Museums as Vanity Purchases and the Problem of Nonprofit Obesity

April 4, 2016; The Art Newspaper

The Art Newspaper recently published a study of 75 museums across 38 countries finding that, in terms of brick-and-mortar expansions, U.S. museums spent more than all the other countries combined, even while the recession was raging between 2007 and 2014.

Museums in the U.S. depend more on private donors than those sited elsewhere, and this seems to have set off an odd kind of building boom. The museums say they need to expand to attract new donors, and that requires enough space to display enough work to pique the special interests of individual prospects.

“If there isn’t room to show these works, you are hamstrung when you want to make the case to a private collector that a particular object would have a suitable home in the museum,” says Neal Benezra, the director of the San Francisco Museum of Modern Art. The Art Newspaper agrees, saying, “Patrons are also more likely to stump up for a splashy expansion than for a lower-profile renovation or acquisition.”

In fact, in the article, new galleries, buildings, and wings are described as grounds for friendly competition among the ultra-wealthy. But after the expansion comes expanded operating costs, of course, and…well, the monthly nut becomes bigger and more formidable.

Bob Rennie, the Vancouver-based real-estate executive who is on the board of the Art Institute of Chicago, says some institutions in North America build extensions without thinking carefully about what will go inside them. “We want to make sure museums don’t become a dumping ground for speculative investments in the art market,” he says. “It costs a lot of money to store and insure these works.”

Indeed, the cost of an expansion does not end with the ribbon-cutting. “There is a tipping point where, instead of the building being a resource, it becomes something that requires resources,” says Mary Ceruti, the director of New York’s Sculpture Center. New York’s Whitney Museum of American Art predicted a rise in its operating budget from $33 million to $49 million after moving to its new Piano-designed building, according to the New York Times. SFMoMA’s operating budget will soar from $35 million to $65 million after it opens its new building. Benezra says the museum has more than tripled its endowment as part of a $610 million fundraising campaign to help cover the increase.

But large institutions have ended up being in constant capital campaign mode, creating bigger sustainability issues in the long run unless the donor money continues to expand and those donors fall in love with funding operations—a doubtful prospect. Too few capital campaigns and major gifts are structured to include endowments or other funding to sustain the buildings over time.

“Some people want to make museums because they feel they are proof of status,” says Renzo Piano, a designer on 25 major museum projects. “You realize this in the first five minutes of a conversation.”—Ruth McCambridge