The Concept of Negative Goodwill: When Do Naming Rights Cross the Line?

An article in the Financial Times tries to make sense of the situation surrounding the attempted renaming of a Pennsylvania high school by Stephen Schwartzman, the founder of Blackstone, the world’s largest private equity group. NPQ wrote about this situation back in April. Naming rights have long been a core strategy for nonprofit organizations to attract large donations from wealthy supporters. But recently, the practice has attracted some significant controversy. The Financial Times article says that there is a line between naming a building and usurping what is meant to be an institution collectively owned, as in a public building housing a community institution. The line has to do, writes Stephen Foley, with the difference between tangible and intangible assets, which Foley says we call “goodwill.”