Friday, January 30, 2009


Financial journalist Felix Salmon points to this "astonishing" article by Judith Dobrzynski at the Daily Beast on Brandeis's overall financial situation.

He's not buying it:

"[H]ere are the numbers: the Brandeis endowment was $712 million in June, and is $530 million now. On top of that, there's an ongoing capital campaign that has raised $820 million of its $1.2 billion goal; much of that money will be used to construct new university buildings. And the university's projected deficit for the next six years is just $79 million -- less than half the losses that the endowment suffered in just six months. [Brandeis COO Peter] French honestly seems to be asking us to believe that faced with a deficit of $13 million a year, he can neither simply spend that money out of the $530 million endowment, nor use any of the money from the capital campaign, but rather has no choice but to sell off a magnificent collection of artworks last valued at $350 million."

Boston-based reviewer Thomas Garvey reads the same article, and comes away with an entirely different impression. He points to this passage in particular:

"Brandeis has already cut expenses and staff this year and last, and raised tuition and fees. French said the alternative now was either a drastic shrinking of the university or selling the art. Faced with the prospect of closing 40 percent of the university’s buildings, reducing staff by an additional 30 percent, or firing 200 of its 360 faculty members—any of which, French said, would drastically change the university’s mission and essentially cripple it—'We’d rather use [the] Rose.'"

His conclusion:

"I hate to say it, but if those really are the choices facing the university, I think they may be doing the right thing. I know, I know - shocking from an arts blogger! But I have to confess I've only been out to the Rose once in my life, and while I'm not saying their art is 'hidden away' in storage (it's often loaned out to other shows), still, the vast majority of it is never on the walls - and aren't there major gaps in the modern collections of, say, the MFA, that could be bolstered by buying the Rose's holdings - which would, perforce, see more foot traffic? As I mentioned before, the Rose collection is simply the most liquid asset Brandeis has. If they're really facing a crisis that could cut the faculty in half (and I realize that may be an exaggeration), then I think maybe people should back off a bit and begin trying to think of ways to keep the best of the Rose collection in public hands, and in the New England area."

Salmon also quotes an email from me, summarizing what I suspect is really going on here . . .

"They want to sell a few paintings without getting hassled by the museum groups. I think, at the end of the day, we're going to end up with a research and study center plus art gallery that looks remarkably like the Rose Art Museum, except it's not subject to the museum ethics rules."

. . . and says he thinks I'm being "overly optimistic." His alternative theory:

"I suspect it had been counting on getting a substantial bequest from Carl Shapiro when he died, and now that Shapiro's money has been evaporated by Bernie Madoff, Brandeis has decided that the Rose's collection will replace it as a source of future cashflow. It's shameful."

Speaking of Madoff-induced evaporation, the NYT's Nick Kristof has a list of "nearly all the private foundations that invested money directly with Mr. Madoff, at least at the time of their most recent tax filings": "What is staggering is how many of these 147 foundations had all their assets invested with Mr. Madoff and may have been wiped out as a result. For example, the Avery and Janet Fisher Foundation, which supported everything from various museums to meals-on-wheels programs, appears to have been fully invested with Mr. Madoff. And the same is true of dozens more." Staggering, is right. (Thanks to a loyal Art Law Blog reader for the tip.)