The Metropolitan Museum of Art reported on March 12th that, as a result of closing until July due to the ongoing coronavirus pandemic, they would take up to a $100 million loss and are considering the furlough or layoff of many of its staff members. This, for many in the art community, was the first major sign of the crisis that has befallen us. As of April 13th, the vast majority of museums in the United States have shuttered their doors, either voluntarily in the interest of public health and safety or as a result of wider government action; for one-third of those museums, those doors won’t open again.

The Met, however, is not one of those museums.

Losing $100 million: a statistic that certainly grabs attention, but what does that really mean to an institution like the Met? I’ve decided to put my business degree to good use and crack open The Met’s 2018-2019 Annual Report to find out. The first figure that jumps out is the obvious one: a $3.8 billion endowment. This endowment—like the majority of museum and nonprofit endowments—is broadly invested in a variety of long and short-term investments that earns the museum a passive income. The Met also has $354,405,000 dollars in liquid resources—cash, cash equivalents, and lines of credit. From these figures alone, we can all be assured that the Met is not in danger of closing any time soon; in fact, one begins to wonder how such a cash-rich institution is considering laying off its staff. Are their compensation expenses so high?

Not so much: in 2018-2019, The Met spent $227,190,000 in compensation. This means that, with the entirety of its endowment and cash on hand, the Met could afford to pay its staff at this annual rate for the next 10 to 12 years while still maintaining its entire collection and property. And yet, they are considering layoffs just weeks into a closure. At this point, the majority of you reading may feel understandably outraged at The Met considering cutting staff; however, the other museum finance nerds like myself out there have probably noticed a critical oversight. The vast majority of the funds in a museum’s endowment come from restricted donations, with the funds earmarked for specific purposes like maintaining a collection or a particular curatorial department. Aha!—clearly, the board members have shackled The Met in a pair of golden handcuffs.

When a person donates to a museum, they often voice an intent alongside the donation in order to ensure that their money is being used properly. In the majority of cases, they use that money to shore-up their particular interest in donating. And I agree that this is the right of the donor; it’s their money, they should be allowed to decide how it’s used. The problem is, very few people that donate to museums would stipulate or allow for that money to be used to compensate staff in case of a long-term closure—which is exactly what the museum needs right now. While I haven’t seen any of the donation contract information, I can guarantee that this isn’t just an issue with the Met or art museums generally; this is a fundamental flaw in the concept of philanthropy.

Very few acts of philanthropy are actively altruistic. Instead, the majority can be seen as exchanges and investments, not unlike purchasing a car or a house. The donor receives not only the benefit of a board position, special events and tax breaks, but also the social capital of being recognized that they are a cultured and important individual. To see how this desire for social capital plays out in real life, one only has to look at one of the most common stipulations attached to incentivize large donations: getting your name on the gallery wall. This incentive is how we ended up glorifying people like the Sackler family, and is a very effective way to get donations. This social capital is also how major cultural institutions like the Met have $3.8 billion endowments and only rely on earned income (i.e., what they’ll be missing out on because of closure) for just 18% of their annual budget. The Tenement Museum in the Lower East Side, by comparison, has just a $2.7 million endowment, relies on admission to cover 75% of its annual budget, and its future on the other side of this pandemic is far less certain. Everyone knows what the Met is, so the social capital is massive; not so for The Tenement Museum.

Philanthropy is inherently flawed, as people don’t donate money equally or without strings attached. But to imagine a world—especially the art world—without philanthropy appears impossible; how will our public institutions function without charitable wealthy donors? The answer is as simple as it is impossible in American society: raising and reallocating taxes, making educational and nonprofit institutions a priority for funding. Instead of hoping that billionaires and millionaires would donate unrestricted amounts of money towards all of the institutions and causes we view to be valuable, we could simply tax them an equivalent amount, allocating the money more efficiently across all institutions and allowing them to do whatever they need to do with the money. This would make museums into truly nonprofit, public institutions, but it won’t happen anytime soon for a very simple reason: it’s a lot more beneficial for the powerful, wealthy elite to be heralded as the heroes and protectors of our cultural institutions with their names ostentatiously engraved and emblazoned on the walls than to be simply taxed more, even if the latter would be more efficient and helpful. Philanthropy is a system which benefits the charitable targets so long as those making the donations are celebrated, and so long as they can say what to do with the money. Proper and fair taxation, as well as equitable distribution of public resources towards cultural institutions, is just boring.

 

Let’s return to The Met. As I said previously, it would be easy to think that the donors who I’ve spent the last paragraphs detailing are the ones stopping The Met from properly paying their staff—but that would be wrong. Yes, the majority of the $3.8 billion endowment is locked-up in long-term financing and restricted donations; but, as clearly noted in the 2018-2019 annual report, page 53, The Met has access to $935 million of unrestricted, board-designated endowment that “could be made available if necessary” at any time, for any purpose. I cannot think of a more necessary time to use that money than right now, in the midst of one of the direst moments in recent memory.

And so, to President Daniel H. Weiss and Director Max Hollein, I make a single and clear request: please, pay your staff. Yes, the art is important and the large endowment is necessary to maintain it and the museum, but right now people are scared and vulnerable and without other options—the art can’t get sick. It’s easy right now to not think about the people as stock markets crash and a $100 million loss looms, but don’t forget every individual that made the museum run day in and day out, that helped to build that large endowment and without whom the loss would be far greater than $100 million. Don’t forget the curators, the educators and especially the janitors and the security guards. The Met is the vanguard of museums in the United States, one of our most treasured establishments and one that I and many in the art world look to as a leader. Please, don’t back down from this opportunity to lead.

 

Finally, for the reader, take this nation-wide pause to consider how our system works; it seems to have exposed many of the flaws in our systems and made the impossible seem likely. Take note, take a deep breath (or several), and get ready to take the first step. A world without coronavirus is ahead of us, and though it may be far, we need to be ready to fix what we can as well as we can. In the meantime, support your local, small museums, galleries, magazines and newspapers, restaurants, bookstores, coffee shops, gyms, and anywhere else you are excited to return to soon.