NEWS ANALYSIS : Museum Merger Plan Bucks Trend

If Orange County’s two most prominent art museums finally win membership support for a merger this week--and if the merger lasts more than a few years--their venture will stand in marked opposition to national trends.

Indeed, experts say it well may be the first successful merger between art museums in the United States.

“I can’t recall a single one,” said Mimi Gaudieri, head of the national Assn. of Art Museum Directors.

It certainly would be among the few successful mergers between arts institutions of any type.

“You don’t just pick [museums] up and move them somewhere else,” said Jennifer Dowley, director of the Museums and Visual Arts Program of the National Endowment for the Arts.

Already the road to establishing a combined Orange County Museum of Art has been rocky. The effort to merge Laguna Art Museum and Newport Harbor Art Museum was hatched quietly last fall in an attempt to gain the museums greater visibility, increased exhibition space and, most of all, more money. But ever since news of the proposal surfaced in February, it has been generating controversy.

Two key developments occur this week: Both the Laguna membership and the Newport Harbor trustees are voting to approve or block the merger.

The appeal of merging two such institutions seems obvious--especially as the general lack of arts funding becomes an increasing threat. By combining staffs and other resources, nonprofit organizations believe they will benefit from economies of scale. They also hope to attract donors critical of what may appear to be an oversupply of needy organizations performing virtually the same service.

Asked why more museums aren’t merging, Jim Copenhaver, executive director of the Western States Arts Foundation, said that perhaps “they haven’t recognized the [economic] crisis yet. They tend to have the more conservative boards, while the idea of collaboration or merging takes more futuristic thinking.”

But mutual fiscal instability--the chief reason being cited for the Orange County museum proposal--can in fact work against a merger’s success. According to a nonprofit merger guide published by the National Center for Nonprofit Boards, it sometimes happens that “two weak organizations . . . compound each other’s problems.”

Dan Monroe, director of the Peabody Essex Museum in Salem, Mass.--one of the biggest arts merger successes of recent years--said mergers “require considerable planning and expertise and sophistication to make them work, and need to be done for the right reasons. Cost-cutting and savings are often not the right reasons.”

In Pennsylvania, Milwaukee and other cities where arts institutions merged only to end up going out of business, financial problems seem to have been a chief culprit, followed by artistic incompatibility.

Meanwhile, negative public opinion--which has plagued the Laguna-Newport Harbor plan from the moment people learned about it--also has been a prime factor in the failure of mergers elsewhere. So have differing traditions and constituencies--which the local museums represent.

Furthermore, according to an article in the Jan. 25 issue of the Journal of Philanthropy, nonprofits do well to work together on a preliminary project, putting potentially different management styles and cultures to the test, before actually tying the knot. Collaborative efforts between Newport Harbor and Laguna have been sparse and limited, typified by a small joint exhibition in each facility’s lobby area in the early ‘90s.

However, other frequent deal-breakers--major differences in working methods and general outlooks; internal divisions on one or both boards--don’t seem to be at play here. And Laguna and Newport Harbor do share a couple of the ingredients that have made mergers work: geographical proximity (they are six miles apart) and similar missions (both focus on California art).

And it’s not as though arts experts don’t like the idea of merging.

“Let’s say we have 7,000 or 8,000 museums in the U.S. with 160,000 trustees. It doesn’t make an awful lot of sense,” noted Steven Weil, former deputy director of the Hirshhorn Museum and Sculpture Garden in Washington, D.C. “You get the maximum amount of diversity but at a dreadful price in terms of use of resources. So I’m inclined to think wherever mergers are possible, they are probably good things.”

Still, Weil added, “there are no choices that do not involve the loss of something,” and as the NEA’s Dowley noted, art museums have their own set of problems when it comes to merging. “Art museums are typically collecting museums that develop programs around their collections,” Dowley said.

Yet virtually all arts institutions share certain characteristics that can either inspire or thwart merger efforts.

There are two major reasons for merging besides money, according to the National Center for Nonprofit Boards, which openly encourages mergers. The center’s 1994 publication “Nonprofit Mergers: The Board’s Responsibility to Consider the Unthinkable” states that survival can be a motive when an institution is threatened by the likes of a scandal, a dispirited board or the loss of a program that brings in major revenue--none of which has affected Laguna or Newport Harbor.

Also, merger can be used as a growth strategy, when two groups “agree to trade their autonomy for increased strength.” The publication says this is relatively rare, in part because institutions tend to be afraid of losing their independence and identity.

Indeed, Laguna/Newport Harbor began with that strategy and ran into that type of opposition. Merger proponents see the day when an Orange County Museum of Art could attract the sort of major touring shows that the Los Angeles County Museum attracts, shows that would never stop at Laguna or Newport Harbor’s relatively cramped quarters.

But opponents, especially in Laguna Beach, fear the loss of what they see as the focus of their city’s artistic community. The Laguna Art Museum’s bright pink building is a downtown landmark, home to a 78-year-old institution created by artists who literally put the town on the map.

Some also were and are upset that the merger was discussed by board members for months before the museum’s members, local artists and the general public ever got wind of it.

In 1987, similar problems sank a proposal to merge the 80-year-old Southwest Museum in the Mount Washington area of Los Angeles with the Los Angeles County Museum of Natural History. The plan seemed to make economic sense to officials of the Southwest Museum, which was suffering from annual shortfalls of $200,000 to $400,000 on a $900,000 budget.

But community leaders in Mount Washington were outraged. They decried the planned relocation of a large portion of their museum’s collection of Native American artifacts.

And problems of secrecy were even more pronounced than they have been here. Dissident board members led by Fred Hartley, then chairman of Unocal Corp., charged that the merger was being undertaken without the knowledge of the full board and even some members of its executive committee. Eventually, the merger talks were called off.

On the other hand, sometimes too much public knowledge has been a problem. Susan Feller, executive director of the New West Symphony in Ventura, a product of the merger in 1995 between the Conejo Symphony and the Ventura County Symphony, said that had the plan become public knowledge, “it could have been torn apart at the early stages and it never would have happened.”

The New West is an example of a merger that can overcome initial community opposition. Once threatened by disgruntled musicians in both core orchestras and by Conejo Symphony patrons who--like some people in Laguna--only wanted to patronize a hometown team (“I don’t live in New West City,” one harrumphed), the New West has received positive reviews.

Attendance dropped initially, but Feller said performances now draw full houses and there has been a dramatic upsurge in corporate sponsors, including American Express, Microsoft and Lincoln-Mercury. “They like the concept of working cooperatively to provide better services for less money.”

As if to fill the small-and-struggling gap in the Ventura County music world, musicians left in the cold after the merger have founded three new orchestras. Even in dire economic times for the arts, “bigger”--or even “more economically viable”--may not be every artist’s definition of “better.”

Feller acknowledges that there has been “constant criticism from the same very vocal people [who opposed the merger in the first place. But] we just stay focused on providing the best quality orchestra we can. . . .”

“You’re faced with reality, and reality is that those two orchestras could not have survived had they not started working together,” Feller said. “The deficits were mounting, and it wasn’t possible to keep things going.”

Within a year, each orchestra had gone from individual deficits of $90,000 to $100,000 to a combined surplus.

But even when a merger of two financially weak institutions does succeed, the pressures of overseeing it at a time of reduced funding can take a toll on staff.

“So much energy goes into consolidation in the start-up phase,” said David Steuart, executive director of the Sacramento Museum of History, Science and Technology, formed in 1994 from the city’s history museum and its science center.

“We had to develop by-laws, articles of incorporation, personnel manuals, job descriptions. It would be more desirable to have enough money to have some people take care of merging and some work on the start-up.”

So it shouldn’t be surprising that one of the nation’s top arts merger success stories involves two institutions that both were in the black.

The Peabody Essex in Massachusetts is the product of a merger in 1992 between the Peabody Museum (specializing in maritime history and Asian export art) and the equally venerable Essex Institute (marine, Native American and American decorative arts).

The merger was undertaken to create a broader base for fund-raising by combining two compatible historical collections. Board membership already overlapped, and the merger idea had been raised frequently during the preceding two decades.