Is the Barnes really in trouble?

ROBERT ZALLER

For the better part of a decade, an unholy alliance of powerful philanthropic groups and their political handmaidens have attempted to sell the public a double lie: that the Barnes Foundation cannot survive in its historic setting in Lower Merion Township, and that its only salvation lies in moving its world-famed gallery collection to the Ben Franklin Parkway in Philadelphia.

I won’t deal with the ancillary arguments that support the move: that the collection is inaccessible at its present location, surrounded by hostile Main Line natives prepared to repel all invaders with poison-tipped arrows, or that it will be seen to better advantage in a mass-marketed, round-the-clock art emporium setting instead of in its historic and aesthetically integrated site. Nor will I deal with the philistine grandiosity of Rebecca Rimel of the Pew Charitable Trusts, our self-appointed culture czarina, whose vision of an Avenue of the Arts really means only one-stop shopping for tourists. I will forbear as well to comment on the greed of state and local officials who want to turn the Barnes into a cash cow for their coffers. I will treat only the bottom-line argument, which is also the only one that bears any legal weight: that the Barnes cannot survive financially in Lower Merion, and that its only salvation lies in the move to Center City.

When the Barnes petitioners came in December 2003 to Judge Stanley R. Ott of Montgomery Couunty Orphans Court, which has jurisdiction over the Barnes trust, they claimed that the Foundation was running a $2.5 million annual deficit, even with assistance from the Pew Charitable Trusts. This testimony was contradicted at the subsequent September 2004 hearing by the Barnes Foundation’s auditors, Deloitte & Touche, who affirmed that the true shortfall was $1.0 to $1.2 million.

Let us pause over this for a moment. The petitioners had overstated their operating losses— the sole legal ground of their appeal— by more than double the actual amount. Game, set, match, right? Judge Ott had already scolded them at their initial appearance in court for the inadequacy of their presentation, and given them the intervening time to get their act in order. Surely this remarkable discrepancy in accounts would exhaust the distinguished jurist’s patience?

Not a bit of it, alas. Judge Ott asked no questions, required no amendment in the petition and, while reserving a bemused skepticism about the reorganization plan submitted by the petitioners, gave it his blanket approval. That plan, I might observe in passing, proposed to fix a $1 million problem with a $150 million solution, including the downtown relocation and a satellite campus in Chester County. This latter sum was recalculated at $200 million after the hearings by the Barnes’s outgoing director, Kimberly Camp; with all costs figured, including those to the taxpayers of the Commonwealth, they actually exceed $300 million--and counting.

The proposed relocation of the Barnes is actually a smokescreen that hides the real truth: the Barnes Foundation can be maintained in its proper home, and the terms of the Barnes trust honored, for a sum of money that even a minimally competent and committed Board of Trustees could raise with ease. You’ve got that right. There is absolutely no need to move the Barnes Foundation.

How so? Let’s look at the critical number again: $1.0 to $1.2 million. Assume, for starters, the higher figure, but assume also that the Barnes budget, egregiously high by the standards of comparable institutions, could be trimmed by $200,000 in administrative cost savings with no loss of function or service. That leaves $1 million. How does an institution whose assets are valued between $20 and $30 billion raise $1 million a year?

The easy answer is: Raise sufficient endowment. Gross mismanagement depleted the original Barnes endowment, but even in the late 1980s--when admission to the general public was $1--the books of the Foundation were still balanced. The Pew Charitable Trusts has promised the Foundation to help raise a $50 million endowment--but only as part of the relocation scheme. Hear that again, please. The Pew could fix this whole mess with what is for them the equivalent of chump change. But that thrifty solution wouldn’t let Rebecca Rimel play queen of the ball.

Well, couldn’t the Barnes trustees raise the money on their own? Yes, if they wanted to. But the same obliging Judge Ott who approved the plan to turn the Barnes into a three-campus circus also agreed to expand the Barnes board from five to 15 members, with most of the new slots to be filled by the Pew. So the Barnes is now, in effect, a subsidiary of the Pew Charitable Trusts. Its trustees are no longer independent agents. And not only are they not raising money, they are turning it away when offered.

A couple of years ago, for example, Merrill Lynch arranged a private tour of the Foundation for some of its moneyed clients--another violation of the Barnes indenture, but, at this point, who’s counting? Merrill paid $25,000 for the privilege. The occasion was a success, and the opportunity to cultivate donors was golden. But when Merrill offered to repeat the event (and the fee), it was turned down without explanation. Asked at the hearing to estimate how much money had been raised from donors by the Barnes in the past year, Director Camp said she hadn’t a clue. After all, she was only running the place.

(Another note for the record: when Ms. Camp first assumed the directorship of the Barnes in 1999, she declared publicly that it was neither necessary nor desirable to move the Foundation. What a difference a little downtown muscle makes.) Certainly, a $50 million endowment for the Barnes would be welcome. At a 5% return a year, it would just cover that $2.5 million operating deficit. But, of course, since the deficit is in reality less than half of that, $20 to $25 million would do the job. I don’t have that kind of money myself. But given control of the Barnes, I’m pretty sure I could raise it jimminy quick. So, I’d bet, could you.

The Barnes owns other assets that are easily converted into cash. The value of its 137-acre Chester County estate, Ker Feal, is estimated at $12 million. Toll Brothers is easily good for that amount. The Barnes gallery collection, which is protected by the indenture and may not be sold, contains only a tenth of the art and artifacts in the Foundation’s possession. Richard Feigen, the New York art dealer, testified at the Barnes hearing that he could sell one of the unprotected assets, a prime Courbet, for $8.5 million by the end of business day. I’m not suggesting that the sale of property or assets is the best way to plug an operating deficit. But selling Ker Feal and the Courbet alone could fetch over $20 million, and that would put the Barnes in the black by itself.

Lastly, revenues at the gate could easily be increased. The Barnes now charges $10 a head for admission, with a ceiling of 62,400 visitors per year. The Foundation counts visiting schoolchildren, who pay a reduced price, as part of the ceiling, although it is not required to. (That’s another way to play poor, of course.) If the Barnes moves, as it well may not, admission will rise to $12, still a modest amount by present-day standards. The Barnes’s neighbors say they are willing to see the admission ceiling raised to 100,000, an amount it could well handle without compromising the Foundation’s educational mission. If the $12 charge were applied at Lower Merion and the 100,000 limit applied to full paying customers only, the immediately realized revenue would be $576,000 (62,400 times the $2 increase; 37,600 times the new $12 charge). With parking fees, audio tours, purchases and (if instituted) refreshments, the total increase would almost certainly approach (if not exceed) the $1 million target.

Actually, the current deficit ought to be substantially less than $1 million, because the Foundation doubled the price of admission from its previous $5 a head after permission for it to move was granted. That ought to have enabled it raise up to $312,000 more in revenue (62,400 times $5). There would, of course, be additional overhead with increased visitation, but the net income would still make up most if not all of the actual deficit.

Parenthetically, you may ask why the Barnes has not applied for the $12 admission to be applied in Lower Merion. Even at the current attendance ceiling, this could realize an additional $124,800 ($62,400 times 2), with no overhead costs. Why would the Barnes administration not want to avail itself of revenue that has already been approved? Maybe you’ve already gotten the idea, though. The current Barnes administration does not want to eliminate its deficit, even by the easy and obvious means available to it. It does not want to free itself from its dependency on the largesse of the Pew Charitable Trusts, which currently funds that deficit. It does not want to do anything that would suggest that it could remain viable in Lower Merion. And the courts of Pennsylvania, which have ultimate responsibility for the Barnes trust, don’t want to hold it to account.

Creative accounting and political footballs are nothing new in Philadelphia, as elsewhere. Rich matrons are accustomed to getting their way. Of course, we are talking about the destruction of a priceless cultural legacy, for the Barnes can no more be recreated in downtown Philadelphia than the Parthenon could be in Nashville, or London Bridge in Lake Havasu City, Arizona. And we are talking, too, about a harebrained scheme that would be a calamity if it succeeds and a disaster if it fails, and whose only certain result would be to drain life and blood from the rest of the Philadelphia art community for years to come. But I don't want to get any further into all that. Since I'm sticking to fact and law here, I'll consider only the damage that moving the Barnes would do to the whole notion of public bequests.
Philanthropy is an act of faith--donors give their wealth and treasure for what they consider worthy purposes, and those who accept, execute, and protect these gifts undertake in turn to fulfill those purposes to the best of their ability both during and after the donors' lifetimes. If this faith is broken, philanthropy will die. Museums will shrivel; universities will starve; hospital wings will go unbuilt.

There is a crisis of philanthropy in this country at the moment, if not of charity itself. The Barnes story is only the most egregious art-world example of trustee faithlessness to donor intent, aided and abetted by courts that should be the last line of defense to that intent, but are all too often the first wall to crumble. How many living donors have found their bequests misappropriated, diverted to other purposes, or simply disposed of? How many museums accept donor gifts with one hand and sell them out the back door with the other? Examples are regrettably easy to cite--only most recently, the Chillida sculpture, whose donor discovered the Metropolitan Museum of Art advertising it for sale on the Internet early this year.

The compact between the generations is one of the things that mark a civilization, and its breach is a symptom of decline. No deed, no trust, no donor wish is ever completely proof against changing circumstances. That is why the law of trust provides for prudent adjustment to such changes. The Barnes Foundation wasn't perfectly provided against all contingencies, more than any other child of time; and it was certainly not immune to the abuse of fools. But its trust need not have been betrayed. And we, the community, need not accept that betrayal in our name.