PITTSFIELD — The Massachusetts Cultural Council is urging leaders of the Berkshire Museum to halt a planned sale of artworks, calling the move improper and unnecessary.
An independent analysis by the state agency concludes that the Pittsfield museum is not in dire financial straits, despite claims from its leaders that it risks closing within eight years unless it sells 40 works from its collection, a move that's sparked controversy, drawn national attention and remains under review by the state attorney general's office.
In a statement Wednesday, the council notes its longtime support for the Berkshire Museum, worth $1.2 million over the last decade, but implores the institution "to reverse its decision to sell these artworks and explore alternatives to stabilize its finances and generate community support for its new vision."
The museum should, it said, "take all necessary measures to curtail the sale of its artwork."
Pending the outcome of the review by the attorney general's office, the council will withhold fiscal year 2018 funding to the Berkshire Museum, it said. Past funding has included support for operations as well as a $670,000 grant in fiscal year 2007 for the Feigenbaum Hall of Innovation and for heating and air conditioning improvements.
A spokesman for the attorney general's office said its review is ongoing.
Anita Walker, the council's executive director, called the course the museum is pursuing a "violation" of the public trust that nonprofits must respect as part and parcel of their special status.
"We believe that public trust is the foundation of the institution of the nonprofit cultural organization," Walker said in an interview with The Eagle. "Once that starts to erode, then I think our institutions are eroded."
Walker was scheduled to present her findings to staff at the attorney general's office Thursday.
With the sale of artworks from its collection, the museum would violate a nonprofit's central compact with its community, she said. "What is it that's being undermined?" Walker asked. "Trust. Once that starts to deteriorate, how do you get that back?"
Further, Walker said she believes the museum and its board failed to properly gauge future costs to build and maintain their "New Vision" proposal for future programming and exhibits, shaped over two years with help from paid and community advisers.
She and the council also fault the museum for breaking ranks with other cultural institutions on deaccession practices.
"Museum collections should never be treated as disposable financial assets," the council said in its statement.
"For better or worse, this case could be a bellwether, a precedent-setter," said Greg Liakos, the council's communications director.
The council praises work by museum trustees to confront a real issue with its financing, but urges them to find another way — and the council pledges to work with the institution's leaders to put it on "solid financial footing."
"We believe there are other solutions to stabilize the organization and bring it into the black, short of a $40 million deaccession," Walker said.
She acknowledged she doesn't know the terms of the museum's contract with Sotheby's auction house. Agreements normally impose heavy withdrawal fees on the owners of artworks who seek to back out of planned auctions.
In a statement Wednesday, the board of the museum expressed dismay that the council issued its critique ahead of a scheduled meeting next month, when the museum planned to provide more information on its financial condition.
"The Massachusetts Cultural Council's decision to not support the Museum ... is deeply disappointing," the board said, "and betrays its stated objective of helping organizations grow and change."
The board said the museum had hoped the council would provide more specific guidance to the institution.
"We share a similar mission with the MCC to inspire and educate citizens of the Commonwealth, yet the MCC has not put forth a concrete or viable alternative, making the MCC's position even more untenable," the board's statement said.
"The Berkshire Museum is facing the greatest financial challenge in its 114-year history, and the Museum's New Vision, which was carefully developed and refined over a rigorous two-year process, will ensure that our cherished institution will be able to enrich our community for at least another century."
The statement said the museum plans to move ahead with its planned art sale and "New Vision."
Walker and members of her staff met with museum officials Aug. 30 in Pittsfield, a session joined by Mayor Linda Tyer, state Sen. Adam Hinds, D-Pittsfield, and state Rep. Tricia Farley-Bouvier, D-Pittsfield.
The council used its database to examine the financial health of the museum. It also consulted with Stephen C. Sheppard, a Williams College economist who runs the Center for Creative Community Development and did his own analysis of the museum's financial health.
The council helps fund the work of 400 nonprofits in Massachusetts.
"I can't imagine anything we could be doing that's more important right now," Walker said of the time spent studying the Berkshire Museum situation.
The outside reviews were consistent, Walker said, including Sheppard's finding that the museum can stabilize its finances with a much smaller growth its endowment than the increase envisioned through the sale of artworks.
The sales are scheduled to begin in November at Sotheby's in New York City and run into 2018.
Walker said her team determined that the museum could be placed on a solid footing by increasing its endowment, now worth $8.6 million, by $5 million to $10 million. Sheppard's analysis said it could make do with an endowment valued at $11 million to $12 million.
The museum's planned art sale is designed to boost the endowment to roughly $48.6 million.
While the council's review identified financial stresses the museum faces, Walker said her team concluded that those pressures did not present a threat to the museum's ability to exist.
"We could clearly see that there was a structural deficit, but it did not appear to be existential," she said. "They were clearly fragile, like many, many, many of our cultural organizations."
On this point, the statement says: "The Museum has run annual operating deficits for a decade, an unhealthy and unsustainable practice. Yet two independent analyses, along with our own review of the Museum's audited financial statements, show clearly that the Museum could put itself in a healthy operating position without deaccessioning art."
Walker said she was surprised, during her Aug. 30 meeting, to find that museum did not appear to have answers to questions she asked about plans for the "New Vision."
She said she asked how much the museum expected to spend on building improvements and, later, on running that space. She said officials at the meeting were unable to provide dollar figures.
"Those are the first questions we would ask anyone coming to the state for capital support," Walker said.
She praised one aspect of the museum's accounting, its move to acknowledge a depreciation of its assets. She said that is a responsible step to take in accounting, but noted that it does not put immediate financial pressure on an institution.
"It's not real money in that you don't have to spend it that year," she said.
The council's financial analysis faulted the museum's move to emphasize use of endowment income over grassroots fundraising.
"Philosophically, we think it's important that we have a strong and viable contributed income stream," she said, referring to donations received.
Otherwise, nonprofits like the museum risk losing their fundraising muscles, she said.
The museum has said the flight of some large businesses from the Berkshires has made it harder to garner support. While she acknowledged that to be true, Walker said nonprofits across the state have regrouped and now routinely look for primary backing from individuals.
She said that helps cultural institutions serve their communities even better, by enlisting members and regular patrons as stakeholders.
Walker said that the decision to sell works from the museum's collection undermines its needed connection with the community.
"Museums are reliant on the confidence of generous collectors to even have a collection," she said. "That was a grave concern to us."
At the same time, she said, the move to "monetize" the collection in a way that reduces its value and access to its surrounding community is a misstep.
While the museum discussed its "New Vision" plan with residents in the past two years, it did not disclose to participants that the shift would be financed through the sale of art.
"They never had a chance to have a conversation about how that will be resourced," Walker said of the museum's shift in direction, "or what the trade-offs will be."
Walker said she was told by Van Shields, the museum's executive director, that the sale would include two paintings by Norman Rockwell.
"That could no doubt cause some reaction," she said she told Shields.
He replied that he had his bases covered, according to Walker.
Nonprofits, Walker said, are relieved of the obligation to pay taxes in exchange for serving in the public interest.
"When you agree to receive public support ... you have now entered into a bargain with the public, and the public has a stake," she said.
That relationship is based on relieving an organization of its obligation to pay taxes in exchange for serving in the public interest.
Because they operate in one of the initial colonies, museums and collections in Massachusetts hold a rich history of the nation's birth, from correspondence of early presidents to the lantern Paul Revere held on his ride, Walker notes.
"How absolutely critical it is that we take seriously our stewardship of this irreplaceable legacy," she said. "Yes, the museum is in a difficult position. But we believe the art collection is a strategic asset for them."
Reach staff writer Larry Parnass at 413-496-6214 or @larryparnass.