Mike Boehm and Kim Christensen's LA Times story this weekend on the financial crisis at LA MOCA mentions the museum's habit of borrowing from restricted funds -- "contributions that donors have made for specific purposes such as acquisitions":
"Whether any laws were broken hinges largely on what restrictions were spelled out in gift agreements detailing donors' wishes. [Board co-chairman Tom] Unterman hedged when asked if MOCA has proof that it got approval from all donors whose restricted contributions were used for other purposes. 'There have been exercises to make sure that to the extent that there were contractual stipulations, that they have been honored,' he said. [He] said MOCA is complying with the attorney general's request for financial records but would not elaborate. The attorney general's office would not comment."
UPDATE: Richard Lacayo comments: "Even if the withdrawals from the restricted fund accounts weren't illegal — and that would depend on how specific the donor's wishes were — they were a bad idea. Once it becomes public knowledge that a museum indulges in that practice, it can have the effect of discouraging future donors, who can't be sure of having their stipulations honored. This is why deaccessioning — selling off art — can also be counter productive as a way to raise money. It makes future donors think twice about where they want their art to go."
