The extraordinary growth and steady price increases reported in the art market the last thirty months is not good news for all. Museums will find it more expensive to fund many sought after acquisitions of art. The unfamiliarity shown by many museum trustees with the art market raises serious questions about their expertise and their attorneys' due diligence standards. San Diego stands out in this issue, because the leadership of many art museums in Balboa Park is strongly influenced by policy makers from the San Diego Zoo, whose President, Doug Myers, is also President of the American Association of Museums. Myers has not only been entirely wrong about the dynamics of the art market and the implications for art museums, he has steadfastly refused to discuss the topic. The internal search engine for reports and resources on the AAM Web Site returned zero results for the search term “art valuation“. Myers has also favored a uniform policy of art museums in Balboa Park to stop public discussion of art market topics since the FBI raided the Mingei Museum and other art museums in an art valuation controversy investigation in January 2008.
The official policy of the Museum of Contemporary Art San Diego, located in La Jolla, makes these issues easier to evaluate. The MCASD website explains, “Trustees have a fiduciary and policy-setting responsibility for the welfare of the Museum; MCASD's Board is extraordinarily generous, supporting ongoing operations as well as special needs such as the 21st Century Campaign and art acquisition.” It is not clear that the trustees have actually read or understood this, but it is clear that none of MCASD’s officers have had any formal training in art economics at all. The top ranked web search engine result for the group is “Sip with Socialites,” followed by many more references to their alcoholic beverage parties and complete lack of familiarity with the art market. The annual report shows no use of art market futures, the trustees never permitted the use of museum facilities to discuss the subject, and they have wasted a significant amount of the museum’s endowment as a result. Ditto for almost all other art museums in San Diego County.
San Diego art museums also fail the high “fiduciary seriousness” test set by the L.A. County Museum of Art, Seattle Museum of Art and other art museums which supplement their expenses with leasing operations. Fiduciary is a big word that is often overlooked in practice. But art museum leaders who take it seriously realize that it is their obligation to make sure these non-profits earn the highest amount possible from their assets to fund exhibitions and education programs. The San Diego Museum of Art has at least taken a positive step in this direction by launching sales of archival prints of select works from its collection. The details of solicitation of gifts of art for museums also has a new degree of controversy following several years in which the art market steadily outperformed the stock and bond markets; there is little indication that museum staff soliciting gifts has had any relevant training regarding art value forecasting. Heirs whose own assets have been diminished because of weak art market research by museum staffs are likely to look elsewhere when planning their own giving programs.
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