Plummeting endowments rock art museums across the country
March 17, 2009
Faced with a loss in its endowment of more than 20 percent, the Wadsworth Atheneum Museum of Art quietly laid off six employees from its staff of 109 last month, and can't rule out further reductions of staff in the coming months.
"There are none planned for now, but no one knows what's going to happen in the next couple of months," said museum spokeswoman Kimberly Reynolds last week.
Reynolds said every department in the museum was affected, either directly by the layoffs or by having vacant positions go unfilled. She declined to say specifically who was laid off.
"Everyone is tightening their belts," said Reynolds. "We are all pulling together to ensure the same level of exhibitions and programs we've offered in the past."
Before resorting to layoffs, Museum Director Susan L. Talbott reduced departmental budgets by 15 percent, deferred staff raises, reduced the museum's hours of operation and put a hiring freeze in place for "non-essential personnel."
"Despite these measures, the worsening economic climate has forced the museum to undertake the difficult decision of reducing its workforce by six employees. In an effort to limit the number of staff reductions, reduced work weeks were offered to another five employees," wrote Talbott and Susan A. Rottner, president of the Board of Trustees in a letter late last month to the Wadsworth's staff and members — about 8,000 people in all.
As of July 1, 2008, the museum's total endowment stood at $83.3 million, with about one-third of that amount restricted to purchasing works of art, and not available for operating expenses, according to Reynolds.
Today, Reynolds says the total endowment stands at about $60 million, which would represent a loss of about 27 percent. The Wadsworth's operating budget in 2008 was about $9 million. Only 5 percent of the operating budget comes from the museum's unrestricted funds, which Reynolds says is intended to ensure the endowment is preserved.
"We are projecting a small deficit for this year," Reynolds said. "Last year we actually had a surplus largely due to Impressionists by the Sea. It's too soon to say what this year's deficit will be, but nothing insurmountable. A lot depends on how the [stock] market goes."
The surplus in 2008 was $309,000.
The Wadsworth has plenty of company in the art world in its endowment woes. Last week, the New York Times reported the Metropolitan Museum of Art was laying off more than a quarter of its merchandising staff, cutting 74 jobs in addition to 53 that were cut last year.
The Times reported that the Met's endowment lost about $800 million, or 28 percent of its value, since last summer when it stood at $2.9 billion.
In late February, the Philadelphia Museum of Art cut 30 staff positions, 16 of which were layoffs and the remainder coming from not filling vacancies. That museum's endowment had fallen from $346 million in July to $256 million by Dec. 1 — a drop of about 26 percent — and has continued to fall since, according to the Philadelphia Inquirer.
In Detroit, hit harder than most cities by the recession, the Institute of Arts laid off 20 percent of its staff, 63 out of 301 employees, according to the Detroit Free Press. The massive layoffs were part of an attempt to cut $6 million from a $34 million annual operating budget. The museum has to raise $15 million annually for operating costs, but museum officials declined to say how much of that total has been raised so far this year.
Even the world's richest arts institution, the Getty Trust in Los Angeles, which operates two art museums almost exclusively on earnings from its gigantic endowment, is hurting, according to the Los Angeles Times.
Getty's $6 billion portfolio fell a precipitous 25 percent in the last half of 2008 to $4.5 billion. That still dwarfs the Metropolitan Museum of Art's $2.1 billion endowment, as the Times points out, but Getty announced plans this week to lay off 10 percent of its workforce of 1,395 full-time and 101 part-time positions.
If there is an upside to the economic crisis wreaking havoc in the art world, it is that masterworks have become much more reasonable in cost, and if you have the money, it's a good time to buy.
"Prices were getting elevated much like the housing market," said Reynolds. "While the downturn has been difficult in some cases, in other areas it has been good. It has brought price back to reality in a way."
And fortunately for the Wadsworth, says Reynolds, the museum is in a position to take advantage of the correction in the art market, thanks to its restricted funds of about $20 million available solely for purchasing art for the museum's collection.
Hence the recent purchase of Georgia O'Keeffe's "Slightly Open Clamshell," a pastel on cardboard painted in 1926 that ranks among the "greatest examples of modern American art by one of America's most important modern artists," according to Reynolds.
"The work has been included in numerous major publications on the artist and on American modernism," wrote Reynolds in an e-mail. "O'Keeffe ranks as one of the greatest modern talents who worked consistently on paper throughout her career, but she was not represented in the Wadsworth's collection of works on paper, making this acquisition a huge complement to the museum's existing collection."
Reynolds was aware of the unfortunate juxtaposition of buying the O'Keeffe and implementing layoffs, but she stressed that the museum is not only ethically, but legally, bound to spend restricted endowment funds solely on acquiring art.
She declined to say how much the Wadsworth paid for "Slightly Open Clamshell," but the work sold at auction at Christie's New York for $1.1 million in December, 1997.