Numerous protests, panel discussions and op-eds in recent years have revolved around the question of whether or not museums should accept funding from toxic sources. But what about the way museums are using the money they already have: are they using it to create positive change in the world — or are they contributing to their problems?
That’s the question asked by Upstart Co-Lab, a New York-based non-profit dedicated to promoting impact investing within the creative industries. Last month, the organization released a report on the topicfor which 61 independent museums in the United States with endowments totaling $10 billion were surveyed.
“It’s fascinating to me that people have protested tainted donations but failed to see where the real money is that is already under the control of museums through their foundations,” Laura Callanan, a founding partner of Upstart Co-Lab, said Artnet News.
“It’s headline-grabbing to stick your hand on a painting,” Callanan continued, referring to recent demonstrations by environmental activists in Europe. “But the real opportunity for the art world to address climate change or any other issue is to change the investment policies of museum foundations.”
Due to their intended use, museum foundations are considered static goods: a large pot of money that gathers dust in a vault. In reality, institutions grow their foundations by investing them.
The problem, according to Callanan, is that most museums invest in public stocks and index funds, placing these institutions in proximity – if not directly connected – to companies that deal in fossil fuels, tobacco, guns and private prisons.
“If you don’t bother to think about who is investing your money, it’s likely going to be a lot of white people,” Callanan said. “And if you’re not thinking about what actual funds and companies you’re investing in, chances are you’re invested in things that don’t really align with your institutional commitment to sustainability or diversity, equity and inclusion.”
Among museums surveyed for Upstart’s report, only 31 percent currently have impact investing strategies, while just 35 percent have women or BIPOC fund managers overseeing their foundations. According to the study, both figures are well behind those of similarly large universities and foundations.
Fortunately, progress may not be far off, Callanan said. Her organization’s report suggests a number of small steps institutions can take toward more effective investing, including recruiting new board members with expertise in the area and identifying different strategies with investment firms.
“Every major financial company on the planet is offering these opportunities to their customers now,” Callanan noted. “If selling it to Black Rock’s clients is good enough for Larry Fink, you should think that MoMA should also consider how this could be part of their own investment strategy for their foundation.”
When asked about trendsetters in this field, the Upstart partner referred to the Walters Art Museum in Baltimore. Over the past five years, the medium-sized museum has hired various fund managers; brought new socially responsible investment strategies to its portfolio; and invested in funds that support Baltimore-based businesses, effectively supporting jobs in his hometown.
This is a blueprint for other museums to look to, Callanan said. “They assumed to identify values [Diversity, Equity, and Inclusion] to think about what kind of companies they are actually investing their money in to become an anchor in the city of Baltimore.”
Other institutions highlighted in the Upstart report include the Brooklyn Museum in New York, the Toledo Museum of Art in Ohio, the Crocker Art Museum in California and the National Gallery of Art in Washington, DC
“Museums will help chart a path to a more equitable future, not only through the artists they showcase and the audiences they appeal to, but also through what they invest in and who they hire to back those investments manage,” said Darren Walker, president of the Ford Foundation, in a statement included in the Upstart report. (Callanan also identified the Ford Foundation as a leader in institutional impact investing.)
“It’s possible to make investments count for both the mission and the bottom line.”
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