How the richest US museums are weathering the storm
By Jason Edward Kaufman. News, Issue 198, January 2009
Published online: 08 January 2009
The Getty Trust president James Wood says its endowment has fallen by 25% from the $5.98bn reported on 30 June 2008—a $1.5bn loss—and that despite having made budget reductions and lay-offs last May before the downturn, he has imposed a freeze on hiring and warned that the fiscal year 2010 budget will “significantly reduce spending, which will have an impact on staffing, programming, and operations”.
The Metropolitan Museum’s endowment had declined over the year ending 30 June 2008 when it was $2.9bn. If the portfolio tracked the market, since then the museum has lost nearly three quarters of a billion dollars, and funding from New York City, $26.8m this year, has already been trimmed 2.5% with additional 4% and 7% cuts announced for 2010. “We are reviewing carefully all of our expenses, as well as ways to generate revenue,” says a spokeswoman.
The Museum of Modern Art would not disclose how much its endowment has fallen since last June when it was reported at $818m, but the museum has already cut 10% across all departments for the remainder of the financial year, and instituted a temporary recruitment freeze. “We are focused on maintaining the museum’s exhibition programme and staff,” says director Glenn Lowry, adding, “we are preparing ourselves for a much more difficult economic environment in the year ahead.”
The National Gallery of Art, which receives the bulk of its budget from the federal government, will get $118m ($16.3m for building renovations) for the year ending 30 September 2009, a slight increase from the previous year. The gallery’s endowment fell from $724m in late 2007 to $609m on 30 September 2008, which is likely to result in a reworking of the budget.
The Smithsonian Institution gets 70% of its $1bn budget from the federal government that will not conclude the 2009 budget until March. Meanwhile, like the National Gallery, the Smithsonian is operating at the same level of funding as in 2008. Private endowments fell from $1bn to around $800m by mid-November, so if federal funding declines the institution will face a severe budget crunch. A recruitment freeze is in effect .
The Museum of Fine Arts, Houston (MFAH)’s endowment fell 22% to around $780m by December, says director Peter Marzio, but he does not plan to alter the museum’s revenue or fundraising strategies. “There have consistently been two guiding principles in governing the MFAH: one is to have a high-quality product; the other is to never do any ‘negative’ [inappropriate] fundraising; neither of those will change,” he says. The museum begins construction this month on a visitor centre at Bayou Bend, its house museum for early American decorative arts.
The Cleveland Museum of Art derives around two thirds of its $36m budget from interest on its endowment, which was reported as $745m at the end of the last financial year. If the portfolio tracked the market, it lost in the range of $180m or roughly $6m of annual income. Yet director Timothy Rub says he plans to make no adjustment to the operating budget, or to the $350m cost of the ongoing multi-phase expansion and renovation, scheduled for completion in 2012, and for which the museum has raised only $205m.
The Museum of Fine Arts, Boston completed a $504m capital campaign in September and the museum plans to continue its expansion designed by Norman Foster. The endowment was down from $555m in mid 2007 to $538m by 30 June 2008 and a more recent figure was unavailable. There have been no lay-offs, but $1.5m has been trimmed from the budget and the museum is looking into increasing revenues from travelling exhibitions, which include shows it sends to the for-profit Bellagio Gallery in Las Vegas and a ten-year-old partnership with a branch museum in Nagoya, Japan.
The Kimbell Art Museum in Fort Worth derives around 65% of its $12m budget from an endowment that has fallen from $466m at the beginning of 2008 to $398m by 31 October. “Currently the museum is not planning major changes to its business activities,” says a spokeswoman. The Kimbell expects to break ground in 2010 on a $70m expansion designed by Renzo Piano, but the timeline has yet to be defined.
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