How Donor Intent and the Freedom to Give Help the Kentucky Derby Museum Grow

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On May 6, 2023, the 149^th running of what’s known as the “most exciting two minutes in sports” took place at Churchill Downs Racetrack in Louisville, Kentucky. The winning colt, Mage, was raced by Hall of Fame jockey Javier Castellano and trained by fellow Venezuelan Gustavo Delgado, a prominent horseman based in Florida, and his son Gustavo Delgado, Jr. 

We recently sat down with Patrick Armstrong, president and CEO of the Kentucky Derby Museum, to learn more about how the museum, its charitable donors and other supporters work together to safeguard the legacy of the Kentucky Derby for generations to come. The nonprofit museum celebrates the history, tradition and pride of the world-renowned Derby dating to 1875, displays unique artifacts and artwork and allows visitors to explore the racetrack through guided tours. 
 
The following interview has been edited for clarity and length. 

Q: Please tell us about the Kentucky Derby Museum, its history and its role in the community. 

The Kentucky Derby Museum was founded in 1985 by four businessmen here in Louisville who felt very strongly that we needed to have a cohesive place that kept and preserved the history of the Kentucky Derby.  

We have grown a great deal since then. We sit on the site of Churchill Downs. However, the museum does own its own building. We have a 22-member board of directors that is made up of business leaders across the community. Each of them makes a donation to the museum as part of their board membership. We have about 100 Kentucky Derby Museum employees. That will scale back a little bit to about 90 as we move into the summer. But during Derby season, which starts in March for us, we ramp up.  

We have a retail operation as well as admissions to the museum. We are the official tour partner of Churchill Downs, so all the tours originate from here at the museum. We have professional tour guides on staff that work on about 15 different tours of Churchill Downs and the barn area to provide guests with the history of Churchill Downs as well as two full floors of exhibits at the museum.  

Our mission is to educate, engage and excite everyone about the extraordinary experience that is the Kentucky Derby. Churchill Downs races 75 days each year, and they are in the thoroughbred racing and gaming business. As for the museum, we are the history, traditions, stories and brand of the Kentucky Derby. The museum is only closed five days a year. We do about 340 rental events each year. Almost every day there is at least one room in the museum that is rented by a community partner, company or private event. We do everything from wedding receptions to a bank’s annual meeting, so it runs the gamut. This facility also serves as an off-site meeting place for conventions that come into town. They are very interested in visiting Churchill Downs and the museum, so we benefit from that “bucket list effect” greatly. 

We are very active in our community, and we do have an education team here at the museum. Starting in September, and all the way through the end of the school year, we host field trips. We have free field trips in January and February at the museum, and then in the other months between September and May there are a lot of paid school groups. We also have an outreach program that goes out into the state and delivers educational programming in different school systems. There’s never an idle moment for our educators! 

Q: We heard about you through Mason Rummel, who leads the James Graham Brown Foundation in your community. Can you discuss how people and foundations support the museum? 

We are generally self-sustaining with revenue that comes in each day through admissions, rentals and the tours that I mentioned and also robust retail activity. We do sell a large amount of Derby merchandise! We have several giving opportunities for individual donors. For instance, some of the horse farms are contributors to the museum. Our largest contributor is the James Graham Brown Foundation. We are actually the only nonprofit that was named in Mr. Brown’s will. He specified that he would like some funding to go to the Kentucky Derby Museum to keep the legacy of the Kentucky Derby going for many years to come.  

The foundation has been a great help to us with capital projects. For example, our signature exhibit is called The Greatest Race. It’s an 18-minute video that is shown inside the Derby Museum. Most people know us for that video presentation. It is really a day in the life of the Kentucky Derby, and we’ve upgraded it several times. Right now, it is in 4K video, shown in a seamless 360-degree theater. The Brown Foundation has given money to upgrade that key exhibit numerous times. We also expanded our facility in 2018. We did an 11,000-square-foot expansion to the museum, and the James Graham Brown Foundation generously donated $1 million to support that expansion.  

Beyond the foundation, we also have a membership program, and some of the members are active donors as well. Various foundations, some in-state and some national, will give to the museum on an annual basis. We also have a strong volunteer program with about 125 volunteers, called the “Outriders.” If you are familiar with horse racing, the outriders are the folks that lead the horses out onto the track. This volunteer organization has been prominent at the museum since the late 1980s, and we’re very proud of our volunteer program. 

We’ve been successful in fundraising with events. Our largest fundraiser is our Kentucky Derby Museum Ball. It happens each April, and is successful thanks to businesses in town donating by purchasing tables and individual tickets for this annual gala. 

Q: It sounds like your donors give to the museum in different ways. More broadly, individuals may give through community foundations, donor-advised funds and so on. There are some in Washington D.C., however, who want to limit some of the tools people use to give, such as through private foundations. What are your thoughts on imposing new restrictions on charitable givers?  

It certainly is concerning. I feel strongly that if the IRS is going to give us a 501(c)(3) designation, and we are a bona fide nonprofit charity with the IRS, I don’t understand why the vehicles by which people give should be limited. 

The act of giving by our donors, our sponsors and the foundation piece is very important to the funding of the museum, particularly the capital projects. We would not have the ability to expand the museum or to build our endowment, which ultimately supports our beloved community, without folks like Mason and the Brown Foundation and some of the other foundations that support us. So, the freedom to give is very important to us, although we don’t typically rely on our endowment for operations like many other museums. Fortunately, we’re normally self-sustaining, but the seed money that is provided by foundations and our donors is incredibly important to us. 

Q: One issue Mason Rummel talked to us about in her interview was the importance of preserving donor intent throughout future generations. That’s an issue we’re seeing more and more—where a donor retires or passes and his or her successors may deviate from the wishes the donor had spelled out. What role do you see donor intent playing? Do you think donor intent should be protected and upheld for the long term?  

If the money is coming from the donor, and the donor passes away, it seems disingenuous for those remaining to break those wishes—particularly if it’s something that is directed in a will or if it’s in another document that the donor wishes to donate to an organization or cause.  

Q: Now that the Kentucky Derby is over for the year, what’s next for the museum? 

We have a great board of directors, and we are diligent about following the five-year strategic plan we set forth in September 2022. There are several components of that plan. One of those is that we are on a mission to update all the exhibits in the museum, so that no exhibit is more than seven years old, by 2025. In a museum like ours, the life of those exhibits is eight to 10 years. So, our goal is to continually upgrade. Over the last five years, we have had one major, permanent exhibit added each year. This year we added the Secretariat exhibit, which celebrates the 50-year anniversary of Secretariat’s Triple Crown win in 1973. We’ve had a huge promotional year and a great deal of interest in this exhibit.  

Next year is the 150th year for the Kentucky Derby, so obviously we have big plans to set forth a large celebration for next year. Then we look ahead to the 40th anniversary of the museum in 2025 and planning special celebrations to commemorate the joyous occasion.  

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