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Art market inflation makes gift-giving essential to survival of museums

Megan Holmes

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St. Petersburg has been working its way onto the map as an international art destination for decades. The Museum of Fine Arts St. Petersburg opened as the first museum in St. Pete, anchoring its waterfront in 1965 with an impressive permanent collection that today includes masterpieces from Monet and O’Keefe, to name a few. But it was not until the Dali Museum’s entrance in 1982 that St. Petersburg’s stature began to grow on the national and international stage.

Both fine art and public contemporary art has been booming ever since. The Chihuly Collection, which began in the Museum of Fine Arts, split off on its own in 2012, and in 2017, the James Museum of Western and Wildlife Art, as well as the Imagine Museum, opened to the public.

The wide array of art displayed in St. Petersburg – from ancient Antioch to contemporary Western, to singular artist collections, is a microcosm of the major trends playing out throughout the art world.

Private museums like the Dali Museum, the James Museum, and the Imagine Museum are on the rise world-wide as a means to store private collectors’ amassed collections and share them with the world. This major shift sees non-profit public institutions like the Museum of Fine Arts struggle with dwindling philanthropic contributions and severe cuts in governmental support.

According to the American Alliance of Museums, museum attendance is estimated to be greater than that of major league sporting and theme parks combined, with a whopping 850 million annual visits nationwide. In St. Petersburg, the Museum of Fine Arts saw nearly 125,000 visitors last year, while the Dali brings in over 400,000 visitors annually.

Revenue from ticket sales cannot keep up with the rising costs of art acquisition, which increases dramatically each year, posing major challenges to the vitality of comprehensive public art institutions like the Museum of Fine Arts St. Petersburg.

“Art has become and has been for millennia such a commodity and the inflation, particularly in the contemporary art market, is so extreme,” said Kristen Shepherd, Executive Director of the MFA.

“It means that public collections like the Museum of Fine Arts are simply priced out of being able to acquire major, major works of art.”

According to Robert Ecklund, Eminent Scholar and Professor of Economics Emeritus, Auburn University, it only takes a few uber-wealthy collectors to drive up market prices. And, unlike other markets, the art market is surprisingly resilient, despite the enigmatic nature of investment criteria.

“Recessions, stock market declines and turmoil in international affairs rarely subdue the fight among these collectors for the best of the best,” explains Ecklund, “especially in contemporary art.

“These soaring prices mean museums simply can’t keep up,” he adds, “and must usually depend on donations to assemble portfolios of the best work, or they’re priced out.

“And billionaires themselves are increasingly setting up their own private museums, further distancing the ability of public museums to get the good stuff.”

Everyday acts of philanthropy like memberships and ticket sales, as well as regular giving to the museum’s Collector’s Circle, are often not enough. With such a hostile and competitive environment for art acquisition, not-for-profit public museums are forced to change their means of acquisition – toward an economy of relationships.

“It really shifts some of the culture of philanthropy for us,” Shepherd explained. “It shifts museum fundraising to be not just about financial fundraising which is absolutely essential to our sustainability, but also gifts of works of art.

“A big part of my job is making sure I understand what collections are happening in my area and even outside of town with the connections that I have.

“Who are the collectors who are interested in amplifying the collection that we have? Strengthening our collection, filling gaps in our collection, understanding the impact they make when they make a gift of a work of art.”

This understanding is integral to the success of the museum’s continued acquisitions. “There are some wonderful collectors in St. Petersburg who are so knowledgeable and so passionate about their collections they want to share them,” said Shepherd.

“And it becomes a conversation about what’s the best way to share it? Is this something you’d be willing to loan to us for a while, is this something as a legacy gift you might consider?

“What we try to do is serve our community in such a broad way. And honestly, the more philanthropic support we get, the more we are able to do, the more we are able to give back to our community.”

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