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Lifting the Museum's Burden from the Backs of the University: Should The Fordham Law School FLASH: The Fordham Law Archive of Scholarship and History Faculty Scholarship 2009 Lifting the Museum's Burden from the Backs of the University: Should the Art Collection Be Treated as Part of the Endowment Symposium: Tax-Exempt Organizations and the State: New Conditions on Exempt Status Linda Sugin Fordham University School of Law, [email protected] Follow this and additional works at: http://ir.lawnet.fordham.edu/faculty_scholarship Part of the Property Law and Real Estate Commons Recommended Citation Linda Sugin, Lifting the Museum's Burden from the Backs of the University: Should the Art Collection Be Treated as Part of the Endowment Symposium: Tax-Exempt Organizations and the State: New Conditions on Exempt Status, 44 New Eng. L. Rev. 541 (2009-2010) Available at: http://ir.lawnet.fordham.edu/faculty_scholarship/61 This Article is brought to you for free and open access by FLASH: The orF dham Law Archive of Scholarship and History. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of FLASH: The orF dham Law Archive of Scholarship and History. For more information, please contact [email protected]. LIFTING THE MUSEUM'S BURDEN FROM THE BACKS OF THE UNIVERSITY: SHOULD THE ART COLLECTION BE TREATED AS PART OF THE ENDOWMENT? LINDA SUGIN* Abstract: A few universities in economic straits have recently attempted to sell artwork to address their financial woes, causing much consternation in the museum community. This Article relates the stories of some institutions' attempts to deaccession artworks, and explains why universities may suddenly perceive their art collections as important assets to monetize. It contends that the universities and their critics have fundamentally divergent conceptions of the role of the art collection in the university, which explains why they cannot agree on the legal responsibilities of universities vis-a-vis their art. The critics have a strong cultural-property conception that privileges art, while these universities see their collections as similar to other property they use in carrying out their programs. This article advocates a contextual approach for choosing among these conceptions. The legal regime that governs the responsibilities of university fiduciaries in managing and selling property generally depends on categorization as endowment or program-related property. Unfortunately, there is no clear law determining whether university art collections should be treated as endowment property subject to the statutory rules of investment responsibility, program-related property governed by fiduciary duties, or cultural property subject to its own unique standards. The Article concludes that university art collections are hybrid cultural-instrumental property, and that universities should be subject to a more flexible standard than museums in making deaccessioning decisions. It argues that university trustees would be faced with too great a fiduciary-duty conflict if subject to the stricter museum standard. To accommodate the cultural-property concerns, it proposes that trustees exercise a heightened level of attention when selling art, but retain their discretion to act in the best interests of the university. HeinOnline -- 44 New Eng. L. Rev. 541 2009-2010 NEW ENGLAND LAW REVIEW [Vol. 44:541 INTROD UCTION .......................................................................................... 542 I. Understanding the Deaccessioning Conflict .......................................... 548 A. Practical Explanations for the University Deaccessioning T rend ........................................................................................ 54 8 B. Theoretical Source of the Struggle over University Art C ollections ............................................................................... 55 1 C. The Consequences of Conceptualization as Cultural Property or Instrum ental Property .............................................................. 552 II. Context Should Determine Category .................................................... 555 A. Cultural Property Is for Museums ........................................... 555 B. University Art Collections Are Hybrid Cultural and Instrum ental Property .............................................................. 557 C. Legal Ramifications of Classification as Instrumental Assets.558 1. Endow m ent ........................................................................ 560 2. Program -Related A ssets ..................................................... 565 3. L iabilities ........................................................................... 573 CONCLUSION: PROPOSALS TO CLARIFY THE TREATMENT OF UNIVERSITY ART COLLECTIONS ................................................................ 575 INTRODUCTION Universities seem to be increasingly turning to their art collections as piggy banks. On January 26, 2009, the trustees of Brandeis University announced their decision to close the University's Rose Art Museum and sell the art collection.' Brandeis had suffered a loss in its endowment, and the University's trustees, who had been particularly hurt by the Madoff fraud, were unable to increase their giving to address the fiscal problems.2 In the museum world, selling art for operating expenses is an unthinkable transgression.3 As soon as the decision was announced, protests were staged at the school,4 newspapers published Op-Ed pieces condemning the * Professor of Law, Fordham Law School. Many thanks to Jennifer Bassett and Renee Reekie for excellent research assistance. 1. See Ellen Howards, Cutting off the Rose: BrandeisNot Smelling So Sweet, ART NEW ENGLAND, Apr.-May 2009, available at http://www.artnewengland.com/issues/AprilMay _2009/cutting-off-the-rose.html; Randy Kennedy & Carol Vogel, Outcry over a Plan to Sell Museum's Holdings, N.Y. TIMEs, Jan. 28, 2009, at Cl, availableat 2009 WLNR 1605421. 2. See Howards, supra note 1; Kennedy & Vogel, supra note 1. 3. See, e.g., Lee Rosenbaum, He's a Museum Leaderfor These Troubled Times, WALL ST. J., Jan. 27, 2009, at D7, available at http://online.wsj.com/article/SB12330114940971 7313.html (showing that Michael Conforti, the President of the Association of Art Museum Directors (AAMD), does not believe that deaccessioning to raise funds is a viable option for struggling museums). 4. See Lisa Kocian, Students Rally for Brandeis Museum: Loss Will Hurt School Stature,Protestors Say, BOSTON GLOBE, Jan. 30, 2009, available at 2009 WLNR 1775207. HeinOnline -- 44 New Eng. L. Rev. 542 2009-2010 2010] ENDOWMENTS & ART COLLECTIONS decision, and the presidents of the American Association of Museums, the College Art Association and the Association of College and University Museums and Galleries all issued statements critical of the decision.5 Shortly thereafter, heirs of donors and museum overseers filed suit to enjoin the closure and sale,6 and the Attorney General of Massachusetts started an investigation] There is a trial set for July 2010, though it is still unclear whether it will be necessary. 8 The massive outpouring of criticism apparently led the University to reconsider.9 For now, the sale is on hold, and the Rose is open with an exhibition of its collection.' ° The museum's I director has been let go, ' and Brandeis's12 President, Jehuda Reinharz, has announced that he will step down. Fisk University, Nashville's oldest African American university, was established in 1866 to educate newly freed slaves.' 3 It boasts an impressive list of alumni and has long been highly respected in the educational community. In 1949, Georgia O'Keeffe, as executor of her husband's estate, gave Fisk the Alfred Stieglitz collection of paintings and photographs by Stieglitz and other artists. 14 She also supplemented 5 Stieglitz's collection with four additional paintings that she owned.' The16 gift came with restrictions against dividing up or selling the collection, modification of which would require a court to determine that it would be impossible or impracticable for the University to comply with the restrictions. In 2005, when the University found itself in fiscal distress, 5. See Howards, supra note 1. 6. See Alana Abramson, Discovery Process Begins in Lawsuit, JUSTICE ONLINE.COM, Oct. 20, 2009, http://media.www.thejusticeonline.com/media/storage/paper573/news/2009 /10/20/News/Discovery.Process.Begins.In.Lawsuit-3807495.shtml. 7. See Howard, supra note 1. 8. See Abramson, supra note 6. 9. See Ariel Wittenberg, Rose Blooms Again at Brandeis, DAILY NEWS TRIB. (Waltham, Mass.), Oct. 29, 2009, available at http://www.dailynewstribune.com/news /x876590494/Rose-blooms-again-at-Brandeis (showing that Brandeis has left the question of what will happen to the art in the Rose Art museum unanswered). 10. Id. 11. See Amy Rogers Nazarov, Death with Dignity: Ethical Considerationsfor Museum Closures, MUSEUM, July-Aug. 2009, at 38. 12. See Judith H. Dobrzynski, Op-Ed., The Art of the Deal, N.Y. TIMES, Jan. 1, 2010, at A21, available at http://www.nytimes.com/2010/01/02/opinion/02dobrzynski.html. 13. In re Fisk Univ., No. 05-2994-II, slip op. at 2 (Tenn. Ch. Ct. Feb. 8, 2008), rev'd sub nom, Georgia O'Keeffe Found. (Museum) v. Fisk Univ., No. M2008-00723-COA-R3- CV, 2009 Tenn. App. LEXIS 434 (Tenn. Ct. App. July 14, 2009). 14. Georgia O'Keeffe Found., 2009 Tenn. App. LEXIS 434, at *7-8. 15. Id. at *2. 16. Id. HeinOnline -- 44 New Eng. L. Rev. 543 2009-2010 NEW ENGLAND LAW REVIEW [Vol. 44:541 Fisk filed a cy pres petition 17 requesting judicial permission
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