In late April, facing a potential shortfall of as much as $150 million, the Metropolitan Museum of Art announced layoffs and executive pay cuts. “While we are not immune from the impact of this pandemic, the Met is a strong and enduring institution and will remain one,” said Daniel Weiss, president and chief executive officer.
Painful cuts aside, Weiss has reason to be optimistic about the museum’s fate. The Met can access a $50 million emergency fund, a $3.6 billion endowment, a board-designated fund of $935 million that does not have donor restrictions, and a Rolodex of patrons who contributed $211.5 million in support in 2019. Many have already risen to the occasion. “Our trustees are clearly stepping up and wanting to make sure that they’re helping the institution. That support is coming immediately, and strongly,” said Met Director Max Hollein.
Add it all up, and Artnet News’ Sarah Cascone’s prediction still holds: “Despite its dire circumstances,” she wrote, the Met “is well positioned to get through the current storm.”
The same can’t be said for smaller museums. The American Alliance of Museums estimates that 30% of museums, mostly in small and rural communities, will not be able to reopen without immediate financial support from the government.
In mid-May, these museums received some good news when Alice Walton’s Art Bridges announced its $5 million Bridge Ahead Initiative to support current and former partner museums, many of which are located in small and mid-sized communities affected by COVID-19.
And so the stage is set. Can billionaires stave off a museum meltdown? Most certainly. But the more salient question is which kinds of museums will billionaires rescue? Wealthy institutions like the Met, or smaller organizations that had to scrounge for funding long before COVID-19 turned the world upside down?
Exposing the “Disparity of Resources”
I recently spoke with Tracie Powell, program director of the Racial Equity in Journalism Fund at Borealis Philanthropy, about how the coronavirus will affect the journalism sector. She told me the crisis “will speed up what was already going to happen” by accelerating outlets’ transition to a digital-only footprint.
A similar acceleration is happening across the arts sector, where commentators worry that COVID-19 will exacerbate the pre-crisis gap between the “haves and the have nots.”
“Some have referred to COVID-19 as an ‘equalizer.’ But this pandemic only exposes and amplifies existing inequalities in America, including the disparity of resources in the world of museums—which are themselves structures of hierarchy,” wrote Artsy’s Claire Voon. Artnet News’ Julia Halperin and Javier Pes argued that the crisis may accelerate “a winner-takes-all dynamic in fundraising that benefits only the biggest institutions.”
And Artillery Magazine’s Cole Sweetwood noted that the crisis is accentuating small museums’ disproportionate reliance on earned income. New York City’s Tenement Museum relies on admission to cover 75% of its annual budget, versus 18% at the Met. Even an infinitesimal shift in donor dollars toward less financially secure organizations can have a transformative impact. The problem, Sweetwood writes, is that the Met’s “social capital is massive; not so for The Tenement Museum.”
In early May, less than a year after the Museum of Modern Art (MoMA) debuted its $450 million renovation, Director Glenn Lowry announced cuts to help the institution weather COVID-19. Citing the MoMA’s “sufficiently large endowment,” Lowry is “not worried about whether we’re ultimately going to go under. We’re not.” (Lowry is also probably heartened by the MoMA’s own donor Rolodex, which includes four billionaires who collectively donated $370 million toward the renovation—David Geffen, Leon Black, Kenneth Griffin and Steve Cohen.)
Lowry is, however, “extremely worried about smaller more vulnerable institutions.” If less affluent organizations can hang on, some will survive “in such a meager state, that you’ll have to make a very complicated argument that they’re still serving their community. That’s just my anxiety.”
A Frustrating Process
In the absence of an influx of donor dollars, small museums have looked elsewhere for help. In mid-April, the Association of Art Museum Directors announced it would not censure any museum or director that uses income from restricted endowment funds, trusts or donations for general operating expenses, including staff compensation and benefits.
And in late March, American cultural organizations asked Congress for $4 billion in emergency relief. They received less than 5% of that figure in the final Coronavirus Aid, Relief, and Economic Security (CARES) Act. MCW Projects founder Melissa Cowley Wolf called the payout a “gut punch.”
Meanwhile, countless nonprofits applied for loans to cover payroll costs through the Paycheck Protection Program (PPP), which is implemented by the Small Business Administration (SBA).
Some museums secured funding. In late April, the San Francisco Museum of Modern Art (SFMOMA) received $6.2 million, allowing it to lift its furlough and keep staff employed through June 30. However, around the same time, Brett Littman, the director of the Noguchi Museum in Queens, told the New York Times, “None of my colleagues have gotten money from the Paycheck Protection Program.”
The Department of Treasury announced the PPP had run out of money on April 17. Ten days later, the PPP relaunched with an infusion of $310 billion in fresh funding. Unfortunately, the SBA reported that “there are double the number of users accessing the system compared to any day during the initial round of PPP.” Users found the process to be even more frustrating than the previous iteration.
“The Philanthropic Version of ‘The Hunger Games’”
It may have caught your attention that as of late April, the SFMOMA, which raised approximately $600 million for its recent 235,000-square-foot expansion, netted PPP funding, while the 24,000-square-foot Noguchi Museum in Queens, which employs about two dozen people, didn’t. It’s hard to know what factors led to that outcome, but it nonetheless reminded me of another point from my chat with Borealis Philanthropies’ Powell.
In explaining disparities across the journalism sector, Powell noted that smaller and more diverse organizations often fail to secure funding because they lack the tools to access funding. In a journalism space replete with inequities, major funders gravitate toward well-resourced organizations armed with flawless grant proposals crafted by well-paid professionals.
In a similar vein, smaller organizations lack the time, resources and connections to navigate a Kafkaesque PPP program. Just ask the Kresge Foundation, which committed $2 million to provide technical assistance to nonprofits that struggled to access PPP loans the first time around. “The current response is highly focused on for-profit businesses,” said Aaron Seybert, managing director of Kresge's Social Investment Practice. “The existing access points for capital are not always designed to serve nonprofits well.”
Meanwhile, “applicants say the process favored larger businesses with established relationships to banks—regardless of what industry they’re operating in—over smaller companies. This dynamic has left many galleries and some smaller institutions behind,” wrote Artnet News’ Eileen Kinsella.
Dance Data Project founder and president Elizabeth “Liza” Yntema agrees. The PPP loan process puts “smaller organizations that need help in an immediate way at a disadvantage,” she told me. “This is the philanthropic version of ‘The Hunger Games.’”
Wealthy Museums Under Fire
As the Met’s trustees have stepped up to provide support, some commentators have called on such affluent museums to do more to support staff.
Citing the Met’s $935 million unrestricted endowment and $354 million in liquid resources, Artillery Magazine’s Sweetwood pled (unsuccessfully) with the Met’s leadership to continue to pay its staff. The Los Angeles Times’ Christopher Knight criticized the Museum of Contemporary Art’s decision to furlough its staff before attempting to secure PPP funding.
SFMOMA also received PPP funding, which allowed the museum to hold off on layoffs and furloughs for now, but some of its staff still penned a letter to leadership demanding that they retain employees during the crisis. The workers, wrote HyperAllergic’s Valentina Di Lisca, “continue to ask the questions that have resounded across the cultural sector for weeks,” like “why aren’t their wealthy benefactors, to whom a handful of millions represents a minimal fraction of their assets, helping sustain them?”
The letter argues that the museum’s actions “support what we all know to be true: Museums perpetuate the culture of exploitation and inaccessibility which keeps the industry run by the white and the independently wealthy.”
This language may sound familiar. Major museums on the receiving end of billionaire largesse found themselves in the hot seat before COVID-19. Last year, when debate over how institutions should handle Sackler family donations reached a fever pitch, the Washington Post’s Peggy Malone noted that “concerns about income inequality have challenged the very notion of allowing billionaires to gild their reputations by making tax-deductible gifts that result in their names being etched in stone.”
If we adhere to Tracie Powell’s contention that COVID-19 “will speed up what was already going to happen,” the crisis will exacerbate anti-billionaire sentiment and amplify calls for major museums to “closely monitor sources of funding” and “give greater voice to staff,” to quote the New York Times’ Holland Cotter. “If the past is an indication,” he wrote, “the changes will be slow.”
Now for the Good News
Powell’s theory also applies to smaller museums. Fortunately, the crisis has magnified many of the encouraging things these organizations were doing before the crisis.
“For both large and small institutions, those that have done the hard, innovative and honest fundraising and community engagement work pre-COVID—and not relied mainly on earned revenue—feel optimistic and are taking the time to retool their programs to best align with this moment,” Wolf told me. In fact, “from what I am seeing, the assumption that large organizations will fare better may not totally be the case. Many of the smaller nonprofits she’s spoken with “are confident in their ability to survive this crisis.”
To Wolf’s point, pre-COVID-19, smaller museums began to set their sights on younger and more socially focused donors on the receiving end of the greatest wealth transfer in history. The crisis will accelerate this dynamic, said Wolf and Sean McManus, whose advisory firm M+D’s Arts Funders Forum helps arts organizations engage younger patrons, for whom “saving the local economies and ‘thinking locally’ has never seemed more relevant.”
Pre-COVID-19, arts proponents argued that “the arts experience” can lead to positive physical and mental health outcomes. Funders will be more amenable to this argument once the crisis subsides. Similarly, calls for “shelter in place” reawakened citizens’ appreciation for the arts. “You may find donors doubling down on arts and culture because it’s an effective mechanism to provide support for social cohesion and education and engagement,” said Elizabeth Merritt, the director of the AAM’s Center for the Future of Museums, in an interview with ArtNet News.
It’s also worth repeating that small museums have an influential and deep-pocketed ally in “America’s most important arts philanthropist.”
“Art Bridges is committed to supporting our partners as they provide greater access to American art in their communities, even while their doors are closed,” said Art Bridges founder and Board Chair Alice Walton.