Since last May, the Detroit Institute of Arts (DIA) has been at the center of bankruptcy negotiations between the beleaguered City of Detroit and a myriad of creditors and pensioners to whom a staggering $18 billion is owed. When Kevyn Orr, Detroit’s state-appointed emergency manager, included the museum’s art collection among city assets available for possible liquidation, the suggestion that the artwork might be sold to satisfy creditors sent shudders through the art community. Could a world-class art museum, part of America’s cultural foundation, be raided, its cultural treasures sold off to pay the debts of its city? And what would that mean for other art institutions around the country?
The story has captured the attention of the powerful and common alike, with many weighing in on the whether the collection should or would be sold. But even before Emergency Manager Orr brought in Christie’s auction house in August to evaluate the art, a group of influential and deep-pocketed DIA supporters had begun to assemble. Federal bankruptcy mediator U.S. Chief District Judge Gerald Rosen gathered a group of national and local charitable foundations in November to brainstorm and discuss “out of the box” ways to prevent the DIA from being gutted, while still protecting city pensions. The result of Judge Rosen’s roundtable has been nothing short of extraordinary and could have long-term implications for the role of charitable foundations in the future.
Last month, a group of ten foundations with close ties to the city joined ranks to develop an unprecedented rescue plan. Led largely by the Ford Foundation, the consortium has pledged to give $370 million to the city pensioners’ fund under the condition that ownership of the DIA’s collection is transferred to a separate nonprofit organization, thus protecting it from the city’s creditors. With the foundations’ commitment in place, the State of Michigan has also stepped in with its own pledge of $350 million, pending approval by the Legislature. Governor Rick Snyder described the offer as a “settlement” rather than a city bailout and it comes with another caveat: pensioners must drop all lawsuits against the city.
The amount of money flowing in to save the DIA, largely from sources outside of Detroit, is breathtaking in its grandeur. The Ford Foundation’s pledge of $125 million is more than a quarter of its entire grantmaking budget in fiscal year 2012. In second and third place are the Kresge Foundation with $100 million (a whopping 70% of its 2012 giving) and the Kellogg Foundation at $40 million. These developments make for quite a story and may provide comfort to those who feel the 139-year old art museum should be left intact. And yet this sudden infusion of cash raises a number of important questions for the arts field and for the institution of private philanthropy alike.
For example, is the foundations’ commitment to the DIA a distraction from other, possibly better giving opportunities, whether in Detroit or elsewhere? Mariam Noland, president of the Community Foundation for Southeast Michigan (CFSEM), reported receiving concerned calls from cultural organizations worried their usual grant funds would be diminished as a result of the foundation’s pledge. However, CFSEM and the other foundations claim they are working to ensure this does not happen, either by stretching their contribution payments out over 10-20 years or tapping into their own endowments – another questionable move. Several of the foundation leaders involved – Noland, the Kresge Foundation’s Rip Rapson, the Knight Foundation’s Alberto Ibargüen, and the Ford Foundation’s Darren Walker – wrote an op-ed for the Chronicle of Philanthropy defending their decision, writing, ”our support…aims to accomplish something even larger: helping a great city get back on its feet quickly and on course toward a better future.”
So just how far will the coalition go to protect the DIA from any long-term financial burden Orr tries to impose on it? Historically, charitable foundations like to avoid quick-fix approaches when it comes to supporting public institutions, favoring innovative policy reforms that promote social change instead. However, here, they are bargaining with Detroit’s pensioners, taking a risk, and potentially opening themselves up to a future of wheel-and-deal funding schemes. Indeed, some in the grantmaking world are already voicing concerns about the precedence of conditional giving being set and whether it “amounts to philanthropic coercion rather than generosity.”
Between the foundations and the state, the total amount put forward now surpasses the $500 million contribution requirement Emergency Manager Orr had originally placed on the DIA. And the museum just recently agreed to raise an additional $100 million itself over the next 20 years, bringing the grand total to $820 million – all of which would be disbursed to the pensioners’ fund. If all parties accept this amount and Orr’s plan, then the City of Detroit would immediately transfer ownership of the entire art collection and building to the DIA, the private non-profit that has actively managed it for decades, thereby bringing a swift end to an at times harrowing situation.
But how much danger was the DIA ever in, really? All of the drama of the past year notwithstanding, the DIA hasn’t had any ultimatums placed upon its collection by Judge Steven W. Rhodes, who is presiding over Detroit’s case in federal bankruptcy court. In December, Christie’s auction house completed its appraisal of roughly 2,800 artworks – comprised solely of pieces purchased with city funds so as to avoid any legal action by donors and their heirs. Christie’s estimated the art to be worth between $452-866 million, with a couple of standout pieces valued at nearly $150 million apiece. The assessment was not music to the ears of creditors, who—their hopes no doubt bolstered by multi-billion dollar speculations made in the media early on—accused the city and auction house of purposefully undervaluing the artwork. The consortium of European banks, bond insurers, Detroit retirees, and labor unions requested that an independent committee conduct a separate review of the museum’s full collection – approximately 66,000 pieces, 95% of which were donated or purchased with private funds. Judge Rhodes has since refused the creditors’ request, ruling that he doesn’t have the authority to permit an independent evaluation of the DIA’s entire holdings.
Rhodes has furthermore said he is seriously considering the formal opinion issued by Attorney General Schuette back in June, which declared that the DIA’s collection, though technically owned by the city, is held in a “public trust” and therefore off limits to creditors. If he does agree that the collection is held in a public trust, it would mean the artwork is legally off the negotiation table.
In the final days of 2013, I took a quick trip to Detroit to visit the museum in question, a reconnaissance mission to experience the day-to-day reality of the institution under threat. It was heartening to see that the DIA was absolutely packed with people on the Friday after Christmas. The clerk at the ticket desk informed me that there would be a live concert that evening in Rivera Court, the large atrium home to Diego Rivera’s masterful work Detroit Industry. Executed from 1932-33, the mural was gifted to the DIA by Edsel B. Ford himself. Unanticipated by Ford, however, was the artwork’s socialist overtones, which caused quite a stir at the time it was created. Sited right at the core of the sprawling museum, the mural depicts the auto industry and its workers as the “indigenous culture of Detroit,” using the literal representation of manufacturing to achieve metaphors of power and growth. From floor to ceiling, assembly line workers dominate the scene in numbers and fortitude, while images of fertility—fruits, grain, mothers, and infants—preside overhead. Standing there dwarfed and surrounded by its twenty-seven boldly painted fresco panels, Detroit Industry makes palpable the heart and soul of the once-thriving metropolis whose influence has extended far beyond its city limits.
Despite the very real concerns that have arisen over the philanthropic “rescue mission” to save the DIA, private donations, both large and small, continue to come in from around the world. It seems that, through its ordeal, the DIA has unexpectedly become the public face of the city of Detroit. Its recent plight is a symbol of the gradual destruction of a cultural and economic legacy rooted in the early years of the 20th century, the so-called American century. As the city painfully negotiates the resolution of the narrative at play in Rivera’s masterpiece, the rest of us are provided with an opportunity to reflect on that legacy – not just the art collection, but how an important American city came to be. It seems that by preserving one, the hope is we save the other.