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L.A. without the NEA: How one little-known program saves museums millions

L.A. without the NEA: How one little-known program saves museums millions
Elaine de Kooning's "Bullfight," 1959, is part of the Palm Springs Art Museum's "Women of Abstract Expressionism" exhibition, made possible with indemnity support from an NEA-administered program. (Jeff Wells / Denver Art Museum / Estate of Elaine de Kooning) (Jeff Wells / Denver Art Museum / Estate of Elaine de Kooning)

When the Palm Springs Art Museum was arranging "Women of Abstract Expressionism," all the typical special exhibition concerns arose: How to tell the story of 12 largely unrecognized female artists? How best to configure and install the works? Myriad logistical issues came with the shipping of 50 major paintings from lenders around the U.S.

But one question didn't keep the museum's director of exhibitions and collections management, Alicia Thomas, up at night: How to insure the pieces against theft or damage?

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The exhibition, organized by the Denver Art Museum and opened in Palm Springs last month, features major works by the likes of Helen Frankenthaler, Joan Mitchell and Lee Krasner. But the typically exorbitant cost of insurance was offset by the little-known Arts and Artifacts Indemnity Program administered by the National Endowment for the Arts.

"The U.S. indemnity program is vital to the museum community," Thomas said. "It enables us to mount exhibitions that we might not otherwise be able to afford."

Congress created the Arts and Artifacts Indemnity Program in 1975 to offset the cost of insuring objects that U.S. institutions borrowed from international lenders for exhibitions. In 2007, partly due to the rising cost of commercial fine arts insurance, Congress expanded the program to include exhibitions with loans from American lenders as well. The cost of insuring artworks against risks such as damage or theft is one of the most significant in a museum's exhibition budget. Without the indemnity program many museums around the country would not present special exhibitions at all.

The program doesn't outright pay for institutions' insurance premiums. It offers indemnity certificates that are promises to pay for approved claims in the case of damage, theft and other risks. With that peace of mind, institutions may choose not to purchase commercial insurance -- which is where their savings comes from.

To date about 250 to 300 arts institutions have received this indemnity support, the NEA estimated. That has resulted in more than 1,400 U.S. exhibitions. American museums have saved an estimated $450 million in insurance premiums through the program, which is considered low risk and low cost because museums generally take such good care of borrowed artworks. In 42 years, the program has paid out only two indemnity claims, costing the federal government a total of $4,700.

If the Arts and Artifacts Indemnity Program were eliminated along with the NEA, as proposed by the Trump administration in its 2018 budget blueprint, large and small museums nationwide would see a ripple effect, said Alison Wade, chief administrator of the Assn. of Art Museum Directors.

"Some exhibitions would have to be cut back in scale, whether by traveling to fewer venues or including fewer objects; in some cases, exhibitions would not go forward at all," Wade said. "The program has run smoothly and incurred very minimal costs to the federal government. This program enables major exhibitions to be presented to audiences around the country, with all of their attendant educational and economic benefits."

The Palm Springs Art Museum, Thomas said, would never have been able to present its late 2013 survey "Richard Diebenkorn: The Berkeley Years, 1953-1966," co-organized with San Francisco's de Young Museum, without the indemnity program. The exhibition included more than 110 objects from 60 lenders; the total value of the show exceeded $200 million, Thomas says, so shipping and insurance were expensive.

"The insurance component of your exhibition budget, if it's a large multi-lender show, is arguably the second highest figure in your budget behind shipping," Thomas said. "For the Diebenkorn show, the values were so high we needed the assistance of the U.S. government to cover the objects in order to borrow the pieces, insure them for their values, and tour them."

The indemnity program also was vital for "Women of Abstract Expressionism" because it's an expensive show to mount. "These pieces come from all over the United States — 25 lenders," she said.

The Denver Art Museum, which applied for indemnity on behalf of itself, the Palm Springs museum and the Mint Museum in North Carolina, would not comment on the total value of the show or the amount it saved in insurance premiums, but it did say the savings were "significant." Arts institutions are not eligible to apply for domestic indemnity unless the total value of the exhibition exceeds $75 million.

The Hammer Museum received indemnity for its exhibition "Leap Before You Look: Black Mountain College 1933-1957," and the Los Angeles County Museum of Art received it for "The Inner Eye: Vision and Transcendence in African Arts."

The potential loss of the indemnity program is on the minds of many Los Angeles museum leaders, said Broad museum Director Joanne Heyler. The issue is of deep concern, she said, even though the Broad is relatively new and hasn't yet used the program.

"It's not a very smart use of public resources to cancel something at almost no cost, federally, that provides museums with hundreds of millions of dollars of relief in terms of their insurance bills," Heyler said. "It's something that any museum, no matter how well funded, has to look at."

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Without the program, Thomas said, the Palm Springs Art Museum would have to "ratchet down" its programming ambitions, significantly increase fundraising efforts and work harder to secure grants.

The museum's executive director, Elizabeth Armstrong, said that until the "Women of Abstract Expressionism" exhibition and its accompanying publication, "much of these women's outstanding paintings were not well known to the general public and, in many cases, to art historians and museum curators."

Without the indemnity program, the museum might never have had the chance to shed light on these overlooked female artists. If the program were to vanish, Thomas added, "it would just be very sad for the museum world."

"L.A. Without the NEA" is a daily series looking at a different community group, how its NEA funds were spent, what artistic or public good did or didn't result and what the cultural landscape would look like if that program were to disappear. Look for more installments to follow at latimes.com/LAwithouttheNEA.

Follow me on Twitter: @debvankin

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