Alliance Faces Dilemma in Suit Against Donor

THOUSAND OAKS —  It is potentially a major calamity for a fund-raising group to sue its largest donor--an event to be avoided at all costs.

But that is exactly the unwelcome situation that the fund-raising arm of the Civic Arts Plaza now finds itself in after deciding to take reclusive millionaire Charles E. Probst to court for failing to deliver on a $2-million pledge.

“This is obviously a nonprofit nightmare,” said Jack Shakely, president of the California Community Foundation, which manages money left to charity by wealthy individuals. “I know everybody probably did everything possible to keep this from happening. It’s just terrible.”

The nonprofit Alliance for the Arts faces some difficult questions. Will the Charles E. Probst Center for the Performing Arts have to be renamed? Will the lawsuit scare away other potential donors? Can the alliance fulfill its promise to support the theater?

Dick Johnson, the alliance’s fund-raising director, is optimistic. So far, the group has made great progress toward its $15-million endowment goal, attracting more than 500 donors who have pledged a total of $10.6 million, he said. Most of the pledges range from $50 to buy a brick at the plaza’s Oaks Courtyard to $1,000 for a theater seat.

Johnson believes a dispute with one donor, no matter how scandalous, is not enough to affect all the work alliance members have done.

“I think we’re still on target,” he said, pointing out that a company pledged $50,000 just last week. “So many organizations and so many individuals have come forward, we are not concerned about our future.”

The alliance’s lawsuit against Probst may be the first time a Ventura County civic fund-raising group has sued one of its largest donors, according to charity officials.

But it is certainly not the first time it has happened in Southern California.

The Irvine Barclay Theater sued the wife of developer Richard A. Barclay because she refused to make good on his $1-million pledge after he died. The UC Irvine theater won the suit last year, but has yet to receive any money: Marjorie A. Barclay’s attorneys may appeal the decision.

“I can’t tell you how strongly I feel about this. It is an awful thing for an arts center to go through,” said Douglas Rankin, director of the Irvine Barclay Theater.

“It is not a pleasant experience, not anything anyone ever wants to do,” he added. “But sometimes you have to do it. In our situation, after careful consideration, we decided it was our obligation.”

The toughest part of suing a donor, Rankin said, is wondering how many potential donors you will lose by doing so.

“You never know when a donor doesn’t come forward,” he said. “It’s definitely something you ponder sometimes. You never know how many you scared off.”

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Rankin said the theater’s fund-raising totals since the suit have been about the same as before. He declined to say exactly what they were.

However, Rankin said he is concerned that publicity from the lawsuit may affect a special $2-million fund-raising drive the theater will kick off later this year, since the possible appeal may keep the lawsuit in the news.

With increasing competition and a shrinking number of donations to arts organizations, bad publicity involving donors these days comes at a difficult time, said Victor Gotesman, executive director of the Cerritos Center for the Arts.

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“It’s not good when an arts organization has that type of problem,” said Gotesman, who also heads the center’s fund-raising group. “This is not just bad for Thousand Oaks, this is bad for all arts groups. It’s already hard enough to raise money. This could make it harder.”

Nevertheless, Gotesman said he commends the alliance for having the courage to take its top donor to court.

“It’s certainly a difficult situation when something like that happens,” he said. “You always approach those things as a last resort, because donors are your lifeblood.”

Suing a donor for reneging on an act of philanthropy was almost unheard of two decades ago, Shakely said. Now it has become an accepted practice.

“Is this going to hurt the organization’s fund-raising ability? No, I don’t think so,” he said. “This has to do with integrity. It would have hurt them 20 years ago.

“But now, people realize that fund-raising groups are like businesses, and they need to act like businesses sometimes when enforcing agreements.”

That is precisely the point of the alliance’s lawsuit, said Daniel Grunfeld, the attorney representing the group.

Probst, 52, and his wife, Florence, signed a legally binding contract to donate $2 million to the alliance over five years, Grunfeld said.

In return, Probst’s name was emblazoned in large golden letters outside the Civic Arts Plaza’s main theater. He received the right to purchase 10 tickets to performances before anyone else, and two prime parking spots.

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But the Probsts failed to make the two required payments of $175,000 last year. Their only contribution was the initial $250,000 payment in the fall of 1994, according to Grunfeld. The alliance’s efforts to get the rest of the money were fruitless.

When asked if the alliance was ever able to reach Probst, a mysterious figure that no one in Thousand Oaks seems to know anything about, Grunfeld offered “no comment.”

Neither Probst nor his attorney returned phone calls last week.

The alliance has gone out of its way to protect the privacy of Probst and other donors who do not make their pledges on time, Johnson said. So far, the group has received about $4 million of the $10.6 million that donors have pledged, he said.

“We’ve had some donors contact us and say they have a cash-flow problem, their husband has lost his job, and they will pay a little later,” Johnson said. “We’re willing to work with people.

“I think part of the reason we have been successful is because we have offered them the privacy and the ability to say, ‘Hey, I need to hold off for a while. I can give you the donation later in the year.’ ”

Indeed, dealing with donors who have not fulfilled their pledges is a part of life for any fund-raising group.

Debbie Giles, spokeswoman for the United Way of Ventura County, said the nonprofit organization assumes in its budget that it will never receive 9.5% of the money donors pledge.

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That way, Giles said, it is prepared for the worst.

“We do realize companies leave the area, and people lose their jobs,” she said. “When Bank of A. Levy was sold, for example, that [affected] the pledges from those employees.”

So, what do other Civic Arts Plaza donors think about the Probst scandal? Those who even agree to talk about it have little to say.

Harry Selvin, a member of the plaza’s board of governors, is also a member of its founder’s circle, meaning that he pledged more than $50,000.

He believes the Civic Arts Plaza is too reputable a complex to be permanently hurt by bad publicity from the lawsuit.

“I think it’s a shame that it happened,” he said. “But I don’t think it’s going to have a long-term effect on the facility. It’s such a great center.”