A Conversation with James H. Lee, Houston Symphony Endowment President

For more than a century, the Houston Symphony has grown alongside its namesake city and raised the reputation of Houston as a cultural arts center. But as we have grown, the financial needs of our orchestra in a thriving metropolitan area have grown as well. That’s why in 1971, the Houston Symphony Endowment was created with the mission of providing strength and financial stability to the Symphony so that the orchestra can maintain its artistic excellence and weather unforeseen events. No one understands these dynamics more than the Endowment Board President, James “Jim” Lee.

A Houston resident for over 50 years, Jim is the managing partner of JHL Capital Holdings, a private family office with holdings in real estate projects, hedge funds, private equity funds and a variety of operating businesses. Jim has been married to Amy Lee for more than 23 years and they have two sons, Hunter and Harrison. Jim has served on the Endowment Board of Trustees for eight years and as its President for a year. Jim knows firsthand the importance of a strong endowment and what it means to build one of the country’s top orchestras.

We spoke with Jim about his passion for the Symphony, his role as Endowment President and the importance of the Endowment in fulfilling the mission of the Symphony.

How did you initially become involved with the Houston Symphony?

I have always had a passion for the arts. To me, it reflects a prosperous and thriving city. The first area that suffers when cities undergo hard times is often the arts. Fortunately, Houston is thriving economically and as a cultural arts center. Business and community leaders across Houston have long supported the Symphony—I admire and respect that about our community. My family and I love the POPS and we enjoy spending time at Jones Hall—especially around the holidays. When I was asked to join the Endowment Board, I was happy to serve in support of the Symphony. I am going into my eighth year on the Endowment Board, and I am proud to report we are in a great position today, perhaps the strongest I have seen during my term.

What are your goals and priorities during your term as President of the Houston Symphony Endowment?

The Endowment Board focuses primarily on the management of the Endowment assets, which are used solely to benefit and support the Symphony. Our job as fiduciaries is to properly manage Endowment assets—into perpetuity—and keep the Fund in a strong financial position. We focus primarily on three areas—compliance, financial condition, and investment posture. It all starts with compliance. Are we meeting all our obligations? Do we deliver audits and reporting on time? Have we complied with donor restrictions and obligations? Are we properly maintaining our tax-exempt status? Compliance is the basic blocking and tackling—it is critically important. If not functioning well, it will disrupt everything else. So, our first order of business is—are we in compliance? Ideally, we check that and move on to the financial condition of the Endowment and our investment posture for what lies ahead. Today, we are in the strongest financial condition of my eight-year term. Our strength today is by no accident—it has a lot to do with leadership, both with senior management and the Trustees. John Mangum is simply a terrific leader; he is strategic and a great operator who interfaces well with the Endowment. Elizabeth Condic, CFO, is equally strong; these two together are remarkable. You can measure their impact on the Endowment and Symphony in real dollars. We also have a remarkable set of Trustees—at the Symphony and at the Endowment. The two Boards work well together and have certainly been “stress tested” in recent years. I also give a lot of credit to Bill Toomey who was my predecessor as President of the Endowment and Steve Mach, the former Symphony Chair, who set the vision several years ago for the investment changes we have undertaken at the Endowment.

Many contributions come to the Houston Symphony Endowment as planned gifts through bequests. But we are seeing more and more patrons choosing to create and support their named Endowed Funds during their lifetimes. How does this shift benefit the Houston Symphony?

There are essentially two ways to increase the Endowment’s support for the mission of the Symphony—higher investment returns or through additional contributions. We are in a good position to generate competitive investment returns over the long term. The Symphony’s vison, though, is to become America’s most relevant and accessible top-ten orchestra by 2025. To fulfill this goal, the Symphony will need to continue to attract and retain the finest artists in the world and undertake capital projects (and improvements) to compete with the very best orchestras. New gifts to the Endowment directly improve the quality and reach of the product offered to those that enjoy the Symphony and accelerate the mission to be ranked amongst America’s best. As additional major gifts are received, the Symphony can better manage operations during major capital projects like Houston First’s renovation of Jones Hall. Supporters, subscribers, and donors to the Endowment can feel comfortable we are good stewards of their capital, particularly in difficult periods. Patrons looking for a mission to support through a lifetime of giving or with their estates, should look no further than the Symphony. The Endowment will continue to be prudent guardians of their funds and will support all facets of the Symphony’s vision to inspire audiences as a top-ten orchestra.

Why is it so important for our subscribers and donors to support the Endowment?

It is true, we are in a good position right now; far different from the difficult predicament we were in two years ago with stagnant ticket revenues, changing ticket-buying preferences, daunting fixed salary and cost obligations, and a credit line at its highest in years. However, to accomplish all that is needed to fulfill our vision of being a top-ten orchestra, additional gifts are still needed. Our role is to invest the assets of the Endowment such that we cover a fixed portion of the Symphony’s operating budget. To become a top-ten orchestra, we’ll need to secure capital investments and increase operational funds to accelerate the acquisition of more world-class musicians—and to achieve both those goals, we’ll require additional major gifts to the Endowment.

What is the most important thing you want people to understand about the Houston Symphony Endowment?

If there is one takeaway, it’s that the Endowment is in the strongest financial position we have seen in nearly a decade. It has a lot to do with the Symphony leadership—John [Mangum] and Elizabeth [Condic], in particular, and the Symphony and Endowment boards. There is a wealth of investment experience amongst the professionals on the Endowment Board and we have worked together very well through difficult times. Discussions are always wide-ranging and deliberate, but ultimately there has been a consensus around the investment changes we have adopted. We have managed through difficult times. So, to be in such a strong position today is a great relief and something the Endowment Trustees are proud of. A high caliber symphony is a reflection of a prosperous and thriving city and the level of support that we have across Houston is remarkable. A city’s cultural art scene is how you judge the strength and quality of a community. The Houston Symphony is a very positive reflection of the great City of Houston.