The Orlando Museum of Art recently received a generous $1.8 million bequest from the estate of Margaret Young, an artist herself who grew up taking art classes there. But while the clouds appeared to finally be clearing for the museum, which has seen better days since its 2022 fake Basquiat controversy, its decision to seek court modification of the restrictions on Young’s bequest has renewed public scrutiny.
In 2022, the museum became part of an FBI raid after its collection of 25 rare Basquiat works turned out to be fake. The beleaguered institution has been in financial straits ever since, being forced to unexpectedly spend a chunk of its budget on legal fees and rehabilitating its image. The New York Times reports a projected deficit of nearly $1 million in the museum’s $4 million budget by the end of June 2024.
Strings Attached
While the windfall comes at a good time for the museum, the bequest has some strings attached regarding how the money can be used. The trust left for Young’s daughter, who died last fall, stipulates that the trust’s remaining assets were to pass to the museum’s “Permanent Collection Fund and used to add to their permanent collection.”
In a petition filed with the Orange County Circuit Court, however, the museum claims that it can’t use the bequest to acquire new artwork because it doesn’t have a “permanent collection fund,” thus rendering Young’s intended purpose impossible to achieve. Instead, the museum is asking to use the money to maintain its existing collection, “including ‘curatorial staff, vault maintenance/repair, security devoted to the permanent collection, etc.’”
Donor Intent
While, under Florida statute, there are instances in which modification of restrictions relating to the “management, investment, or purpose” of a gift are permitted, the burden is on the charitable organization to prove that “the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund.”
Though the museum maintains that its petition isn’t an attempt to circumvent Young’s donative intent and use the bequest to “address its financial shortfall,” the move has raised some eyebrows among the museum’s other donors, including members of the Friends of American Art, who donate money to buy art for the museum’s permanent collection. The group has publicly raised concerns about how their money will be spent. Critics are also crying foul at the museum’s argument that it doesn’t have a “permanent collection fund,” as it appears to have a fund for acquiring art for its permanent collection, just not by that exact name.
According to The New York Times, Ginnette Childs, a lawyer representing the museum, said that creating a new “permanent collection” account for Young’s bequest would be redundant given the existing one for the Friends of American Art group and that legal expenses to do so would be “significantly more than modifying the restriction.”
Is the museum being dishonest about its plans for the bequest? Modifying restricted gifts is sometimes a much-needed avenue; for example, when so much time has elapsed since the gift was made that its purpose has become impractical or impossible to achieve. “There are also cases where a court has ruled that financial distress is sufficient cause to alter the terms of a restricted gift, and that’s certainly preferable to selling off part of the current collection to pay the bills,” said Joanne Florino, the Adam Meyerson Distinguished Fellow in Philanthropic Excellence at Philanthropy Roundtable in Washington, D.C. “But if the argument of the Orlando Museum rests on semantics alone (is there a “permanent collection fund” by another name?) – or even on the argument that it will require too much time and money to establish one – then I imagine the court will ask many hard questions before agreeing to the request,” Florino explained.
The Optics
How likely is the court to override the donor’s intent? “The Florida Attorney General’s reported support for the museum’s application probably puts points on the board in the museum’s favor from an optics perspective. But the court will still have to grapple with the fact that the donor expressed a fairly specific donative purpose – funding art acquisitions,” opined Amelia Brankov, found of Brankov PLLC. “And while the museum is stating that the funds would go toward supporting its existing collection, money is fungible, and those funds that would have been necessary to support the collection would then be freed up to pay for other expenses,” she added.
Not respecting a donor’s intent isn’t just a bad look for the museum; it can also deter future donors from giving gifts to the organization. Per The New York Times, one unhappy potential donor is Margaret Young’s surviving daughter, Dee Miller, 77, who also has a trust set up by her mother that would, at her death, donate the remainder of its assets to the museum for its “Permanent Collection Fund.” Miller believes the museum should fulfill her mom’s wishes and use the money for its intended purpose.
