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A History of the Indianapolis Foundation and Its Funding of the Indianapolis Symphony Orchestra, 1893-1984 Dissertation Defense: December, 2011

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A History of the Indianapolis Foundation and Its Funding of the Indianapolis Symphony Orchestra, 1893-1984 Dissertation Defense: December, 2011 DEFINING COMMUNITY NEED THROUGH THE LENS OF THE ELITE: A HISTORY OF THE INDIANAPOLIS FOUNDATION AND ITS FUNDING OF THE INDIANAPOLIS SYMPHONY ORCHESTRA, 1893-1984 Marc Alan Hardy Submitted to the faculty of the University Graduate School in partial fulfillment of the requirements for the degree Doctor of Philosophy in the Department of Philanthropic Studies Indiana University May, 2012 Accepted by the Faculty of Indiana University, in partial fulfillment of the requirements for the degree of Doctor of Philosophy Kevin C. Robbins, Ph.D., Committee Chair Robert G. Barrows, Ph.D. Doctoral Committee David M. Craig, Ph.D. December 9, 2011 Kenneth L. Gladish, Ph.D. ii © 2012 Marc Alan Hardy ALL RIGHTS RESERVED iii This dissertation is dedicated to my wife, Jodie Hardy, whose love, encouragement, support and patience were instrumental in its completion. iv ACKNOWLEDGEMENTS I thank my Dissertation Chair, Dr. Kevin Robbins, for his tremendous commitment of time and expertise. As both a mentor and teacher, his counsel, guidance, instruction, candor and advice have been absolutely invaluable to the completion of my academic degrees and the success of my academic career. Additional thanks go to the members of my dissertation committee. Dr. Robert Barrows and Dr. David Craig have both instructed me as a student in their classes and the research papers I completed in their courses helped hone my research, writing and critical thinking skills. Dr. Kenneth Gladish has been extremely helpful in filling in gaps of information about the Indianapolis Foundation and connecting me with important people and resources that assisted my research. The feedback from all three based on their diverse academic disciplines has added immeasurably to the quality of the content of my work. I would not have embarked on this path in Philanthropic Studies had it not been for a number of scholars and mentors at the Center on Philanthropy. I was introduced to the Masters program by Charlie Johnson, who guided this adult student through the maze of academic rules and regulations as a Philanthropic Studies Masters student, and I thank him for his concern and advice. Dr. Dwight Burlingame, Director of Academic Programs, has been an advisor and professor from the beginning of my graduate school experience, and has managed to expertly shepherd many a graduate student, including myself, through the program to receive our degrees. His knowledge as a scholar and his help as a mentor have been invaluable to my growth in the field. Dr. Leslie Lenkowsky, former Director of Graduate Programs, deserves the respect of all of the Ph.D. students for v taking the Ph.D. program in Philanthropic Studies from a fledging startup cohort of seven mid-career students, of which I was one, to the nationally recognized program that it is today. His skillful navigation of the complex graduate school rules and requirements served all of us well, and his classes were always a great submersion into the present day realities of philanthropy and nonprofit organizations. I owe my acceptance into the program to the encouragement and help of Dr. Constance Baker, the former Director of Graduate Studies. Finally, my thanks to Dr. Gene Temple for his leadership as the former executive director of the Center on Philanthropy, and Dr. Patrick Rooney, the current executive director, for their commitment to sustain and grow the center, and especially to strengthen the Ph.D. degree. Writing this dissertation while also working full-time in academia has been a challenge, but it would have been much more difficult if it were not for the patience and understanding of those I worked for. While I was Associate Director of the Center for Research and Scholarship at Butler University, Dr. Robert Holm extended to me not only his friendship, but the time and resources to continue my research. While I been Director of Nonprofit Executive Programs at the University of Notre Dame, my supervisor, Thomas Harvey, has gone above and beyond in so many ways to help me complete the writing of the document you are about to read. My deep gratitude and thanks goes to both of them. My research would not have been possible without the help of Brenda Burke and the Ruth Lilly Special Collections staff at IUPUI. Brenda‟s assistance was crucial to locating and duplicating archival materials from the Indianapolis Foundation collection. I would also like to thank the following people and institutions: the Indiana State Library vi staff; Tom Akin, Indiana State Symphony Society; Mallory J. Brooks at the Eli Lilly & Company Archives; the library staff at the Nina Mason Pulliam Indianapolis Special Collections at the Indianapolis-Marion County Public Library; Greg Lynn, Vice President of Real Estate & Facilities, Central Indiana Community Foundation; and the staff of the Indiana Historical Society. Many thanks also to Debra Barker of IUPUI Graduate School who helped me with the final formatting of the manuscript. Finally, many thanks to my fellow members of the first cohort of Philanthropic Studies Ph.D. students. As my peers and friends, they offered tremendous support and encouragement through the dissertation process. May we all use what we have been given to make a positive difference in the world. vii ABSTRACT Marc Alan Hardy DEFINING COMMUNITY NEED THROUGH THE LENS OF THE ELITE: A HISTORY OF THE INDIANAPOLIS FOUNDATION AND ITS FUNDING OF THE INDIANAPOLIS SYMPHONY ORCHESTRA, 1893-1984 This history investigates the beginnings of community foundations in general and the creation of the Indianapolis Foundation specifically and its eventual funding of the Indianapolis Symphony Orchestra. My findings reveal that, contrary to previous histories that have been written, the creation of community foundations was not driven by benevolence but by changes in federal and state banking laws starting in 1913 that allowed banks to have trust departments that broke the monopoly that trust companies had long enjoyed. In response, trust company executives chartered community trusts to publicly position themselves as benevolent, community-minded businessmen. This distinguished them as trustworthy compared to the greedy bankers of the day, which helped trust companies gain trust customers. Community trusts were responsible for identifying and disbursing funds to deserving beneficiaries, thereby relieving trust companies of a costly and time consuming burden. Even more important, the trust companies retained control over the community trusts by appointing surrogate board members. In addition, none of the trust companies that chartered the Indianapolis Foundation donated their own money, yet appeared charitable. All of these factors made community foundations a very lucrative arrangement. viii Funding the areas of arts and culture was not designated in the Indianapolis Foundation‟s original purpose statement, yet the Indiana State Symphony Society was funded at the height of the Great Depression while many Indianapolis citizens went hungry. The love of music played a very small part in efforts by the wealthy elite to garner support from the Indianapolis Foundation for the Indianapolis Symphony Orchestra. The public justifications for funding the symphony began with giving psychological relief to the citizens of Indianapolis from the pressures of the Great Depression, to the need of employment for musicians, then the importance of musical education of children, expanding to the importance of the symphony to the city‟s reputation, and finally, in the 1980s, the symphony as a community asset that helped rejuvenate downtown Indianapolis. However, the real reason for funding was that the wealthy elite wanted the symphony to use as a flattering cultural institution that would elevate their social status and attract fellow elites and businesses to Indianapolis. Kevin C. Robbins, Ph.D., Committee Chair ix TABLE OF CONTENTS LIST OF TABLES ......................................................................................................... xiv LIST OF FIGURES .........................................................................................................xv LIST OF ABBREVIATIONS ...................................................................................... xvii CHAPTER 1: WHY ONLY TRUST COMPANIES? ....................................................1 Definition of Terms..............................................................................................................3 Other Histories of Community Foundations ........................................................................7 CHAPTER 2: THE ROLE OF TRUST COMPANIES IN THE CREATION OF COMMUNITY FOUNDATIONS ............................................................................23 Fees Charged by Trust Companies for Trust Administration and Distribution .................34 Using Advertising and Marketing to Promote Community Trusts ....................................39 The Lawyers vs. the Bankers: Titans of Wealth Clash ......................................................40 The Clash between Banks and Trust Companies ...............................................................49 The Proof is in the Assets ..................................................................................................50 Conclusion .........................................................................................................................56 CHAPTER 3: THE FORMATIVE YEARS: AN INTRODUCTION AND OVERVIEW OF THE INDIANAPOLIS FOUNDATION’S EARLY YEARS OF INACTIVITY, 1915-1923 .........................................................................................60
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