Art Museums in the Pandemic


Katie and Steve welcome back to the podcast museum director, art commentator, and art historian Max Anderson to discuss what art museums (now closed) are dealing with during the Covid-19 crisis in terms of mission, funding, audience engagement and an uncertain future.  They discuss structural issues and practices pre-existing the pandemic that put pressure on museums’ stated missions and appeal, as well as potential shifts in focus and priority that may come out of this current moment of reorganization and prioritization.

This is the first of several episodes of the Art Law Podcast discussing the impact of the pandemic and its accompanying shut downs on the art world.

Resources:

http://www.maxwellanderson.com/about

http://docplayer.net/15254796-Metrics-of-success-in-art-museums.html

 

https://aamd.org/our-members/from-the-field/museums-and-covid-19

https://aamd.org/for-the-media/press-release/aamd-board-of-trustees-approves-resolution-to-provide-additional

https://www.washingtonpost.com/entertainment/museums/this-is-how-bad-things-are-for-museums-they-now-have-a-green-light-to-sell-off-their-art/2020/04/29/b5492a5e-899e-11ea-8ac1-bfb250876b7a_story.html

 

https://abcnews.go.com/Business/coronavirus-exposes-vulnerability-nyc-museums-museum-workers/story?id=69957903

https://www.bloomberg.com/news/articles/2020-05-06/the-moma-has-taken-a-chainsaw-to-its-staff-budget-and-exhibitions

https://www.theartnewspaper.com/news/whitney-and-new-museum-lay-off-staff-members-as-economic-fallout-continues

https://hyperallergic.com/558008/metropolitan-museum-lays-off-81-employees-now-estimates-150m-in-losses/


Episode Transcription

Steve Schindler: Hi, I’m Steve Schindler.

Katie Wilson-Milne: I’m Katie Wilson-Milne.

Steve Schindler: Welcome to the Art Law Podcast, a monthly podcast exploring the places where art intersects with and interferes with the law.

Katie Wilson-Milne: The Art Law Podcast is sponsored by the law firm of Schindler Cohen and Hochman LLP, a premier litigation and art law boutique in New York City.

Steve Schindler: Hi, Katie.

Katie Wilson-Milne: Hi, Steve it’s nice to be back on the podcast.

Steve Schindler: It’s great to be back. We’re, like everyone, living at home and sheltering.

Katie Wilson-Milne: Working at home, yeah.

Steve Schindler: Trying to engage with some new technology to bring back the Art Law Podcast.

Katie Wilson-Milne: Yes, I’m in my kitchen studio right now, Steve.

Steve Schindler: I’m in a study with my lovely dog in the background egging me on.

Katie Wilson-Milne: Not to be self-congratulatory here, Steve, but I think we’ve done an excellent job on our prior episodes of anticipating some of the issues that are even more front and center right now in terms of legal and ethical questions for the art world such as, you know, deaccessioning, which we framed in the context of the Berkshire Museum redefining itself and selling off major parts of its art collection. And also use of museum funds in challenges with how to pay for operations. So, I think some of the issues we’ve already talked about in the podcast are more relevant than ever. So, listeners should feel free to go back and listen to those old episodes.

Steve Schindler: And I think a little self-congratulation in this time is certainly warranted.
Katie Wilson-Milne: So, we thought that we would, sort of, return to our normal programming as best we can from home, as I know you all are, too, by doing a series of episodes about the state of the art world in this pandemic time, both looking at art museums and arts non-profits and also the commercial art world and what is going on right now. I mean, what level of stand still occurs. What can we hope to see when things return to normal, if they do, and in what fashion and what may change forever? So we are going to hope to do a series of interviews with different guests who have valuable perspectives on this to talk about those questions.

Steve Schindler: And also, I think try to reflect along the way on some of the ethical dilemmas that are being brought front and center as a result of the pandemic and some of the legal challenges that will come along as well. So, we know our first guest is going to be Max Anderson who has been on the podcast before. Max is a prolific director of major museums around the country as well as a serious writer, and author and as always offers a lot of insight into the current state of the museum world. Max, who really needs no introduction, has a PhD in art history from Harvard, has had over 30 years of experience as an art museum director, and he is now president of the Souls Grown Deep Foundation and Community Partnership, a nonprofit organization dedicated to documenting, preserving, and promoting the artwork of African American artists from the south. So, with that, welcome back to the podcast, Max.

Max Anderson: Thank you very much, Steve.

Katie Wilson-Milne: So, we find ourselves in unprecedented times and that is true for the world generally and how we’re all living. And we’re going to just talk about the microcosm of the art museum in this time today, which is one of the places that like many business has been profoundly affected and may continue to be affected in terms of how things are when the world reopens. So, we thought, Max, you would be the best person to talk to given your extensive museum experience since our listeners know you’ve been, you know, the director of several major museums and have been involved in, you know, tracking and running and advising major museums for decades. So, tell us a little bit about what you think is going on here. What is the state of US art museums in this current moment and does it compare to anything, you know, that’s happened, let’s say, in your lifetime?

Max Anderson: Thank you, Katie. You know, I think the conundrum we’re facing is that unlike past crises that museums have weathered, like 9/11 or the 2008 market crush, there are fundamental questions yet to be answered not only about reopening museums but about their mission and viability. And one of them is this, up until the pandemic, art museums have been consumed for years by one topic: diversifying, their exhibitions, their acquisitions, staff, audience and board. It’s been topic A at every museum director’s meeting for years, but the moment the lockdown begun, who were the first staff members to be laid off? It was the frontline workers, the custodians, the guards, the ticket takers, restaurant staff, information desk staff, most of whom are people of color. And a majority of whom can least afford to go on without earnings or health insurance. So, to me that’s at the core of what’s difficult about this moment. It’s not like it will reboot once a certain chapter has passed and we can move forward. We don’t know that, and so what I’m concerned about is, that the impulse to protect endowment value before the pandemic hit is the ascendant question rather than saving jobs, saving expertise, and saving in effect the core constituency of the museum staff.

Steve Schindler: That’s a great point and one that I think we’re going to come back to because this constant tension between saving people’s jobs and protecting things, I think, is also kind of at the core of how museums are going to finance themselves in the days to come. But with respect to the current layoffs, how are those decisions being made?

Katie Wilson-Milne: And how extensive are the layoffs? How serious is this situation?

Max Anderson: Well, it’s rolling thunder, because the initial concern was taking stock of declines in both earned and contributed revenue over a cycle, over a period. Almost all US art museums end their fiscal year on June 30th. So, they were looking down the road to a deficit clearly, but could they contain the deficit to a more manageable size by immediately moving to layoffs since the majority of museum budgets are personnel. And that’s notwithstanding the fact that they’re very expensive to climate control and to operate physically. The cost that is the primary one and, which is a variable cost rather than a fixed cost, is people. So, that was the first impulse was how to do we ratchet down the payroll? One of the challenges of doing that of course, is that in many cases, except for our hourly employees and contract employees, there is a reasonable assumption that there’s a payoff in the form of severance. And so when you lay off an employee who has been there for years, they’re likely to get one month of compensation per year served. So, the savings isn’t actually material in the first iteration of a budget. It’s not for several months that they will receive savings from that. So, the complexity of the challenge is there’s an impulse to shed expense. It’s a variable impact by virtue of the fact that there’s severance for a lot of the higher compensated staff, and we have to assume that the core staff remaining starts with the director, senior management and middle management and the easiest, “people” to let go are those who are lower in the tiers of management.

Katie Wilson-Milne: Yeah, and those are people who, ironically, probably weren’t making that much money, but it just adds up, I guess, or they’re the most expendable because they’re easy to replace.

Max Anderson: That’s the theory, but the reality of course, is that an institution has paid lip service to the community it represents, to the way in which it operates as an organism, and my point being at the outset that if diversity is the quest, that’s not actually what’s in the decision tree to get to this first phase of layoffs. And now what we’re beginning to see is reduction in compensation of the most highly paid employees which I think is a more humane way to go about this. Taking cuts of up to 20 plus percent in compensation to make room for middle management and lower tier staff. To me that’s one sensible approach rather than laying off at the outset those at the bottom of the food pyramid.

Katie Wilson-Milne: And maybe we should just take a step back and say, you know, the basic state of museums right now is that they’re all closed, right? So, there’re not — they’re no shows — you know, whatever shows were up, we can’t go see, and I think whatever shows maybe planned, are those indefinitely on a hold or…? It seems like another big loss right now is that these programs that museums rely on to bring people in and garner attention and acclaim, they can’t plan for them, right?

Max Anderson: Right. Most exhibitions are either postponed that haven’t yet happened. If they’re still in place, they can’t really disassemble them and ship them back to their lenders. It’s a state of frozen collections and displays. One thing to bear in mind is that exhibitions don’t really represent a big part of museum revenue or expense. They may represent 10, 20% of a museum budget and the fixed costs of the building, its energy, its requirements for climate control, and the like are a big chunk of the fixed cost. So, by not having an exhibition opened to the public, the museum is still realizing significant costs. And that’s one of the challenges of how to keep the budget intact to the extent possible without jeopardizing works of art that are both in the collection and on loan by keeping relative humidity and temperature constant.

Katie Wilson-Milne: And those are the operating expenses?

Max Anderson: They’re some of them. You know, the biggest operating expenses are personnel and from there, moving on to costs that are basically energy related, security, programming, and a variety of other ancillary expenses that come and go based on the program.

Steve Schindler: On the revenue side, how are the museums trying to ensure funding for these fixed expenses that they have to pay going forward? What are the places that they’re looking for revenue?

Max Anderson: So, the majority of larger institutions have endowments that have, of course, suffered a great deal in the short term. But the spending policies of most museums is to draw against a three-year trailing average of value. So, even though the market has tanked, they are by policy, able to weather this theoretically, by saying, “Well the value in the market today is X, but the value over 36 months it hasn’t even begun to hit. So, we can still draw 5% of the accrued value of this portfolio for the next bit of time.” In some cases museums are making a choice to ratchet down their draw, which seems counterintuitive on an assumption that the market may not recover to a point where they have the cash. So, that’s the large museums, the mid-size museums often have smaller endowments. They rely even more heavily on trusty giving, the donations also from the closest to them who are philanthropists and in a position to support their material activities. And the least revenue that they obtain would be from the earned income side: ticket revenue, shop revenue or restaurant revenue, and the like and entry level memberships. So, the good news is that the core costs can be met usually by endowment and the larger donor support. But that does leave a hole that is growing as major donors are themselves feeling a pinch and while their wealth may be, to the point of view of most people, reasonably intact, they have the same anxieties as everybody else. And so if they see a net value loss of their massive portfolio of X percent, it feels as painful to them as it would for a person who has smaller resources. So, the clenching of donations by the top tier donors is a huge issue and then the questions around endowment draw are really one of the few things that museums have at their disposal. And chunks of the endowment are restricted, can’t be altered in terms of how they’re spent or necessarily even how they’re drawn, but there’s typically a good chunk of board-designated endowment where the board can make a decision to say, “You know what? We had, five years ago, earmarked this for acquisitions or exhibitions, we’re going to redesignate it, temporarily, for operations unrestricted.” And that’s a valve that can be opened that I don’t think has been.

Katie Wilson-Milne: What’s really changed immediately in the current crisis is that there’s no ticket revenue or shop revenue, but theoretically the endowment, you know, income and donations shouldn’t be directly affected by the fact that people can’t go to the museum anymore. What is the reason for these massive layoffs? I mean, why are we seeing museums with the largest endowments really freaking out about this? I mean, what are they seeing down the line? Is it that they think their major donors are going to stop giving?

Max Anderson: I don’t think so. I think what they’re concerned about is that their endowments may not recover in a timely way. And so they’re trying to preserve the book value as close it was before February. And the awkwardness is what we tend to do is look at the handful of the largest museums in the United States as the examples to follow when in fact they are exceptions to the rule. They’re exceptions to the rule because they’re unique in a heavy reliance on earned income from foot traffic, which most museums are not. They’re unique in having significant annual giving from wealthy trustees, and most museums rely on only a couple of major donors. And they are also unique in having major collections typically that can be a draw in the future without pricy exhibitions and can be used in compelling programming. So, I think we need to be careful not to look at them at the Met, the Modern, the Whitney, or the Guggenheim and say, “What are they doing?” Because what they’re doing is indexed to the particularities of their board culture, their history, their forecasting, and to an extent their sense that tourism is not coming back anytime soon, which is not a factor for the vast majority of museums who rely on their communities as attendance and supporters, not tourists.

Katie Wilson-Milne: I guess it’s worth trying to both keep in our heads this important distinction that most museums are not the Metropolitan Museum Of Art or MoMA and don’t have endowments. And so these debates about endowment spending and what can be done and what can’t and why can’t the principle be touched are irrelevant for most museums. And I think you were totally right, we forget that. But, you know, we do want to spend a little bit of time just probing the idea of why there are so many rules around endowment spending? So, for example, we think The Met has something like $3 billion in its endowment and the ethical guidelines and often governance polices of these major museums that have significant endowments don’t allow for spending any of the principle of the endowment. So, it’s not really even an emergency fund. It’s just a pot of money and you can use the income off that endowment, like you said the draw, often in a restricted manner, but you can’t tap into the principle. And no one right now seems to be, you know, contemplating that that could ever happen. But that raises questions for a lot of people. You know, if the Met has $3 billion, what are we doing firing so many staff members or if they have thousands and thousands of works of art that are in storage for years and years, why can’t we sell some of those and pay for some of these jobs? And those are good questions. They were questions before the crisis, but they’re now in pretty sharp relief. You know, why — why do we still have these rules about endowment spending and certainly sale of art in a time of crisis like this?

Max Anderson: Well it’s working looking at the separately. So, endowment spending, you mentioned the Met. The Met has a very, I think, structured policy. They say about 80% or 80% of the spending is based on their prior fiscal year of spending which they adjust for inflation. And the remaining 20% is based on the market value of the endowment at the prior fiscal year. They tend to spend between 4.5 and 5.75% of the available funds. And when the times are tough, they are towards the top of the number often. Some other museums draw 6% normatively, and I think there’s a perspective on many that museums cannot change that spending rate, that it is fixed. And it’s not actually fixed. In fact, when most museums run deficits, they clean it up at the end of the year with what’s called an appropriation. And the appropriation is a draw from the endowment in excess of their policy that cleans up the shortfall and that way they don’t have to, “run a deficit” when in fact they are drawing more heavily from their endowment.

Katie Wilson-Milne: We mean income, just to be clear for our listeners. They’re not drawing from the principle of the endowment they’re drawing from income —

Max Anderson: Yes.

Katie Wilson-Milne: — of the investment.

Max Anderson: Yes, that’s correct. The invading the principle is a core question that has not had to happen in recent years and is not likely to happen. And to your point about the largest endowments, they have a lot more flexibility on what they can do with board designated funds and with spending rate. Smaller institutions that have, let’s say, a $20 million endowment, if their operating budget is only $5 million, that’s a huge chunk of their operating budget, $1 million a year. So, I don’t want to suggest that the problem is unique to the Met or that smaller institutions don’t have latitude or obligations and needs, but each institution approaches their endowment policy differently, and it is exactly at this moment, at a time of stress, that those policies come into fresh scrutiny and can lead to change.

Steve Schindler: So maybe we should talk a little bit also about deaccessioning Max, because that has come into relief also recently with the AAMD resolutions about trying to provide some additional flexibility to art museums during this times of crisis. You know, it has always been a bedrock kind of prohibition about deaccessioning to use those funds for operations, but I’m wondering whether in this time of crisis, whether there’s any flexibility that you see in that, kind of, long-standing policy?

Max Anderson: Yeah, so it’s fraught, because there’s two aspects to deaccessioning that are not connected with the museum itself. One is the behavior of donors in the future. If museums begin to take objects that were donated to them, which is the vast majority of how collections are built, and sell them, they, of course, are obligated, at least morally, to go back to the family or heirs and assigns who made that donation and say, “We’re going to be selling the art, and we’re going to use the funds from selling that art, for another purchase.” That’s been what’s happened in the past. Last year in March of 2019, the second issue pops up, not just how donors think about future sales or past sales, but it’s the Financial Accounting Standards Board which is not a household entity for most people. But FASB, Financial Accounting Standards Board, is tasked by the IRS with accounting standards that affect museums directly in this respect. And up until last year, museums were enjoined, were prevented, from selling art and using the proceeds for any purpose other than buying art by the FASB definition of collections and the FASB protocols in their policy.

But a year ago, in March of 2019, they changed it to accept not the AAMD’s much more restrictive policy but the AAM, the American Alliance of Museums, which is a massive organization with multiple museums of all types. And now, as of a year ago, they can use funds from deaccessioning, from selling art, to spend on “direct care.” So, what’s direct care? That’s the slippery slope. Nobody can really say definitively and it’s why FASB has now mandated that every art museum have a policy that’s specifically delineates what is direct care. We would normally interpret it to be framing, conservation of the artwork, costs associated with its display, storage costs, art handling expenses, and those are direct care. But some museum policies may make an exception and say, “You know, to us direct care is the climate control system that affects the arena in which that artwork is displayed or where it’s stored. It is the roof over that work being replaced, so that there is no leakage.” It ends — so the slippery slope is you can define direct care how you choose to and what this can lead to, which is where people are concerned, is that in a while a new trustee will come on the board. They will learn about a mounting deficit in two years’ time or three years’ time and say, “Why don’t we just sell a Picasso? We can fix that deficit, and we can appropriately have our policies reflect all the direct care costs which include staffing,” the big personnel number. And then you’re in a point where what has been a line in the sand, and it really just has been that, is no longer viable, and how do you close this door now that it’s been opened? So, I think the FASB redefinition a year ago, ironically, is even more important than the contributions going on today, because it already gave a license to museums within the Association of Art Museum Directors to behave more liberally with their collections.

Katie Wilson-Milne: But it doesn’t — you know, we call this the problem of operating expenses, right? Even that change, which mirrors the American Association of Art Museum Directors new, sort of, temporary resolution that says just for now, we — you won’t get in trouble from us if you use proceeds from the deaccessioning on direct care, if you have a policy that explains what that is, but we won’t tell you what that is. That doesn’t solve the problem that we’ve been talking about, you know, on this podcast so far, which is that someone has to clean the museums, someone has to pay the electricity bill, someone has to pay for salaries. If they can’t use most endowment funds because they’re restricted for that, they can’t use major donations, because a lot of major donors like to give restricted gifts for capital projects, not for operations, and they can’t use really their only asset, which is their art. Whether the art is ever going to be on the wall again or not, I think it’s a reasonable debate in question about whether these rules make sense. Especially for every single art museum in very different circumstances in a time when the economic reality of museums was already changing before this pandemic, and it’s certainly the case now. I mean, how do we pay for operating expenses if there’s so many restrictions?

Max Anderson: So, I think the biggest change in museums that has led to larger budgets that need to be fed has grown up alongside these collections which have, in many cases, endured for a century or more. What happened in the 1980’s was significantly inflated physical plants that carried significant energy bills, maintenance, costs and labor. Larger and larger staffs that are highly specialized, many of whom were highly compensated, a reliance on donors who are today feeling pinched and are likely to be softening commitments to operating support and even to costly capital projects that are underway. This decline in tourism that’s driven admissions income and merchandising revenue down. A decline also in membership once renewal dates role around since entry level members often join for a privileged access to major shows, which are being delayed or cancelled. And then as we talked about these conservative fiscal policies restricting the draw on endowment or redesignated endowment funds. So, those are the moving parts apart from the collection that have driven up costs, that have put museums in a situation where they need more money than in the past when they had fewer aspirations around physical growth for its own sake, exhibition costs to drive foot traffic, neither of which actually adds to the bottom line. So, from my point of view, attempting to cannibalize the collections to pay for the sins of over-expansion, over-hiring, over-programming is missing the point. Art museums are not business, they’re charities and they’re charities that rely on philanthropic support to survive. The fact that they’ve been acting like commercial entities for 20 years has brought this world of hurt upon them. If they were charities and they relied to a much lesser extent on the performance of a business model, as is the case with the university museums which are not hurting as much right now. They’re hurting but they’re not hurting as much. This situation wouldn’t present itself. That’s my point. In the long term to be looking at the collections now as a honey pot is in effect contravening the intention of these institutions from the start which was cultural heritage protection and the saving of our collective creative heritage.

Steve Schindler: So, Max that brings to another things we would like to reflect on with you is, what is the mission of a contemporary art museum now and how does it stay relevant throughout this crisis? Can it continue to sort of meet its mission goals, while remaining closed for sort of a prolonged period of time? I know it’s something that I’ve thought about in connection with a small art organization that I’m a president of the board of which is Artists Space, I think you know that. And, you know, it’s primarily an exhibition space. How does an organization like that remain relevant and thus also maintain its revenue, because to some extent being able to meet some kind of mission is critical to getting people to support you? And so maybe we can talk about that mission and where museums are in terms of moving forward in the context of the larger institutions.

Max Anderson: Sure, and I think it’s helpful always to separate the categories of museums we’re talking about. You used the word contemporary museums, but I think you just meant this current moment around museums.

Steve Schindler: Yes, exactly.

Max Anderson: So, that’s one issue and the second is collecting versus non-collecting. So, museums that have collections carry with them both a responsibility and a massive obligation that carries with it extraordinary costs, whereas museums that are kunsthalle, or basically programming focused, have a very different ethos and a very different business model. In terms of the mission, museums are struggling to make a case for themselves in a life and death moment, because they haven’t been deemed essential like a grocery store. And posting photographs of inaccessible art isn’t proving to be that satisfying for a lot of people. The disconnect is that many museums have argued that they’re important because they offer time limited experiences rather than emphasizing what they used to be known for, which was their collections. And now making an appeal to remember that they have collections for a lot of audiences is less than compelling. So, I think, to your question about mission, museums, like schools, could instead focus on the social emotional needs of the public. To your point, this is what gets people’s heartstrings plucked. Works of art, tell stories. They invite dialogue and debate. They reflect larger social, political and religious concerns. And for decades these values have been subordinated to the vagaries of the art market. Museums have privileged artists whose works command massive sums at auction, and audiences have followed, you know, in our celebrity-mad culture. For museums to draw the attention of the public and the attention of supporters who have a dwindling attention span and also a dwindling disposable income, museums have to turn inwards and become storytellers using every means at their disposal to harness the humanity of art and let go of the fetishizing of art market fashions. To me, that’s how institutions find their footing, in a community, in a donor community, in a larger public and to make a case for themselves apart from their commercial instincts.

Katie Wilson-Milne: Sounds like that is a trend that you were hoping to see and I think many of us were hoping or a course-correction, you know, that many of us observed prior to this pandemic and has been exacerbated by that. Because the major blockbuster show that, you know, is the Met’s entire focus can’t happen now and so what are they? But do you feel like it’s sort of just a continuation of the problem you were observing before? Is there something new in this pandemic moment where they’re physically closed? That is either a reckoning or making it even more challenging for museums — art museums to be relevant?

Max Anderson: I think the pressure is on museum directors to live between their staff who are suffering clearly, and their board, who want to see a return to normal. Their board wants to see status quo ante. They want things to go back to the exciting fair and events and opportunities for learning that they enjoyed previously. And the directors report to those boards. So, for the director to go to them and say, “Hey, I’ve got a great idea. We’re going to ratchet way down on the fun stuff of personal enjoyment in the building and at events, and we’re going to focus on our communities.” They are in a bind having to make a case for that, both from the point of view of board interest of support and also rebooting their business model. Because for most of them it is the generous donor who keeps these places humming. So, I think if we look at rebooting, we also have to remember that for many people the art of the past, by which I mean say the pre-1980’s, has become less relevant than art experiences made for today. The Kusama Mirror Rooms, the glittering names of art stars who are herald in the art market and then by museums themselves and that has made collections less and less relevant for both the visitor and the museum. And we have seen across the art world, a shrinking of expertise in art of the pre-contemporary world. In universities the academic appointments for people in fields prior to the contemporary world have been shrinking and consolidating. You have one professor teaching ancient, medieval, baroque, renaissance — I mean, it’s got to the point where our appetite for the art of the past, is dwindled. And so for museums to now figure out the story telling side, the emotional appeal, the connection to art’s true power, which should not be about the market, but about the conversations that artists make possible is, apart from the education departments where it’s always lived and been vibrant, it’s a kind of missing limb and the DNA of a lot of institutions who operate at their core more like attractions.

Katie Wilson-Milne: So, what would that look like now? I mean, what could museums do in a meaningful way while they’re closed to be relevant in the way you’re suggesting?

Max Anderson: Well, what I’m suggesting isn’t necessarily permanent. In other words, the return to normal is what everybody wants most in the world. And that’s to be expected, that we’re all craving something familiar, but I think the issue for art museums that have expanded and acquired all of these significant variable costs is to look first at what’s essential, what’s necessary to reopen, and what areas of activity are optional but perhaps not feasible. And I think if you start with a zero based approach that way, and you begin building from your set of values and mission to the way in which you extend yourself to a public mission and purpose, it’s better than saying, “How do we just fire up this thing again and get everything working again?” Because that will be very difficult both fiscally but also to make a case for when, if you’re not addressing the first thing I begun speaking with which is for years, diversity was the topic. Where is it? Where is that topic? It didn’t go away because we’ve had this massive financial reversal. If that was the key value that was missing from museums was being representative of their communities, and now the impulse is to basically run to the cave and bar the door and say, “We’ve got to make sure we’re holding on to our assets.” To me that’s a problem and that is really where one should start is where did you leave off before the pandemic? What was concerning you, as you were saying, in a larger refocusing of aspiration of institutions to be fulfilling a public charitable purpose in an educational mandate? And simply to try to get back to a footing that was, feels like a missed opportunity.

Katie Wilson-Milne: And I guess, before, you know, we do want to spend some time talking to you about what — what this part of the art world is going to look like when it reopens, you know? And I — I agree with you there are some long term transformations that are really teed up here, that could be positive, or not positive, but are just certain to occur. You know, but I do want to get your thoughts on whether museums right now in this closed state can be relevant at all or is what you’re saying, that they’re not. They’re just on hold, and what they do to plan for the future while they’re on hold matters, but there’s no now. It’s just what happens later? You know, we see a lot of virtual exhibitions and, you know, there’s some attempt, I think, at the museums to stay in our lives but it’s not clear to me if they can really fulfill any of their core missions in the current climate or not.

Max Anderson: It’s difficult to quickly provide something for the public that really was not needed until now. The fact that databases of museum collections began to be made in earnest 20 years ago and are now fairly robust has led museums to say, “We’re relevant because we have these collections, look at them, think about them, enjoy them.” And they’ve had fun saying, “go and dress up like this painting,” and it’s been entertaining. I mean, it’s a creative way to think about how an individual can connect with a work of art. I think given that the impulse first is to rush online, I don’t think that’s bad, and I also think that it may end up being more important to institutions. I think online simply means as we are connected, but it’s not about still images in a database, it’s something more substantial through augmented reality. And augmented reality is changing our lives in various ways as we know from the wonderful way you can have emojis come alive on your page and people’s faces morph, which is again a fun house. But when the Isabella Stewart Gardner, a year and a half ago or so, put together an augmented reality experience of holding up your phone on the walls of the Gardner museum and seeing the stolen paintings in their frames, on the wall, is such a powerful concept. And in effect goes to the heart of what the Gardner’s experience has been since the theft so many years ago. The missing ingredient of their magic and their mission. That’s only one example of many that augmented reality can offer the museum experience, not just in person but also online. And to me, we’ve had this very simple affect, it started with engravings of works of art in the 18th century, moved on to photography and now digital databases, but really it hasn’t changed very much. It’s recording the physical appearance of a work of art and documenting it as accurately as possible. When what people are hungering for is something beyond that. Because they can get that in the museum. They can go look at it, but what they can’t do with that augmented reality is see that work of art imagined in its original setting. Imagined in an artist’s studio or a cathedral or the Vienna Kunstschau in 1903. Seeing works of art in their various lives, and that’s the power of technology to deliver on something above and beyond simply replication. A few months ago, the director of the Egyptian Museum in Turin said something I wrote a column about in the Art newspaper, and he said, “We must not insist on the sacrality of the original.” And if you think about that, there’s a museum director saying the fetishization of original works of art has led to massive problems with cultural tourism, contributing to climate change, the massive audiences rushing to see the Mona Lisa, rushing to see works of art in endangered sites, archeological sites. And he was basically saying, we need to rethink this whole fetishization of original works of art. That’s an opportunity for museums, because it allows us to think about replication in new ways beyond simply copying, but also emulation and animation. And I think that’s what museums can be thinking about today and going forward both for the onsite experience and no less importantly the seven billion people who don’t visit the Met every year could have access to an experience. That’s a pretty huge possibility.

Steve Schindler: Right. It’s interesting, I mean, given the historical importance of collection and the role of collecting in these larger institutions, it seems like there might be some just sort of inherent resistance to what you’re saying. I mean, the repudiation of the original as a kind of, you know, guiding, sort of, principle seems like a pretty powerful, sort of, counter force and one that kind of runs counter to what these collecting museums, you know, view themselves as, I would think.

Max Anderson: Dr. Greco wasn’t saying repudiation, he was saying you shouldn’t insist on it. In other words, that there are alternative strategies to appreciate creativity, and they don’t hinge purely on standing in front of an object. And for those who have suffered the experience of being in the Louvre and attempting to look at the Mona Lisa, you know you’re not looking at the Mona Lisa. You’re looking at the 12 people in front of you with their iPhones in the air, through bulletproof ultraviolet filtered glass in a low lit image of a thing hovering which you can see —

Katie Wilson-Milne: Terrible, yeah.

Max Anderson: Yeah, you can see far better on a screen at home.

Steve Schindler: Right.

Max Anderson: So, I think that part of what he was saying is that the insistence on the sacrality has led to a fetishization which is an anti-intellectual impulse actually, Steve. It’s an impulse which is purely about being in the aura of something valuable, something important versus learning about it, connecting it with your life, with the past, with history. It’s an Instagram moment.

Steve Schindler: I agree with that. What’s interesting to me is that museums today, as — as you sort of outlined, are so largely invested in that experience of being in the museum looking at the thing itself it’s what they’re built around. And the suggestion that there are other ways to experience these works of art, I think just runs slightly counter to the model that, you know, has been so central to the museum’s mission.

Max Anderson: Right, except the reality of course is, that the lion’s share of a typical museum visit isn’t spent contemplating and reflecting. It’s circulating through the building. It’s pausing to take advantage of amenities, it’s speaking with others, it’s reading wall texts or labels or using apps. The amount of time people actually spend drinking in a work of art is finite. Being present in the aura of great works can be very motivating but museums have for several years now made a case that experiencing a fleeting exhibition is the primary draw, not quiet contemplation in front of the work of art. The permanent galleries are empty. They are low traffic. The exhibitions that they promote are high traffic, and those experiences, forgive me, are not contemplative. Anything but, and, you know, I think the — what I mentioned earlier the art of the past being somewhat devalued is presaging a bigger challenge ahead upon reopening as the punishing costs of permanent displays that are not well-trafficked need to be subsidized. And the decision by the Los Angeles County of Museum of Art to effectively demolish its campus, rebuild a kunsthalle, forego permanent collection galleries is a canary in the mine, and it’s a discounting of the unique value of encyclopedic collections in a quest for fleeting experience. So, when our collective visual heritage is entrusted to museums but the last few decades have been spent promoting time limited offerings in a quest for earned income and buzz, it’s going to be hard to pivot back to a time when museums focused on their collections, did shows drawn purely from their collections and didn’t have the bread and circuses.

Katie Wilson-Milne: But is there something about this moment that’s really forcing their hand that, I mean, in a way I hear what you’re saying is that somehow the problem adapting to pandemic circumstances is really the museums are to blame. Because they created this world in which only, you know, the exciting visit that you can Instagram to the fashion show, is what you think of when you think of going to this museum and there’s nothing deeper to sustain a relationship in a time where that can’t occur, you know. And is this a moment to stepping back from that and transforming? Because to be honest, we don’t know how long this is going to last. We don’t know if there’s going to be a second shut down or another pandemic in our lifetimes or many. It seems like this is a moment when I wonder if some museums will want to or be able to pivot into a new form of meaning for their audiences, because they realize that the world around them is changed in a way they wouldn’t have before.

Max Anderson: Yeah, and I don’t want to be hard on museums doing what was effectively asked of them. I don’t think that museums made these decisions in isolation from lots of pressures economic and otherwise, but I think we are seeing in high relief the impact. You know, learning about audiences, you mentioned how audiences are engaged, is something museums are not very effective at doing. What museums can do is count the number of heat impulses across a threshold, and the art newspaper sanctifies that annually with the survey of throughput, but do the museums know who was visiting? What her background is? Why she came? What she’s doing when she’s there? What did she glean from the visit? Will she return? Will she recommend the museum to her network? Will she join as a member? In other words, the phrase audience engagement sounds like a worthy goal, but very few museums know who their visitors are. Why they came, what they did what they took away. And at the Dallas Museum of Art, we experimented with a program called DMA Friends, a free membership that attracted over 100,000 people to sign up in a few months and we obtained over two million data points shading light on who people were, why they came, what they did. And the opportunity to learn about audiences in innovative ways, I think is on the horizon for museums, to make a case for themselves for public support which is something that has always seemed a declining preposition until the Detroit Institute of Art succeeded in the massive infusion of annual support from tax revenue. So, if museums aren’t relevant to their audiences, they have a harder time making an appeal to the public purse which is common place of course around the world. We’re the only country that doesn’t have significant public support of museums. You know, I don’t think that is impossible to make a case for yourself in a way, and we did it in Dallas. We had an increased appropriation from the city council for the first time in memory for the museum. So, I think it’s possible to look at audience, not just engagement but who are the visitors? What are they achieving in their visit and what might they need?

Steve Schindler: Max, you mentioned the — the fact that in this country, museums don’t typically rely on government support for their operations as compared to Europe. Do you see that changing in the current circumstances? Do you see any possibility that there will be increased public or governmental support for museums?

Max Anderson: Well, it seems naïve to even hazard a guess that that might happen. So, it runs to your point contrary to our conventional wisdom. Here’s how it could change as state, city, federal budgets are now clawing back radically and hemorrhaging and shrinking. As budgets are built back, the questions will be for every constituency within a tax framework, what is the public value that’s being brought? And museums, I think are better compared to libraries than to shopping malls. I think libraries have made a very strong case for themselves over the years for public support. Museums have not. Why is that? Well, libraries have not focused on the commercial extensions of what they can offer. They have focused on their being essential to the community and that includes knowing their audience by the way because people have to get a library card whereas museum goers just have to swipe a credit card. So, learning about the audience, who they are, where they live can be very helpful in making a case over time for public support. It’s certainly not an overnight preposition.

Katie Wilson-Milne: Of course, I think, you know, our worry right now is that while we’re anticipating perhaps donor purse strings tightening, endowment shedding off less revenue because of the market, I think in the short run whatever government support does exist, you know, may suffer even more. I mean, we’re seeing cities and states have to slash funding, you know, especially in New York across the board and the cultural sector is not exempted from that. It’s part of the precariousness of the state of these museums right now that they never got that much government support. They’re not getting extra government support other than, you know, as any business could through these Care Act loans, and they’re probably going to get less for some short amount of time. So, you know, where we come out after all that readjusts and changes years down the line may be better. There may be a better case for more public support, but I see it being a long road.

Max Anderson: Clearly, and the point simply is if museums are redefining how they serve an audience and how they serve the community, that provides an opportunity to make a case for their support whether it’s from private individuals, from foundations, from corporations or from government. It’s not limited to the potential of increased support down the road after the pandemic suffering has eased.

Katie Wilson-Milne: So, where are we going to be let’s say in July or September? I mean, are we going to see a lot of smaller museums closing their doors for good or are we going to see consolidations? Are we going to see big changes in donor behavior? I mean, what are some tangible differences you might expect to see whenever we do get to walk into a museum again? I mean, will they be there and what will be different at least in that kind of short term sense?

Max Anderson: It will clearly be halting and contingent on the particulars of a given city or a given museum and that city. So, in the major tourism markets like New York and San Francisco which are unique in our country in that respect, there will be challenges in thinking about the earned revenue side for the very largest institutions given the dearth of likely tourism. The consolidation at the low end, yes. It’s been predicted by the American Alliance of Museums that a healthy or unhealthy chunk of museums are going to simply go out of business. They’re going to shutter, and what that means is that they will stop operating as a public resource. That they will hold on to their collections while they try to figure out what is to become of them. And in terms of consolidation, we shouldn’t assume that the reward system for museum administration will be that different. It will still be that if you can make this institution feel essential to a community, let’s make it work. And so the donors aren’t going to disappear. I think they’re going to be more careful about asking what’s the startup plan? What’s going to be proven to be essential? Why do we need so much overhead in our budget? Is there anything we can do without? And so the most vulnerable will be the education departments as we’ve already seen with a couple of museums saying, “That’s where we can just shut down. We can sacrifice the education departments because people aren’t coming in the door.” And yet isn’t that at the core of what these are? These are educational institutions who can be providing access to information online through augmented reality in ways that are essential at this time for a community looking for some larger answers in their lives and looking at how the past can teach us something about the future. So, I think every market will be different, Katie. I think every museum within those markets will be different, but I do think they’ll be consolidation, closings, and a reduced operating overhead for even the largest institutions, looking at exhibitions in particular. Exhibitions take three years to plan, you know.

Katie Wilson-Milne: To your point about education departments, I mean, it’s ironic that those departments are so vulnerable at a time when, you know you’re describing, they’re really the way to the future. They are uniquely able to diversify the experience of a museum and, you know, the audience the museum is appealing to and reimagine what is to experience art in a way that could sort of get museums past this point, this precarious moment, and yet they may be done away with right as they’re the most needed.

Max Anderson: They are the conduit to the educational system, K to 12, higher education, graduate school research, post-doctoral research. They are a mechanism that’s essential for the museum to make a case for itself in the arena of public education, which is struggling mightily today to find its way forward with non-classroom instruction. What better vehicle for an educational experience of the world than the visual arts? What is easier, the databases are built, the objects are illustrated, the associated information is available. Why would we be looking at that as ripe fruit to sacrifice when, to your point, making museums remain relevant should start with research and education and conservation and the actual physical care of the objects? That’s to me at the core, and it’s unfortunate that that’s not being respected uniformly.

Katie Wilson-Milne: Is this a moment, as well when the conversations were already happening about the amount of restricted gifts, the amount of funds that cannot be used on operating expenses for better or worse, deaccessioning objects that are not on display. Do you think these debates will be intensified now or will there be a new — a willingness to sort of review and question those old norms because of the funding crisis we’re seeing now or do you think that will sort of quickly go back into the status quo?

Max Anderson: Who knows? I mean, I’m hopeful about one core fact: that is that the well-intentioned staff of museums and the generous boards have to figure out going forward one institution at a time, what matters. And having that real conversation, that conversation I so vividly remember in 2008 at the Indianapolis Museum of Art, when my board chair and I were meeting a few minutes before the finance committee dealing with an endowment that had lost hundreds of millions of dollars. And he looked at me and said, “I don’t want to cut the staff yet, do you?” And I said, “Of course not.” He walked into this meeting and he said, “Are we here to have a great museum or a great endowment?” And that phrase just hit me like I couldn’t believe my board chair was saying that. And his point wasn’t, let’s be profligate. Let’s not focus on reality. His point was, let’s take a breath here. Let’s figure out from a zero based approach what we need to operate this institution to a mission and a set of values, and let’s build from that rather than thinking, let’s just go back to what we were before. Because there were many choices made by institutions in the last generation that were optional, that aren’t actually at the core. So, I think the hard part of all of this is the suffering of staff and the privation of visitors. The good part of this is that it opens up a fresh conversation about mission and values.

Steve Schindler: That’s such a profound sort of statement. And one that could be applied as you hinted at earlier even to higher education, which is suffering from the same maladies right now.

Max Anderson: Exactly.

Katie Wilson-Milne: Thank you so much, Max. As always, we love talking to you, and you have excellent observations, which I know our listeners will also appreciate hearing.

Max Anderson: Thank you, Katie. Thank you Steve, very much.

Steve Schindler: And that’s it for today’s podcast. Please subscribe to us wherever you get your podcasts and send us feedback at podcast@schlaw.com. And if you like what you hear, give us a five star rating. We’re also featuring the original music of Chris Thompson. And finally we want we thank our fabulous producer Jackie Santos for making us sound so good.

Katie Wilson-Milne: Until next time, I’m Katie Wilson-Milne.

Steve Schindler: And I’m Steve Schindler bringing you the Art Law Podcast, a podcast exploring the places where art intersects with and interferes with the law.

Katie Wilson-Milne: The information provided in this podcast is not intended to be a source of legal advice. You should not consider the information provided to be an invitation for an attorney-client relationship. You should not rely on the information as legal advice for any purpose and should always seek the legal advice of competent counsel in the relevant jurisdiction.


Music by Chris Thompson.  Produced by Jackie Santos.