Friday, March 04, 2005

Rhode Island Historical Society: Selling A Desk II

As mentioned earlier, the Rhode Island Historical Society, cash-strapped from poor endowment management and bad decisions, has decided to auction off a rare desk, estimated to be worth $10-12 million. Now, members of the family who originally donated the desk are protesting the potential sale. From the Providence Journal story:
In a Feb. 16 letter to society president Roger Begin, members of the Brown and Goddard families say the sale would violate the "intent of the gift" that brought the desk to the Historical Society in 1944. Prior to 1944, the desk belonged to Brown & Ives, a Providence company that traces its roots to the days of the desk's original owner: 18th-century merchant Joseph Brown.

The letter, which was released to The Journal this week, also questions whether the society's financial problems are as acute as its officials maintain.

Last fall, an internal review found that the society's endowment had dropped by nearly 30 percent in six years, from $6.5 million in 1998 to $4.5 million in 2004. The review, which is posted on the society's Web site (, also found that future operating costs could result in deficits of up to $700,000 a year.

But Nicholas Brown, a former director of Baltimore's National Aquarium and one of the Brown family members to sign the letter, said the review exaggerated the extent of the society's financial crisis.

"If you look closely at the report, it's clear the deficit numbers don't reflect the society's current situation," Brown said. "What they've done is take a bunch of programs and other initiatives that they want to implement after they sell the desk and simply folded them into their financial projections for future years."

Brown said the society should explore other options -- including selling its longtime administrative headquarters, Aldrich House -- before selling the Joseph Brown desk. (In addition to Aldrich House, the Historical Society operates the John Brown House Museum and the RIHS Library in Providence, and the Museum of Work & Culture in Woonsocket.)

Rhode Island Historical Society / David Schultz

This mahogany desk and bookcase is expected to fetch up to $10 million in auction.

"The problem with selling the desk is that once you've sold it, it's gone," said Brown. "You can't get it back."

At the same time, Brown conceded that mounting a legal challenge to the sale would be difficult. He noted that the desk had been given to the Historical Society without specific directions for its future care or display.

"Basically, our position is that the sale violates the spirit and intent of the bequest," Brown said. "The question of whether there's a solid legal basis to challenge the sale is, at best, murky."

Contacted about the letter -- which was also signed by Angela Brown Fischer, William H.D. Goddard and Thomas P.I. Goddard -- the Historical Society yesterday released a statement saying that it is willing to discuss any "realistic ways to strengthen the society in ways that would make selling the Joseph Brown desk unnecessary."

However, the statement added that "no realistic alternative to selling the desk has yet appeared."

The statement also detailed steps the society has already taken to ease its financial problems, including eliminating one-fifth of its paid staff and reducing hours at its Hope Street library.

The statement concluded with a stark choice: "The sale of the desk will allow the society to properly care for its vast collections, which represent all Rhode Islanders, for generations to come. The alternative is a desk locked away in a closed and shuttered house, dark to the public and lost to the community."

Meanwhile, representatives of some of the state's leading arts and cultural organizations have signed their names to another letter condemning the Historical Society's actions.

The letter begins: "We are writing today to express our sorrow and indignation at the proposed sale of the Joseph Brown desk by the Rhode Island Historical Society."

Written by Pieter Roos, executive director of the Newport Restoration Foundation, the letter goes on to say: "This action by the Historical Society is nothing short of the sale of Rhode Island's birthright, and as both museum professionals and residents of this state, we are deeply angered by this major breach of ethics."

So far, the letter has attracted more than 25 signatures, including those of Trudy Coxe, executive director of the Preservation Society of Newport County; Christine Callahan, executive director of the Newport Art Museum; and Lora Urbanelli, interim director of the Rhode Island School of Design Museum.

"Basically, it's a way for those of us in the museum world to express our feelings about what the Historical Society is doing," said Roos, an expert in Colonial-era furniture. "In the museum field, you're supposed to take care of the objects that have been entrusted to you. You're not supposed to get rid of them, especially to cover expenses."

Other letter signers echoed Roos' remarks.

"I have the greatest respect for the Historical Society and its leadership," said Coxe. "But in this case, I think they need to consider the long-term impact of their decision. Who's going to donate the Joseph Brown desks of tomorrow if there's a chance they'll be sold?"

"I think it's a tough letter, but I think it sends an important message," said RISD's Urbanelli. "We all want to support the Historical Society, but we think there are better ways to deal with its financial problems than selling off what is, in effect, its greatest treasure."

. . . Protests have grown in recent weeks, as the society moves closer to selling the desk and other objects. The items' combined value is estimated at $12 million. The most likely scenario is a public sale organized by a major auction house such as Christie's or Sotheby's.

For the most part, Roos and other critics say they have no objection to selling pieces with little or no connection to Rhode Island. What they can't abide, they say, is the sale of the Joseph Brown desk, a "nine-shell" mahogany desk and bookcase long attributed to Newport's famed Townsend-Goddard workshop, but now thought to be the work of Providence cabinetmaker John Carlile Jr.

In the eyes of Roos and other experts, the desk's Providence pedigree makes it even more valuable, since few examples of high-style Colonial furniture were produced in the city.

"Regardless of whatever monetary value you assign to it, its historical value is really incalculable," said Roos. "Its beauty, its rarity, its craftsmanship -- along with its intimate connection to Rhode Island and to Providence -- really make it one of a kind."
Many of the critics fault the RIHS for wanting more money than it really needs.
Four years ago, the society was operating with a $700,000 deficit. In the past few years, the organization cut $500,000 from its budget, but stills runs a $250,000 deficit. Its annual budget is now $1.7 million.

How did the society get here?

Many factors led to the group's financial situation, but the society's leaders say that the crisis centers around the endowment fund, which is the financial backbone of many nonprofit organizations. The society's endowment fell from $6.5 million to $4.6 million between 1998 and 2004 because of fluctuations in the stock market and heavy withdrawals in previous years.

Investment income from the endowment is used to support an institution, but the principal money and remaining interest income are supposed to be untouched.

A safe draw on an endowment fund is about 5 percent, said Bernard P. Fishman, who was hired in 2002 as executive director of the Historical Society. But from 1995 to 2002, the society drew 6.5 percent to 12.3 percent from the fund each year.

"It's contrary to sound practice," Fishman said.

The withdrawals infused the society's budget with between $320,000 and $804,000 annually, but eroded the endowment and masked the deficits that the society was running, society leaders said.

During that period, the society expanded programs and plunged into efforts to create the Heritage Harbor Museum -- a project that failed.

A former director of the Historical Society said the Heritage project distracted and drained the society.

"Rhode Island Historical Society didn't pay enough attention to its own fundraising needs," said Sanderson, who recently resigned from the board because of the proposed sale of the mahogany desk and bookcase.

The society's leadership believes the sale of the desk and other objects could fetch $12 million at auction. The money would be pumped into the endowment fund, and in turn, help pay for cataloging and preserving the society's massive collection.

But Sanderson believes that the society should raise the money through donations, not the sale of the desk.

"I think the society needs to make its case to the community for increased support," he said.

Fishman said there is no way they can raise $12 million from the community. The most the society has ever raised in a fundraising campaign is $1 million, he said.

Fishman said it is difficult for a financially unsound organization to raise money, and contributors are reluctant to donate to an endowment; they prefer giving to "bricks and mortar" projects where they can see the results.

Critics question whether the society really needs $12 million.

Sanderson, the Brown family, and Harrison Wright, another board member who quit over the sale of the desk, believe the society could survive with less.

The society predicts it will have deficits of $700,000 in upcoming years. But Wright said that scenario is based on a "strategic plan" that involves creating exhibition space for the society's collection. Wright and Sanderson said the proposed plans are good for the society, but not at the expense of the desk.

The society could survive with an additional $3.5 million, which would cover the $250,000 deficit, Wright said.

That is just treading water, said Donald Carleton, acting director of development at the society. "Treading water means no attention to collections care," he said. "It means only keeping the lights on."
The question is: is it worth selling a unique piece with intrinsic historical linkages to Rhode Island for the sake of preserving and expanding the mission of the Rhode Island Historical Society? How much more Rhode Island History can be preserved and shown if this one piece is "sacrificed"? There is no easy answer, but it would seem that losing one, extremely valuable piece to save many more is worth it. The hard part is being confident that the RIHS will spend the money wisely. They haven't shown such ability in the past. Nonetheless, the point is not to tread water, it is to extend and expand the reach of the RIHS. In the course of saving a vast quantity of Rhode Island's history, it would seem that one item is a small price to pay.


Anonymous said...

They also have to weigh the potential alienation of future donors. The living members of the Brown family will probably never give them anything else - and the story will live on. Deaccessioning often produces really bad feelings among the very people you're trying to suck up to for more major donations.

Marc said...

That's a good point. However, it sounds as if the RIHS has more than it could handle now anyway. Nonetheless, your point is well taken.