Thursday, February 10, 2005

Selling History to Save It

The Rhode Island Historical Society has decided to sell off historical artifacts in an effort to keep a balanced budget and maintain funding levels. The decision is based on the recommendations (PDF) of Financial Options Task Force of the RIHS.

According to the story published today in the Providence Journal:
In a letter sent to members earlier this week, the Rhode Island Historical Society says it may be forced to sell as many as 40 objects from its permanent collection, including a rare Colonial-era desk once thought to be from the famed Townsend-Goddard workshop.

The proposed sale, which society officials say can still be called off if enough money is raised over the next few weeks, follows last month's $8.4-million sale of a Townsend-Goddard tea table from a local private collection, as well as plans by the Providence Athenaeum to sell an original folio edition of John James Audubon's Birds of America.

"I hope people realize that nothing less than the survival of the historical society as an institution is at stake here," said executive director Bernard P. Fishman. "We've made all the staff and budget cuts we can make. Unless we can raise enough money from outside sources, we have no choice but to consider selling parts of the collection."

Fishman said that cost-cutting measures, including sharp reductions in staff and a decrease in hours at the society's library facility on Hope Street, had resulted in a balanced budget in 2004.

The potential price tag: about $10 million, most of which would be used to improve care for and access to the society's collections, and to shore up the society's $4.5-million endowment.

Fishman said he would gladly call off the sale if enough money could be raised to cover the society's expenses and bolster its endowment. Otherwise, the society, which has already solicited proposals from several auction houses, plans to move forward with the sale.

"We truly hope the sale can be avoided," Fishman said. "But before making our plans public, we did pursue private inquiries regarding potential donors. Needless to say, the results weren't encouraging."

According to Fishman, the bulk of the sale would involve objects that may be valuable in the eyes of collectors, but which have little connection to Rhode Island and its history. . . But the star of the sale would be a "nine-shell" block-front desk once attributed to the Townsend-Goddard workshop and now thought to be by Providence cabinetmaker John Carlile.

. . . Unlike other pieces under consideration, the desk has impeccable Rhode Island credentials: commissioned by Providence merchant Joseph Brown in the late 18th century, it remained in the Brown family until 1944 when it was donated to the historial society. . . "There's no question the desk is an outstanding piece," Fishman said. "But you have to weigh that against the future viability of the historical society itself. What point is there in holding on to the desk if the result is that the society ceases to exist?"

But others, including some prominent historical society members, aren't so sure.

Edward F. Sanderson, executive director of the state Preservation & Heritage Commission and a Rhode Island Historical Society board member, said he supported the decision to sell pieces not directly related to Rhode Island. But he expressed dismay over the potential loss of the Brown desk, which he called "a cultural artifact of the first rank."

"This isn't just a rare piece of furniture, it's the rarest of the rare," said Sanderson. "As far as I know, there's only one other nine-shell desk in existence. It's literally in a class by itself."

Former Rhode Island School of Design Museum decorative arts curator Thomas S. Michie called the Joseph Brown desk "arguably the most important piece [of furniture] in the historical society's collection and one of the greatest pieces of Colonial-era furniture" made in Rhode Island. . ."The fact that it was probably made in Providence and not in Newport is hugely important. . .While great Newport pieces are rare, great Providence pieces are virtually unheard of."

. . . Pieter Roos, executive director of the Newport Restoration Foundation, said the sale might even threaten the society's museum accreditation.

"Basically, you're selling off your birthright to pay your expenses," said Roos, who is also the Rhode Island representative of the New England Museum Association. "That's a very dangerous precedent."
It is a tough situation and the story of tight budgetary constraints on an historical society is familiar. In the particular case of the RIHS, the sources of their financial woes were summarized in the aforementioned Financial Options Task Force report
Briefly summarized, the RIHS was hurt through the 1990’s and early 00’s when growth in programs was not matched by commensurate growth in the financial underpinnings of the organization. Long the possessor of excellent collections and for many years the beneficiary of an admirable level of state funding, in the late 1980’s and early 1990’s the Society’s saw its reach begin to exceed its financial grasp. Programs grew, but revenues and endowment did not keep pace. Significant effort was devoted to the Heritage Harbor project, which did not
materialize. Development was under funded, and state aid ominously began a slow decline after 1997. The gap was filled by increasing the endowment draw. During the stock market boom of the late 1990’s this appeared to be sustainable, but with the end of the boom the increased draw coupled with declining asset values rapidly took their toll, and the endowment began to shrink at a precipitous rate. Between 1998 and 2004 the endowment fell from over $6,500,000 to $4,564,000, more than a 29 % reduction.

In 2002 the Board took several decisive actions by changing the Society’s executive director and authorizing him to begin reducing the operating expenses to match the decreasing revenue stream. Much work was done pursuant to this decision, and by 2003 the Society was operating in a much more balanced financial state. This year, 2004, the endowment draw is back down to approximately 5.3%. Ominously, however, the RIHS had to spend four months fighting a 50% reduction in its state funding, equivalent to approximately 15% of the operating budget. While restored at the end of the budget process, the proposed cut was a clear sign that the Society’s days relying on automatic state funding are decisively over. . .

The unfortunate side effect of all of these actions has been to substantially reduce the Society’s programs, collections support, and public presence. The proposed state budget cuts are evidence of this. The Society’s ability to invest in new programs to generate additional revenues has been severely crippled – neither the funding nor the staff is available any longer for these purposes. (Financial Options Task Force Report, p. 2)
Selling some of its holdings is one way the RIHS can maintain financial security. To coopt a marketing term, they also need to make their product more appealing to the public, which would also increase their revenues. After years of ad-hoc management, the RIHS has implemented a long term strategic plan (PDF) that lays out goals on a set timeline. It seems that the RIHS has righted its own sinking ship, though it is still bailing water. Unfortunately, to stay afloat, it needs to throw some of its collection overboard. The sooner they can stop the sinking, the better.

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