On February 4, 2002, in a short letter to Smithsonian Secretary Lawrence M. Small, Catherine B. Reynolds announced that she will withdraw most of a planned $38 million donation from her foundation that would have created a 10,000-square-foot "Spirit of America" exhibit on individual achievement at the National Museum of American History. The announcement came less than three weeks after some 170 activists and scholars complained to the Smithsonian Board of Regents that the Institution's chief executive was commercializing the museum complex.

In her letter to Small, Reynolds stated, "It is with deep regret that I inform you that the Foundation will not be proceeding with the remainder of its donation to the National Museum of American History for the "Spirit of America" exhibit...Unfortunately, and painfully, this gift to our nation has become impossible to give. . . . I wish you the best in your efforts to bring the Smithsonian and its staff into the new century."

According to Marc Pachter, acting director of the Smithsonian's National Museum of American History: "We regret the foundation"s decision and the fact that the exhibit, which was to have opened in 2004, will not now go forward. We are disappointed that the Catherine B. Reynolds Foundation has decided to withdraw from this project, which was being developed in strict accordance with Smithsonian standards. We remain committed to exploring opportunities with private donors that will enable the museum to tell the compelling story of Americans and American history."

The exhibit—designed to honor "achievers" such as television personality Martha Stewart, ice-skater Dorothy Hamill, basketball legend Michael Jordan, and film director Steven Spielberg—drew sustained and widespread criticism from the media, museum professionals, and others. Most recently a New York Times editorial characterized the exhibit as "empty-headed." According to the Times, "What was controversial were the terms of the plan which would have granted her [Reynolds] and her foundation inappropriate influence over curatorial decisions." The primary concern of the Smithsonian"s professional historical and curatorial staff indeed was that according to the terms of the never-made-public agreement between Reynolds and the institution, Secretary Small apparently had granted Reynolds rights to define the scope, contents, and appearance of the exhibit.

In her letter, Reynolds stated that it was the sustained criticism over many months that led her to change her mind about the donation: "Apparently, the basic philosophy for the exhibit—the power of the individual to make a difference—is the antithesis of that espoused by many within the Smithsonian bureaucracy, which is "only movements and institutions make a difference, not individuals." After much contemplation, I see no way to reconcile these diametrically opposed philosophical viewpoints."

Some Smithsonian staff took issue with the Reynolds' rationalization for withdrawing the donation. According to Smithsonian historian Paul Forman, "If this had been done properly, we could have come to an agreement on the exhibit." Helena Wright, vice president of the Smithsonian's Congress of Scholars agreed: "I think there was possibly room to have worked this out with negotiation, but that didn"t happen here."

According to Wright, the basic problem was that there was a disconnect between the Reynolds Foundation and the museum as to how Smithsonian exhibits are planned and executed. Museum curators saw the exhibit as envisioned by Reynolds as a sort of an "old curiosity shop"—a smorgasbord exhibit full of stories, objects, and pictures of famous people with little historical context or value. Other critics felt donors such as Reynolds were being permitted by Secretary Small "to dictate" program content to the Smithsonian, thereby "sacrificing the Smithsonian's independence and integrity."

According to sources inside the Smithsonian, staff curators were making some progress in redefining the scope of the exhibit and had made some headway in advancing the notion that an "achievers exhibit" ought to explore all facets of achievement in America including political, social, and economic barriers to achievement. Reynolds apparently disagreed and decided her money wasn"t going to be well spent.

The larger impact that the Reynolds decision will have on other fund-raising efforts at the Smithsonian is not entirely clear. But according to University of Chicago history professor Neil Harris, who sits on the Smithsonian commission that has been examining the future of the National Museum of American History, "This kind of event will produce rethinking of the nature of public-private relationships with the Smithsonian." The New York Times was more blunt in its assessment: "This episode is a perfect demonstration of the short-coming of Secretary Small's fund-raising—given the compromises implicit in accepting the Reynolds gift there is reason to question his leadership."