Museums Suffer the Art World's Biggest Fallout

When the art market collapsed along with everything else last year, the general public's first reaction was a resounding "Who cares?" After all, what skin was it off their noses if a Jeff Koons failed to sell at Sotheby's or some snooty London gallery shut its doors?

Art museums, however, are another matter. People visit them by the tens of millions—often taking along the kids—and consider them markers of cultural cachet. When museums lay off staff, curtail hours, cancel shows, and start to look a little unkempt, people notice. The Great Museum Cutback is the second—but far worse—body blow delivered to art by the latest global recession.

The most salient drama was played out in Los Angeles. The Museum of Contemporary Art dipped into its endowment's principal to pay expenses (the biggest no-no in the nonprofit world), flirted with closing or being absorbed by the Los Angeles County Museum of Art, and was temporarily rescued by $30 million from billionaire patron Eli Broad. But MOCA is not alone in crisis mode. The Getty Trust—whose holdings include the Getty Museum complex in the hills above L.A.—lost a whopping $1.5 billion in its endowment over the last fiscal year. The venerable Philadelphia Museum of Art saw its nest egg drop $100 million, and Cleveland's declined by 30 percent. New York's Guggenheim Museum had to pare $6 million from its operating budget.

Jobs disappeared. The Getty cut 200 positions, Toronto's Art Gallery of Ontario shrank its workforce by 20 percent, and even the august Metropolitan Museum of Art in New York reduced its staff by 14. Others left positions vacant, furloughed workers, cut salaries, and raised admission fees. In London, the Tate Modern—which shoehorns 5 million visitors annually into a refurbished power station on the Thames that was designed for 2 million—has scraped to-gether only about a third of the money needed for a planned expansion. Smaller British museums report a reduction in investment income of more than 10 percent and expect cuts of another 10 percent in next year's public budget.

Similar cuts almost certainly await on the continent, too, where museums are even more reliant on public funding. Things are looking down. One of Vienna's major museums, the Albertina, canceled an exhibition on the late German artist Jörg Immendorff, scheduled to open in October, and the Centre Pompidou in Paris postponed its show of contemporary Indian art to open in 2011 instead of next year.

When museums get really desperate, they try to sell off their art. According to generally accepted but hardly ironclad rules, they're supposed to do this only to raise money to buy other art. But when Baby needs shoes—or drinking fountains or the lights kept on—museums can be tempted to satisfy such needs first. In 2009, Brandeis University tried to get around the rules by simply closing its very good Rose Art Museum, which would have allowed it to sell off the entire 6,000-piece collection and replenish its Bernie Madoff–devastated endowment. But the uproar in the academic and art worlds has kept the museum open—though its director was fired—while a university committee studies other options. England's Southampton City Art Gallery has tried to unload two works from its collection—a Rodin sculpture and an equestrian painting by the British artist Sir Alfred Munnings—in order to raise $8 million for a new gallery and a proposed exhibition on the Titanic.

Such moves might seem sensible, but the long-term consequences of opportunistic sell-offs can be devastating. "Art museums will insist donors give them the option to deaccession, and, conversely, donors will demand ironclad agreements that museums will never sell," says art consultant Richard Polsky, author of the book I Sold Andy Warhol (Too Soon). "The end result will be fewer donations to art museums."

To be fair, the crisis is somewhat relative. The Washington, D.C., art blogger Tyler Green says, "At a time when entire industries are declining by 30 or 40 percent, museums cutting staff by five or six is not the kind of percentage worth getting gloom-and-doom about." Mitchell Kahan, director of the Akron Art Museum (which opened its Coop Himmelblau addition just before the economy went south), sees big changes in the way museums have to operate. "Art-rich but cash-poor countries have for quite a while cashed in on their patrimonies," he says. "Now American museums may start down that path: you'll rent the Renaissance from Detroit rather than Florence."

Such moves may help. But it won't be pretty. Visiting a museum suffering from a diminished endowment, operating budget, jobs, and programs is like going into a financially troubled store with thinning shelves. Whatever brave front is put up at the entrance, there's an unmistakable whiff of fear in the place. The old-master portraits, which used to look contemplative, now just look worried. Just like the people viewing them.