Wednesday, January 20, 2010

Insidious - Updated

Michael O'Hare [has] noted FASB 116's ongoing advantages for large museums and disadvantages for small museums. [He's] also noted that it was the large museums that lobbied to institutionalize their own ongoing advantages. What [he hasn't] noted, as far as I've seen, is the special advantage large museums have when accumulated disadvantages finally take down small museums.

Existing "ethical" guidelines expect a failing museum to gift its permanent collection to a successful museum (aka "merge") so the successful museum can assure continued care for that permanent collection. The rich get richer, and the poor fall by the wayside, and it's all facilitated by the existing mortmain model with its uncapitalized collections and stranded values. Insidious indeed.

[Mark Gold, considering deaccession rules,] writes: "At the end of the day, the survival of the museum is really the best way to protect collections for the benefit of the public." True enough, but the unspoken corollary is that the death of the museum is the best way to aggregate collections for the benefit of insiders. And what do the profession's rules promote? Small dead museums!

There's no suggestion here that the AAMD grandees actually got together and said
"Let's think up some rules that ensure we end up with all the art!" The rules arose more insidiously than that. On the other hand, though, the fact that the deaccession rules promote this outcome is unlikely to make big rich museums any less zealous in enforcing them. With this pressure, poor little museums will need to a strong constitution to stand up for their own best interests.

That's where Coaccession can help. When museum trustees take the entire institution into account, rather than just the permanent collection, they'll use the full value of the collection -- financial as well as cultural -- to create a thriving community of experts, investors, and visitors around the collection. Fully funded by investors, the experts perform the research, acquire the objects and mount the exhibitions that celebrate the permanent collection with visitors, increasing both its cultural and financial value, which rise together. With Coaccession, they can keep the entire collection together, even expand it, while mobilizing its financial value to strengthen the programs that celebrate it in a virtuous circle.

Poor little museums, resist the urge to merge. And don't deaccession, Coaccession. Strengthen your museum by using your collection's value fully, not partially, so you can thrive rather than just survive.

UPDATE: Mark Gold writes: I think that FASB 116 advantages ALL museums – both large and small, by not having to disclose the value of collections. I think it was a bigger issue for the larger museums, and that the ethical rule limiting the use of proceeds was, at least in part, a response to the FASB pressure and driven by the larger museums. I think the ethical rule disadvantages smaller museums over larger. But I don’t think FASB 116 does.

I had originally written "Mark Gold and Michael O'Hare have noted FASB 116's ongoing advantages for large museums and disadvantages for small museums." That projected Michael O'Hare's take, I believe, and my own on Mark Gold, making an unfair characterization of his position. Still, in our defense, to the extent that small museums don't capitalize their collections, they look weaker financially than they would if they did (and they are weaker financially to the extent they don't mobilize their collections' financial value). But in Mark's defense, FASB 116 doesn't prohibit capitalizing collections, it just lets museums choose not to. Almost all museums, large and small, now take that option explicitly, or implicitly by publishing a capitalization with no connection to current market values.

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