L.A.'s Museum of Contemporary Art has set a goal of building its endowment to $100 million, as it tries to outgrow the financial vulnerability that has dogged it for more than a decade. Already, the museum says, it has commitments from its board that would lift its endowment past $60 million.
Word of the new pledges follows the announcement by the MOCA board last week that it would keep the museum independent and step up efforts to raise money, effectively rejecting an offer to be absorbed into the Los Angeles County Museum of Art.
LACMA Director Michael Govan had presented a takeover offer at the request of some MOCA trustees that called for keeping MOCA’s name and its two downtown buildings, while raising $100 million.
MOCA’s Tuesday announcement said that the new commitments to the endowment came in over the last two weeks. It wasn’t immediately clear how much was pledged, who the donors are, or what the timetable might be for receiving the pledges or for completing the campaign.
Endowments are piles of money held solely to be invested, with the principal from the original donations left untouched, but the investment proceeds available to be pumped into an organization’s regular operations.
A 5% annual withdrawal is typical, so a $100-million endowment could mean $5 million a year in spendable income for MOCA. That would cover up to about 30% of its annual needs, based on spending in recent years.
Museum officials did not respond to a request for comment beyond a prepared statement announcing the endowment campaign, which is being called “MOCA Independence.”
Jeffrey Soros, president of MOCA’s board, and longtime museum trustee Eugenio Lopez are the campaign’s co-chairs.
“The financial support we have already raised demonstrates the commitment of the board to ensuring that MOCA remains a world-class independent contemporary art museum, and we call on others to join in this campaign,” Soros, a board member since 2003 and nephew of hedge fund magnate George Soros, said in a statement announcing the fundraising push. “We firmly believe that the best future for the museum is one that continues our history of making our preeminent collection available to the public and … presenting innovative, scholarly programming.”
The aim, said Lopez, who joined the MOCA board in 2005 but whose support dates back several years before that, is to continue MOCA’s “exemplary exhibition program” and further build its prized holdings of post-World War II art.
“With a healthy cash reserve and no debt, boosting our endowment gives us the financial security to fulfill our mission,” added Lopez, who has his own museum in Mexico, Coleccion Jumex, named for his family’s juice drink empire.
MOCA Mobilization, a support and watchdog group founded by Los Angeles artists Cindy Bernard and Diana Thater amid MOCA’s 2008 funding crisis, said it was “positive but guarded” about MOCA’s latest announcement.
“We’re concerned that no mention is made of funding for the day-to-day operating costs of the museum and the hiring of new staff, including a chief curator,” Bernard and Thater said in a written statement. “We hope that further details are forthcoming.”
Bernard said in an interview that she was encouraged by language in MOCA’s campaign announcement that suggested the board is committed to the museum’s traditional strength of “innovative, scholarly programming.”
It was unclear whether the $60-million-plus figure the museum announced includes the untapped $8.75 million from the museum’s leading funder, Eli Broad, who has promised to match up to $15 million in endowment contributions.
The museum’s most recent public financial filing put its endowment at $19.86 million in mid-2011, still well short of the peak $38.2-million endowment total in mid-2000. Eight years of subsequent overspending, followed by the global financial meltdown of September 2008, dropped the endowment to $5 million and threatened to bankrupt the museum.
Broad stepped in with a December 2008 bailout worth up to $30 million. The $15 million in exhibition support he guaranteed over five years is due to expire after this year.
Before Tuesday’s announcement, MOCA had managed to harvest $6.25 million of his endowment pledge.
Charles Young, who served 17 months as MOCA’s interim chief executive between Broad’s rescue and the mid-2010 arrival of Jeffrey Deitch as museum director, said the fundraising announcement was “heartening.” But he, too, had questions.
“If the money is coming from the board, then that’s dramatically more than anybody on the board has talked about doing, and that’s wonderful,” he said. “I think in addition to the endowment, they need a program of ongoing donations for operations. In my opinion, the budget of the museum has been cut below the quick, and operations need to be restored. They don’t have a sufficient number of people to do the things that need to be done, including fundraising.”
Young said that layoffs he oversaw in 2009 cut the museum’s spending and staff by about a third, and that the resulting spending level, about $16 million to $17 million a year, was “very close to what I think would be the minimum operating budget of a successful museum of the size and quality of MOCA.”
Until the museum reaches the $100-million goal and the investment returns kick in, MOCA will face immediate challenges that may include having to replace Broad’s $3 million a year for exhibitions.
James Hackney, who heads the cultural division of Alexander Haas, an Atlanta-based fundraising consultancy, said he has been fascinated by the MOCA drama.
“I am impressed that they were able to put this money together in just a couple of weeks,” he said.
“This is something everyone in the art world has been watching with great interest. The MOCA collection is just so terrific and so important to the art world that I think everybody is pulling for it.”
For a fundraising campaign to succeed, Hackney said, it isn’t enough to state a general goal such as improving an endowment or putting an institution on firm financial footing. What’s needed, he said, is a specific vision for the programming it intends to offer, and a plan for generating the revenue needed to achieve it. Also imperative, he said, is an assurance that strong administrators are in place, fully backed by the board.
“People like to give to excellence. It’s excellence, not need” that generates big gifts, he said. Also, he added, MOCA board members will need to make eye-opening donations of their own to generate substantial outside support.
“People need to make a gift that’s appropriate to their own wealth, and if they don’t, it’s very difficult for people from outside the board to want to step up,” he said. “If people see them making sacrificial impact gifts themselves, and combining that with a very strong, publicly stated plan and strategy of what their mission is going to be and how they’re going to impact the contemporary art world, I think the rest of the contemporary art community will fall into line very quickly.”