When the Unthinkable Happens – Museum Shut-Down

Brandeis University’s decision to “boost endowment” by closing the Rose Art Museum has been met with shock and dismay.  According to the Wall Street Journal, Tony Pals of the National Association of Independent Colleges and Universities called the move “the most severe cost-cutting step” a university has taken since the economic downturn.  Who could disagree with such a statement?  The collection itself is worth approximately $350 million dollars, according to Michael Rush, the museum’s director.

This situation is not, however, a first of its kind.  Several schools, including Randolph College in Lynchburg, Virginia and Fisk University in Nashville Tennessee have resorted to such drastic measures in recent times.  While Randolph College moved forward, after legal challenges were dropped, with the sale, the Fisk University situation remains in flux.

It is important for all museums and colleges/universities to be aware of the significant risks associated with such a tactic such as breach of contract actions by donors and allegations of charitable intent violations.  At the very minimum, a museum must be fully conversant with donor contracts and trusts before undertaking a wholesale auction of its prized work.  Rigorous deaccession policies and notice requirements should be implemented and followed by museums to help mitigate donor angst and donor lawsuits.  I always recommend that donor agreements include certain language that would address a catastrophic event, such as a museum closing.  Although this may not be an immediate concern at the time of the donation, the uncertain economic times call for heightened diligence.  At the very least, you will have had the conversation with your donors about the potential for a catastrophic event, however unlikely. 

In light of the economic crisis and the economic strain placed on donors and museums alike, now is a perfect time to review your donor contracts, deaccession policies and overall museum purpose.  Such a review will not only help ease any latent concerns, it will enable you to adjust your documents and policies to meet the potential for a catastrophic event.

Partial Deaccession

Anschutzian Deaccession

Having Your Cake and Eating it Too?

 

In late spring of 2008 the Denver Art Museum (DAM) and Colorado businessman and art collector Philip Anschutz assisted DAM in the acquisition of Thomas Eakins’ “Cowboy Singing”.  The potentially controversial and precedent setting portion of the agreement grants Mr. Anchutz a fifty (50%) percent ownership stake in a piece of the DAM’s existing collection, Charles Deas “Long Jakes (The Rocky Mountain Man”) – or what has been coined a partial deaccession.

 

The Issue

 

The rub in this transaction is whether or not the transfer of a 50% interest in a work already a part of a museum’s collection triggers a deaccession.   In fact, DAM director Lewis Sharp acknowledged the question in an interview with Tyler Green of Modern Art Notes.  Dr. Sharp indicated that:

 

“It seemed to me that probably falling on the safe side, I decided to use the inflammatory phrase deaccessioning.  Deaccessioning is a technical term and it simply means that you’ve taken it off the registrar’s [list] at the museum—and we haven’t, because we still have fifty percent….If I have the whole thing to do again, I probably would remove the term deaccessioning.”

 

But should he?  After all, while technically, the work has not been removed from registrar, it has, to a degree been partially removed from the collection for 6 months of the year (The Anschutz agreement allows the painting to be in the possession of DAM for 6 months and by Mr. Anschutz for 6 months).  Additionally, the original Donor’s intent in providing the work to the museum most likely did not anticipate a fractional ownership arrangement between DAM and a private collector.  A key component to any museum deaccession policy and any analysis into the authority of a museum to engage in a deaccession is the consideration of the Donor’s intent.  And isn’t one of the accepted rationales for deaccession the procurement of art to update the collection and further the mission of a museum?   

 

At present, the Association of Art Museum Directors (AAMD) is scrutinizing the deal in light of its Professional Practices in Art Museums.  Although the strict standards of the AAMD specify that deaccessioning funds are to be used only for the acquisition of new works, which occurred in the DAM case, the AAMD will undoubtedly look into whether or not the preferred methods of sale standards (publicly advertised auction, sale to an established dealer or other public institution) were violated, and whether or not the public benefit outweighs the benefit to a private collector.  The AAMD decision may provide insight into the future of partial deaccessioning.

 

Protective Steps

 

While we all await the AAMD comments and the final resolution of the Anschutz transaction, there are steps that museums may take to help avoid a messy public debacle.  Most often, the loudest opponents to a deaccession event are members of the public who are generally of the opinion that museums should acquire art, not dispose of art.  As a result, whenever a piece of art is deaccessioned, museums must, and most do, take detailed steps to strictly follow their own deaccession policies and involve patrons, donors and the public to the extent necessary.

 

In light of the potential burgeoning market for half-deaccessioning, or for lack of a better term, Anschutzian Deaccessions, museums should consider taking certain precautionary steps:

 

1.                 Deaccession Policy Revision.  Museums should revisit their deaccession policies and determine whether the policies address a partial deaccession.  If the Anschutzian Deaccession is attractive, any museum looking to model a transaction as a partial deaccession should provide proper language in their policy so that the public, donors and patrons are aware of the policy from the outset.

 

2.                 Donor Documentation Revision.  All agreements with donors regarding accession transactions should make reference to the possibility of either a full deaccession or partial deaccession in accordance with the terms and conditions of the museum’s deaccession policy.  Donors should be the first to be contacted about a partial deaccession.

 

3.                 Public Reaction Management.  As with an deaccession, there is certain to be public dismay with the museum action.  Educating the public, donors and patrons of the museum as to any potential partial deaccession with a private party, including public notice, should be seriously considered.  Technically, the AAMD regulations prefer a sale through a publicly advertised auction, sale to another public institution or sale to a reputable dealer.  Any sale that falls outside of the preferences should be communicated to the public, donors and patrons through advertising and proper notice.

 

4.                 AAMD Clearance.  Although not required in any deaccessioning, until the AAMD issues new regulations or a clarifying memorandum, a musem may want to consider presenting a potential partial deaccession transaction to an AAMD committee for comment.  This may help protect the museum in the event of any third party action as a result of the deaccession.  Although certainly not dispositive of the issue, the blessing of an industry association can have an important impact on a legal analysis of the legality of a deaccession.

 

As the price and competition for important pieces of art increases, museums must become creative in acquisition strategy.  Anschutizian Deaccessions may be a vehicle to provide much needed funding for museums while allowing museums to keep a piece of work in its catalog for public display.  How such deaccessions will be received by the public, donors and patrons remains to be seen.  However, museums may be able to strike a delicate balance with such deaccessions and have their cake, and eat it too.