It is a time of deep reflection and change in American museums. In recent years, they have come under attack for their colonial legacy, their exclusive, largely white staff and collections, their labor practices, their skill in program and architecture, and what has come to be known as “toxic philanthropy,” their financial contributions. they receive from donors who made their wealth through munitions, fossil fuels, or opioids, just to name a few examples.
But the link between American museums and unseemly fortunes is nothing new. It’s in their DNA. Many of the country’s greatest art museums were founded during the Gilded Age, with the support of so-called “robber barons.” There was a lot of money in the hands of the ultra-rich at the end of the 19th century, a division of wealth not seen in America until now! And some of the money went to major new museums from Boston to New York and Chicago.
As we face a man-made climate crisis, we can see the roots of the men who fueled the growth of our beloved museums: fossil fuel giants like John D. Rockefeller (whose wealth helped MoMA take off) and J. Paul Getty, whose billions endow its independent museum, the richest in the world. Meanwhile, the Guggenheim family’s mining and smelting wealth took a toll on large-scale environmental damage in the United States and Latin America. Other great fortunes have been linked to industrialists who brutally fought unions (Henry Clay Frick) or developed the “trickle down” economy (Andrew Mellon). These names are synonymous with art and culture in the United States.
But that’s all history, and their legacies are being taken advantage of now, aren’t they? incorrect This wealth has seeded legacy organizations that amass billions of dollars in endowments that are invested for the most part with one goal in mind: maximizing financial return. “Cultural Capital: The state of museums and their investing”, is a recent study by Upstart Co-Lab (a non-profit organization that advises socially responsible investors on the creative economy), the Association of Art Museum Directors and the Black Trustee. Alliance for Art Museums. He says that almost 7 out of 10 museums do not have policies that guide their investments towards and corporate governance (ESG) or to ensure that the fund managers they hire include women and people of color. Thus, most museums that make broad statements about sustainability, social justice, or diversity fall far short of acting on a huge asset, their endowment. Unless you hear otherwise, it’s a safe bet that your endowments are invested in fossil fuels, big pharma, and the like.
Isn’t that at least as important an issue as getting new money out of the Koch brothers or the Sackler family? As a director or trustee of a museum, you may tell yourself that your institution needs new contributions to do good. But endowments are funds you already have. You decide where to invest them. If your endowment’s financial great-grandfather was John D. Rockefeller, who amassed a staggering fortune thanks to his oil monopoly, that’s in the past, over 100 years ago. But if you’re still investing in ExxonMobil (an arm of Rockefeller’s Standard Oil and the largest private contributor to US greenhouse gases), that’s in the present and has the power to make a difference. This is not particularly radical. Even the Rockefeller Foundation has pledged to divest from fossil fuels, and MoMA has quietly reduced its fossil fuel investments to almost nothing, while implementing “significant ESG principles to guide the review and management of its endowment investments,” as first reported time here
And, above all, the economic defense of immorality the investment appears to be bogus. The Upstart Co-Lab study (aimed at museum leadership and investment committees) cites strong evidence that investing that takes into account the well-being of workers, communities and the planet can produce financial results on par with, or even better than, conventional investments .
What would it look like if museums allocated their billions to positive goods instead of amoral investments simply for profit? They could invest their endowments in taxable municipal bonds, helping to build new public schools, hospitals and libraries. They could make it a priority to invest in areas of their cities that have long had no access to capital. What if they looked at their mission and invested in companies that employ artists, designers and other creative people? What if they helped support green alternatives to our dependence on fossil fuels? Museums need to be more careful about where they put their money. The proposition, forcefully argued in the Upstart Co-Lab report that you can do good without sacrificing your return on investment, begs the question: Why wouldn’t you make this change?
Tom Finkelpearl and Pablo Helguera are co-authors of a forthcoming book on the challenges facing American art museums. Finkelpearl was an unpaid advisor to the Upstart Co-Lab report.