As MOCA's Money Woes Simmer, A Look at How Major Museums' Finances Work
In the wake of chief curator Paul Schimmel's controversial departure from L.A. MOCA, various stories have swirled about the museum, its dire financial situation, and the competence of former art dealer Jeffrey Deitch in the director's position. Comparisons have been made to Los Angeles's other major art museum, LACMA, and other major U.S. arts institutions, not least because MOCA shares trustees (and therefore donors) with some of these museums.
With the idea of exploring the financial position of museums, ARTINFO set out to find out more. It is fairly common knowledge that at major museums budgets are big, ticket sales don't cover all expenses, and directors are paid handsomely to coax hefty checks out of well-known collectors — but we set out to find the specifics. We requested the most recent tax returns (form 990) from the Met, MoMA, the Art Institute of Chicago, LACMA, L.A. MOCA, and, in search of a more comparable museum to relatively tiny MOCA, Minneapolis's Walker Art Center (the documents are available to browse on Scribd). Here are the three most interesting things we found in the numbers from the last fiscal year (July 2010-June 2011):
The nation's largest art institutions are billionaires, and even the medium-sized ones are millionaires. The Met, for example, had net assets (basically, a total of all the resources it has on its books, except the value of the art) of $2.9 billion at the end of June 2011, according to its tax return. Both MoMA and the Art Institute of Chicago had net assets of just over $1 billion, LACMA reported $300 million, and the Walker Art Center $243 million. L.A. MOCA, with its lack of invested endowment, had a relatively miniscule $38 million.
However, assets are built up over a long period of time, and how much a museum spends in one year might be a more apt way of comparing their sizes and scopes on a day-to-day basis. What they spend will vary from year to year, especially if there is an expansion project going on, but the annual expenses are a decent way to estimate a museum's budget. L.A. MOCA had the lowest expenses of the six, with expenses of only $17.5 million. It was just behind the $22 million spent by the Walker. LACMA's expenses were almost six times MOCA's, at just over $100 million. MoMA's were 13 times MOCA's, and the Met, with $345 million in expenses for the fiscal year, spent 20 times as much as the troubled California museum (of course, in the long term, its pockets are more than 70 times as deep).
Of Patrons and Populism
Think about this the next time you complain about the $25 entry fee for a major museum: no museum on this list could cover even 10 percent of its annual expenses based on its ticket sales. Even the most popular museums in the nation, the Met and MoMA, cover only a measly 9-10 percent of their costs through ticket sales (between July 2010 and June 2011, the Met made $32.2 million on tickets, and MoMA $22.7 million). The Art Institute of Chicago is arguably the worst off, bringing in only $8.6 million through entrance fees despite spending $313 million — but then again, the Institute also includes a well-respected school and its associated costs.
So how, then, do museums get by? It's fairly common knowledge that our arts institutions are supported by big donors, many of whom sit on museum boards and, with enough cash, can widely influence the way that the institution is run. We largely still live in a patronage system. Depending on how you look at it, museums either don't have to be populist, or they can't afford to be. Other than for PR purposes, it doesn't necessarily matter to the short-term health of the museum that a show gets 100 or 1,000 visitors per day, as long as it has a good relationship with a smattering of wealthy patrons who will fund exhibitions and acquisitions and endowments (the latter of which, if large enough, throw off a healthy income on their own). That, really, is where the money is coming from.
Of course, the current problems with MOCA are not caused by its size, per se. Rather, the problem is that its funds have not been managed properly, and Jeffrey Deitch is perhaps not the director to bring things back into balance. Though the Walker brought in roughly the same amount in revenues last fiscal year, its endowment is $152 million, almost 10 times the size of MOCA's shriveled $19-million safety net. Yet the Walker's director, Olga Viso, is paid just over half Deitch's salary, and took a pay cut last year, to boot. The Walker reports Viso's compensation at around $375,000 — Deitch's was $650,000. MOCA seems to be paying Deitch a salary that is semi-competitive with the likes of Thomas Campbell at the Met (according to the tax return $650,000 in base taxable income, though there was an extra $380,000 or so in other compensation and benefits) and LACMA's Michael Govan (about $1 million in base, with $200,000 in other compensation and benefits).
For an institution that desperately needs to cut costs or raise money, is he worth it?