Met Money 2
Collection sales are a "slippery slope"? Yes, to thinking that museum leaders are either devils or dopes.
Think “compensation”
I don’t think too many people who read “Met Money 1” would disagree with the sentiment, expressed not just by me, that if museums are to change they will need to do so at the top. This applies as much to the ethics and values of their leadership as to their business models, and the two are surely intertwined. On museum boards, billionaire dollars cannot but entrench billionaire interests (whatever these may be). Soliciting those dollars in a crisis, like the current one faced by The Met’s $150m shortfall, would not entail less entrenchment, but more.
For the record, I have immense respect for the many museum leaders and critics who have denounced The Met’s plan to consider selling from the collection as a means to fund some portion of their “operations.” In this, these people (they’ll be named in a moment) who have deep experience and expertise in their fields, are simply upholding and honoring that experience and expertise, all in an effort to defend an institutional mission that holds the “collection” as first among its priorities.
But it’s that opposition between the “collection” and “operations” that is at the root of the problem, and the privileging of the one over the other, as if museum “operations” were the shapeless, unexercised, and thus unsightly body to which the pristine and beautiful visage of the “collection” just happens to be so unfortunately attached, is one way in which critics of The Met’s (and other museums’ proposed) move go very wrong when trying to think through this problem.
Just remember, every time you hear the word “operations” mentioned in the context of museum funding, what people are really saying, but not actually talking about, are salaries and wages and healthcare and retirement funds. Operations is people, their livelihoods, their desires to thrive and to contribute. Some want to serve Culture-with-a-capital-C. Others want to serve their communities (however they choose to define these). Still others just need a good place to work.
To put this in numbers: “Compensation” was 65% of The Met’s overall operating expense in 2020 and by far its largest cost at almost $234 million. In second place? “General Office Costs,” ringing in at $22.5m, or 6.3% of total operating expenses. These numbers include “Supporting Services” (fundraising, management and general administrative) as well as “Auxiliary Services” (retail, restaurant, and parking). Strip the numbers down to just the museum’s “Program Services” (curatorial, conservation, exhibition, education, library, and public services) and compensation rises to 73% of the cost required to deliver on the museum’s mission. “Operations” doesn’t quite cover it.
Keep this in mind as I consider the arguments for avoiding the slickest of descents down which critics believe all museums would be tumbling uncontrollably should one dollar from the sale of The Met’s or other museum’s art go to “operations.”
A black diamond run named “The End of the Aristocracy”?
In response to The New York Times article on The Met’s funding plans, Thomas Campbell, The Met’s prior director and the current one of the Fine Art Museums of San Francisco, helpfully mapped out the various steep grades and precipitous drop-offs of this particular slippery slope. (I quote Campbell at length below for obvious reasons, but I have also done Campbell the favor of adding “compensation” to his mentions of “operations,” not in any attempt to shame, but to remind myself, and others, of what “operations” has a tendency to obscure.) Here is Campbell:
Disconcerted to read that The Met is considering deaccessioning art to support [compensation and] operating expenses. While I know as well as anyone the complexity of running that behemoth, and I have great sympathy for those in the driving seat, I fear that this is a slippery path. Until last spring, the Association of Art Museum Directors – the industry watchdog – mandated that funds raised by deaccessioning could only be used to purchase new works of art.
Now, to help art museums impacted by the COVID pandemic, AAMD has relaxed those rules, creating a two-year window in which museums can deaccession art to raise [compensation and] operating funds. While this is well meant, the danger is that deaccessioning for [compensation and] operating costs will become the norm, especially if leading museums like the Met follow suit.
Deaccessioning will be like crack cocaine to the addict – a rapid hit, that becomes a dependency. I fear that the consequences could be highly destructive to the art museum industry. Deaccessioning for [compensation and] operating costs will disincentivize future art donations; it will release boards and civic authorities from their responsibility to find financial support for their art museums; it will encourage new debate about assessing museum art collections as fungible assets; and it may undermine the foundation of the tax deduction that incentivizes private philanthropic support of art museums.
So, if the Met board is to vote on this in March, I hope they will weigh the ramifications carefully. Their action will resonate far beyond the walls of the Met.
Now, I’m going to address Campbell’s arguments, but I want to briefly turn to the responses that his post garnered, which are revealing in their own right and demonstrate how blinkered much of the thinking on these topics really is:
Artist Vik Muniz affirmed Campbell’s take that, “If the MET does it, any other museum will feel entitled to do the same.” But then turned his argument to make the easily countered point that, “Museum acquisitions tell a story that can be undone by deaccessioning, thus affecting the meaning of a collection as a whole.” To Muniz one need only respond that museums deaccession (sell) art all the time, but meticulous records are kept, so the story is there for anyone who cares to tell it.
Nevertheless Muniz’s response did creep up on the salient issue, even if it failed to grab hold of it. He writes that, “we will no longer understand why a culture of a certain period favored certain stiles [sic] and works if we are to be complacent with the understanding of why a certain culture of a certain period felt obliged to get rid of the choices made by their predecessors.” Muniz is right. We should not be “complacent” when considering the obligations to sell work from the collection. The question needs to be, though, to whom is the museum obliged? This is a complicated question, but I can’t help feeling that, in this context in particular, “the public trust” or “posterity” or “cultural history” fail as priorities when placed up against people’s livelihoods.
Paul Schimmel offered the wonderfully impassioned statement that he had, “Been there done that and it’s the devil’s answer to a godly challenge!!! No one should ever give art for operation!!!” Again, think “compensation” in front of that final triple-exclamation for the necessary change of valence. If God paid people’s bills I might be more sympathetic.
Susan Ballek wrote: “Should this occur at even one major art museum in the country, the ripple effect at small and mid-sized museums will be catastrophic to their long-term and prospective donor bases.” Again, any donor that doesn’t value the livelihoods of the people that make these small and mid-sized museums what they are might need to rethink their priorities.
Adrian Sassoon wrote: “Years ago we bought something at auction sold to benefit the San Francisco Museums and sold it to the Metropolitan Museum.” A very helpful reminder to everyone that 1. museums are active players in the markets for art but are the only ones for whom special accounting rules apply and 2. works that one museum dispose of often find their way to other museums — i.e. to sell a work does not entail its disappearance from the face of the planet. Sassoon added that “Selling because of ‘taste’ is questionable too.” Without that troublesome “too” I would take this as tacit support of the points I have been trying to make.
Finally, the most revelatory response came from the collector Andy Hall, who wrote that, “Selling the silver to pay the butler has never been a good or sustainable strategy. Selling from the collection is a slippery slope indeed!”
Unless you are the butler.
That may be a bit ungenerous, but Hall’s post gets the logic perfectly, if your perspective is that of lord of the manor and not of the “help.” It also opens up to the related observation, uncomfortable though it may be, that museums (particularly the big ones), in their current instantiations, are aristocratic institutions, overseen by both a monied and highly educated elite. If their priorities are for the “silver” only, then I suspect they are destined to meet the same fate as the landed gentry.
To stick with the analogy a moment longer, remember that the “silver” got sold to a then rising class of bourgeois business types who were making their fortunes in the professional arena and on speculative activities in new markets. I’m sure some of that silver passed through many hands, perhaps bought cheap and sold dear, but often vice versa, and some of it ended up at places like The Met, as well as, importantly, in collections such as Andy Hall’s, which numbers more than 5000 pieces and began, as he tells it, with purchases made from the auction houses, which built their brands and businesses on the liquidation of all those manorial assets that went along with the changing class dynamics of the nineteenth century and still function very much in that respect today.1
Après ski at The Broad; or, How’s the view from the bottom?
And this is where I will come to Andy Hall’s defense, in part, because the Hall Art Foundation itself, and similar foundations in general, serve as arguments that are perpendicular to the one both Hall and Campbell and the other catastrophists of the “slippery slope” sentiment put forward.
Private foundations, of which Hall’s is one, do list the value of their assets. From the last publicly available return from 2017, Hall’s collection was listed at a fair market value of $34 million.2 That year the foundation generously disbursed $1.2m to the Schloss Derneburg Museum in Germany and nearly $100k to MASS MoCA, where portions of the Hall Collection are on long-term loan. The foundation actively lends its works to other museums around the world, opens its Vermont home base to the public between May and November, hosts school groups free of charge, mounts exhibitions and publishes accompanying catalogues.
Such foundations have been the subject of a healthy debate that revolves around whether they are worth to the public the tax benefits that they, and their founders, receive. That’s a good debate to have. Next to The Broad, the Brant Foundation cannot but appear like a narcissistic boondoggle.
But here is the key point: nothing in those debates points to the assessment of any given foundation’s “fungible” assets, i.e. its collections, as an existential threat to the status of the foundation as a tax-exempt entity. What is more, those private foundations, with art as the bulk of their assets and at the core of their missions, are not constrained by the AAMD or any other “watchdog” group from selling pieces from their collections. As long as the foundation is disbursing 5% of its assets every year, and following the rules required to maintain tax-exempt status, it will keep its nose clean with the one regulator that matters: the IRS.
When Campbell claims that selling work from a museum’s collection for compensation will “encourage new debate about assessing museum art collections as fungible assets,” that may well be the case. But the question this raises is, What is there to be sacred of? Fear of public backlash? That the number will be just too damn high? If that were the case, then the private foundations that function as museums — The Broad here in Los Angeles being a good example — would be the target of continuous public outcry. And yet it’s just the opposite. Why? Because The Broad has been making good on its public commitments. Were it to sell some art to fund those public commitments, no one would blink an eye.3
And it’s difficult to see how any of the above would “undermine the foundation of the tax deduction that incentivizes private philanthropic support of art museums.” The foundation of that tax deduction issues from the organization’s 501(c)(3) status, which comes from its being an “educational organization,” with “educational” here defined as “The instruction of the public on subjects useful to the individual and beneficial to the community.” It does not make any mention of specific cultural heritage or interests, the national trust, or any similarly high-minded rhetoric. It doesn’t mention the keeping and caring of collections of things as central to the museum’s categorical status as a tax-exempt organization. In fact, when section 501(c)(3) of the federal code mentions museums at all, which it does in a number of places, it only mentions a “collection” once, and in that example the collection is for sale!4
It’s quite possible that sales of art from museum collections could go a long way to bolstering arguments for the tax deduction, particularly if the proceeds of those sales served better the educational definitions of its tax-exemption in times of plenty and the charitable definitions — such as “relief of the poor and distressed or of the underprivileged” and “lessening the burdens of Government” — of the same in times of crisis.5
From the perspective of the private foundation, then, and with the language and examples from the 501(c)(3) code in mind, the bottom half of Campbell’s slippery slope argument — recognizing the art collection as an asset and the end of the tax-deduction — looks a little less, well, steep.
So let’s move uphill, where we get to Campbell’s two other claims about the dangers of collection sales. I won’t take issue with the specific language that Campbell uses in his claim that boards and public officials would be “released” from their “responsibility” to support museums financially or to “find” that support elsewhere. Boards are fiduciaries, and public officials feel these responsibilities only insofar as they help (or don’t hurt) them at the ballot box. For the former, that responsibility is contractual; for the latter it’s political. Neither can be released without exiting the roles they’ve chosen to play.
Nevertheless, the argument Campbell is understandably trying to make is that, with access to a storehouse of valuable assets at their disposal (literally), museum trustees would find it just too tempting to make the collection their first and only resource when looking to fund new initiatives or, more importantly, to pay salaries (hopefully associated with big, ambitious new initiatives). A big pool of assets would sap them of their own will to give or to fundraise on the institution’s behalf, because, why bother? The institution’s already got the money.
If you are nodding your head up and down in agreement, I have one word for you:
Harvard.
At the end of 2019 Harvard University’s endowment, the biggest of any U.S. university, stood very close to $41 billion, but that did not stop it from raising another $1.2 billion in 2020, the third highest raise that year behind Stanford, which, by the way, had the third biggest endowment in 2019, at $27.7 billion. The biggest fundraiser was Johns Hopkins University, whose endowment stood at a mere $6.28 billion in 2019, but has Michael Bloomberg as benefactor. (He began giving to Hopkins in 1964. The amount? Five dollars.)
As the Harvard example demonstrates, it does not stand to reason that supporters of rich institutions go scattering for the exits when the collection plate starts coming down the pew. If anything, it’s just the opposite. The resources that those institutions command enable them to mount ambitious and exciting initiatives, attract top talent, engage their publics, and make important contributions to the commonwealth. Donors want to be a part of that; indeed they will pay for the privilege.6
Furthermore, in 2019, Harvard brought in $622 million in federal research dollars. Yes, those dollars came from the NIH and the NSF and NASA, etc., funds from which museums like The Met are rarely if ever are able to access. But again, that argument is immaterial. Museums that attract research and teaching talent in the arts and humanities for big, ambitious initiatives will be best placed to attract public monies for their projects. The task then is convincing elected officials, and the public, of the importance of making that funding available. (Harvard and other universities spend a lot of time in Washington D.C. lobbying for just those budgets.) But no funding review committee at NIH or NSF looks at a Principle Investigator’s affiliation and says, “Nope, that PI’s from Harvard, they don’t need the money.” Harvard isn’t asking the government to support it just because it’s, you know, “Harvard!” And museum’s shouldn’t receive government funding just because, you know, “Art!”
Finally there’s this idea that were museums to sell from their collections the donations of art would dry up. Campbell may have more experience hearing this kind of thing from prospective donors given his one-time tenure at the top of The Met’s hierarchy and in his other leadership experiences as Fundraiser- or Collection-getter-in-Chief. As long as the tax code remains in tact, however — and there is no good reason from what we’ve detailed above to think it’s going anywhere — the incentive to give will remain. To my mind, O’Hare drove the final nail into the coffin of this concern years ago, so I don’t feel the need to rehearse his arguments.
Of course donors who do not wish to give their collections over to the museums for fear of seeing portions of them disposed of in the service of paying salaries (but hopefully also for funding other big initiatives) can establish their own foundations, but then the works will be on display anyway, and will be accompanied by education programs and other public benefits, and likely in a generation or two will come under the control of, and enter the collection of, one museum or another. Most collectors and their heirs are not in a position to establish these kinds of foundations, at least ones in which art serves as the main public benefit, so one expects museum collections to continue to get their share of the goods. Lowering estate tax thresholds (i.e. the level at which the estate tax kicks in) would be one way of ensuring a steadier stream of art that museums could be set free to dispose of, but it’s likely not even necessary (even if one believes it’s simply the right thing to do).
At this point I haven’t even addressed the role that leadership and expertise can play in being judicious and intelligent about selling from the collection. Campbell’s assumption (inelegantly put), which holds that recognizing a museum’s collection for the asset that it is would be simply too much for all of those museum directors and boards of trustees who would immediately turn their quarterly meetings into something resembling r/WallStreetBets, really does take a dim view of the field. More on that to come.
At this point though I feel (relatively) satisfied for having exposed the slippery slope argument for what it actually is: more flat-earth theory than an accurate picture of how the world would look were museums, The Met in particular, be set free to sell some art to, at the very least — and all together now! — raise funds for compensation and operations and maybe even a little something extra.
To read the first draft of Met Money click here. And the next draft in the series is here.
The next draft will take a closer look at the AAMD, whose rules regarding collections read like a catalogue of creative opportunities for transforming museums for the better. In the mean time, this story has been unfolding even as I have been writing:
Max Hollein is standing his ground, and should be applauded for it.
Brian Boucher at Artnet interviews Hollein, who gives great responses but obviously from my perspective could push much further.
And The Whitney has fired 15 more staff…
As always, thank you for reading, and feel free to comment or, even better, sign up!
To an extent. As we know, the big auction houses are as much engines of speculation as wealth liquidation (i.e. transfer), but the later still remains a big piece of the business, from the big houses on down to the regional ones.
That number is likely bigger today, and not all of the art that Hall owns might be held by the foundation. For comparison, The Broad Art Foundation, which holds most of the The Broad’s collection, lists the fair market value of its “other” assets — i.e. its art — as $1.42bn.
I want to be clear: This is not a defense of The Broad’s decision to layoff 130 visitor services and retail staff at the beginning of the pandemic. The museum had the assets to cover those salaries, and that is a team of people that could have been put to work — this just from the top of my head — building and delivering one-on-one “art talks” or zooms or whatever else for LA’s senior population who were shut in their homes and shut off from their families and caregivers out of fear of deadly infection and desperate for connection. Or the museum could have kept paying their wages on condition that they volunteer with some social service organization that needed the people power during the last year. My point being that The Broad isn’t any more off the hook than other museum’s for not backing its people over its things, it’s just that the arguments being put forward by Campbell and others in favor of backing things over people looks less than useless when leveled at The Broad.
Granted, this example is given to demonstrate how an organization such as a museum could run afoul of the tax-exempt rules, not because the collection is for sale however, but because the majority of the proceeds from the sale of the collection are, in this example, being given back to the artists! — which violates the prohibition of tax-exempt organizations benefiting private interests.
This last point should embarrass any museum that argued over the past year that layoffs were in fact more humane and charitable because they allowed its employees to collect unemployment.
Yes, I am well aware of the arguments that point to Harvard in particular and other elite schools in general as engines of inequality, but those arguments are not material to the one that I am making here in opposition to one piece of Campbell’s slippery slope. The smartest of those arguments that I have read belongs to Daniel Markovitz.