The Orlando Museum of Art recently received a generous $1.8 million bequest from the estate of Margaret Young, an artist herself who grew up taking art classes there. But while the clouds appeared to be finally clearing for the museum, which has seen better days since its 2022 fake Basquiat controversy, its decision to seek a court modification of restrictions on Young's inheritance has renewed public scrutiny.
In 2022, the museum became part of an FBI raid after its collection of 25 rare Basquiat works turned out to be fake. The beleaguered institution has been struggling financially ever since, having to suddenly spend part of its budget on legal fees and rehabilitating its image. New York Times reports a projected deficit of nearly $1 million in the museum's $4 million budget by the end of June 2024.
Strings attached
While the windfall comes at a good time for the museum, the legacy has some strings attached about how the money can be used. The trust left for Young's daughter, who died last fall, stipulates that the trust's remaining assets would go to the museum's “Permanent Collection Fund” and be added to their permanent collection.
However, in a petition filed in Orange County District Court, the museum claims it cannot use the bequest to purchase new artwork because it does not have a “permanent collection fund,” making Young's intended goal impossible. to be reached. Instead, the museum is looking to use the money to maintain its existing collection, “including 'curatorial staff, vault maintenance/repair, permanent collection security, etc.'”
Intention of the donor
While, under Florida statute, there are cases in which modifications of restrictions regarding the “management, investment, or purpose” of a gift are permitted, the burden is on the charity to prove that “the restriction has become unenforceable or futile, if impairs the management or investment of the fund, or if, due to circumstances unforeseen by the donor, a modification of a restriction would further the purposes of the fund.”
Although the museum maintains that its petition is not an attempt to override Young's endowment intent and use the bequest to “address his financial shortfall,” the move has raised some eyebrows among the museum's other donors, including members of the Friends. of American Art. who donate money to purchase art for the museum's permanent collection. The group has publicly raised concerns about how their money will be spent. Critics are also bemoaning the museum's argument that it doesn't have a “permanent collection fund,” since it appears to have an art acquisition fund for its permanent collection, not with that exact name.
According to New York TimesGinnette Childs, an attorney representing the museum, said creating a new “permanent collection” account for Young's legacy would be excessive given the existing one for the group Friends of American Art and that the legal costs of doing so would be “significantly more than modifying the restriction.”
Is the museum dishonest about its legacy plans? Modifying limited gifts is sometimes a very necessary path; for example, when so much time has passed since the gift was made that its purpose has become impractical or impossible to achieve. “There are also cases where a court has determined that financial distress is sufficient cause to change the terms of a limited gift, and that is certainly preferable to selling part of the current collection to pay the bills,” said Joanne Florino, Adam Meyerson. Distinguished Fellow in Philanthropic Excellence at the Philanthropy Roundtable in Washington, DC “But if the Orlando Museum's argument rests solely on semantics (is there a 'permanent collection fund' by another name?)—or even on the argument that it will also require a lot of time and money to create one – then I think the court will ask a lot of hard questions before granting the request,” Florino explained.
Optics
How likely is the court to overlook the donor's intent? “The Florida Attorney General's reported support of the museum's application probably puts the score in the museum's favor from an optical perspective. But the court will still have to face the fact that the donor expressed a very specific donative purpose – to finance art purchases,” said Amelia Brankov, found at Brankov PLLC. “And while the museum maintains that the funds will go to support its existing collection, the money is fungible, and those funds that would be needed to support the collection would then be freed up to pay for other expenses,” she added. .
Disregarding a donor's intent isn't just a bad look for the museum; it may also deter future donors from giving gifts to the organization. for New York Times, one disgruntled potential donor is Margaret Young's surviving daughter, Dee Miller, 77, who also has a trust set up by her mother that, upon her death, would gift the remainder of her assets to the museum his for the “Permanent Collection Fund”. Miller believes the museum should honor her mother's wishes and use the money for its intended purpose.