How and Why Does the City of Detroit Own DIA's Art Collection?
The DIA was incorporated in 1885 as a private, nonprofit corporation. Shortly thereafter, the City began appropriating money to support the museum. These appropriations raised concerns, a lawsuit was filed, and ultimately the Michigan Supreme Court decided in 1915 that the appropriations violated the state Constitution’s restrictions on a city’s lending of credit to an entity other than a public or municipal agency. After this, the museum began to struggle, and in response, the Michigan Legislature enacted a law (1919 PA 67) that allowed a corporation situated in a city empowered to maintain an art institute to convey its property to the city, so long as the property was used for the purposes for which the corporation was organized. Pursuant to this, the DIA transferred its collection to the City, while the nonprofit organization (today the Founders Society) continued to support the museum. This unique and problematic structure led the DIA to fluctuate in prosperity as Detroit experienced extreme financial fluxes and political problems over the last century.
In the wake of Governor Engel’s budget cuts to the DIA beginning in 1991, the Founders Society launched a fundraising campaign and raised over $25 million for the DIA, creating some space to formulate a long-term solution for the museum. In 1998, the City and the Founders Society reached an agreement under which the City retained legal title to the collection while the Founders Society had the exclusive right to acquire and dispose of the museum’s works of art.
Because of the convoluted nature of the structure, it’s been difficult to tell what rights the City has in potentially selling off any of the artwork to pay down some of Detroit’s debts. Earlier this summer, Michigan’s Attorney General, Bill Schuette, issued a 22-page nonbinding opinion that it would be illegal for the City to do so.