The implicit contract amongst the board of a non-profit institution, its staff and its community goes something like this: If the staff does a good job, the community will embrace the staff’s work and the board will support it at a level that allows it to continue to do good work. It’s a triangular feedback loop that has worked well for art museums, which are, happily, overwhelmingly well-run. Art museums collect and preserve our visual and cultural heritage, generate scholarship, provide more education than any other organizations except schools, and expose Americans to peoples and ideas that would otherwise be outside their experience.
But somehow that traditional, tripartite system has broken down in Los Angeles and Indianapolis, where boards have failed to support widely respected institutions. In Los Angeles, the Museum of Contemporary Art is in its fifth year of crisis. Last week the Los Angeles Times reported that in addition to merger talks with the University of Southern California, MOCA’s board has initiated similar discussions with the Los Angeles County Museum of Art. Until the directorship of Jeffrey Deitch, MOCA had been America’s most admired and copied contemporary art museum. By bringing traditional art historical rigor to today’s art, MOCA set a standard that every significant contemporary art museum in the U.S. has followed. Many in Europe have too: Two of the continent’s top modern and contemporary art museums — Amsterdam’s Stedelijk and Cologne’s Ludwig — are run by former MOCA curators.
In Indianapolis, IMA director Charles Venable announced last week that the IMA was laying off 21 people, 11 percent of the museum’s staff, and that it was eliminating 29 jobs in all. (The Walker Art Center also recently announced a much smaller round of layoffs.) Under Max Anderson, Venable’s predecessor, the IMA had emerged as one of America’s top-performing art museums. The IMA’s digital initiatives, such as its transparency-providing Dashboard, its video service ArtBabble and its open-information deaccessioning policy, set new standards for the field. Under Anderson the IMA became free, providing everyone in Indiana with the same access to the art the museum held in trust for them. The IMA also spearheaded the United States presentation at the 2011 Venice Biennale and, at a time when too many Americans rushed to demonize Islam, the IMA presented a significant exhibition of Islamic art. When Anderson left the IMA, the museum was a national model.
The MOCA and IMA situations would appear to be as different as can be: Indianapolis is a fraction of Los Angeles’ size. MOCA is a contemporary art museum and the IMA is an encyclopedic institution (though via projects such as its new 100 Acres sculpture park, it has demonstrated better than most of its peer institutions how an encyclopedic museum can put contemporary art its heart.) MOCA has an international board of billionaire contemporary art scenesters, the IMA’s governors are almost entirely Indianans. But the two boards share one thing in common: They have allowed the implicit contract between staff, board and community to fail. MOCA’s board has been leading poorly for more than half a decade. Now the IMA’s board has joined them. [Image: Los Carpinteros, Free Basket, 2010. Collection of the Indianapolis Museum of Art.]
MOCA’s situation and the unwillingness of its board to support the museum is long-chronicled, most recently by Christopher Knight on the front page of Saturday’s Los Angeles Times. The Indianapolis Star is no Los Angeles Times, so the Indy situation is less clear. Let’s focus there.
As with MOCA, the IMA story is about not just the board, but about how the board is allowing a director to lead. In the Star, Venable recently claimed that the IMA cannot afford its current level of services and that he needs to cut around $2 million from the museum’s budget, roughly 10 percent of expenditures. He told the paper that the core of the alleged problem is that the museum is drawing down about six percent of its endowment this year. Venable considers this is an unacceptably high figure, not just in terms of draw, but in another, more novel way. [Image: Edouard Vuillard, The Seamstress, 1893. Collection of the Indianapolis Museum of Art.]
“In my opinion, endowments ideally should not be used to support more than 50 percent of operations as a rule with the other half being supported through donations and earned revenue,” Venable said. In over a decade of covering the non-profit sector and in years of working for non-profits before that, I’ve never heard of any remotely similar formulation or management theory. Nor could I find one when I looked.
How much should an art museum draw from its endowment each year? There is no industry-standard figure. Under rules put forth by the Internal Revenue Service, each year private foundations must make eligible charitable expenditures that equal or exceed five percent of their endowments. (The IRS rule also details what counts toward that figure and how it may be calculated, but that’s a little beyond where we need to go here.) Art museums are not private foundations. They may, if they choose to, spend far less than five percent of their endowment per year. Or far more. But for better or worse, art museums and other non-profit institutions have taken the IRS’ ‘five percent rule’ for foundations as a guideline.
According to Venable, the IMA is exceeding that figure by about one percentage point. Venable seems to have presented this percentage point to the Star as an irresponsible expense that will damage the institution if it is not controlled. Is six percent on the high end of the average art museum endowment draw? No data is available, but based on years of conversations with museum directors, I’d say yes. But is it irresponsibly or dangerously high, a level of spending that will damage the institution? Certainly not. It’s within the realm of reasonable. However, the Star accepted Venable’s analysis and wrote that the museum is “struggling.” But is that really true?
No, and it’s not even close. The IMA is an exceptionally well-endowed institution. As of last June, the IMA’s endowment stood at $326 million. (With the Dow Jones Industrial Average up 12.1 percent and the S&P 500 up 14.2 percent since the IMA last reported its endowment total, today that figure is likely substantially higher.) While there is no available accumulated set of data that ranks current art museum endowments, the IMA’s endowment is likely within the top 15 in the country. [Image: Rembrandt, Self-Portrait, about 1629. Collection of the Indianapolis Museum of Art.]
According to the Star, just over $200 million of the IMA’s endowment is available for operating expenses. So when Venable talks about an alleged need to cut $2 million from the IMA’s expenditures, the math is pretty obvious: $2 million equals almost exactly one percent of eligible endowment draw. Venable’s decision to axe staff and to reduce the IMA’s mission-delivery capability stems from a false imperative to reduce endowment draw — and at a time of fast-rising financial markets, too — and a novel formulation of from where a charity’s revenues should come.
(Especially galling: Just as Venable decided that he needed to cut $2 million, $1.7 million of which will come in staff cuts, he admitted to spending about $1 million to launch a show of art rented from the Baltimore Museum of Art, effectively sending money raised and earned in Indiana not into the IMA coffers, but to Maryland.)
This brings us to the choice made by Venable’s bosses, the decision to either instigate or allow devastating cuts to staff and mission fulfillment. The IMA board is doing its best MOCA impersonation: Instead of increasing giving as part of a considered medium-range effort to reduce its endowment draw — for this is how such reductions typically work — the IMA board chose to fire staff and to lessen the IMA’s ability to serve its community. Instead of building on the generosity of the past donors who built the IMA’s endowment and MOCA’s collection, their current boards are content to coast on the wealth of the past. Instead, they should be giving so as to enable their museums’ present and ensuring its future. That’s both flinty and an abdication of responsibility to staffs and previous donors who have helped make the two museums respected national leaders. [Image: JMW Turner, The Fifth Plague of Europe, 1800. Collection of the Indianapolis Museum of Art.]
Even worse: Two days after the IMA and its board mandated austerity, the Dow Jones hit an all-time high. Apparently Rep. Paul Ryan’s America lives on the IMA and MOCA boards.
The decimation of MOCA’s capabilities has been well-chronicled. The cuts made by Venable and his board are already degrading the IMA’s ability to fulfill its mission: The IMA laid off its director of publications, which portends poorly for the IMA’s ability to produce scholarship, particularly on its many excellent collections. Last night the museum’s librarian sent an email to IMA staff outlining cuts in library services: The IMA’s library will no longer provide open access to the public. It is also cutting its hours and will be open only six hours a day. The museum has signaled that further cuts are coming to the curatorial and conservation departments. Those cuts will be especially self-defeating as those are two of the museum departments most able to attract substantial grants from regional and national donors and foundations.
There’s an additional unsavory edge to Venable’s early IMA tenure. It’s clear from my conversation with journalists, present and former IMA staff and others involved in the arts in Indiana that someone or someones have initiated a whisper campaign portraying the museum’s previous leadership as irresponsible, profligate spenders, the kind of people that Indianapolis just couldn’t afford. Heck, the whisper campaign has continued, this place just doesn’t need to provide for its community the way museums in Minneapolis or Kansas City do, let alone museums in Los Angeles or in that place Anderson came from, New York!
On many levels, poppycock. The IMA is immensely popular in its community: In terms of population, the Indy metropolitan area ranks No. 33 in the U.S. It is not a city that draws a significant number of tourists. Yet according to the most recent available survey data from the Association of Art Museum Directors, with over 400,000 visitors per year the IMA ranks No. 19 in museum attendance, ahead of better known museums such as the Frick Collection and the Cleveland Museum of Art. The community has clearly embraced the staff’s work. [Image: John Marin, Hurricane, 1944. Collection of the Indianapolis Museum of Art.]
Venable himself fed the Star some data that allegedly pointed to Anderson’s irresponsible ways: Venable claimed that only 7,000 people visited a recent IMA exhibition of Islamic art. Yesterday, Anderson took to his Facebook page to reveal that figure as false: According to Anderson, 20,000 people visited the exhibition, and on a cost-per-visitor basis the show was not exceptional. Sniping at the previous museum director and presenting misleading data about his programming is small. The IMA board and director should be trying to build on the successes I detailed above, not explaining them away. (The exchange is revealing in another way: Anderson’s IMA was focused on being a museum that was engaged with world culture, art, artists, scholarship, conservation and education. Venable, who has proposed an exhibition of automobiles, seems more interested in fairgrounds-style attractions and less interested in collections, historicizing exhibitions or in enabling and publishing scholarship.)
Should all this matter to art-lovers outside Indianapolis or Los Angeles? Yes. When the boards and directors of large, successful museums abandon the staffs and past donors that have produced and enabled significant work, and when they shrug at the communities that value that work, it serves as a warning shot for the whole field. It is the kind of behavior that should be documented and noted, as a warning of worst-practices. If it can happen at admired institutions such as MOCA and the IMA, it can happen anywhere.