Is MoMA director Glenn Lowry the luckiest leader of a cultural nonprofit in New York City? That is what the New York Times suggests in a comprehensive look at pay packages for executives in the cultural realm. Lowry “may have the best deal of all,” the Times writes, noting that he received a $2 million salary last year, as well as free accommodations in a $6 million condo above the museum on which he does not pay taxes, which some accounting experts in the piece say may be risky move.
Lowry is not the only director receiving complimentary, tax-free housing. American Museum of Natural History president Ellen V. Futter lives in a $5 million apartment on the East Side, and Metropolitan Museum of Art director Thomas P. Campbell resides in a $4 million co-op situated across from the museum. However, the aggressive tax break recalls an earlier MoMA tax episode, reported by the Times in 2007, when the museum confirmed that a private trust established by the Modern's trustees had paid Lowry $5.35 million between 1995 and 2003.
MoMA, the Met, and the Natural History museum maintain that the free housing does not count as taxable income, since the spaces are used by their directors to entertain donors as part of their job. University presidents and motel managers claim a similar exemption since they are often required to live on the premises of their workplaces, the Times reports. However, the exemption is not frequently taken since it is often "difficult to successfully argue one of these because they seem to stretch the purpose of the ‘business premises’ exclusion in the tax code," law professor Daniel S. Goldberg told the Times.
Not all museums who provide residences for their directors take the exemption. LACMA head Michael Govan, for instance reports the value of the home (which he uses to entertain donors) as income, which he pays taxes on. The Morgan Library & Museum goes one step further, charging rent to its director, William M. Griswold, on the apartment in which he resides, and reports the gap between market and paid rent as taxable income.
Housing perks have come back to haunt museum executives in the past. In 2007, the Washington Post published a series of reports on the lavish lifestyle of Smithsonian secretary Lawrence Small, who among many other emoluments unusual for leaders of tax-payer-funded nonprofits received $1.15 million over six years in return for using his palatial home for Smithsonian-related entertaining. Small resigned later that year.