Art museums exist to acquire and treasure important works for the benefit of you and me. Exhibitions, education and scholarship are all essential, of course. But those activities derive from art museums' primary function -- collecting works that deeply reward the public's admiring gaze.

Unfortunately, economics are challenging all that. Public collecting is endangered by a shortfall of resources, a decline in political support and even a loss of nerve that could cut off the flow of masterworks for the people.

It has always been hard for museums to compete with private collectors, but driven by the scarcity of great old works and an expanding class of wealthy buyers, the recent stratospheric rise of art prices has utterly outstripped most acquisitions budgets.

Quality is crucial to the equation. A museum survey conducted by the Assn. of Art Museum Directors shows that about 37% of the respondents reported an increase in their acquisitions over 2006. But an association spokesman admits that the vaguely worded questionnaire was intended to assess the number of objects acquired, not their value.

Sadly, when museums are connected with top-quality objects in today's art market, it's often as sellers, not buyers. Take the Albright-Knox Gallery in Buffalo, which recently sold its $28.6-million Hellenistic/early Roman Imperial bronze, "Artemis and the Stag." The museum will use the proceeds to buy contemporary art, which it considers its core mission. The buyer was not another museum but a European private collector, and "sell to buy" increasingly -- disturbingly -- amounts to collecting at the expense of the collection.

Even the richest museums aren't necessarily able or willing to compete in the marketplace. The J. Paul Getty Museum can afford to indulge in the urge to splurge, but its acquisitiveness is much less voracious than when the "Getty factor" -- cornering and inflating the masterpiece market -- was routinely decried by competitors.

Although the Metropolitan Museum of Art splurged three years ago on a pricey early Renaissance masterpiece by Duccio, its European paintings department in fiscal 2006 purchased only one work, for $1.36 million. That sum will buy you, as it did the Met, an excellent Corrado Giaquinto, but not even a so-so Rembrandt. The Met's usual yearly acquisitions budget of about $30 million seems generous (and it's way above average for most museums), until you consider that it's spread over 17 curatorial departments and is less than the $45 million to $50 million reportedly spent (thanks to the timely generosity of donors) to acquire the one Duccio.

And what about those donors? Museums always rely on the kindness of friends -- collectors whom curators and directors nurture with freely shared expertise, board seats and art-market contacts. Those grateful acquirers, in turn, share their bounty through loans and, eventually, gifts and bequests to the museums that cultivate them.

Today, many top collectors hire private advisors, and they simply aren't as beholden to museums as were their predecessors. Uncle Sam isn't helping. Last year, tax deductions for "fractional" donations were sharply restricted. Collectors used to be able to promise a work to a museum and take the tax benefit over time, sometimes over decades. Museums displayed the works occasionally, donors had them the rest of the time and the deductions appreciated as the work appreciated.

The new restrictions "effectively ended donations of fractional gifts to museums," wrote Gail Andrews, president of the Assn. of Art Museum Directors, in a recent letter to Rep. John Lewis (D-Ga.), chairman of the House Ways and Means Oversight Subcommittee. Andrews, director of the Birmingham Museum of Art, urgently requested changes in the law and described the plight of five unidentified institutions across the country that had lost donations.

Jeremy Strick, director of Los Angeles' Museum of Contemporary Art, acknowledged that MOCA was one of those institutions, and that a donor had withdrawn 40 promised works. Strick told me that about 30% of art donated to his museum had previously come as fractional gifts. The tax-law changes, he said, derailed negotiations with "five to 10" potential donors.

One offshoot of the decline of collecting by traditional museums is the single-collector museum spawned by magnates who want their trophies displayed in one place on their own terms. Some single-collector museums, such as the Frick Collection in New York, and (despite some rough patches) the Getty in L.A., have evolved successfully. But one-man museums often lack the quality and administrative savvy of museums designed under professional rather than personal auspices, and they may be burdened by their founders' constricting conditions. The most recent addition to the ranks of collectors coveting museums of their own is Donald Fisher, founder of the Gap and a member of the board of the San Francisco Museum of Modern Art. He has announced his intention to give his contemporary holdings not to the hometown museum where he is secretary-treasurer but to his own creation, a 100,000-square-foot facility that he hopes to build at the Presidio in San Francisco.

Perhaps the most troubling challenge to public collecting is timidity when it comes to spending the acquisition funds museums do have. After ownership fights like the one between the Getty and Italian officials, many museums won't touch most antiquities even if there isn't a shred of evidence that they've been illicitly removed from their countries of origin.

One field in which curators who are confident of their connoisseurship can still make important purchases at relatively reasonable prices is recent work by artists who are not yet auction superstars. But the bellwether Met has publicly dismissed as "speculative purchases" the acquisition of "works by 30- or 40-year-old artists," in the words of curator Gary Tinterow. The Met's director, Philippe de Montebello, commented to the New Criterion: "There is plenty of time, if someone emerges as a major artist, to buy that artist 50 years from now."

Had the Met followed that policy in 1957, it wouldn't have made its landmark purchase of "Autumn Rhythm" (1950) by Jackson Pollock. Just try buying a comparable Pollock in today's market, 50 years later, where one of his major works was reportedly sold by David Geffen for about $140 million.

There is one ray of dubious hope for a revival of museums' collecting drive. A global economic slowdown could cause prices to dip to more accessible levels and perhaps even induce hard-hit mega-collectors to liquidate their Lichtensteins or try to donate their Warhols for tax breaks pegged to the bull-market prices they paid.

But if it means that our economy is in shambles, "Treasures of the Deposed Hedge Fund Moguls" is one exhibition we may not want to see.

Lee Rosenbaum, a contributing editor of Art in America magazine, blogs as CultureGrrl at artsjournal.com.