Matthew Barney, Cremaster 3, production still
Economics blogger Felix Salmon provides grim answers to virtually every question I had about the Brandeis’ self described forced shuttering of the Rose Museum this morning. Responding to an article interviewing Brandeis University COO Peter French by Judith Dobrzynski at The Daily Beast, he had this to say:
There was precious little sympathy for Brandeis before this piece came out, but I imagine that there will be even less now. French and Dobrzynski are talking about Brandeis’s “financial collapse”, but here are the numbers: the Brandeis endowment was $712 million in June, and is $530 million now. On top of that, there’s an ongoing capital campaign that has raised $820 million of its $1.2 billion goal; much of that money will be used to construct new university buildings. And the university’s projected deficit for the next six years is just $79 million — less than half the losses that the endowment suffered in just six months.
French honestly seems to be asking us to believe that faced with a deficit of $13 million a year, he can neither simply spend that money out of the $530 million endowment, nor use any of the money from the capital campaign, but rather has no choice but to sell off a magnificent collection of artworks last valued at $350 million:
By Massachusetts law, French said, Brandeis can only spend gains, not capital, from the endowment–and it will be some time before there are any of those. Brandeis’s reserve fund, which is included in the endowment for management purposes, is projected to run out in about 18 months.
Borrowing money was out of the question, French explained; Brandeis already has $256 million in debt, and as he put it, “If we take out more debt, what would service it?”
Fine, don’t borrow the money. Just spend what you’ve got. The whole point of having an endowment is that when you run into bad times, there’s money there to tide you through. Turning around and saying that you’re not allowed to actually spend the money largely defeats one of the key reasons for having the endowment in the first place.
It only gets more damning from here. On the subject of deaccessioning laws Salmon explains,
The idea seems to be that an active museum can’t sell off artworks, but that if the museum has been closed down, then deaccessioning rules no longer apply, and Brandeis can get to work tactically selling off bits and pieces of its collection as and when it needs the cash.
Um, ick. Read the full piece; Salmon’s take is essential reading.
UPDATE: Felix Salmon reports he received a number of emails this afternoon from David Nathan, director of communications in the Office of Development and Alumni Relations at Brandeis, demanding his post be removed for unspecified inaccuracies. This doesn’t seem like the best PR strategy in the world to me, but Salmon, who at this point, likely has more information than most of us having spoken to Nathan at length, stepped back from his previous position:
Brandeis has been saying that it’s not going to be selling off all of the Rose Art Museum’s art at once — or even, necessarily, any of it at all. So I asked Nathan why the musem needed to be shut down, if the university is going to hold on to the vast majority of its art for the near future.
Nathan told me that the reason is that selling art which is part of a museum is very difficult indeed. Clearly, Brandeis has come to the conclusion that by shutting down the museum, it can ignore all rules pertaining to deaccessioning, and worry only about the strings attached by donors to individual artworks.
Nathan also said something else which was extremely interesting to me: apparently all of the Rose Art Museum’s artworks are considered to be assets of the university endowment, valued at $1 each. All the proceeds from the sale of any artwork, then, is automatically a desperately-needed capital gain for the endowment.
…Had it not been for the deaccessioning rules, then, the Rose Art Museum might well have lived. There’s a good chance that its director would have resigned in protest at his art being sold from underneath him, but then he would simply have been replaced by someone more complaisant, a bit like the publisher of the LA Times. It would have been a deplorable outcome, but still one preferable to what we’re facing today.
Also, time to sign the petition In Opposition to the Closing of the Rose Art Museum, if you haven’t done so already.
And finally, credit where credit is due: Looks like Tyler Green was right.