Last week I joined Gregory Rodriguez, Lori Fogarty and Jim DeMersman on air for KQED’s Forum in San Francisco to discuss the effect of the recession on museums (archived recording here.) I was generally pleased with the discussion, but I am suffering from massive “Rats! I should have said…” syndrome regarding a question from one listener. Fortunately, this blog gives me an outlet for these second thoughts.
Michael’s email to the show blamed museums’ financial woes on the “anti-social management” of collections, pointing out that that “the Art Institute of Chicago could sell approximately 1% of its $35 billion collection and endow free admission forever.” I trotted out three answers, the first of which was the trite (but emotionally satisfying): “that’s like selling one of your children into servitude to support the others.”
Right after I finished the interview, I furiously scribbled down what I wish I had said:
1. Museums in the U.S. are filled with great collections largely because people donate them
2. If we start using collections as financial assets, the IRS is going to treat them as such, restricting or revoking the deductions associated with donations of collections (not to mention forcing museums to capitalize their collections and report them as assets, which would be a total pain in the ass.)
3. People who donate collections are motivated in large part by the associated tax-deduction
4. If the deduction disappeared, many of the donations would dry up
Then, being a good futurist-in-training, I sat back and started to question these assumptions. I think #1 holds up pretty well to examination. I am willing to say with complete confidence (despite the lack of data to back it up) that the vast majority of collections in our storage rooms were donated rather than purchased (and even the purchased objects are typically bought with charitable cash donations). Whether this is a good thing is another matter. I have long contended the prospect of “free” donations undermines attempts at rational collections planning by tempting museums to accept less than optimal material, using up scarce resources such as storage space, and staff time.
Having wrestled with IRS staff for many years on issues of capitalization, I am willing to stand by #2 as well. It has been extremely difficult to explain why our collections are primarily artistic, historic, cultural and scientific assets rather than financial assets. If we start conveniently treating them as financial assets whenever we need cash, that argument is going to quickly collapse. Particularly in light of pressure from pork-hunters such as Sen. Charles Grassley, R-Iowa, who takes particular delight in seeking for waste and fraud amongst nonprofits. Meanwhile, the financial downturn is pressuring the federal government to find additional tax revenues wherever it can. There is an ongoing struggle to diminish the deductibility of partial gifts of art—and I can easily envision a future in which there is no deductibility at all.
But starting with #3, I think my assertions begin to get shaky. Looking at the whole array of things donated to museums (archives, wedding dresses, doll collections, ethnographic artifacts from around the world, fossils, etc.), how strongly are donors influenced by the prospect of a tax deduction? Sure they may be tickled at the prospect (I like a 50-cent-off coupon as much as the next person) but for the vast majority of the middle class donating items of relatively modest value, will it really affect their bottom line? And (stand by, heresy alert here) unlike Michael, I am not just concerned about donations of multi-million-dollar major works of art. With objects that valuable, the owners are going to take damn good care of them—the older works have probably spent the majority of their existence in private hands already. As long as we know where they are, do they have to be in museum storage to be accessible, or can they be accessed via loans? (And if this isn’t a viable model, tell me why so many museums skip over the works in their collections to borrow from private collectors for many exhibitions…) I am more concerned about objects with relatively lower monetary value that may be lost, damaged or disassociated from crucial contextual data if they don’t find their way into nonprofit institutions that appreciate their (potential) significance.
This in turn leads me to question assumption #4. I don’t doubt there would be at least a temporary dip in contributions (as there was after the 1986 tax changes that lowered tax rates making deductions effectively smaller), as people hold on to their “precious” to see if the policy would (with rabid lobbying) reverse. But in the long run, will donors be primarily motivated by their desire to ensure their treasures are preserved for posterity, and shared with the world? I think the answer is yes.
That leads me to the second answer I gave on-air to Michael’s question—you can’t violate the public trust “just a little bit” and then expect people to be reassured that everything else in storage is safe. Either museums have the reputation of taking their public trust responsibilities seriously (demonstrating this with the huge angst and often field-wide hue and cry whenever collections are prominently deaccessioned) or they don’t. I do believe that if the collections in storage are treated as a rainy day fund, people will be less likely to take museums seriously as custodians of the nation’s (non-financial) assets.
And I stand by my third on-air answer to the question as well, which is that all other issues aside, selling collections is too easy a way to solve the problem. A fat endowment can be an invitation to continued irrelevance, if it leads you to ignore the need to make anyone else care about and support your institution. Isn’t it safer, and better, to be so important to so many people that they want to pay for your services (or pay to let others, perhaps with fewer financial resources than the donors, enjoy them as well)? Think about it…then post your responses here.