February 24, 2018
 
AG Says Berkshire Museum May Sell Art to Help Ensure Survival

February 10, 2018 — Massachusetts attorney general Maura Healey yesterday agreed that the Berkshire Museum in Pittsfield may proceed with the sale of artwork, three months after she sought to block the move, which the museum's board of trustees said it must pursue to shore up its finances.

If the state Supreme Judicial Court approves the agreement, the Berkshire Museum will sell its most valuable work, Norman Rockwell's Shuffleton's Barbershop, as part of an effort to raise $55 million. According to the AG's office, a nonprofit U.S. museum has offered to purchase Shuffleton's Barbershop, on condition that it remains in public view.

When Healey sought an injunction against the artwork sale last fall she said the proposed sale "would amount to the application of previously acquired assets to new purposes in violation of the charitable trusts for which the museum holds those assets."

In a letter to the museum's lawyer, the AG's office wrote that "after reviewing the financial status of the museum and coming to understand the museum's decision making process, the AGO believes that, in these circumstances, the museum has reasonably concluded that it does not have any alternative sources for the significant infusion of funds it needs in order to continue to fulfill its mission, and the museum cannot practicably survive without lifting or amending the restrictions on at least some of the works of art to permit their sale."

The agreement acknowledges that "The Berkshire Museum faces serious financial challenges including a dwindling endowment, a weakening fundraising climate, and an annual operating deficit of$1.15 million — that will force it to close within the next several years absent a substantial infusion of capital of approximately $60 million" and the fundraising alone won't bridge the gap.

The plan to sell the artwork to support its fiscal stability plan sparked protest from the American Alliance of Museums and the Association of Art Museum Directors, as well as from the Massachusetts Cultural Council, which argued that the plan is "a violation of the museum's public trust."

The AG's office, which is charged with overseeing Massachusetts nonprofits, wrote "that in reaching the determination to support the museum's request for relief, it is not [its] role to substitute its judgment for that of the museum's board, nor necessarily to endorse its specific decisions or the manner in which the museum announced its plans to the public."

“Importantly, the agreement adheres to Massachusetts charities law and sets an important precedent for other museums that charitable organizations must act transparently and seek court approval to modify restrictions and sell charitable assets in accordance with their charitable mission and demonstrated financial need,” noted Emily Snyder of the AG's office.

The Berkshire Museum can now structure the sale of the artworks according to the following schedule agreed to by the AG's office:
  • $50 million of the net proceeds to the museum may be used by the museum without restriction.

  • Net proceeds between $50 million – $55 million will be held by the museum in a separate fund to benefit the museum’s collection and to be used for acquisitions and to support the museum’s collection, including in connection with the museum's New Vision strategy.

  • Any net proceeds that exceed $55 million will be held by the museum in a separate fund for the benefit of the museum’s art collection and to be used for acquisitions and to support the museum’s art collection.
The museum last year adopted a strategy, developed over nearly two years, to strengthen links between science, history, and the arts and provide financial stability, which would require $60 million. Twenty million dollars was expected from the sale of the 40 works of art to fund the strategy, with the remaining $40 million to create a new endowment. The strategy also included a capital campaign to raise $10 million.

Last November, Berkshire Superior Court Associate Justice John A. Agostini, who had allowed the artwork sale, but who was overruled by the state Appeals Court, noted that creating an endowment, "demonstrates a commitment to the community to keep the museum operational. The decision to maximize the museum’s endowment and to improve substantially its facilities was not unreasonable, nor did it fail to take into account the individual donors and the community."

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