NEWS ANALYSIS : LACMA: Not a Pretty Model of Philanthropy : A traditional philanthropic example has never been broadly set. In its absence, three generations of cultural benefactors have been lost.

The gruesome stereotype of Los Angeles as a place that doesn’t put its arts money where its mouth is has now been shown to have a firm basis in fact. A confidential management study commissioned for the County Museum of Art paints a damning picture of cultural philanthropy in L.A., especially at the Wilshire Boulevard museum.

An overview of the survey, compiled by the respected Boston Consulting Group and reported Friday in The Times, shows that LACMA trustees donate considerably less to their own institution than do trustees at other American museums. Comparative figures also reveal that general donations to museums by wealthy citizens are lower in Los Angeles than in any other major U.S. city.

Furthermore, the new report offers the first concrete evidence of how a problematic pattern of philanthropy allows the board unusual latitude in controlling decisions that most museums leave to curatorial staff. LACMA’s board has long had a reputation for undue intrusion into museum management.

The study does not examine giving by specific board members, and its figures go back only to 1988. The numbers, however, remain relatively uniform from year to year, regardless of the shifting economic climate in Southern California.

Charitable philanthropy comes in two forms: restricted and unrestricted gifts. Unrestricted gifts allow a museum’s professional staff wide range in determining priorities. By contrast, restricted funds give great authority to the donor, who is able to set priorities, indirectly managing museum affairs.

A crucial, comparative difference between LACMA and other major American museums will be found here, in the categories to which LACMA trustees donate money. Almost all their gifts--more than 84% in the last five years--are restricted funds targeted to specific purposes.

LACMA’s huge expansion in the 1980s saw the annual operating budget more than triple, growing to $31.5 million by 1992. The report says revenue growth to pay for those operations was driven by increases in taxpayer support from the county. Annual appropriations nearly quadrupled in a decade, reaching $15.3 million by 1992.

If there’s any good news in the Boston report, it’s that L.A. County government has built an exemplary record of support for its art museum--perhaps the finest record among local governments in the nation. Civically, it’s a rare, pace-setting recognition of the arts as a basic public service, essential to the social and economic health of a community.

The survey also states, however, that the broad expansion of county funding masked serious weaknesses in board practice. A structural problem was inadvertently created. For with the county paying the museum’s general expenses, why should trustees provide unrestricted funds?

For fiscal stability most museums rely on two sources of income, which are largely unrestricted: a general endowment, whose income can be roughly predicted from year to year; and annual donations from individuals, including corporations and foundations, but led by trustees. LACMA has fared badly on both counts.

The endowment is tiny. At $21 million--less even than the museum’s budget for a single year--it ranks 53rd among American museums in income generated, covering barely 2% of LACMA’s annual costs.

Despite these dangerously low figures, LACMA trustees made no donations to the endowment in four of the last five years. In the fifth year, endowment gifts totaled just $86,000. For a board averaging about 45 members, that equals less than $400 per trustee since 1988.

Trustee gifts to LACMA’s unrestricted annual fund are, comparatively speaking, no better. At New York’s Museum of Modern Art, trustees last year gave $1.3 million; at Houston’s Museum of Fine Arts, half a million dollars; at LACMA, just $170,000--about what they’ve collected each year since 1988.

As at most major museums, LACMA’s board operates like an exclusive club. Apparently, the exclusive club has petty dues: The average MOMA trustee’s annual-fund gift is $33,000; at LACMA, it’s less than $4,000.

By stark contrast, LACMA’s trustees have given money for specific capital campaigns, exhibitions, education, acquisitions and other programs. Since 1988, gifts to targeted categories have totaled more than $5.1 million.

Ironically, given the substantial control trustees have thus been able to exert, the report’s grim comparisons also show LACMA way behind the pack in total giving by trustees. Donations by trustees in Houston last year reached $4.7 million. In San Francisco, trustees of the Fine Arts Museums annually donate $2 million to $3 million. LACMA’s trustees gave $1.05 million in 1992.

Among the report’s most shocking revelations is this double-whammy: Los Angeles is home to more wealthy individuals than any other U.S. city except New York; yet, philanthropy to art museums by those who can most afford it is at the bottom compared to every other major urban locale. In households with more than $500,000 income, individual donations to museums average almost $3,200 in L.A., while surpassing more than $8,000 in Minneapolis, San Francisco and New York, and more than $10,200 in Chicago.

The largest source of museum income, after county appropriations, is membership dues. LACMA is second in the nation in membership income, which last year brought in $6.7 million. Compared to membership revenues, individual gifts are proportionately smaller at LACMA than at the Metropolitan Museum of Art, the Art Institute of Chicago, the Seattle Art Museum, the Denver Art Museum and others.

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Ideally, trustee philanthropy is built on a firm base of unrestricted support for broad institutional goals. The report implies that the comparatively poor figures at LACMA show a board that lacks a general understanding of traditional museum priorities, and without a willingness to solicit and give funds to achieve those aims.

The roots of the problem no doubt run deep. But the go-go decade of the 1980s appears to have set the stage for the museum’s current woes.

With some similarity to Reagan-era supply-side theory, a kind of “voodoo museum economics” has prevailed. Sidestepping the fiscal responsibilities of a wealthy oligarchy, and instead spreading them around among taxpayers and museum members, a rosy future for LACMA was promised but not ensured.

LACMA director Michael E. Shapiro, who arrived on the job last fall, inherited a messy situation from his predecessor, Earl A. (Rusty) Powell III, now director of the National Gallery of Art. Powell’s principal museum experience, prior to taking the helm at LACMA, had been as curator at a public university museum in Texas and as executive curator at the National Gallery. In Austin and in Washington, state or federal government appropriations provided institutional lifeblood.

In L.A., Powell succeeded at nudging county government to steadily increase operational funding, in order to match the private capital expansion of the museum during the 1980s. However shrewd, the strategy met only short-term goals.

Simply put, the deal in the past has been this: Wealthy trustees would construct buildings and amass collections and deed them to the county; in exchange, the county would pay for general operations.

Now, the deal must change. County support is dwindling. A superstructure of individual giving, which significantly adds unrestricted funds to targeted donations, must be built atop basic county support. What is required is a breadth of commitment to ongoing, unrestricted cultural philanthropy, of a sort that has eluded Los Angeles in the past.

Cultural philanthropy does not happen by itself. It is taught by example, passed down from generation to generation. As new money develops, it’s encouraged to become competitive with established philanthropy, and the circle grows.

Los Angeles has seemed uncannily resistant to that phenomenon, even though the museum has been in its Wilshire Boulevard home for nearly 30 years. Now we know why: A traditional philanthropic example has never been broadly set. In its absence, three generations of potential cultural benefactors have been lost.