, he donated $115 million to Princeton University and $50 million to the Solomon R. Guggenheim Museum in New York. He is on the boards of both. Forbes magazine recently estimated his worth at $1.3 billion.

Lewis gave Case a $37 million gift, the biggest the university ever received, to build the newly dedicated $62 million Peter B. Lewis Building, a metallic, swirling home of the Weatherhead School of Management designed by renowned architect Frank Gehry, a Lewis friend.

Jill Snyder, director of the Museum of Contemporary Art, said Lewis has been an occasional donor, most recently through a $25,000 gift two years ago.

"We enjoy when he does decide to make a contribution to us. But we don't have to depend on it. We have a diverse funding base," Snyder said.

Donna Brock, a spokeswoman for the Cleveland Museum of Art, which is planning an expansion, would not discuss specifics of the Lewis boycott.

"Peter B. Lewis continues to be a valued member of our board of trustees, and he's not reneged on any commitment to this organization," Brock said in a statement.

Lewis said in a recent interview he's more optimistic now about the university, but not satisfied by recent concessions from Case that include gradual change in the board's composition. He has repeatedly said the entire board should be replaced.

"This was not a matter of pique," Lewis said. "They haven't changed the board. They've talked about plans to change the board in the future. Great, I'm optimistic."

The board adopted term limits in October, under which some seats could be phased out. The board has peaked at greater than 50 members and now has 44, including four added last month. Several terms will expire over the next two years.

George Aronoff, a lawyer and 10-year board member at Case, said Lewis' criticism may have created "a sense of urgency" for Case to review its management.

"I don't think anybody on the board thinks Peter's analysis is correct that the university is dysfunctional," he added.

Edward Hundert, the new president at Case, has made a point of cultivating a working relationship with Lewis, while encouraging changes at the school.

"He and I are in touch almost every week," Hundert said. "Our ongoing conversations not only indicate a great working relationship, it involves some of the highest quality advice I'm getting. As I work on a new vision statement, I send him each draft."

(Copyright 2002 by The Associated Press. All Rights Reserved.)