“We hired an architect, but after the building was built, we met with so many experts and consultants that finally we used our own experience constructing the museum,” Mr. Halim, 74, said. “We manage apartment buildings and have 5,000 units under our management. We believe if you can manage our business, you can do anything.”
That kind of confidence motivates many contemporary collectors to preserve and promote their holdings in ways that wealthy businesspeople a generation ago did not.
Private museums “aren’t new, but they’ve grown significantly in terms of the numbers in the last 10 years or so,” said Mac MacLellan, president of the central region at Northern Trust Wealth Management. “The interest in creating a private museum has increased as interest in art overall has increased. It runs from the very small to the very large. It’s not as narrow a topic as you might think.”
First things first: Let’s look at the tax break that people get when creating museums and filling them with their collections. To earn a charitable deduction for donating a collection to a museum one has created, a founder must show that it is a true public institution.
“A tax-exempt private museum has a duty to provide a benefit to the public,” Mr. MacLellan said. “You don’t just slap your name on it and open a museum and keep it for yourself. You need to provide some educational programming and access. You’re under extreme scrutiny by the I.R.S. and the public.”
He said the tax break was often offset by the costs associated with building and maintaining a museum.
Mark Walhimer, a consultant on museum planning who also helps accredit institutions for the American Alliance of Museums, said entrepreneurs who had created their own fortunes sometimes had trouble making the mental leap involved in giving their collections to the public.
“It’s the community’s collection,” he said. “That’s tough for some founders. ‘What do you mean it’s no longer mine? It’s the public’s?’ You can put your name on the museum. You can get credit for it. But it belongs to the public.”
A museum, of course, requires a building. That building helps define the museum’s personality, but it also has continuing costs.
“A collector may say, ‘I want this material to be seen in perpetuity,’ but they don’t realize that the type of expenses that are involved are significantly more than where they’re holding the works now,” said Gail Lord, a founder of Lord Cultural Resources, a cultural planning firm.
“There are occupancy costs, which include heating, lighting, cooling and security, and insurance is a very significant cost,” said Ms. Lord, who is also the firm’s president. “‘Open to the public’ means there has to be a staff of some type who is going to be opening the doors and charging or not charging admission. You also need someone to provide information to fulfill the educational requirement.”
Credit Michael F. McElroy for The New York Times
After Fred Bidwell sold his advertising firm to WPP in 2010, he began to think seriously about opening a contemporary art museum for the collection that he and his wife, Laura, had amassed. As a result, the Bidwells bought a 1920s power plant on Cleveland’s West Side, renovating and expanding the property to create Transformer Station.
Mr. Bidwell, 65, said the initial cost in 2013 was $2.5 million to $3 million — not including what the couple paid for the artwork — and that annual expenses were about $250,000. He said he knew that running the building and managing the museum and its exhibitions would be challenging, so he struck a deal with the Cleveland Museum of Art, where he is a trustee. The Bidwells makes their exhibition space available to the museum for half of the year.
“We were a little naïve about how much work this would be,” Mr. Bidwell said. “When we lend our galleries to the Cleveland Museum of Art, we challenge them to do exhibitions that are more daring than they normally would.”
Some experts said that acquiring and maintaining a building, however costly, was the easy part. Engaging effectively with the public, on the other hand, can be challenging.
“I’ve dealt with many museums that have failed or are failing,” Mr. Walhimer said. “Most of it happens when there isn’t community buy-in. It makes it difficult to fund-raise, to attract members, to promote exhibits.”
Another consideration is what becomes of a museum after its founder dies.
Mr. Bidwell said that in the case of Transformer Station, the building and the art would go to the Cleveland Museum of Art after 15 years.
“In 10 years or so, we can walk away and relax a little bit, and it will go on as a lasting institution,” he said. “We did this because we’re activist collectors and we like to work with artists, but we’re not immortal.”
Mr. Halim is taking a different approach. He believes that his three children and their spouses will remain involved the museum he has established. And he is trying to ensure that they will have the means to do so.
He would not say how much he had spent on the building or provide a value for his collection, but he said he had given thought a lot about how the museum might sustain itself.
“We don’t believe the museum is going to be self-supporting selling $17 tickets,” he said. “We built a banquet hall for weddings, parties and business events to subsidize it. We hope the museum will break even.”
Some advisers said that most would-be museum founders might be better off considering the difficulty of supporting something so personal for a long time.
There are 35,000 museums in the United States, and not all of them have lines around the block and enviable endowments. Many struggle to stay open and fulfill their missions.
Others struggle with succession planning, just as family businesses do. John Lizzadro, 76, has been involved with the Lizzadro Museum of Lapidary Art since his father started it in 1962. The collection of cut and polished stones, which is in a park in Elmhurst, Ill., still attracts schoolchildren and those with a scholarly interest in such stones.
Although the museum has a board of trustees, Mr. Lizzadro said he worried about his grandchildren’s generation getting involved.
“Finding someone in the family who is really interested in what we’ve been doing for 55 years — that’s a problem,” he said. “If there was no family involvement in it, I’m not sure what would happen.”
One possibility he has considered involves the foundation that controls the museum selling the collection and using the proceeds to finance other charitable endeavors. That might seem like a practical solution, but Mr. Walhimer, the consultant, said that selling a museum collection to finance other initiatives — or even to pay the operating costs of the museum itself — would violate the code of ethics that museums agree to in order to remain accredited.
“The future is worrisome to me,” Mr. Lizzadro said. “I’ve been watching this thing too long. I don’t want it to fall apart.”
Source: New York Times