In a recent piece, I called attention to the fact that many smaller museums have been channeling their inner Nancy Reagan and "just saying no" to expensive and incredibly risky capital projects.
We can now add Maine's Portland Museum of Art to that ever-growing list.
It received a $5 million matching donation by Judy and Leonard Lauder to increase its endowment by a total of $15 million. The museum's press release read, "While we recognize the importance of buildings, we also recognize the tremendous importance of economic stability for cultural institutions." (Emphasis added.)
As far as subtle anti-capital expenditure commentary goes, the museum's innocent quip is perhaps only second to billionaire J. Tomilson Hill's "I'm not into wings, I'm into art."
In other words, in the absence of a perfect world where fundraisers can effectively beef up a museum endowment while simultaneously erecting glistening towers, institutions like Portland Museum of Art opt to take the less sexy and more financially prudent route.
Mark H.C. Bessire, the museum’s director, declined to say how much money had been pledged to the Focused Endowment Initiative because most of the donations have been not been collected. The museum’s current endowment is about $30 million and its annual operating budget is $6 million.
And what about the donors?
Well, if the last name rings a bell it's because Leonard Lauder is the chairman emeritus of Estée Lauder, the cosmetics company named for his mother. In 2013, he donated his collection of 81 Cubist paintings, works and paper and sculptures to the Metropolitan Museum of Art in New York City. The collection included 34 pieces by Pablo Picasso and was valued at more than $1 billion.
The couple's donation to the Portland Art Museum mirrors one that Leonard, along with brother Ronald and son William, gave to the Wharton Business School back in 2013. That $10 million gift wasn't for a new business building but for the school's five-year, $20 million fundraising campaign focused on financial aid, outreach and tech upgrades.
In short, some donors are into wings. Others not so much. Oh, and this sizable gift to an institution off the beaten path is another reminder that regional art museums have been doing extraordinarily well lately, as we've been reporting. A reason for this is that donors can make a far bigger impact at these places than at name-brand museums that already have a stable of top-tier philanthropists on their boards. (Of course, Maine—long a vacation stop for wealthy East Coast types—is not that far off the beaten path; in case you're wondering, Judy Lauder has a house there.)
One final point here. While recent history underscores the risks associated with expensive capital improvements, museums nonetheless take the plunge because they believe it's in their long-term financial interests to do so. Evidence increasingly suggests this can be a faulty assumption. What's more, museums may have to consider the Tweeting elephant in the room: an imminent Trump presidency, and with it, potentially advantageous investment opportunities.
The S&P index is up 5.6 percent since Election Day, and all major stock indices hit records on December 9th. According to some analysts, this may be just the tip of the iceberg. A recent New York Times piece titled "Trump's Honeymoon Begins: Confidence in Economy is Booming" suggests that a blistering "Field of Dreams" economy may be on the immediate horizon.
If a Trump administration turns out to be "very good for unleashing business"—to quote JP Morgan Chase CEO Jaime Dimon—those endowment funds may look like far more savvy investments than a new wing with a seven-figure price tag.