Art is For Everyone–Detroit Institute of Arts Q & A

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  1. 1.      Why does the DIA need a millage?

 

The Detroit Institute of Arts (DIA) had been supported by public funds from 1893 to the early 1990s. For nearly 100 years the City General Fund and private philanthropy provided sole support for the museum as it grew to be one of the world’s major art museums. An appropriately sized operating endowment—an important component of the business model for most large cultural organizations—was never established.

 

In the 1970s, the State of Michigan recognized the museum’s unique contribution to the entire state and incorporated financial support for the museum into the state budget. Beginning in the early 1990s state support for the museum was slowly but steadily reduced, a situation that was accelerated as a series of economic downturns hit the state. At the same time, the city’s ability to support the museum was sharply reduced until all city funding was eliminated.

 

Today the DIA does not receive any funds from the state, city or county. The elimination of all public funding for operations has required the museum to turn almost entirely to the private sector, an operating model that is not sustainable, particularly in the current economy.

 

The museum’s ultimate goal is to become financially self-sustaining. After considerable research and evaluation, a dedicated millage to temporarily restore public funding for the DIA, which would allow fundraising to focus on building an operating endowment, was identified as the most viable option to guarantee the DIA’s continuing viability and eventual non-reliance on public funding.

 

  1. 2.      How large of a millage will the DIA need, and for how long?

 

The DIA is asking for 0.2 mil for 10 years.

 

  1. When would the millage proposal appear on the ballot?

 

The proposal would appear in the August 2012 primary election.

 

  1. Why August instead of November?

 

The millage effort is patterned after the Detroit Zoo’s successful 2008 campaign, which was reviewed and approved by commissioners in Macomb, Oakland and Wayne counties.  With four potential elections – February, May, August and November – DIA volunteer consultants recommended following the Zoo effort with an August election. While there are fewer major candidates and issues on the August ballot, there is still sufficient voter interest and the smaller ballot allows issues-based campaigns the ability to fully make their case to voters. Less “noise” around the election allows the DIA to communicate more effectively and cost efficiently.

 

  1. 5.      What counties are included in the millage?

 

Wayne, Oakland and Macomb Counties.

 

  1. 6.      How much would 0.2 mil cost each homeowner?

 

It would cost approximately $15 per year for every $150,000 of a home’s fair market value.

 

  1. If a 0.2 mil levy is successful in all three counties, how much revenue would be generated by each county?

 

0.2 mil would raise approximately $23 million: $10 million in Oakland County, $8 million in Wayne County, and $5 million in Macomb County.

 

  1. Will these funds go into your endowment?

 

No. Public funds will only be used to cover operating expenses and will not be used to increase the museum’s endowment. The public funds will enable the DIA to devote its fund-raising activities in the private sector to build its endowment to achieve a long-term goal of no longer requiring public funds to sustain operations.

 

  1. 9.      If the millage is successful in all 3 counties, how will the tax revenue be used?

 

  • It will cover the shortfall that resulted from the loss of public funding from the State of Michigan and the City of Detroit.

 

  • It will provide funding for free general admission for residents of the counties that approve it, removing financial barriers to enjoying the museum.

 

  • It will allow an expansion of operating days and hours to better accommodate public and school groups.

 

  • It will fund education and public programs and provide support for exhibitions.

 

  1. Will there be oversight of how the tax money is spent? What is the mechanism? Will annual reporting be required?

 

Yes. The arts authorities in each county, whose members are appointed by the commissioners and county executives, will ensure DIA compliance and an annual audit will be required.

 

  1. Has the DIA been fiscally responsible?

 

Yes, the DIA has always been and continues to be fiscally responsible. In addition to balancing the budget every year, the museum’s financials are subjected to annual outside audits and consistently receive the highest rating

 

  1. 12.  What cost-cutting measures has the DIA taken to help trim the budget?

 

  • In 2009, the DIA reduced its workforce by nearly 20% (more than 60 full- and part-time positions), moved from a defined benefit plan to a defined contribution plan, and reduced operating expenses to bring its total operating budget from $34 million to $25.4 million.

 

  • Effective 1/1/2010, the DIA discontinued its retiree health-care plan, moving instead to stipend paid to retirees, who then purchase their own insurance. Employees hired after this date are not eligible for retiree health care benefits.

 

  1. Why not cut the budget further?

 

Because of the high fixed costs required to maintain the facility and protect the art collection, significant cuts beyond the 2009 reductions would severely impair the museum’s ability to operate.

 

  1. 14.  Does the DIA have an economic impact on the tri-county area?

 

Yes, in the following ways:

  • The DIA employees 282 people who pay taxes and support local businesses for work-related expenses.

 

  • In the 2011–12 fiscal year, the DIA spent the following on vendor goods and services: Wayne County, $4,394,873; Oakland County: $2,295,777; Macomb County: $415,555.

 

  • The DIA supports jobs through capital projects such as roof repairs, improvements to the building and other structural upkeep.

 

  • Many of our 400,000 annual visitors support local business by spending money on parking, local restaurants and shops. During special exhibitions, such as Rembrandt and the Face of Jesus, spending at local businesses increases dramatically.

 

  • As reported by Crain’s Detroit Business, ArtServe confirms that for every $1 invested in nonprofit arts and cultural groups in 2009, those organizations pumped $51 back into Michigan’s economy through spending on rent, programs, travel and salaries.

 

  1. 15.  What is the process for seeking a millage?

 

In December, 2010 the Michigan Senate and House approved legislation to provide for the establishment of art institute authorities that would allow voters in counties to decide whether to establish a new millage to support the DIA. Each county determines whether to put it on the ballot for the voters to decide.

 

  1. 16.  What will happen if the DIA is not successful in its millage campaign?

 

There would be a severe reduction of museum services and programs. Museum leadership has outlined different scenarios that include opening selected galleries only on weekends, elimination of school tours, public programs and community outreach. A DIA without millage support will not be the DIA we know today.

 

  1. What will happen if it is only partially successful – i.e., it does not pass in all three counties?

 

The DIA will have to evaluate that based on the amount of revenue available. The urgency of the situation requires success in all three counties for operational stability.

 

  1. Is it practical for the DIA to think of a public millage with Michigan in such a weak economic state?

 

While the DIA is very sensitive to Michigan’s economic difficulties, we also recognize our obligation to preserve and protect this very important institution for future generations. Public funding is the only available option that would not seriously jeopardize the museum’s ability to serve our community with continued quality.

 

  1. 19.  Will passage of the millage affect the governance of the museum?

 

No. The DIA is governed by its board of directors representing the tri-county area under an operating agreement with the City of Detroit by The Detroit Institute of Arts, Inc., a 501(c)3 not-for-profit organization. That will not change.

 

  1. 20.  What assurance do counties have that the millage money will be spent according to how the DIA says it will be spent?

 

The DIA will enter into a contractual agreement with the authorities established by each county. If the authorities determine that the DIA has breached the contract, the DIA would no longer receive funding.

 

  1. How many of the DIA visitors come from each of the three counties targeted for the millage?

 

Of the average annual attendance of 400,000 visitors, 32% come from Wayne County, 19% from Oakland County, and 10% from Macomb County.

 

  1. What benefits will the voters receive in return for their financial support for the museum?

 

Counties that approve the millage will receive free unlimited general admission for its residents.

 

  1. Why not just sell some art?

 

The DIA’s art collection is held in trust for the benefit of the public and works of art may not be sold except to purchase other art to be added to the DIA’s collection. Such a sale would violate the intentions of donors, donor confidence would be shaken – resulting in fewer gifts of art, and public outcry would be tremendous.

 

Selling art to fund operations would violate universally accepted museum practices and put us in violation of the DIA’s operating agreement with the City of Detroit, which specifies that the museum must be operated according to accepted practice.

 

Selling art also would isolate the DIA from the national and international museum community. Other institutions that have considered selling art have seen public demonstrations and a withdrawal of financial support. The DIA would not be able to organize exhibitions such as the recent, highly successful Rembrandt and the Face of Jesus and art loan requests would be refused, eliminating our ability to display exceptional art from renowned museums around the world to our visitors.

 

  1. Who owns the art?

 

Under the current operating agreement, the collection is owned by the City of Detroit.

 

  1. Can the city of Detroit sell the art?

 

Detroit Mayor Dave Bing has provided written assurance, acknowledging that any sale of art is expressly prohibited by the operating agreement between the city and the museum, and the city has no intention of selling art. Should that position ever change, the DIA has consulted legal counsel and would block any attempted sale through legal action.

 

  1. Why not just raise admission prices?

 

Admissions count for only 3% of the DIA’s revenue. To take in enough revenue from admissions to close the annual operating gap would make the cost to visit the museum prohibitive.

 

  1. Why not have just the people who use the museum pay for it? Why should I pay for something I don’t use?

 

The existence of the DIA benefits every resident in Michigan, especially school children in the tri-county area. A cultural resource like the DIA is one element among many necessary for a healthy, vibrant society and is crucial in attracting businesses to the tri-county area.

 

  1. What guarantee do we have that the City of Detroit will not access the funds raised by the county millages?

 

The Michigan statute that governs the millage expressly requires that all funds received be used solely to support the DIA. The Act creates multiple layers of protections to ensure adequate oversight, control and transparency in this regard.

 

  1. What is the maximum amount an individual can contribute to this millage campaign?

 

There is no limit on individual contributions to the millage campaign, and the money can only be used to support the campaign’s efforts.

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