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Sun August 21, 2011
Detroit Institute of Arts uses restricted funds to cover operating costs
The Detroit Institute of Arts is struggling to raise money in this tough economy. It doesn’t help that Detroit is still reeling from the recession, and a quarter of its tax base, which helps fund the museum, has fled the city over the past decade.
To help relieve a little pressure, DIA director Graham Beal asked permission to take money from funds dedicated solely to acquisitions, and temporarily use it to cover operating costs. In his monthly newsletter, Beal explained it like this:
I approached the trustees of the two funds and asked, given the current situation, whether they would consider the temporary diversion of income from the funds to operating costs for five years. (The principal would not be touched.)
They agreed to the temporary diversion. But in an interview with Michigan Radio, Beal warned the current situation is not sustainable:
"The amount of money that we get from this is useful for us right now. But if we can’t restore our original business model that was based on tax support, the money we get from this is not going to be significant in terms of what would happen to the D.I.A.".
The diversion amounts to $10 million over five years. The DIA's budget for this fiscal year is $25.4 million.
Beal says the museum's financial struggles are well known, "but fortunately for the rest of the art museum world, there aren’t too many others in this straightened circumstance that we’re in right now," so he doesn't think other museums will follow the his lead.
In his monthly e-newsletter, Beal explained the decision to divert funds. Here's an excerpt:
At a recent meeting of the Association of Art Museum Directors, a number of my colleagues questioned this tactic (the DIA is not alone in this) on the basis that the minds of deceased individuals cannot be second-guessed. In our situation, those involved felt comfortable that this is what their relatives would have done. In one case, there is evidence that the donor helped pay staff salaries in the Great Depression, after the city's Arts Commission had formally voted to dismiss all curators and educators. My high-school history teacher liked to say "all ages are ages of transition," and that is certainly the case today. Changing circumstances call for unusual measures, but I like to think the changes we're making are directly related to our mission: creating places for visitors to make personal connections with art.