The Real Meaning of a Court Battle

LETTERS TO THE EDITOR

To the Editor:

The March 31 issue included two substantial opinion articles discussing the recent decision by a Pennsylvania court to permit the Barnes Foundation to move from Merion, Pa., to Philadelphia.

The article “After the Barnes Ruling: What Donors Should Do to Protect Their Wishes,” by William Schwartz and Francis J. Serbaroli, was a thoughtful piece. Although the Barnes Foundation’s board disagrees with their suggestion that the court’s decision should be cause for significant worry in the donor community, most of the authors’ comments seem to be balanced and helpful.

The article by Marie C. Malaro (“A Dangerous Precedent for Unpopular Groups”) is utterly different. Ms. Malaro testified against the Barnes Foundation in the court case, and her piece unfortunately contains many assertions that are incorrect, and others that are seriously misleading.

For example, Ms. Malaro wrote that “a Pennsylvania judge” sanctioned “the foundation’s plan to construct a large traditional art museum in the center of Philadelphia,” and that the court “did not focus on the language” of the original Barnes charter, which stated that the purpose of the foundation was “to maintain an art-education program in Merion.”

The judge rendered two opinions in this case (January 29, 2004, and December 13, 2004), and a simple reading of the transcripts demonstrates that the facts are completely at odds with Ms. Malaro’s assertions.

For example, neither of the two petitions of the Barnes Foundation sought to create a “large traditional art” museum, and the judge did not sanction anything that could conceivably be interpreted to mean that. Nor did the judge neglect to highlight the language of the original charter, with its explicit definition of the Barnes as an educational institution.

In fact, on the first page of his January 2004 opinion, Judge Stanley R. Ott quoted from the foundation’s original charter, pointing out that Dr. Barnes intended his foundation “to promote the advancement of education and the appreciation of the fine arts.”

The judge made absolutely clear — in both of his opinions — that the issue before the court was not whether the foundation should alter its mission in any way.

The question was whether the foundation could feasibly carry out that mission, given the financial jeopardy of the Barnes, and the exceptional difficulty of raising any significant funds because of the severe limitations placed upon the foundation at its present location.

Intensive efforts, by very experienced institutional leaders, had failed — for several years — to persuade donors to contribute any major gifts to the Barnes, so long as it remained at its current site.

The judge was persistent in his efforts to analyze the seriousness of the foundation’s financial difficulties. Could some of the Barnes’s land holdings be sold? Could the paintings that were not legally prohibited from sale be auctioned, and would they yield the necessary amount of money?

The judge explicitly stated that — in his view — the museum profession’s strictures against de-accessioning might not apply “in a non-museum setting…Otherwise stated, we question whether the same constraints on a museum not to sell its art bind an educational institution.”

The result of the judge’s inquiries, however, was an unambiguous conclusion that no combination of sales of land and art could raise more than a fraction of the necessary money.

In addition, the judge asked Steven Harmelin, a Barnes trustee, about the likely effect on the foundation’s education programs, should the foundation move to Philadelphia.

Mr. Harmelin replied that not only would the programs remain intact but also that the works of art would be hung “in the exact same ensembles” — essential to the education program — “as are currently displayed.”

Meanwhile, the president of the Barnes stated that the educational programs would actually have more capacity to grow in a new location, and that the current Merion galleries would retain their present modest scale and configuration.

Finally, the judge — in his two opinions — referred to the primary educational mission of the Barnes more than a dozen times, and, in his summation, he stated that the Barnes’s role as an educational institution, “not a museum… has been the refrain of every party of interest in these proceedings.”

In short, it is difficult to see how the record supports Ms. Malaro’s contention that the judge failed to highlight the foundation’s educational nature, or that the court proceedings sanctioned the creation of a “large traditional museum” in Philadelphia.

In addition to those matters, Ms. Malaro’s article omitted other important information, and contained additional inaccuracies.

For example, she stated that Dr. Barnes’s main goal was to create a “school” for the study of art in his gallery (with very limited public access).

She suggested that the original Board of Trustees — some of whom served well into the 1980s — followed Dr. Barnes’s instructions “to the letter” after his death in 1951, but that successor trustees concentrated (in the 1990s) “on attracting more visitors” rather than on the education program.

Finally, she asserted that “poorly conceived projects” by the successor board were the cause of the fact that “by 2002 the foundation was in serious financial trouble,” and that the board then turned “in desperation” to outside funders who wanted the Barnes to move to Philadelphia.

The actual record shows that as early as 1923, Dr. Barnes wrote in a letter to his attorney that he wanted “to prepare the way for the gallery to be a public one after my death.”

In his formal, revised charter of 1926, he made provision for public access to the gallery on two days out of six. Although he deplored “walk-through” museumgoers, he clearly gave the public fully one-third of the gallery’s hours each week, while reserving much of the remaining time for his own use. He stressed that “plain people” from the working class should be admitted to the gallery free.

Although he reiterated — in very general terms — his commitment to “promote the advancement of education and the appreciation of the fine arts,” he also stated that he had no specific plans for the implementation of a program of study. In fact, he stressed that the purpose of his gift was to create an educational foundation that was “democratic” and consistent with the ideals of his friend and mentor, John Dewey.

Dr. Barnes also stated that the foundation would be open to “any…students and instructors of institutions which conduct courses in art and art appreciation.”

Dr. Barnes was obviously an unusually complex person, and his views and plans changed — frequently — over time. There was clearly an unresolved conflict in him between the concept (following Mr. Dewey) of a broad, “open” democratic education for all people, and an equally strong desire to ensure that art should primarily be studied in an intensive, systematic way by highly committed students.

His educational program became more structured in his later years, but he continued to try to accommodate both of his “parallel” and sometimes conflicting goals.

Given these (and other) facts, it is surprising that Ms. Malaro would define Barnes’s educational ideas so narrowly as a kind of “school” — without highlighting all the evidence related to Dr. Barnes’s (and Mr. Dewey’s) strong interest in using art to enrich the experience of every individual.

The original trustees, after the death of Dr. Barnes in 1951, structured the formal education program more stringently (and tightened public access) over the next quarter-century. Indeed, a series of court cases, threatening the tax-exempt status of the foundation, eventually established the fact that the foundation’s policies had become increasingly exclusionary.

In 1960, the courts compelled the Barnes to return to a policy that admitted visitors two days per week, in spite of the trustees’ contention (in their legal brief) that “they had express authority…to deny to the public any access to the gallery.”

By 1967, the courts ordered the gallery to be open an additional half-day per week (two and a half days total), and the number was later increased to three (also by court order).

In other words, a sustained movement to increase the number of open days (and weekly visitors) began more than 40 years ago (not in the 1990s), and it arose from a legitimate concern to maintain a substantial degree of public access to a tax-exempt institution.

The most important requested increase in access that was made in the 1990s was that the gallery be open three and a half days per week (instead of three), and that the allowable number of visitors per week be 1,500 (instead of 1,200). This was certainly a more modest potential change than what the court had mandated three decades earlier.

The financial problems of the Barnes are anything but new or recent, and certainly did not begin, as Ms. Malaro suggests, in the years from about 1990 to 2002.

The transcripts of the court cases from the 1960s provide ample evidence of financial difficulties that were even then systemic, not simply episodic. The causes of these problems are not hard to identify.

For example, Dr. Barnes defined in his will a highly conservative investment policy for the foundation. Consequently, the endowment missed virtually all significant opportunities for growth in equities from the 1950s to the 1990s, and the value of the endowment lost very substantial ground, not only against inflation, but also against the rise in professional standards (and legal requirements) for the design and maintenance of an art gallery.

Dr. Barnes prohibited any social gatherings, group tours, gala events, large dinners, or similar functions from ever taking place inside any of the foundation’s buildings. As a result, the opportunity — taken for granted by essentially all nonprofit institutions — to have on-site events that might attract donors and friends to the Barnes, was completely eliminated.

The small (and declining) number of permitted visitors, and the very low admission charge (raised to $2 in the 1960s) obviously precluded the generation of any significant revenue from this particular source. All rises in admission fees must be approved by court order, and even though the court recently granted the foundation’s request to raise the charge to $10 with a stipulated maximum of 1,200 visitors per week, the new fee will cover only about 12 percent of the foundation’s bare-bones expenditure budget.

The foundation’s location in a suburban neighborhood, with zoning appropriate to a residential area, has created further complications. Some efforts to generate more funds for the Barnes were limited by neighborhood concerns and township regulations. These restrictions are not unreasonable, but they clearly have an impact on the foundation’s finances.

Given all these and other factors, it is clear why an institution that began with a $6-million endowment more than half a century ago would be faced with a set of constraints that allowed for no significant change in its financial capacity.

It is true, as Ms. Malaro states, that a group of new trustees of the Barnes (beginning about 1990) began to take aggressive steps to try to reverse the downward financial spiral of the foundation. Some of these steps may have been less than well-conceived; some were certainly controversial, and at least one was seriously counterproductive.

But it is fair to say that the board was faced with a crisis — inherited, not created — and it had to act expeditiously. On balance, several of its decisions were very effective. These included a series of petitions to the courts intended to address at least some of the foundation’s most critical financial and other difficulties.

For example, it made an appeal to the court to permit an international tour of a selection of major paintings from the collection, in order to raise enough money to renovate the Barnes’s buildings and improve the gallery so that it would comply with legal requirements and professional standards. The petition for a tour was granted, and the resulting renovations were highly successful.

The board also received permission to diversify the foundation’s investment policies.

During the 1990s, the foundation and some of its neighbors — and Lower Merion Township — became engaged in a number of lawsuits that have been very unfortunate — as well as costly — for everyone.

In addition, the foundation has itself made lengthy and costly legal appeals related to its proposed move to Philadelphia.

These actions depleted the foundation’s unrestricted reserve funds generated by the international tour.

Nonetheless, if all the legal expenses of the past 15 years had somehow been spared, and all the money had been saved, the result would still have left the Barnes seriously underfunded, and it would have had essentially no real effect on the foundation’s persistent (and continuing) structural financial problems.

Also, during the 1990s, additional efforts to attract major donors to the Barnes produced no tangible results.

In the past four years, the composition and size of the foundation’s Board of Trustees has markedly changed.

The new board studied the foundation’s capacity to function at its present location. It also tried, unsuccessfully, to raise significant funds to enable the Barnes to remain where it is now situated.

In the end, the board concluded that there was simply no reason to believe that the intractable problems of the foundation could be solved as long as it remained in Merion.

The board did not in 2002 — because of a sudden financial crisis — turn for help “in desperation” to three major foundations. The financial problems of the foundation had been developing as early as the 1960s.

The trustees entered into discussion with three foundations because those institutions had reached conclusions similar to the Barnes Foundation’s, and were willing to help finance a move to Philadelphia.

Assuming that the move takes place, the current board will be fully committed to increasing the strength of the foundation’s educational programs. It is equally committed to the present scale and configuration of the gallery spaces, and to the existing placement of the works of art.

Nor is there any intention to construct a behemoth of a building that would function as a “conventional museum.”

There are no design plans and certainly no architectural plans of any kind at the moment. But we know that there are several ways to design a facility that would be consistent with the concept of a small-scale institution, and we are persuaded that an excellentarchitect could create such a design.

Given these facts, it is difficult to know how Ms. Malaro could declare that “under their plan” the trustees would only “include a section” in its “large traditional” museum where the Barnes’s teaching gallery would be housed.

The Barnes Foundation’s projected move has generated media attention focusing largely on the potential advantages — in terms of tourism — that would result from such a decision.

Our own intention, however, is to ensure that essentially the same number of “simultaneous” visitors to the gallery — a very limited number at any one time — would remain the foundation’s policy in the future.

If more visitors can be accommodated annually, that will be the result of different zoning regulations — allowable in Philadelphia, but not in Lower Merion — whereby the gallery can be open to the public more hours per week, but not to more visitors during any given hour.

The current Board of Trustees has given full attention to all the complex issues associated with the Barnes Foundation, and it has decided — after thorough examination of all these issues — that the foundation should move to Philadelphia because of very compelling financial reasons, based on the clear evidence and experience of the last half-century.

The central purpose is to preserve the essence of the foundation’s original educational purposes, rather than to preside over the steady diminution and dissolution — indeed probable near-term bankruptcy — of an extraordinary institution.

Bernard Watson
Chair, Board of Trustees
Barnes Foundation
Merion, Pa.