To raise substantial amounts of income, you must sell good, and thereby potentially important, works of art. The smaller the amount raised by sales of works of art, the more this solution becomes stopgap. If a long-term solution is to be achieved, not only must substantial amounts be raised, but also the money must be put into an endowment with an annual spendable rate that preserves the principal.
The unintended consequences could well include a change in the board’s perception of its fiduciary responsibility to one more focused on asset management than philanthropy. Human nature has shown us that if there is an accepted alternative to giving one’s own money, many, if not all, will seize it. And potential and past donors of works of art will be uncertain as to the future use of their gifts.
While I agree with Wood, I'm not so sure that these valid considerations would not be within the mindset of deaccessioning arbitrators. Remember that Dobrzynski was keen in asking that the arbitrators have not only artistic and legal expertise, but nonprofit governance expertise as well. Surely in better economic times deaccessioning arbitrators would not allow, much less facilitate, the fire-sale of Warhols and Picassos simply because board members failed to "give or get."
Wood's full letter here.
Interesting thoughts nonetheless.
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