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When Philanthropy, Reputation Collide: The Sackler Family Saga

Tom Burroughes, Group Editor , 28 March 2019

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Controversy about a wealthy US family's contributions to art galleries and other organisations continues. It highlights how philanthropy and reputation can clash.

(An earlier version of this news item appeared on Family Wealth Report, sister news service to this one. Several examples of affected museums and charities are outside the US.)

The world of ultra-high net worth philanthropy has had its share of controversies. Recent uproar about the trust of the Sackler family, whose pharma company is linked to the sale of opioids wreaking havoc in the US, is arguably the biggest controversy yet. It will fuel debate on where philanthropy and reputation collide.

A number of major art museums such as the UK’s National Portrait Gallery and Tate Galleries have announced that they will not accept money from the Sacklers. The Guggenheim Museum in New York also said that it will not accept the family’s money. In February, for example, protesters entered the Guggenheim Museum in New York and demanded that the museum remove the Sackler name from one of its wings.

At the core of the anger is that the Sackler family owns Purdue Pharma, which created and manufactured OxyContin.

Purdue Pharma has repeatedly said it is being unfairly targeted and that it supports initiatives in law enforcement, education and health care aimed at addressing the opioid crisis.

“I am deeply saddened by the addiction crisis in America and support the actions Purdue Pharma is taking to help tackle the situation, whilst still rejecting the false allegations made against the company and several members of the Sackler family,” Theresa Sackler, chairman of the Sackler Trust, said on its website. “The Trustees of the Sackler Trust have taken the difficult decision to temporarily pause all new philanthropic giving, while still honouring existing commitments,” she continued. 

Reports (NPR, Washington Post, others) said that a new federal lawsuit has been filed by 600 cities, counties and Native American tribes alleging that eight Sackler family members were involved in deceptive marketing practices of Purdue Pharma and its painkiller drug. The company has settled a lawsuit with the state of Oklahoma that will require Purdue and the family to pay $270 million for research, education and treatment.

The Smithsonian, which opened the Sackler Gallery in 1987, said that it is contractually bound to keep the family name on the Asian art museum and that it has no plans to return the original donation (source: NPR).

The saga, whichever way litigation goes, is sure to drive debate over whether large gifts to philanthropic bodies, museums and other entities are all too often exercises in reputation management and vanity rather than more benevolent objectives. Big gifts can sometimes also raise questions of control and accountability. 

(Editor’s note: FWR is keen to hear from readers engaged in philanthropy for their views on this issue. Contact tom.burroughes@wealthbriefing.com)

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