Wednesday, January 28, 2009

Should Universities Own Millions Of $ Of Art?

TW: The Economist laments Brandeis University decision to divest its art collection. The divestiture is the result of the tough economy which has hurt their endowment and on-going fundraising. The sale will cause the school's poorly attended art museum (roughly 50 visitors per day) to close. The value of the art is estimated at $350 million (inc. some stuff by big hitters such as Picasso etc.). As Economist notes that valuation may fade in the light of the current down market for high-end art.

My question though is why should universities own art portfolios valued in nine figures. The $350 MM could throw off conservatively about $15MM per year in cash flow to fund standard university activities such as say educating folks (and hopefully not with another pretty dorm but staff salaries or scholarships). There are numerous vehicles by which students of Brandeis (located in Boston) can gain access to top quality art. Why does the university need to carry such a large collection? Don't get me wrong, art museums are highly relevant but why to be owned by the university. If I were a contributor there I would wonder.

Frequently I believe our private top-end universities are accumulating trophy assets in the form of massive endowments and things such as very expensive art museums, which do little to provide education at a reasonable cost and return. We have hundreds of state and other higher education institutions starving for cash, they are the ones in need of support.
http://www.economist.com/blogs/freeexchange/2009/01/an_artless_liquidation.cfm

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