Will US museums succeed in reinventing themselves?

The recession is forcing North American institutions to reconsider every aspect of what they do


As museums struggle with financial difficulties and declining attendance, will we see a rise in populist shows such as the touring exhibition of costumes, models and props from the "Star Wars" films? (Photo: Spencer Platt/Getty Images)

“You never want a serious crisis to go to waste,” Rahm Emanuel, President Obama’s hyperactive chief of staff likes to say. By that measure, art museums may have been handed a historic opportunity.

As we all know, the Great Recession has been tough on museums, especially American ones. Layoffs, furloughs and hiring freezes have become common. Endowments shrank by up to a third during the worst of the market swoon—the larger the institution, the steeper the losses. According to a 2009 survey of North American museums by the Association of Art Museum Directors (AAMD), three out of five institutions lost revenue in 2008. The first half of 2009 was especially scary. Institutions that entered the downturn with shaky finances, like MoCA in Los Angeles, had near-death episodes. Others, most notably the Rose Art Museum at Brandeis University, flirted with art sales and closure.



Endowments are now creeping back, but confidence isn’t. Private donors remain skittish. Corporate support is hard to find and ever more tightly tethered to marketing priorities. Public funding is jeopardised by imploding budgets and competing needs. Foundations, too, are smarting from losses. Some are rethinking their support for culture altogether. Venerable charities like the Ford and Rockefeller foundations no longer have divisions with “art” in their names. Museum income from tourists, members, publications, shops, rentals and restaurants is stagnant. It has been a perfect storm.

To make matters worse, museums on the whole are no longer the happy exception to the shrinking and greying of fine arts audiences. Last summer’s NEA Arts Participation Survey found attendance registering “noticeable declines,” tumbling from a high of 26% in 1992-2002 to 23% in 2008—back to 1982 levels. Although a survey in The Art Newspaper last month found that large museums are capturing audience gains, three out of four Americans don’t visit museums regularly. When they do, they often come for the blockbusters and entertainments that museums have deployed to attract a wider public. Meanwhile, the median age of visitors has shot up since 1982, from 36 to 43 years—a bump that cannot be explained away with aging baby boomers. Especially worrisome is a 12% decline in arts attendance among college-educated Americans.

A recent report from the Center for the Future of Museums looked ahead to 2034 and found a litany of challenges. These include soaring energy prices, which may force some museums to open satellites in their suburbs. From the collapse of quality arts media to the atrophy of expert-based cultural consensus, museums are losing traditional pillars of their authority. Writing in the Stanford Social Innovation Review, arts policy expert Diane Ragsdale summed up the stakes thus: “Not unlike newspapers, automotive companies and record labels, many fine arts organisations have failed to adjust to the radical social, cultural, and technological changes that have taken place in the United States during the last few decades.”

Of course, the fall-out has been especially vexing for American museums. In Europe, government subsidies have locked in a sense of security—for now. At an Art Basel discussion last June, I asked five museum leaders how they were coping. Christine Macel of the Centre Pompidou spoke of the “huge support of the state” in France. Lars Nittve of Stockholm’s Moderna Museet reported growing public and corporate support, and an improved environment for acquisitions; “what is wonderful since last year is that other values than market values have come back in the world of art,” he added. Nicolaus Schaffhausen of Rotterdam’s Witte de With Center for Contemporary Art declared: “We are not affected by the financial crisis.” Even Iwona Blazwick of London’s Whitechapel Gallery was sanguine. Then it was Whitney Museum director Adam Weinberg’s turn to speak. “I see you have saved the worst till last,” he began. He then described the gut-wrenching consequences of a $5m investment shortfall for an institution that receives only 1% of its support from government.

Museum projects in the Gulf, the former Soviet Union and China are drawing on soaring wealth and national ambitions. Yet those, too, will someday confront inconvenient truths, among them the shrinking pool of museum-quality art, the contested status of many historic objects, the game-changing effects of technology, and the unpredictable tastes of tourists and local populations. Largesse from ascendant and welfare states won’t last forever. As I write, French museum workers are striking over planned layoffs. Museum directors around Europe are on notice to start fundraising privately. Sooner or later, all museums succumb to their version of the “cost disease”: while expenses mount, there are hard limits to making institutions more efficient.

In America, certainly, the economic downturn is hastening a realisation that business-as-usual won’t work anymore—and that’s not necessarily a bad thing. With financial windfalls no longer papering over systemic problems, museums are considering moves that were unthinkable, or just unnecessary, in frothier years. Behaviour modification may be the silver lining of this crisis. The result may be museums better equipped to confront 21st-century realities.

Money

Money, of course, is at the root of museums’ problems. There is no universal fix for museum finances because their fiscal situations are astonishingly varied. According to a 2000 RAND study, the top 5% of US visual art institutions control almost four-fifths of combined museum revenues, endowments, infrastructure and donations. Yet institutions of every size contend with the same fundamental dilemma: how to make ends meet with scarce resources, when they have limited options to build revenue streams and no latitude to monetise their core assets?

With donations falling, income stalling and some endowed funds restricted for donor-intended purposes, museums typically respond to crises by cutting expenses. Such measures are self-defeating after a certain point, but there are few magic-bullet alternatives. In addition to furious fundraising, museum leaders can—and increasingly do—ask donors to permit more flexibility in spending. In recent months, some boards have redirected their giving to “bread and butter” needs. The remaining options are controversial at best. Raising ticket prices is unpopular, and makes hardly a dent in a typical budget. Business ventures to exploit licensing and other earned-income sources are expensive and time consuming. The sale or leaseback of museum facilities is usually a non-starter. Taking on debt is imprudent. What, then, is a museum to do?

In the world beyond museums, such situations prompt organisational restructuring. The current difficulties have provided a mandate—or cover—for some museum leaders to consider changes that in normal times would run up against opposition or inertia. With two out of five museums reporting headcount reductions, existing structures are stretched to the limit. In response, some museums have begun to reconfigure their core staff. The Brooklyn Museum, for example, has created teams of curators and support staff that work across departments. Many institutions are supplementing full-timers with freelancers. The changes are painful and imperfect, and they can corrode morale and mission. But they may prepare museums to cope in a harsher climate.

Museums are also looking for ways to share resources. For Adam Weinberg of the Whitney, “collaborations between collections tend to work quite well.” Efficiencies from joint programming, however, are “a bit of a fallacy: I don’t think that they always end up saving money.” Whatever the case, the downturn has created a new incentive to team up. Joint purchases are the most obvious opportunity. “Let’s say three institutions share the cost and the work becomes a nomadic work,” said Christine Macel. “That’s becoming a natural process now; it’s not so surprising anymore.” Museums are joining forces more readily on publications and web projects, such as Artbabble, a kind of YouTube for art videos. But while content partnerships are proliferating, museums have stopped well short of the kind of consolidation that reshapes other distressed industries. “There is a pride factor that makes it very difficult to merge,” notes Maxwell Anderson, director of the Indianapolis Museum of Art.

Deaccessioning also makes museums nervous. According to current guidelines, museums can only sell art to buy other art, not to cover operations. Those rules exist for a good reason. But when finances are pushed to the brink, museums’ largest asset category—its art—is more likely to get a second look. “Does it make sense to keep a large percentage of a museum’s art assets in storage, never to be seen, when the same museum is laying off curators?” asks a donor to several major American museums. “How does one responsibly go to benefactors for more support?” Sensible reform proposals—for example, to allow sales when objects stay in the public domain—are already being floated. Meanwhile, museums are finding that the best deaccessioning policy is a smart accessioning policy. They are more careful about accepting gifts and asking donors to cover exhibition and ownership costs.

Museums are also gingerly testing their ties to the art market. “Today, the institution struggles to sustain art by playing yin to the art market’s yang,” says Marc Mayer, director of the National Gallery of Canada. But is this ivory-tower mentality still realistic? For Mayer, the idea “that we would even think about the market” is “mildly controversial”. But, he adds, “we can’t pretend that we don’t have an effect.”

Such earnest talk is still rare. More than a decade after the much-maligned “Sensation” exhibition, the travelling show of Charles Saatchi’s collection seen at the Brooklyn Museum in 1999, the current skirmish over the New Museum’s display of works from the collection of Dakis Joannou, a museum trustee, has put the anguished debate over private-donor influence back on the front page of The New York Times. Museums have not yet succeeded in publicly articulating new terms of engagement with the art-market players that have a hand in their survival. But the financial crisis may help them reach a point of realism and transparency. That’s not to put the foxes in charge of the hen house. To the contrary, the close call with financial doom also presented an opportunity, in Nittve’s words, to “think about the consequences of American style endowments—not just in terms of finances, but in terms of the influence of donors.”

The downturn, in short, may help erase romantic attitudes and tamp down excessive faith in free markets and private wealth.

Opening doors

When it comes to programming, the standard response to belt-tightening has been to scale back exhibitions, curb opening hours and close temporary-display galleries. According to the AAMD, one third of US museum directors planned programming cuts in 2009. No less than 70% aimed to turn hardship into a virtue by refocusing on permanent collections. But museums can’t calendar-edit their way out of their problems. The real issue is the size and composition of the audience.

Many museum professionals express hope that the downturn will jolt art institutions into opening their doors wider. As Blazwick put it in Basel, “this is a crucial time to be receptive to what is happening to people’s lives.” But such receptiveness is not yet reflected in the attendance statistics. In the US, only 9% of museum visitors are from minority populations, whereas one third of the population is minority. “Diversity is a real issue,” says Timothy Rub, director of the Philadelphia Museum of Art, not only among visitors, but also in museum leadership ranks.

Many visual art institutions yearn to be more popular, but they face a conundrum: how to democratise their programming without trivialising it? Smarter marketing and community outreach, while indispensable, are only part of the solution. Reaching the young, the underserved and the disinclined requires a change in ingrained museum habits—what Osvaldo Sánchez, director of the Museum of Modern Art in Mexico City, calls a bottom-up rethink of programming, “from a kind of historical academic field to something that would understand curatorial practice as a more interactive discipline.” Some of this is already happening. Certain museums are blending contemporary art into their historic wings. Others are mixing up specialisations and dismantling curatorial silos. Such ideas have been floating around for some time. The downturn is lending new urgency to them.

The greatest audience development and diversification opportunity of our time, however, unquestionably lies in the deployment of the internet as a fully-fledged programming tool. “We really have to stop thinking about the web as an add-on, and think about it as a virtual museum almost in and of itself,” says Lynn Zelevansky, director of the Carnegie Museum in Pittsburgh. Launching a museum blog or a Twitter feed can no longer be considered an innovative web strategy. The websites of the Tate, MoMA, the Walker Art Center in Minneapolis, for example, already resemble digital magazines with rich content, customisation, and networking options. And great expectations surround the Metropolitan Museum’s rollout of its ambitious new technology platforms, which starts next year.

The real challenge of the digital age is that it requires organisations to fundamentally alter their relationship with their constituencies. Museums must start to treat their audience as a community with a say in what happens, much like media companies are learning to do. This goes against the grain for an institution accustomed to speaking to its public from a position of detached Olympian authority. For Zelevansky, the prospect of expanding the museum into the virtual realm is both disruptive and liberating: “How does a museum that has enshrined structures of enlightenment rationality, clearly delineated departments of knowledge, remain open to this fluidity?” Nobody quite knows. But the current pressures to innovate are pushing museums to experiment more boldly.

The vision thing

Museum veterans see the calamitous period that just passed as part of a larger cycle. Since their advent, museums have been occasionally tested by economic and social upheavals—only to emerge stronger in subsequent periods of prosperity. Digesting the full cultural implications of a once-in-a-generation event like the Great Recession will take years, even decades. In the meantime, museum leaders have an opportunity to frame new visions for the future.

Out of necessity, trustees and directors are embracing a “bigger is not better” philosophy, as the curtain closes on the epic museum building binge of the past few decades. More doubts are being voiced about whether vast structures designed by brand-name architects are truly advancing the cause of art or delivering the promised economic benefits. Museum boards, like overextended families, are straining under the expense of maintaining their exalted infrastructure. “Everybody loves the golden eggs, but nobody wants to pay for the goose feed,” says Samuel Sachs, former director of the Frick Collection. Tomorrow’s great building challenge, in any case, will be the shift from travertine to terabytes—from erecting physical monuments to investing in much-needed virtual infrastructure. Shaking the addiction to costly expansion projects should also enable museums to focus more on their core exhibiting and educational functions. Putting up a building will no longer substitute for a cultural mission.

The other vision-setting task for museum leaders is to find an effective language to advocate for art institutions in a time of diminished resources. Given the weaknesses of their current business models, museums may not be able to sustain their core missions without making a stronger case for financial support—not just from private sources, but also from government. “The pendulum is swinging back to more complex funding streams,” says Rub. “The emphasis will be on public-sector funding and getting a piece of that. It has to be. These are generational investments.” To unlock those investments, however, museums will need to move beyond the narrow vocabulary of “instrumental benefits” that in recent years has been used to justify cultural support. They must remind their patrons—public and private—about the intrinsic value of the museum experience, convincing them that, in Rub’s words, museums still “hold a special place within the ecosystems of our cities.”

“Caught up in historical change, dependent on new sources of support, and torn by conflicting pressures from both within and without the profession—toward what shapes are museums being pulled and pushed?” Museum analyst Stephen E. Weil posed that question in a seminal essay titled “The Multiple Crises of Museums”. That was in 1971. Today’s museums confront much the same question. The circumstances of the moment may prompt surprisingly reassuring responses.

András Szántó is a Senior Lecturer in Art Business at the Sotheby’s Institute of Art, New York, and an adviser to cultural and philanthropic organisations


L.A.'s MOCA picks art dealer Jeffrey Deitch as director

The museum calls the decision to go with the New York gallery owner a bold move. Deitch, an advisor to major collectors around the world, touts his deep connections in the art world.

Jeffrey Deitch stepped into a gallery at the Museum of Contemporary Art on Monday where a photographer was set to take his portrait in front of a painting in the shape of a bull's-eye by Kenneth Noland.

But Deitch, 57, had another idea for a backdrop: He suggested "A Lot to Like," James Rosenquist's massive 1962 canvas that occupied another wall in the gallery.

"Jim's a friend," Deitch said.

The offhand remark illustrates the assets and potential drawbacks that New Yorker Deitch, appointed Monday as MOCA's new director, brings to his new role in Los Angeles and the larger art world.

An advisor to heavyweight art collectors around the world, an active collector himself and a gallery owner who helped shape the careers of groundbreaking late-20th century artists, he now takes on the leadership of an institution many regard as the world's leading museum dedicated to post-World War II art, one that nearly foundered financially less than two years ago.

MOCA's board of directors called the appointment of Deitch, one of the few gallery owners who has moved into the directorship of a museum, a bold move, and clearly believes his business savvy and connections will serve him well in the job. Others see the potential for conflicts of interest, with the reputation of the museum on the line.

MOCA already has made enough of the wrong kinds of headlines: a 2008 financial crisis in which overspending ate up its endowment and left the museum so vulnerable that there were fears it wouldn't survive as an independent institution.

That's why Deitch might want to avoid being photographed in a bull's-eye: He's already assured of being a target for minute scrutiny.

Deitch won't officially assume his new job until June 1, when his five-year contract begins. Between now and then, he plans to get out of the art business and lay the groundwork for making his connections benefit MOCA.

In his first year, he hopes to bring in donations that will take MOCA from what he sees as a post-crisis "austerity budget" of $15.5 million, to the $18-million-plus budget he thinks it needs to mount exhibitions that will maintain its reputation.

After three years, he hopes to be running a museum that's financially stable, has done "some superb exhibitions," reaped a "steady increase in attendance," and is ready for "major initiatives" both in programming and a long hoped-for expansion, perhaps by renovating and enlarging the Geffen Contemporary building in Little Tokyo that complements the museum on Grand Avenue.

Interviewed in the library of MOCA's executive offices, Deitch said one of the best cards he holds is his long-standing connections with leading art collectors around the world: "Effective fund-raising is based on relationships."

Deitch said he'll give up his New York City gallery, Deitch Projects, possibly transferring parts of the business to some of his current employees. He expects to take a financial hit, partly from the earnings he'll forgo, and partly from the leases he may have to eat on the largest of his three gallery buildings and on other sites.

"I'm just going to stop all commercial activity. The gallery will be over," Deitch said, as will his work as an art consultant to collectors.

He also will resign from the committee that rules on which works purported to be by Jean-Michel Basquiat are genuine. Deitch (pronounced DIE-tch) was a close friend of the artist, who died in 1987.

Deitch says he aims to cut back, but not discontinue, the acquisition of art for his personal collection, which he says includes about 50 major works, in keeping with his wish to own a major piece by every artist he's worked with closely.

In the future, he says he will acquire less expensive work by less established artists, while complying with museum-world ethical guidelines designed to ensure that a director puts the museum's interests first and doesn't use the position for personal enrichment.

That, Deitch said, would include giving MOCA the right of first refusal on any piece he might want to buy.

"I have to exercise good judgment and be appropriate," he said. "Would I arrange an exhibition that features a major work I'm thinking of selling? Absolutely not, because that's not appropriate."

Deitch says he can handle the scrutiny that comes with being the first person in memory to make the transition from being a successful art dealer to running a major nonprofit American art museum.

"Lots of people are going to be concerned and looking, and all their comments are important," he said. "What I hope is I'll eventually be seen as an actual individual, not as some abstraction -- an art dealer running a museum."

Deitch majored in art at Wesleyan University, not far from his hometown of Hartford, Conn., where his family owned a heating oil business. He then earned a master's in business administration from Harvard, but he always had his heart set on being part of the art world. After working as a curator of the DeCordova Museum, a small institution in Lincoln, Mass., he cast his lot with the commercial art world.

In 1979, Deitch launched an art advisory service for clients of Citibank. He went on to become an independent dealer, championing Basquiat, Keith Haring and Jeff Koons, among others. In 1996 he launched Deitch Projects, which has won praise for putting on adventurous shows of less-commercial genres such as street art and performance art, and drawing in young audiences by forging connections between the art and underground music scene.

Running MOCA hadn't occurred to him until last October, when he was contacted by the executive search firm working for the museum.

"I was very intrigued, but I didn't take it very seriously" until December, when he started speaking to members of the museum board's search committee and sensing how passionate they were about the museum and its future.

"They were so enthusiastic, and I then took on some of the same enthusiasm," he said.

Deitch said he called his accountant to find out what it would cost him to take the job. After running the numbers, he said, "I thought I might have to reconsider. But this is what I've always wanted to do."

His contract includes a "relatively modest" housing allowance, he said. He wouldn't say what his compensation package will be -- except that it will be substantially less than he's been accustomed to as an art dealer.

Part of Deitch's legend among members of the international art scene has been his spartan living conditions -- a small Manhattan apartment with no art on display so he had nothing to worry about keeping secure while jetting around the world. Now he's thinking it would be appropriate to settle into a proper home in L.A., where he can entertain visitors and show them some art.