THE ARTS : Garden of Hope : Heading off a projected financial shortfall, the Huntington is finding ways to boost revenues, including increased membership and mandatory entrance fees.

The more Los Angeles changes, the more the Huntington Library, Art Collections and Botanical Gardens seems to remain the same. And the harder American cultural institutions are rocked by economic turbulence and shifting social priorities, the more stable the Huntington appears to be.

Forever gorgeous, civilized and serene, the gracious 207-acre San Marino estate is firmly rooted in traditions of respect for intellectual and artistic achievement. With its great research library, its premier collection of 18th- and early-19th-Century British art, a growing cache of American art and 130 acres of gardens containing 14,000 different kinds of plants, the Huntington seems to have it all.

But the winds of financial and social unrest haven’t spared the Huntington. Founded in 1919 by Los Angeles developer Henry Edwards Huntington, the estate was endowed with an $8.5-million fortune that seemed munificent at the time but proved to be woefully inadequate.

In the past two decades, the Huntington has grappled with serious challenges even as it has expanded its collections and facilities. Today--while art museums all across the country scramble for private money to offset losses of public funds and UCLA’s leaders talk of privatizing the mighty, state-supported university--the Huntington joins its colleagues in facing a problematic future.

At its current level of funding, the Huntington’s resources can’t support its aspirations, according to a study conducted by management consultants McKinsey & Co. Inc. during a yearlong pro bono review. Looking ahead 10 years, the report projects a shortfall of $32 million in capital and $3 million to $4 million in annual operating income just to cover basic needs. To close the anticipated gap, the Huntington must either lower its aspirations or heighten its financial support by raising endowment funds, boosting annual giving and increasing public receipts, the study says.

That conclusion didn’t exactly come as a shock to Huntington President Robert A. Skotheim, who has chosen the latter course, observing that the institution has sometimes behaved like an impoverished dowager who sits in her crumbling mansion rather than vulgarize her lifestyle by getting a job.

“Here we are in an elegant building but the irrigation system is antiquated and the roof leaks,” he says.

*

But don’t panic and don’t turn the page. This is not one more story about an impending disaster. Skotheim saw the bleak future coming when he arrived in San Marino in 1988--while champagne was still flowing at local museums’ black-tie receptions and mountains of haricots v erts and shiitake mushrooms were being served to arts patrons at sumptuous dinners. No one wanted to hear his gloomy message then, but during the past seven years he and the Huntington’s trustees, overseers and staff have professionalized and opened up the institution so that it can move forward with its eyes open and its bills paid.

If all goes according to plan, 25 years from now a financially responsible Huntington will serve the public more fully in better-maintained facilities while carrying out its scholarly mission. Some of the buildings are likely to sprout new wings, but the emphasis will be on maintenance and services, not growth. That modest vision is a far cry from the expansionist ideals of past decades, but it seems refreshingly realistic--even optimistic--in the 1990s.

Indeed, the tradition-bound Huntington may turn out to be a model of forward thinking for younger and more adventurous institutions. If so, much of the credit should go to Skotheim, who attributes his prescience to being an outsider--both in the museum world and in Los Angeles.

Skotheim--an American cultural historian who served as president of Whitman College, a private liberal arts and sciences school in Walla Walla, Wash., from 1975 to 1988--came to Southern California from an economically depressed region and from a campus that had overcome financial problems by raising $50 million for its endowment.

In his new home, the scene seemed “unreal.” Cultural patrons “were using philanthropy to elevate their social status,” and “serving on boards was a way of pursuing a social life. I wasn’t used to that,” he says.

“I can remember the way Los Angeles cultural institutions advertised themselves with gala dinners, fund-raising through entertainment, Hollywood stars, each party grander than the one that went before it. We were always the guests of some corporate person who had bought a table at an event. I had never seen such wealth.

“It was as if providence had delivered Los Angeles and Southern California to the center of everything,” Skotheim says. “Reagan was President. You could read about your friends in the newspaper. All I had to do if I wanted to know where my trustees and overseers were was to pick up the paper and read where they were having dinner.”

In a series of interviews at the Huntington, Skotheim put the situation in historical context. What he saw when he arrived here was the end of “a paradigm of tremendous growth through aggrandizement or through accretion of associated activities,” he says.

“It seems to me that in every institution or organization there has been some parallel expansion, all dependent on the assumption that the more attractive you made yourself, the more people would be drawn to you and the more revenues you would have. But it’s not [motivated by] venal commercial or financial considerations alone; it is democratic faith and faith in opening up access. It’s a perfect example of the American fusion of idealism and materialism.

“If it happened gradually until World War II, it exploded during and after the 1960s,” he says. But a turning point came at the end of the 1980s, when it suddenly became painfully obvious that the pattern couldn’t continue. Now people are asking, “Where did all the money go?” or at least “What happened?” The question may be expressed in various ways, he says, “but everyone assumes that something has changed, just as earlier they assumed that growth is the American way.”

In retrospect, he contends, it is clear that many cultural institutions were not as flush as they once appeared. Expensive maintenance was deferred at colleges, universities and museums, which were not required to declare depreciation. Had those postponed costs been included in their budgets, many institutions would have been running at a deficit.

Now the bills are coming due. But at the very moment when their aging physical plants are in dire need of repair, cultural organizations are facing stiff fund-raising competition from social service organizations.

“Irony of ironies, when the economy was operating most efficiently, when the growth of the nation fueled these institutions, we also didn’t have AIDS,” Skotheim says. “We didn’t have drugs. We didn’t have urban disrepair to the extent that we do now. We didn’t have a welfare system that was both so costly and so troublesome. We didn’t have an aging population to the same degree, and on and on and on.” All these problems have been compounded by a national trend toward decentralization in government and business, he says.

Skotheim took over an institution that had been debt-free during its first 30 years, 1919-1949, but had generally run at a deficit thereafter.

“Why wasn’t that alarming?” he asks. “Well, there was the growth assumption and a belief in the value of the work being done--increasing access, fulfilling the mission. And everyone underestimated the rate of inflation.”

Furthermore, he says, the Huntington’s genteel values and clubby social style excluded some of the very people who might have been eager to help financially--including Huntington docents and wealthy San Marino neighbors who took their patronage elsewhere. Unlike most museums, which open their highest membership categories to everyone who pays the price, you had to be invited to join the Huntington’s most prestigious support groups--no matter how much money you gave. Now a full range of membership is open, priced from $45 for individuals to $2,000-$10,000 for the Society of Fellows and $2,500-$25,000 for Corporate Fellows.

Skotheim’s predecessor, Robert Middlekauff, who presided over the Huntington from 1983 to 1987, took on the challenge of balancing the budget and left soon after he accomplished that feat.

“He’s a real hero,” Skotheim says. “What he did not do was create a system to make the institution self-sufficient in the long run.” And that is Skotheim’s mission.

The Huntington has an annual operating budget of $12 million. About $6 million of that sum comes from endowment income, $2 million from admissions, $2 million from memberships and the remaining $2 million from bookshop and cafe sales and reproduction fees. Under Skotheim’s stewardship, the endowment has increased from $62 million to about $90 million, but it should be three times that sum, he says.

Instead of launching one big capital campaign, the Huntington is raising funds through smaller initiatives that benefit specific aspects of the program. A $15-million library initiative, of which $12 million goes to the endowment, is in its final stages. Next on the agenda is a $30-million botanical gardens initiative. Half of the proceeds will go to the endowment, the rest to capital improvements.

The McKinsey study concluded that new ways must be found to increase public support of the Huntington’s relatively private scholarly mission. One suggestion in process is to institute a mandatory admission fee of $7.50 per person. It costs the Huntington about $24 to admit each visitor, who pay an average of less than $4 under the current, voluntary system. The mandatory fee is expected to go into effect next year.

Entrance was free until 1980, when a $1-per-car parking fee was introduced. Now there is a suggested fee of $7.50 for adults, $6 for senior citizens and $4 for students and children 12 years of age and older. With about half a million visitors each year, annual gate receipts add up to about $2 million. The mandatory fee would raise an additional $2.2 million if visitor volume remains constant. If visitorship declines by 20%, the Huntington would still gain $1.5 million.

Another plan to enrich the Huntington is to make more lucrative use of images of items in its collections. Reproduction rights are handled by the institution, but that job is likely to be delegated to an image bank that will promote the Huntington’s interests. Fees will remain low for scholars, but commercial users will pay a higher rate.

These efforts are only part of a multifaceted move to prepare the Huntington for the future. Skotheim also has beefed up staff, public services and private support. “But it costs money to make changes, and that meant deficit spending again,” he says.

When senior staff members retired, salaries had to be raised drastically to bring in good new people, he says. Indeed, when Skotheim arrived, 52% of the Huntington’s staff were earning $14,400 or less a year--a sum that qualified them to receive food stamps if they were heads of households. “It was a plantation,” he says.

Today, the Huntington has a staff of 275, assisted by 650 volunteers. Skotheim presides over the directors of the library, art collections and botanical gardens, as well as the chiefs of financial affairs, development and research and education. The administrative structure has changed considerably through the years. Once headed by a director of research, and later a director, the Huntington now has an administrative president who relies on specialists to direct programs.

The balance of power between administrative and curatorial affairs has been a controversial issue in art museums. The Los Angeles County Museum of Art recently caused a stir by splitting its long-vacant top job and hiring as its first president Andrea Rich, executive vice chancellor of UCLA. The move has been criticized in some art circles because the yet-to-be-named director will report to Rich. But the Huntington’s system has caused little comment, probably because it evolved over time as a logical way of running an institution with an unusual, hybrid program.

In addition to its paid staff, the Huntington has long been governed by a board of five trustees and a larger group of overseers. To revitalize community support, Skotheim has increased the number of overseers from 35 to 58 and instituted self-evaluation procedures that encourage members to take their responsibilities seriously.

“The issue is: How do you increase the level of commitment of your support groups, and how do you keep them from being fair-weather friends,” he says. “It was one thing to be a supporter of a cultural institution a decade ago when it was fun, when you could make a matching gift from your employer and you had disposable income. It’s another thing now.

“What I would hope is true for the Huntington is that we have not only deepened the level of commitment but we have recruited new people for whom the attraction is programmatic rather than social,” he says. “That is a delicate issue because Southern Californians like their parties, but I hope that however much socializing goes on, the motivation to be attached to the Huntington is that you identify with the art collection or the gardens or the library and not with the party, which will be reported and allow you to be seen as a grand and fine person.”

The hardest part of Skotheim’s job has been delivering an unpopular message. In his early days, he was sometimes invited to speak in public--but asked not to talk about money. He gained a more receptive audience when financial problems cropped up at the Music Center, the Los Angeles County Museum of Art, the Southwest Museum and the Museum of Natural History.

“People not only began to listen but to rally around,” he says. “In 1991-92 I thought there might be light at the end of the tunnel. At the end of 1992, my wife, Nadine, and I observed that we detected a more hospitable climate, even a glimmer of affection and support. The next year, the glimmer increased. Now we have a supportive and affectionate constituency.”