Wednesday, February 25, 2009

The New Borgias

In Superstruct, the Alternate Reality Game from the Institute for the Future that ran last fall, player Phil Deely wrote a story titled “The New Borgias.” Deely posited that, in the game’s fictional future of 2019, the wealthy few dominate and control cultural institutions in the U.S. As with many hypotheses explored in the game, this one seems very plausible the more I mull it over.

Deely’s story came to mind this past week as I helped Phil Katz, AAM’s research director, pummel the data from AAM’s latest financial survey into shape. Everyone is eager to see the financial survey data. It compiles three years of information, through FY 2008, and documents the initial effect on museums of the current financial crisis. Even this early in the analysis one thing leaps out: many fewer museums answered this survey than responded to its predecessors. We received 588 complete or partial surveys, compared to 822 in 2006 and 806 in 2003. (And a big shout out to readers who did complete the survey for your museum! We love you…)

This sample size is still theoretically big enough to give us sound statistical data, but why the small numbers? There may be a psychological block to completing this survey in a time of economic confusion (looking over the financial statements is just too depressing!) Unfortunately, a major reason for the low response rate appears to be that many museums are scrambling just to keep themselves afloat. AAM staff made personal phone calls to directors and staff of many museums to try to increase the response rate. These conversations gave us a heartbreaking glimpse of museums struggling with layoffs, deficits, and how to keep faith with their audience, communities and staff while making difficult decisions about what to do and stop doing as funding shrinks. They don’t have time to answer a survey, even though they desperately need exactly the data the survey is gathering to support their case for funding. This also may skew the survey data, since museums most severely affected by the economic crisis may be underrepresented.

And that’s what makes the data really scary. I have no doubt that once we crunch the numbers, they will document profound damage. Unlike the period following the terrorist attacks of 2001, when individual museums or regions suffered but the field as a whole was sound, the effect of this economic crisis is pandemic. It may also be long lasting: in the CFM forecasting report Museums and Society 2034: Trends and Potential Futures authors James Chung and Susie Wilkening of Reach Advisors point out that it took Japan a decade to climb out of the financial hole created by the bursting of their real estate bubble. This suggests that our recovery could be equally protracted. However long our current recession lasts, things will get grim for museums and other cultural institutions. Government support, endowment values and individual donations and foundation support are already in decline. This leads to the obvious question—in the future, where will the money to support museums come from?

Which brings me to Deely’s prescient story. Per the old joke, crooks rob banks because that is where the money is. Museums, while we like to think of ourselves as too virtuous to resort to theft, follow the money just as assiduously. In the future, that money may be found exclusively in the pockets of the rich. Museums and Society 2034 observes that our society has a large and growing wealth gap. The ranks of the poor are growing, while the middle class slips in its relative earning power. The top 5% of households in the U.S. earn one third of the total earned income, and the top 0.5% (roughly 500,000 households) account for 14%. These top earners are taking a financial hit too, but they still have large amounts of money available for discretionary spending. A D.C. realtor recently underscored this point: explaining why the mortgage crunch was unlikely to interfere with the sale of the Icelandic Ambassador’s residence (priced at over $5.6 million), he noted that people buying over the $2 million price point tend to pay cash. Indeed.

We have seen several examples of the wealthy playing white knight to museums threatened by financial dragons. Most recently, Eli Broad rode to the rescue of the L.A. Museum of Contemporary Art, spearheading development of a $75 million recovery plan which included an offer of as much as $30 million from his own foundation. On the face of it, what a fine solution! If the wealthy are willing to follow the example of Andrew Carnegie and invest in society by investing in its cultural institutions, why not let them assume the responsibility?

The problem is, museums know from long experience that whoever provides the money calls the shots. Money from prominent donors usually comes with very explicit agendas. It has been suggested, for example, that in “rescuing” MOCA Broad was in fact watching out for his own financial interests: the closure of MOCA’s downtown location could threaten his financial interests in adjacent real estate.

In my experience, Broad’s willingness to wield the influence that comes with patronage exemplifies the rule, not the exception. To cite just one other example, consider the Experience Music Project founded and funded by Paul Allen. In 2004, four years after opening, that museum scrambled to downsize when Mr. Allen repurposed a large portion of their space as a science fiction museum and hall of fame.

The Borgias, the Medicis and the Broads of this world have been marvelous supporters of culture. We all have benefited from their patronage. But their support has, perforce, shaped the arts and, by extension, our own values and tastes, to conform to theirs. Their influence is in large part responsible for the perception that we now work so hard to reverse—that museums are elitist, unwelcoming and, well, patronizing. As Museums and Society 2034 discusses, younger Americans expect opportunities to contribute to the content presented by museums and take an active role in creating their leisure experiences. Communities expect museums to be responsive to their needs and concerns.

So before we cede control of our museums to the new Borgias, I suggest we pause and ask: Can you create a truly democratic museum, one that responds to the expectation of its audience and community and by so doing becomes a vital part of society, with aristocratic funding? And if we don’t like the effect patronage will have on museums, what is the alternative?

Stay tuned for future posts exploring our options…

Next week: Pt. II, alternate financial models for the future

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