The decision by the board of the Delaware Art Museum to sell up to four paintings produced an outcry in some quarters.
How could a cultural institution sell some of its best works (none have been identified) perhaps to an oligarch or hedge fund mogul who might lock the masterpieces out of sight?
In the end, the board had little choice, but to see if it can raise the estimated $30 million it might receive from the sale while facing ostracism in the traditional-laden museum world.
Faced with a crushing debt load, the board had to do something to pay off nearly $20 million that came from an ill-timed expansion as well as a depleted endowment that took a beating during the downturn.
In hindsight, the expansion, coming after the so-called stock market “ dot bomb” downturn, remains a puzzling move that raised a few eyebrows at the time the expansion was proposed.
While the museum needed more room to exhibit its growing collection, the fund-raising effort came at a time when corporate supporters were downsizing, merging or moving on to other priorities. Typically when a fund-raising effort sputters, plans are redrawn or shelved. That did not happen. Instead the museum took on a debt burden that would have been difficult to manage in the best of times.
The recession and banking crisis of 2008 and 2009 brought stiffer lending standards and left the board with few options.
Meanwhile, the museum, as it cut marketing and other expenses, almost disappeared from the public consciousness. The 100th anniversary came and went with relatively little notice locally.
Not that a surge in attendance would have helped that much. Ticket revenues accountant for only a piece of the total budget, contrary to popular belief.
Director Danielle Rice, who left the post last year, did an admirable job, but admitted the debt load was the proverbial elephant in the room. In better times, it might have been possible to find a more flexible lender, but that did not happen. The balance sheet was simply too ugly.
The museum will pay a price for its decision, as institutions are correctly viewed as public trusts that only sell artwork in efforts to buy other artwork. But when a bank calls in a big loan and no one rides to the rescue, selling off the heirlooms is the only option.
Unlike most museums, the Delaware Art Museum has a $25 million endowment, and the stock markets are at an all-time high. No one has proposed that, instead of including in the sale heirlooms that would increase the museum’s reserves to a staggering $35 million, the DAM should cash in $20 million of its endowment and pay off its debt without sacrificing a single masterpiece. Using endowment for such a purpose is regrettable, but much less so than violating the public trust that the state’s cultural treasures will be protected and preserved in perpetuity. With the remaining $5 million endowment, the DAM still would have a cushion for a few years, during which with a new director the museum would be able to reach new heights without the stain and stigma spoiling its reputation for a decade or more.