The Metropolitan Museum’s jittery staff members, some of whose livelihoods are likely to be jeopardized due to the virus crisis, have been granted a month-long reprieve, as outlined in a new letter from President Daniel Weiss and Director Max Hollein. Faced with mounting pushback against its plan to consider implementing cutbacks beginning Apr. 5, the Met (as reported in the NY Times) has now postponed any such changes until May 2.
“This action [the delay of staff-related cutbacks] is largely possible through the financial support of the Board,” Weiss and Hollein stated in their letter to staff, a copy of which I have obtained. (I excerpted their earlier letter to staff about impending financial cutbacks, here.) Implicitly responding to those who have questioned why an institution with a $3.6-billion endowment would need to inflict financial pain on staff, the administrative duo noted that “fundraising cannot simply be replaced by drawing more from our endowment, because of legal requirements [emphasis added] governing how endowments may be used, as well as specific restrictions that donors have placed on how many funds may be spent.”
The effects on the Met of legal requirements for prudent spending from endowment, as set forth in New York State’s Prudent Management of Institutional Funds Act (“NYPMIFA”), are detailed on p. 68 of the Met’s 2018-19 Annual report:
Target spending rates applied to the market value of the endowment are limited to a range of 4.5% to 5.75%. Target spending rates are recommended periodically by the Finance Committee of the Board of Trustees, and final rates, which may not be less than 4.5% or greater than 6.0% of the market value of the endowment, are approved each fiscal year by the Board of Trustees.
The Museum applied a target spending rate of 5.5% in fiscal year 2019. The primary objective of the Museum’s investment strategy is to provide a stable stream of funds to support the operations of the Museum in perpetuity. The long-term management goal is to maintain the purchasing power of the portfolio so that support for the operating budget remains consistent in real (i.e., inflation-adjusted) terms over time [emphasis added].
Meanwhile, the Met keeps exploring ways to address what it has described as an overall operating “shortfall” approaching $100 million, which could be significantly reduced by emergency measures. In response to my queries, a Met spokesperson told me yesterday that several donors had stepped up to reduce that shortfall, but “as of now they have chosen to be anonymous.”
As detailed in the Weiss-Hollein missive, expense-reduction initiatives will include: “freezing all discretionary spending and greatly reducing programming expenses for the foreseeable future. In so doing, we anticipate relying more on our magnificent permanent collection, our brilliant staff [or what’s left of it], and other core assets as we develop a vision for the future after reopening” [emphasis added].
For now, their “vision for the future” is far from rosy:
Even with our substantial endowment, we are nonetheless greatly diminished financially at a time when we cannot generate any of the revenue from admissions, membership, dining, special events, and retail that normally constitutes 30 percent of our annual income.
Indeed, we anticipate that even when the museum reopens, our revenue levels will be significantly decreased from reduced tourism for a sustained period and a decrease in domestic consumer spending. In addition, our fundraising will face new and significant challenges in an environment of many new, competing philanthropic priorities.
Here’s the (pre-coronavirus) revenue breakdown in the pie chart from the latest annual report (FY 2019):
Given the mandate for immediate financial belt-tightening and the expected disruption of future plans at cultural institutions in general and at the Met in particular, I’ve been wondering whether the Frick Collection still plans to assume the remainder of the Met’s financial obligation to lease the Whitney Museum’s Breuer building to 2023.
The Frick intended to use the Breuer space (which was the Whitney’s Madison Avenue headquarters until 2015, when it moved downtown to the Meatpacking District) for displays of highlights from its permanent collection, while its 70th Street building closed for comprehensive renovation and expansion.
Here’s what a Frick spokesperson told me, in response to my queries about the current status of this exercise in museum musical-chairs:
Our plans (including our temporary move to the Breuer) have not changed, but under present circumstances, we don’t have a more detailed timeline to share. In terms of the building project, I’m happy to share news that on Mar. 17, [New York City’s] Board of Standards and Appeals voted unanimously to approve zoning variances for our renovation project….There has been no talk of a delay or change in plans at this point in time.
[The spokesperson did mention to me that the target date for its assumption of the Met’s lease “is Aug. 1, rather than July 1,” as has been previously “miscommunicated.”]
We are planning a temporary installation of the Frick’s permanent collection in the Breuer building, for which more information will be made available later this spring or summer. We have no information about what will happen to the building when our interim occupation is completed and we return to our home on 70th Street.
Seeking an update on that, I recently accosted Whitney director Adam Weinberg at the press preview for his (now closed) museum’s Vida Americana show.
Here’s our exchange:
Rosenbaum: What’s the status of the Breuer building?
Weinberg: Status quo. We don’t know what we’re doing yet.
Rosenbaum: Are you thinking of going back in?
Weinberg: I don’t even know yet. I’m still thinking, Lee!
As for the Frick’s financial circumstances, its spokesperson told me that its “full and part-time staff are being paid.”
In other symptoms of the virus crisis: The American Alliance of Museums has cancelled its annual meeting scheduled for May 17-20 in San Francisco; the Association of Art Museum Curators has announced plans to hold its 2020 annual meeting virtually, via Zoom, on May 1, 4 & 5. (A previous version of this post incorrectly identified the organization to hold its “virtual” meeting in May as the Association of Art Museum Directors. It held its annual meeting in January.)
Speaking of Zoom, that’s the online platform on which we plan to conduct the Rosenbaum Passover Seder, where the question to be asked by CultureGrandchildren (“Why is this night different from all other nights?”) and the recital of the list of 10 plagues (should we now add an 11th?) will have new meaning.
As for the current status of those of us planning to gather around our virtual banquet table (pass the gefilte fish!), all of us are still healthy and managing reasonably well during this unsettling time. The rollicking seder song, “Dayenu” (“It would have been sufficient,” or as my 4-year-old granddaughter might say, “Good enough!”), will have gained deeper resonance as we count our family’s blessings.
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