The Deaccessioning Debate

January 7, 2009 7:00 AM

In these difficult economic times, what's a museum to do? Is an art collection a financial asset or a trust to be held in perpetuity? These questions are being raised by The National Academy in New York's recent sale (or "deaccessioning" in museum lingo) of two important paintings for $15 million to shore up its finances, first reported by Lee Rosenbaum's ArtsJournal blog. The museum's director told The New York Times that it was the only way for the 183-year-old academy, which runs a chronic operating deficit, to survive. The Association of Art Museum Directors censured the Academy and called on its members to suspend any loans of art to the institution. New York lawyer Donn Zaretzky's ArtLaw Blog has become ground zero for a fascinating debate involving art critics, museum directors, financial bloggers and others.
posted by up in the old hotel (40 comments total)

This is an interesting question.. The repercussions of the economic downturn has been rippling. Especially difficult times are ahead for non-profits.
posted by namewithhe1d at 7:13 AM on January 7, 2009

It's an issue for rare book libraries as well, like the Providence Athenaeum or Massachusetts Horticultural Society.
posted by Horace Rumpole at 7:38 AM on January 7, 2009

Keeping all the artwork forever would be best, but if they can't find any other source of funding, then what else is the museum supposed to do? Would the AAMD prefer that they close? That assets be sold by a court order rather than by the National Academy's choice?
posted by grouse at 7:40 AM on January 7, 2009

what else is the museum supposed to do?

Corporate sponsorship.

Allow companies to place their logos on the artworks in question. The bigger the logo, the higher the cost.
posted by Joe Beese at 7:43 AM on January 7, 2009 [1 favorite]

Part of the problem in situations like this is the difficultly in raising money to cover operating expenses. Funding for a curatorial position (named after you!) is one thing - funding for heat and air conditioning - that is not so sexy.

But yes, The National Academy is now breaching one of the most basic and important of AAMD's principles by treating its collection as a financial asset, rather than the cornerstone of research, exhibition, and public programming...

Deaccessioning should be the third rail.
posted by R. Mutt at 7:44 AM on January 7, 2009

They own it, they can do whatever they want with it. Boohoo if you think someone who owns a $15,000,000 asset didn't do what you would prefer.

The only thing I would worry about is if the person who donated the art was still alive, then run it by them first, you really owe them that much.
posted by parallax7d at 7:50 AM on January 7, 2009

Corporate sponsorship.

Allow companies to place their logos on the artworks in question. The bigger the logo, the higher the cost.
posted by Joe Beese

Corporate sponsorship's a pretty giant deal in the art museum world, for real. Ferinstance, in my neck of the woods, the 3 largest art museums all have either a program or a chunk of real estate with the name "Target" attached (and, to be clear, I don't think this is a bad thing). But like R. Mutt says, general operating expenses are usually the least attractive thing to get funding for. Target would much rather shell out for a Target Interactive Studio than a Target Week of Paying the Electrical Bill.

Incidentally, one TC museum (which, as far as I know, hasn't gotten much local-corporate largesse) recently decided to (hope fully temporarily) shut its doors and put its collection into storage rather than start selling off works.
posted by COBRA! at 7:51 AM on January 7, 2009 [1 favorite]

The Brooklyn Museum recently dealt with a related problem in a much better way.

Brooklyn Museum’s Costume Treasures Going to the Met:

After three years of negotiations, the financially strained Brooklyn Museum has arranged to transfer its rich collection of American and European costumes and accessories to the Metropolitan Museum of Art so that it can be properly cared for and exhibited.

That is, they didn't sell off half of it to "save" the collection.
posted by R. Mutt at 7:51 AM on January 7, 2009

The Chicago Sun-Times reported today about the effects of the market downturn on the endowment of the Field Museum of Natural History in Chicago. The endowment dropped from $315M to $220 -- almost a third.

In response, they're laying off workers, though a few are "retiring" into emeritus positions, where they'll remain on duty under retirement pay.

As to the collections? "Selling assets is out of the question as museums generally use the sale of objects to rebuild collections, not support operations, he said."

However, there's only so far cost-cutting can go. You can't layoff past the last worker. If you cut hours too much, you'll destroy your visitor base, and that'll destroy your donor base. Ideally, you'd arrange a "loan" with a better endowed museum, who'd gift you X million in exchange for a long term loan on a couple of pieces, but grouse sort of hits the nail on the head: Should a museum die honorably or sell a couple of pieces to keep the rest of the collection available to the public?

Because, you know, if it goes to Christie's, most of those works may end up in private hands.
posted by eriko at 7:53 AM on January 7, 2009 [1 favorite]

They own it, they can do whatever they want with it. Boohoo if you think someone who owns a $15,000,000 asset didn't do what you would prefer.

No, as a nonprofit, they are not free to "whatever what they want with it". You have no idea what you are talking about.
posted by R. Mutt at 7:54 AM on January 7, 2009 [1 favorite]

They own it, they can do whatever they want with it. Boohoo if you think someone who owns a $15,000,000 asset didn't do what you would prefer.

Well, no. The museum is (very likely) a 501(c)(3) tax exempt organization, chartered to provide the public with the social and educational benefits of access to the works over which it has custodianship. It probably gets public and private grant money based on that. At the very least, when it sells its $15,000,000 "asset" it (probably) won't pay capital gains tax, which means it is taking money out of YOUR pocket.

So let's not oversimplify. The museum is not any old private citizen who owns a valuable asset. The issue is far more complex than that.
posted by The Bellman at 7:56 AM on January 7, 2009

Or, uh, on lack of preview, what R. Mutt said.
posted by The Bellman at 7:56 AM on January 7, 2009

Technicality: "deaccessioning" isn't just museumese for "sale." Items offered for sale have already been deaccessioned. Deaccessioning is a process of review with regard to a collections policy, usually involving review by a collections committee, museum staff, and the board of directors. It's one of the most sensitive things museums do, and it's done very carefully.

In most cases, money raised from the deaccessioning of an object has to honor the donor's intent. Most collections policies stipulate that the money be reinvested in collections - and usually that it can be used for conservation, restoration, or acquisition of new objects, but not on stuff like staff time or storage. So the problem here is not that the national academy deaccessioned something, but that their planned use of the funds is not in accordance with the general ethics in the field or with ethics guidelines set forward by the American Association of Museums.

The National Academy is an honorary association of artists (called Academicians) who are responsible for its governance. The artist/members voted 181 to 1 (with one abstention) in favor of selling the works. An alternative that was considered but rejected was selling the Academy's swank Fifth Avenue mansion and moving to less pricey quarters.

That's an unusual structure. I don't see why this statement in the Times story shouldn't be taken at face value:

Ms. Branagan also argued that the academy, founded and long known as the National Academy of Design, has never functioned as a traditional museum — it does not buy works of art but acquires them only through donations — and should not be considered as such by the museum directors association, from which the academy recently withdrew.

It seems to genuinely be a professional association rather than a museum whose mission is for the benefit of the public at large. They do have the freedom to set their own ethical boundaries, and don't seem to be AAM accredited, and have rejected membership in the Association of Art Museum Directors, so it's hard to see why they'd be bound by ethics codes established by those organizations. There is precious little organizational information on their website, but they do appear to be a 501(c)3 since they have tax deductible memberships. Still, I don't think anything in the tax code would prevent them selling deaccessioned works and using the money for operations. I would hesitate to generalize too much from this story to the state of art museums, or all museums, in todays' economy. But it is interesting to track the weirdo art world and the things that happened. In many many ways, art museums operate very independently from the other sectors of the museum community. What wouldn't fly at the Natural History can fly at the Met. So much of this is self-governance within the guidelines of the law.

For those interested in museum issues, NPR has been running a pretty terrific series on Museums in the 21st century, and covering a lot of related stories. It's exciting; I haven't heard so much mention of museums in mainstream press in my entire career as I have this year.
posted by Miko at 7:58 AM on January 7, 2009 [3 favorites]

The only thing I would worry about is if the person who donated the art was still alive, then run it by them first, you really owe them that much.

Oh, and just as an aside, that part's also not correct. The IRS takes a very dim view of the museum asking the donor what he or she wants done with the work. At the time of the gift, the donor must give up all control, backdoor or otherwise, over the work -- if he or she retains any special privilege at all with respect to the work, it must be reflected in the tax treatment of the gift. (Yes, there are special tax vehicles for dealing with this, including partial gifts and loan backs. I'm talking about the ordinary course, here.)
posted by The Bellman at 8:00 AM on January 7, 2009

Isn't selling-off the core assets piece-by-piece merely corporate best-practice in order to provide maximum return to the investors? Seems like these artsy-fartsy types should be applauded for finally getting with the program.
posted by Thorzdad at 8:04 AM on January 7, 2009

In practice, though, The Bellman, museums usually do notify the donor that changes are being made to the gift. It's usually written into the collections policy. The donor may not have any power of veto, but there is typically a conversation and sometimes a search for an alternative solution.
posted by Miko at 8:04 AM on January 7, 2009

(you know, an alternative solution like "you endow it, we keep it")
posted by Miko at 8:05 AM on January 7, 2009

Maybe the government should buy major works at fair market value. The museum gets the money to stay open, the art stays in the country (maybe on loan to the museum that sold it, maybe in a national museum), and the people maintain access to great art. Don't let it end up hanging in some oil guy's TV room.
posted by pracowity at 8:08 AM on January 7, 2009

I read the Felix Salmon piece yesterday, and it lead me to this entry from the Art Law Blog about the Eakins painting. Can someone explain to me Zaretsky's reaction? Why is it "making matters worse" that the painting will end up in a exhibition of Eakins's work?
posted by mullacc at 8:09 AM on January 7, 2009 [1 favorite]

mullacc: I think he's being sarcastic.
posted by Miko at 8:11 AM on January 7, 2009

Isn't selling-off the core assets piece-by-piece merely corporate best-practice in order to provide maximum return to the investors?

Please see the previous comments: this isn't a for-profit corporation, and accordingly the "best practices" are different.


Seems like these artsy-fartsy types should be applauded for finally getting with the program.

What "program"? And the sneering and dismissive reference to "artsy-fartsy" types? Museum and non-profit management is no dilettante's affair. See: Miko.
posted by foxy_hedgehog at 8:15 AM on January 7, 2009

Miko: That's what I thought until he referred to that article in his response to the Salmon piece: "mentioned, through tears, here."

It makes more sense to me as sarcasm. But if that's the case, that dude really sucks at sarcasm.
posted by mullacc at 8:20 AM on January 7, 2009 [1 favorite]

foxy_hedgehog: I think he's being sarcastic.
posted by grouse at 8:21 AM on January 7, 2009

pracowity: Don't let it end up hanging in some oil guy's TV room.

From the NYTimes piece:

The academy owns more than 7,000 works, most of which have never been publicly shown.

I'm not sure which is worse: the painting winding up in an oil guy's room or in a crate in a museum basement, enjoyed by no one.
posted by up in the old hotel at 8:26 AM on January 7, 2009 [1 favorite]

I'm not sure which is worse: the painting winding up in an oil guy's room or in a crate in a museum basement, enjoyed by no one.
posted by up in the old hotel

I see what you're saying, but if nothing else a museum's more likely to have a conservation/maintenance program for the piece.
posted by COBRA! at 8:35 AM on January 7, 2009 [1 favorite]

pracowity, nice thought in theory, but there are several problems. First, the U.S. economy has pretty severe budget problems of its own. Second, buying the works and giving them to the national museum just transfers the problem. Unless the government also gives more money to the national museum, the national museum then has to cope with the additional expense of caring for the art.

In the case of the U.S., the national museum is the Smithsonian, which has budget problems itself. See here, and here , for a couple of examples of articles taking about the Smithsonian budget and the need for private fundraising to supplement.

From the second link: "One issue ... is the hit that Smithsonian investments have taken in the turbulent financial markets, which Sant said this week are "down somewhere in the 25 percent range." In September, the Smithsonian endowment was estimated at approximately $1 billion.

"We expect private contributions to be less. We expect the federal budget to be hit. And we will be getting reports on that in the morning," Sant said. "We are already in a conservative mode. We already have a hiring freeze, and we realize the daunting conditions facing us." "
posted by gudrun at 8:37 AM on January 7, 2009 [1 favorite]

mullacc, just read it again - he's calling back his own sarcasm in a sort of echo of his previous post, because he really agrees with Salmon that deaccessioning can be a positive move and that there is an illogical bias against emergency deaccessioning to raise funds.
posted by Miko at 8:40 AM on January 7, 2009

Miko: Absolutely -- the courtesy call leading to the request for more money. Just has to be a careful call. The institution can't actually ask what the donor wants done with the gift. And thanks for the clarifications on deaccessioning generally. The concern, as I'm sure you know, is whether the particular use of funds to do anything other than shore up the collection for the public benefit endangers 501(c)(3) status, not whether the sale generally is contrary to the not for profit law (which it certainly is not).
posted by The Bellman at 8:49 AM on January 7, 2009 [1 favorite]

Agreed and thanks. I just wanted to mention the structures surrounding deaccessioning because, to the general public, it seems so awful for museums to ever sell anything - people think of museums for preservation, period. But what trumps any specific preservation goal of a real museum (which I agree, this Academy isn't, exactly) is the educational nature of its mission, and that means the collection will change over time.

The Bellman, do you know of any areas in the tax code that speak to how funds raised from deaccessioning can be used? I don't know enough about tax code specifics, and my understanding is that this is a purely ethical/accreditation matter of philosophy and governance rather than a tax issue. I'm not sure whether that understanding is accurate.
posted by Miko at 8:52 AM on January 7, 2009

They needed something to pay their security guards. Which is better? Selling it for SOME money, or having some guy break in and steal it for NO money?
posted by Megafly at 9:02 AM on January 7, 2009

It sucks out loud, but sometimes you have to harm the patient a bit to cure the patient. Over time, it heals.

I'd much rather see a couple of pieces go than lose an entire museum.

Of course, one thinks that they could petition the National Endowment for the Arts or engage the Government in another way for emergency funding, but the Government feels it's more important to save banks right now. So, there.
posted by spirit72 at 9:40 AM on January 7, 2009

The academy owns more than 7,000 works, most of which have never been publicly shown.

Most museums that are object-collection based have most of their collection in storage. Conservation plays a much larger role in such organizations and storage space, and money to fund said conservation and storage space, is always lacking. People love to donate to museums but those donations can vary widely. Most museums will have a collection policy that narrows down the type of items they are seeking to place in the collection. Even items worth a lot of money don't belong there if it doesn't fit their collection policy.

I am hoping that the two paintings they sold were outside of the scope of the museum. I think it is better that a museum sells off two items rather than go belly up and sell the lot.
posted by Foam Pants at 9:58 AM on January 7, 2009

Do museum folks call it "weeding" when no one else is listen? Or is that just the librarians?
posted by stet at 10:12 AM on January 7, 2009

This may be of interest to those reading this thread: "No Bailout for the Arts?".
posted by gudrun at 10:20 AM on January 7, 2009

There seems to be an assumption that putting the collection out on the market isn't in the public interest, but some of those oil guys have done a pretty good job of putting their collections on public display.
posted by up in the old hotel at 12:54 PM on January 7, 2009

People love to donate to museums but those donations can vary widely.

And you also have "the rich get richer syndrome". People want to donate to the Met, but it's a high bar to get a painting on the walls there.
posted by smackfu at 1:45 PM on January 7, 2009

... a museum's more likely to have a conservation/maintenance program for the piece.

In this country, maybe. Elsewhere, less so. One part of me would prefer that more museums de-access if only to spread the risk of damage from accident, war, religious lunacy, neglect, poverty - the usual. (That said, I have also known people who put their impressionist water colors in bright sunlight because they thought them much prettier there. As I say- I'm torn)

And speaking of oil guys....
posted by IndigoJones at 2:44 PM on January 7, 2009

Should a museum die honorably or sell a couple of pieces to keep the rest of the collection available to the public? Because, you know, if it goes to Christie's, most of those works may end up in private hands.

False choice. If a nonprofit folds, its assets by law (see Tax Code 1.501(c)(3)-1(b)(4)) must be distributed to other nonprofits pursuing a similar mission or else handed over to the government for a public purpose. Christie's and private collectors never get their mitts on them. The point of a nonprofit is that the taxpayers are subsidizing the organization (by covering the tax bills that it and its donors would have otherwise paid) in exchange for permanently dedicating all of the org's work and assets to serving a public good. They're a public trust. Even bankruptcy doesn't void that.
posted by nakedcodemonkey at 3:26 PM on January 7, 2009

The Brooklyn Museum recently dealt with a related problem in a much better way.... That is, they didn't sell off half of it to "save" the collection.

This assumes that what you have on hand is something that another institution wants and/or is better prepared to care for. The BM's costume collection is/was legendary.

But speaking of false choices, keep in mind that selling a painting is not the same thing as removing a painting. The new owner may well choose to keep it at the museum where it will be displayed and properly conserved.

Personally, I grew up in the NPO world. My father built a local "house-bound" historical society into one caring for four buildings at two sites, one of which was also a general local history museum, the best for a community of its size in the state and very nearly as good as the two major city history museums in the state. A financial crisis after his departure caused the society to quit the museum and in the process deaccession much of what my father had managed to build up in the course of his 25 years there.

The society was left with no place to display a handful of major holdings, such as a tractor built as a precursor to the city's eight-decade association with the auto industry. Nineteenth-century tax records that were saved from the dumpster (literally) under my dad were almost pulped again, and are now stored in a probably-humid underground tunnel back at the court house. Saved, but not conserved, and not accessible for research (mainly of the genealogical sort). Other items are now subject to being moved in and out of exhibits and storage, subjecting them to sub-optimal conservation effects.

My perspective, therefore, is that preserving a viable institution has value. Sometimes the institution has to make dire choices among its missions. I would rather that the society had sold a few choice pieces if that would have ensured the survival of the rest, but it's also true that if you sell enough, you no longer have a collection worth showing.
posted by dhartung at 11:12 PM on January 7, 2009

More articles on U.S. museum budget problems.
posted by gudrun at 11:34 AM on January 8, 2009