A GENEROUS GRIFT: Museums, Finance Capital, and the Clash of Cultural Workers and Collector-Trustees
In the 21st century, museums have opened in numbers unmatched by the preceding 200 years, and not by popular demand. The expansions and satellites proceeded even as visitors declined. Behind this growth rests a crisis of overaccumulation. Capital, lacking profitable outlets in the realm of commodity production, seeks returns from asset speculation: Stocks, real-estate, and blue-chip art. Inflation of these assets is not a given; it must be driven, and museums help maintain and bloat prices in all three categories. They directly channel billions to the financial sector, grease the gears of gentrification, and backstop art as stores of wealth. Rather than visitors, then, demand for museums comes from speculating segments of the ruling-class.
In the United States, museums are governed and primarily funded by a coalition of finance capital and property. 40 percent of major museum board members or trustees represent the financial sector, with the closely-interrelated field of real-estate accounting for the next largest group (followed by oil and gas). They are vested with power over executives and expansions, and even at times over accessions and exhibitions. Their fortunes, to be clear about the source of value, are surplus appropriated from labor as profit, interest and rent through the circuits of global capitalism, and then hoarded in assets. The only qualification for museum trusteeship, to administrators and fellow trustees alike, is wealth and a predilection for buying art. With this, trustees harness the considerable powers accorded public charities to their material benefit.
The modern American private foundation—the grant-making vehicle often used by corporations and wealthy individuals to fund art and other charitable organizations—originates in the previous turn-of-the-century Gilded Age. Industrialists and railroad monopolists, enriched by labor repression and the genocidal expansion of western markets, promoted philanthropy as a bulwark against communism. During the Cold War, art and literary institutions partnered with US intelligence to exercise soft power toward the same ends. The explosion of “charitable giving” in recent decades (a steady, inflation-adjusted increase from less than $150 billion in 1976 to nearly $400 billion in 2016) partly charts growth of the nonprofit-industrial complex, a combination of state, capital and activists mobilized against proletarian self-organization.
From some angles, museums remain the instruments of counterinsurgency envisioned by robber barons and cold warriors. During the George Floyd Uprising, the Oakland Museum of California solicited plywood protest art from business and property owners who’d boarded their windows, authorizing the rebellion’s targets as its storytellers. But, in the US, the relatively limited role of institutional art collections in legitimizing state power and projecting national identity diminished under neoliberalism. As prices for contemporary artists soared in the 1980s, crass marketization overtook the pretensions to public representation characteristic of Fordist-era museums. Today, through tax policies regulating nonprofits and art, museums provide a public subsidy for the private accumulation strategies of their collector-trustees.
In other words, collector-trustees do not underwrite museums out of generosity. Philanthropy is commercial secrecy. In exchange for donations, collector-trustees receive definite services and material benefits. Activists have lately observed how association with museums enhances donors’ social standing, but this is just one enticement. With this article, I start to categorize trustees’ stakes in managing the flows of value in and out of museums. I outline three aspects—the plaque, the rebate, and the pump—so as to trace the oppressions refracted in the circulation of artwork. My goal with the three-part article is to contribute towards a program of solidarity and struggle for museum unionists and anticapitalist artists and cultural workers.
The plaque
The best-known service museums offer donors is a plaque. It comes in sizes: small, like a thank-you note in the wall text, or a large engraving over the doorway. “Naming rights,” the top-shelf option, implies donors could call a gallery anything they’d like, but they usually name them for themselves. The plaque is meant to denote a wealthy, civic-minded sophisticate. It reinforces the assertion, sputtered against the prospect of expropriation, that art extends only from generous plutocrats: “Without wealth,” wrote Andrew Carnegie, the violently anti-labor industrialist reputed today as a philanthropy thought-leader, “there can be no Maecenas.”
Today, though, reputation laundering has limits. Take the Sacklers: The Purdue Pharma dynasty, funders of institutions including the Guggenheim and the Metropolitan Museum of Modern Art, turned to these art institutions for “short positive statements,” coordinating directly with museum staff, as activists highlighted their role in opioid addiction, only to see their names stripped from the donor walls. Leon Black, the billionaire cofounder of private-equity firm Apollo Global Management; and Warren Kanders, chief executive of military and police equipment manufacturer Safariland; resigned from their respective positions at the Museum of Modern Art and the Whitney Museum of American Art under pressure not only from artists and activists but out of deference to fellow trustees. In every case, other donors endorsed jettisoning the spotlit donors when they began to undermine the social elevation museum trusteeship confers.
Campaigns against “toxic donors,” like the Vietnam War-era institutional critique of the Guerrilla Art Action Group or Hans Haacke, who exposed connections between the New York art establishment and US imperialism, treat the plaque as a strategic lever. By pressuring profiteers of militarism and addiction in their philanthropic guise, as with Kanders and the Sacklers, activists can amplify public pressure through the art press and disturb their targets within elite social circles. Yet the focus on “toxic” donors also risks the political mistake of affirming trustees’ structural position by implying some harmless wealthy person deserves to be glorified by the plaque. The risk, in other words, is of reifying instead of contesting institutional hierarchy.
The rebate
Only the wealthy minority of taxpayers who itemize deductions avail themselves of the charitable contribution deduction, which reduces income subject to taxation, and the wealthier the donor, the greater the advantage. In other words, the state treats identical donations differently based on the donor’s income. For example, a low-income donor’s $1 contribution to a public charity costs $1, whereas a wealthy donor’s $1 contribution effectively costs $0.65.
Museums are a lobby group for such regressive tax policy. In 2006, Museum of Modern Art director Glenn Lowry and San Francisco Museum of Modern Art director Neal Benezra pressured lawmakers to preserve one of the more perverse incentives of philanthropic arcana, fractional giving. In this now-limited scheme, one could donate successive shares of a single artwork, effectively milking the artwork’s appreciation, without even relinquishing the artwork.
Museum endowments, the focus of this article’s second installment, “Hedge Funds With Art,” also avoid taxation on investment returns with the use of offshore “blocker” corporations. What matters is less the dizzying loopholes and more that the foregone tax revenue subsidizes private accumulation. Reformers have periodically curtailed the tax-saving practices of museum donors (Congress largely disincentivized “fractional giving”), without seeming to disturb the underlying trend of art institutions’ increasing fealty to self-interested collector-trustees.
The pump
Artwork enters the world as an embryonic commodity, fledges at the point of exchange, and absorbs value from the productive economy as it circulates. Museums are integral to this circulation, underpinning the arch-fetishism of the auction house. They establish and maintain the “symbolic value” realized as price. Auctioneers plainly cite curatorial authorities at museums to boost investor confidence. So do the major banks and specialized firms in the growing, $24 billion market for art-secured lending. Collectors seize on high prices not only by buying and selling, but also tapping their appreciating assets for liquidity in evermore ways. Art collections rank behind real-estate and securities as the fourth most common collateral loan.
Most art comes to museums as donations, not purchases. Trustees and donors exploit their position to confer institutional credibility on their investments, or gain competitive edge over other collectors. They donate with the knowledge that even news of accessions affects prices, and acquire similarly-useful, privileged information about programming as well as access to curators, whom they enlist as more and less formal consultants. By conditioning donations, they undermine the autonomy of curators who could limit their capacity for self-gain; and by conditionally loaning collections, as with the Fisher Collection at SFMOMA, their grip tightens.
With some $58 billion in endowment funds, US museums are also significant sources of investment capital, fees, and returns for the financial sector. Major donors establish the principal funds of endowments, while investment income is the other primary source of museum revenue next to direct donations. Mapped within capital accumulation and circulation, endowments in particular index the racialized exploitation of labor and natural resources in the Global South. As I’ll detail in the second installment, trustees influence institutional investments with little oversight, authorizing annual management fees to Wall Street contractors of as much as $10 million—in some cases, to firms whose executives sit on the museum board. The self-dealing is institutionalized, and it threatens to transform museums into hedge-funds with art.
Under the direction of donors with nearby property interests, new museums encourage or stabilize luxury residential and tourist districts. The Broad, opened in 2015, followed developer and insurance financier Eli Broad’s prior investments in downtown Los Angeles. The recently-launched Institute of Contemporary Art San Francisco expands the real-estate holdings of the Rappaport family in the deindustrializing Dogpatch neighborhood. Less obviously legible in the built environment is art institutions’ contribution to finance-driven gentrification. Museums, like sovereign wealth funds and pensions, are significantly parking endowments in private-equity rental portfolios. In 2021, landlords enjoyed pandemic-era corporate welfare and double-digit rent increases in metropolitan areas. Although unsustainable not least to most of their workers, trustees are hitching museum endowment returns to the continued rise of urban housing costs.
The cultural worker
Collector-trustees do not exercise their power unilaterally. It is mediated by directors and executives held in thrall to the board by lavish compensation and perks, like housing stipends or interest-free home loans; manager-administrators answerable to the c-suite; curators and programming staff with ambivalent allegiances; third-party contractors such as security guards; unpaid docents; and a plurality cohort of frontline, installation, and other entry-level workers. For the increasingly agitated ranks of cultural workers, the supposed prestige and access afforded by art institutions no longer compensates for sub-living wages and professional precarity.
Between 2018-2020, more than 1000 workers at 14 museums nationwide formed union bargaining units. Amid the George Floyd Uprising, ad-hoc organizing emerged from personal accounts of workplace racism. Layoffs and pay reductions during the pandemic, as well as anti-union measures taken by museum leadership, spurred more workers to action. Recent months have seen labor activity at institutions including the Art Institute of Chicago, the Brooklyn Museum and the Jewish Museum. Yet the wave of labor and pressure campaigns tends to crash on the rocks of the administration, or else rattle the moors of the boardroom and then vaporize. The third installment of this piece examines the politics of recent mobilizations.
The coalition character of museum boards illustrates the economic position of the cultural worker. At first, it appears contradictory: The landlord who takes most of their income sits above the administration suppressing their wage (and so limiting rent). Yet the financier, amongst the dominant coalition, resolves the problem by offering the cultural worker credit instead of raises. Given these conditions, the cultural worker’s wage improves only with the board’s dominance over tenants and debtors. Emerging from this predicament, though, are possibilities for coalitional counterforce: If the cultural worker’s boss acts on his interests as a landlord, is he more vulnerable to tenant pressure? If collector-trustees broadly act on their interests as asset speculators, cultural workers’ leverage rests in organizing across sectors and national borders.
This article doesn’t conclude with proposals for ethical investments or ameliorative policies. The point is that museums’ current growth model depends on expanding forms of exploitation beneficial to their ruling coalition. Whether looking to the organizational chart as something to invert or decapitate, or to unionizing or contract negotiations, cultural workers must continue developing capacity for analysis and collective action. To the current regime, museums’ relationship to appreciating assets determines their fate, and the internal contradictions of capitalism spell massive devaluation. Even the chance to decide what’s worth salvaging from the carapace of hoarded capital hangs in the balance of power between cultural workers and collector-trustees.