Law & Ethics
Root of all Evil? The ethics of doing business with for-profit entities

By Elizabeth Merritt

This article was published in Museum News July/August 2006.

Q. My director wants us to accept a sponsorship from a local company for our upcoming exhibit. The exhibit is about certain kinds of diseases, and the company engages in research for pharmaceutical companies. They would like the opportunity to review the label texts, and they “request” that some of the images and quotes that appear in the exhibit brochure relate to their products. In addition, they prefer that their financial support of the exhibit be anonymous. Is this acceptable?

A. Museums have been heavily criticized over the past decade for doing business with individual collectors and for-profit entities. Controversies have notably centered on exhibits of material from private or corporate collections, often accompanied by support from the lenders and commissions on the sale of art on exhibit. Museums often enter into these arrangements in order to comply with expectations that they behave in an entrepreneurial manner and do a better job of supporting themselves independent of government funding. However, ethical firestorms arise when the public thinks the resulting arrangement compromises a museum’s integrity and independence of judgment or uses resources managed by the museum for the public good to enrich private, already wealthy entities. This is compounded if it looks as if the museum is trying to hide the details of such arrangements.

The good news is the public’s sensitivity to museum actions actually stems from the high regard it has for museums and the high standards to which it holds them. A 2001 AAM survey on public confidence in various sources of information showed that museums are the most trusted source of information, ahead of books and television news. People award this trust because they believe that museums base their exhibits on research and offer “independent and objective information.” In other words, they see us as having scholarly integrity and presenting a view of the world unbiased by other considerations, political or monetary.

Examples abound of people getting upset by museum actions that seem to violate this trust. Take, for example, the string of “brand name” exhibits in various New York museums in the 1990s showcasing high-end products such as Dior, Tiffany, Fabergé, motorcycles (sponsored by BMW) and Armani. Some leveled accusations that these exhibits were thinly veiled advertisements for company products, offered in return for corporate support. “Why bicker over artistic control,” culture writer Judith Shulevitz wrote on Slate.com, “when you can just cede the hall to a sponsor?”

People are equally touchy when they think that the resources a museum holds in trust for the public are being used for private good. Consider the controversy surrounding the Smithsonian Business Ventures deal with Showtime Networks restricting access by other filmmakers to Smithsonian staff, collections and archives. The Smithsonian has declined requests to make the full text of the agreement public but has said that any projects involving “more than incidental” use of Smithsonian assets would have to be offered to Showtime for right of first refusal. More than 200 filmmakers and historians petitioned Smithsonian Secretary Lawrence Small to undo this arrangement, arguing it would discourage independent filmmakers from doing projects for other media outlets, such as PBS.

“It is a fire sale of public history,” said Nina Gilden Savey, Emmy-winning documentarian and director of the Documentary Center at George Washington University, as quoted in the Washington Post. The Smithsonian attempts to justify its actions, saying it needs to behave entrepreneurially to bring in much-needed cash to repair aging buildings. The Business Ventures Office is not, technically speaking, subject to the Freedom of Information Act and therefore does not have to make the contract public. But it ends up looking as if the preeminent public museum (“the nation’s attic,” as it is called ad nauseam in the press) is using public resources to benefit a for-profit corporation and its stockholders.

Once started, these controversies often cascade into endless dissection of the motives of everyone involved. In the “Sensations” exhibit at the Brooklyn Museum of Art in 1999, did Charles Saatchi intend to use the exhibit to drive up the value of his collection and then “flip” it in the market? Did the prospect of profit affect the artistic judgment of staff at the Walker Museum of Art when they charged commissions on the sale of art loaned by galleries and private collectors? The salaries and bonuses offered to the staff of Smithsonian Business Ventures, in a notable departure from the usual practice at the Smithsonian or other museums, follow a private-sector pay scale with incentives for performance. Does this create a conflict of interest in which the prospect of private gain might compromise the responsibility to manage the collections in the public trust?

While these controversies often seem blindingly predictable in hindsight, clearly they are harder to spot than one might think, given the frequency with which museums are embroiled in them. One contributing factor is that museum staff often focus on what they believe to be true about a situation rather than on how it will appear to the public. And since people’s judgments regarding ethical behavior are often based on appearances, it honestly may not matter what the “facts” are. You may not be able to make people share your opinion on the appropriateness of an action, however well you communicate. They may disagree with your premises, reasoning or values, or the situation may simply be too complex to explain. The only way to assess whether actions may be ethically questionable is to look at them from the point of view of the people whose opinions matter to you, whose trust and support you need. Red flags include:

• Lack of transparency or openness. Failure or outright refusal to share pertinent information automatically makes people suspect the worst.
• Factors that seem to compromise the integrity of the museum—i.e., is there a motive to adapt what you say or do to the interests of the funders?
• The possibility that private individuals or companies may benefit financially from their arrangement with the museum. You get a pass on this one, though, if the individuals in question are not already wealthy. No one objected to “The Quilts of Gees Bend” being used to boost the income of the artists living in this remote and poverty-stricken community.)

The best defense against becoming embroiled in ethical controversy is to develop a thoughtful, comprehensive policy that addresses how the museum will make decisions about entering into certain types of relationships with private or for-profit lenders and what constraints will be put on those arrangements. This ensures that the museum will not make these decisions ad hoc, demonstrates to the public that decisions are based on a well-thought out, consistently applied set of rules and helps resist the pressure to be swayed by powerful individuals or the prospect of imminent profit. Although ethical guidelines of the field are general and cannot cover the endless permutations that arise in the course of operations, such guidelines do provide a framework for developing a museum-specific policy. This in turn shows that the museum is guided by accepted practice as codified by its peers, which makes the museum’s decisions more credible. Put this policy in writing, so it can be shared, preferably before controversy arises. When approaching a potentially volatile decision, have a communications plan in place from the very start. How will the museum seek outside input? Frame and communicate its decision? Answer potential objections? And most importantly, don’t change or circumvent the written policy once an offer is on the table. Nothing is more likely to make it appear that the museum has indeed been seduced into compromising its principles.

Elizabeth Merritt is director, Museum Advancement & Excellence, American Association of Museums, Washington, D.C.