Fresno Art Museum mentioned in 5/20/10 Wall Street Journal and Philanthropy News Digest

Ailing Museums Seek 'Bailouts' From Universities

Tottering under years of budget deficits, accumulated debt, and declining donations, several of the country's small and midsize museums are turning to the art-world equivalent of a bailout and forging partnerships with academic institutions, the Wall Street Journal reports.

Museums' financial problems follow years of ambitious expansions, generous executive pay packages, and questionable real-estate investments undertaken during the real-estate boom. To finance that spending, many museums took on significant debt — only to have the floor fall out from under their endowments in 2008 when the stock market crashed. In response, some museums, including the Museum of Contemporary Craft in Portland, Oregon, and the Judah L. Magnes Museum in Berkeley, California, are turning to universities for help, in some cases handing over artwork and moving to new locations. According to many museum directors, a university is more likely than a private collector to keep a collection intact and maintain public access.

Financial tough times can also present difficult choices to museum donors. A donor might decide to write checks to keep a museum afloat, only to see the museum fail. Or she might support a new partnership or leadership change, only to have it end up infringing on the institution's unique character. Donors also worry about the financial health of rescuing institutions; like museums, many universities are struggling with funding cuts, shrinking endowments, and declining private contributions. Indeed, according to the Giving USA Foundation, donations to arts institutions and education organizations declined by almost 10 percent in 2008, and many institutions saw their endowments shrink, in some cases by as much as 30 percent.

Still, despite less-than-rosy financial outlooks, some museums are holding out. The troubled Fresno Art Museum, for instance, considered a merger with California State University, Fresno earlier this year but eventually decided against the move. "We were concerned with turning over our art collection to the state system with no guarantee that the art would stay in our community," said the museum's chairman, Tom Speck. Instead, said Speck, the museum will cut expenses and develop a five-year strategic plan designed to increase donations. "It was definitely a wake-up call to stop spending beyond our means."

Banjo, Shelly. “Hit by the Downturn, Museums Seek Bailouts.” Wall Street Journal 5/20/10.