Survey of Arts Management

Course blog for American University PERF-570, Fall 2014

The Role of Corporations in the Grand Bargain of Detroit

As the City of Detroit faces bankruptcy, the Detroit Institute of Arts faces a huge threat of selling their collection to pay debts. In spite of this, DIA has motioned a plan to not only preserve their collection, but lift Detroit out of bankruptcy through the collective effort of private corporations, state government, and the community in what is called the Grand Bargain! DIA’s Board pledged to raise $100 million solely for the pension fund so the pension cut for retirees would be far less. This is a great case in how the different types of entities: for-profit, not-for-profit, and government agencies can act in cooperation for Civic issues. Through the innovation and skills of the Board, the potential outcomes are much greater than originally foreseen of losing the art collection and forcing a significant cut on retiree pensions. It is a notable story to follow and an accord has yet to be met.

 

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3 comments on “The Role of Corporations in the Grand Bargain of Detroit

  1. hshambroom
    September 10, 2014

    What a fascinating article and interesting response to Detroit’s financial crisis! I remember starting to follow this story when it was first proposed that the DIA sell the collection to satisfy the city’s debts and am relieved that this seems to have been avoided.

    As selling art to pay off debt is extremely frowned upon the museum world, I glanced over the DIA’s response to the initial proposal to sell the collection (http://www.artlawreport.com/files/2014/05/DIA-Response-to-Motion-re-collection.pdf). The DIA found several problems with the proposal. The museum and the city signed an operating agreement in 1997 that stated the museum’s collections policy, such that the art was held in trust and could only be used for art purposes. To sell the collection to satisfy the city’s debt would not be for “art purposes” and would therefore have violated that agreement. Furthermore, while the city might have paid off its debt by selling the collection, it would have lost an extremely valuable cultural asset, one that could have been used by the community. And finally, with the sale of artwork from the collection the museum likely would have lost accreditation along with any possible future contributions from donors – monetary or art pieces – who felt angry that their donations ultimately went toward debt payment rather than promoting the arts.

    So overall this seems like a much better plan.

  2. emkais
    September 11, 2014

    This is such a great example of a multistakeholder approach to overcoming seemingly insurmountable obstacles, and certainly says a lot about the local support for the cultural significance of the DIA. I think more of these types of creative approaches to problem solving, funding, and more need to be utilized by today’s art managers.

  3. awellfare89
    September 12, 2014

    I hate that art seems to be on the tip of everyone’s tongues when cuts must be make and am glad that the community has rallied around the DIA. Something that stuck out to me in the article was this quote: “Museums know a lot more about donors than cities do, and have relationships and dedicated board members who can make such an extraordinary campaign happen with astonishing speed.” In times of funding turmoil, I think that it is beneficial to think like a nonprofit. If they can’t think like one, go to one and pick their brains. I love the convergence of industries in this situation. Coming from a state job and witnessing the stereotypical attitude that comes with it, new ways of thinking can be hard to come by. Kudos, Detroit.

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