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Cleveland Kerfuffle

By Intellectual Property Law, Esq.

Lee Rosenbaum calls attention to The Cleveland Museum of Art's recent request for court permission to "use for a period years a portion of the income from two charitable trusts and two endowment funds to assist with the funding of the renovation and expansion of its facilities" (Complaint paragraph 2). Because the trusts at issue were established to fund the acquisition of art, Lee is outrageously outraged: it's "the most egregious disregard of donor intent by an art-displaying institution in recent memory." (In a follow-up BlogBack, Michael M. Thomas tells her "high horses are all very well, but sometimes can run pretty rank when one gets real.")

Steve Litt's Cleveland Plain Dealer article which broke the story mentions that "in 1955, ... the county probate court granted the museum permission to use income from art-purchase funds to build an expansion completed in 1958 (since demolished)." But it's worth noting that it wasn't just any "art-purchase funds" in that case; it was three of the four funds at issue in the current case. (The fourth didn't come into existence until after the 1955 decision.) In the earlier case, The Cleveland Museum of Art v. O'Neill (129 NE 2d 669), the court was "convinced that the settlors were persons of broad vision and that in any event they would want the Museum to prosper, to expand and to be able to carry on its work indefinitely. The Court has no hesitancy in saying that under existing circumstances they would willingly deviate from their expressed method of procedure and permit the income from the trusts to be used as prayed for in the petition."

In this case, the museum argues that the expansion project addresses the "need for additional space for the display, care, conservation and presentation of the Museum's collection," will "allow greater access to the Museum's collection, accomodate a broader range of educational activities, and provide improved amenities for the 500,000 plus visitors that come to the Museum every year." It will also "allow the Museum to display on a regular basis a far greater percentage of its outstanding collection," "replace outdated environmental and security control systems," and "allow for the continued expansion of its collection in the future."

(Lee's counterargument is that allowing this deviation "could make benefactors around the country doubt that museums can be trusted to honor their wishes" and "may well give rise to second thoughts by potential donors.")

Two other points worth emphasizing from Litt's article:

1. "The proposal wouldn't erode the value of the art purchase accounts because it would involve using only a portion of the investment income from funds -- not the principal"; and

2. The museum's request "is supported by Ohio Attorney General Richard Cordray, whose office supervises the two endowment funds and two charitable trusts involved, and by Key Bank, which manages the two trusts." Cordray is quoted as saying: "It doesn't do much good to buy art once you run out of space, because you're going to stick it in the basement."

Full post as published by The Art Law Blog on September 02, 2009 (boomark / email).