Donor Intent Watch: A Dispute at the Berkshire Museum Offers Lessons on Donor Intent

Earlier this year, following the passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent controversies around the country to better inform those who care about this important topic. We continue to await updates on lawsuits involving Middlebury College and the former Hastings College of the Law, and will continue to inform readers about those topics.   

Most cases discussed this year have involved gifts to colleges and universities, and that will likely continue. Art and natural history collections have also experienced such disputes, however, as indicated by our coverage of the Barnes Foundation. This month, our focus is entirely on the museum world as we discuss a landmark case and the complications that can ensue regarding donations to museums and donor intent.  

We encourage donors to contact us with any questions they have about our featured items and consult additional resources on donor intent at the Roundtable’s Donor Intent Hub. We also welcome any news about donor intent that we may have missed.   

The Controversy Over Raising Funds by Selling Art at the Berkshire Museum 

As we noted in August, the controversy at the Brauer Museum of Art at Valparaiso University revolved around the university president’s decision to sell three notable pieces of art to raise funds for expanded on-campus student housing. The courts eventually dismissed the lawsuit brought by his opponents because they lacked legal standing. There was no decision on whether the institution’s financial need was sufficient to justify the sale.  

A 2017 case in Massachusetts, however, was ultimately resolved – at least legally – on the basis of financial need. The Berkshire Museum, a relatively small facility in the western part of the state, faced continued annual financial losses and its trustees had been considering how best to resolve its critical budget crisis since 2015.  

In 2017, they agreed to deaccession and sell 40 works of art at auction, not only to address the museum’s immediate need, but also to raise $60 million for a long-term sustainability plan to recreate the museum to showcase science and history along with art. Among the art works to be auctioned were two Norman Rockwell paintings that had been donated by the artist himself, an Alexander Calder sculpture and a painting by the Hudson River School’s Frederic Church.  

Two lawsuits were filed in response, one by the three sons of Norman Rockwell who argued the museum trustees were violating their father’s donor intent. All the sons were beneficiaries of the Rockwell estate, and one was the estate’s executor. Another plaintiff in that suit was Tom Patti, an artist and owner of a company contracted by the Berkshire Museum to install two glass works. He sought to prevent the modification or revocation of his contract in the museum’s proposed plans.  

The last group of plaintiffs in the Rockwell lawsuit were members of the museum, several of whom had also made donations beyond their membership dues. They claimed the decision to sell works of art constituted a breach of contract between the museum’s trustees and its members. A second lawsuit was filed by a group of plaintiffs who were residents of Berkshire County, some of them also museum members. 

Museum professionals also objected to the proposed sale. In July 2017, the American Alliance of Museums and the Association of Art Museum Directors issued a joint statement noting the two organizations were “deeply opposed to the Berkshire Museum’s plans to sell works from its collection to provide funds for its endowment, to make capital investments and to pay for daily operations. One of the most fundamental and long-standing principles of the museum field is that a collection is held in the public trust and must not be treated as a disposable financial asset.” 

From the beginning of the dispute there were questions about the legal standing of the plaintiffs to seek injunctive relief from the courts to block the sale of the paintings. On October 30, 2017, the attorney general of Massachusetts at the time and now governor of the state, Maura Healey – who had been named a defendant in the Rockwell suit – joined that lawsuit and “filed an emergency motion to ‘convert from defendant to plaintiff if plaintiffs lack standing’ and, if so, to seek a preliminary injunction on behalf of the Commonwealth.” This motion was granted. 

The decision of the Superior Court of Massachusetts was issued on November 7, 2017. Associate Justice John A. Agostini dismissed all the non-governmental plaintiffs in the Rockwell lawsuit and all the plaintiffs in the second lawsuit for lack of standing and denied the attorney general’s motion for a preliminary injunction. The text of the decision is enlightening in understanding the various factors when a museum’s collection management policies are in play.  

Regarding art deaccessions, for example, the court noted, “If it is used to pay for a greater work of art or to change a collection’s focus, deaccession is generally tolerated. However, if it is used for operations or capital expenses, it is discouraged, if not condemned.” Agostini added, however, “there are numerous examples of museums deaccessioning artwork for operating or capital costs,” and “the courts have played a very limited role and there is scant legal authority, statutory or case law, when a conflict of this nature arises.”  

Instead, the court’s primary concerns were whether the plaintiffs had standing and whether the requirements for a preliminary injunction had been satisfied. The Rockwell sons, Agostini ruled, had no standing to enforce their father’s contracts; only his estate or trust had that option. Patti lacked standing because his suggested injuries were “too speculative.” And the rights claimed by museum members or donors or residents of Berkshire County were simply insufficient for legal standing. 

Regarding the attorney general – who clearly did have standing to request an injunction – Agostino raised many questions. Noting that her office had been “fully engaged in this controversy” for at least four months, no steps had been taken to intervene or even question the upcoming auction until the last minute. Even then, the office stated merely that it had unspecified “concerns,” and needed more time to investigate the situation. Yet there was no request for a continuance, simply one for a preliminary injunction. He concluded, “In this litigation, the AGO is a reluctant warrior” and the “general reluctance [of her office] gives the court pause.”  

Tackling the major points of the attorney general’s argument, the court found the museum trustees were responsibly performing their fiduciary duty by acting “in good faith” and with “reasonable care.” Their proposed sale of works of art would not violate any charitable trusts, nor would their plan to showcase science and history as well as art violate their corporate purpose.  

In his opinion, Agostino paid particular attention to the assertion that the sale of the two Rockwell paintings would constitute a violation of donor intent, a contention he vigorously countered by noting, “There is no evidence before this court that Rockwell ever said – to anyone, let alone the Museum – that he wanted these paintings to remain with the museum or to be displayed forever in the Berkshires.” “The sum total of the evidence,” he added, “tends to show that Rockwell simply wanted to benefit a museum that he particularly enjoyed.” 

In his final statement, Agostino recognized that his denial of an injunction “may very well mean that timeless works by an iconic, local artist will be lost to the public in less than a week’s time.” That, however, was not the case. Just three days before the auction was scheduled to begin at Sotheby’s, the Massachusetts Appeals Court, responding to a motion requested by the attorney general’s office, placed an injunction on the sale until at least December 11, 2017, and granted that office the option to request an extension beyond that date so it could continue its investigation of the matter.  

In February 2018, the attorney general and the trustees of the Berkshire Museum won court approval of the settlement agreement they had reached and the sale of designated works of art was scheduled for April. Both sides had made concessions to reach this point, and again, the fate of the Rockwell paintings – particularly, Shuffleton’s Barbershop – was a key issue. The attorney general’s office conceded the right of the Berkshire Museum to sell some of its acquisitions because of financial need and agreed its long-range plan was appropriate. The museum trustees agreed to the restriction that Shuffleton’s Barbershop be sold only to another nonprofit museum and to a $55 million cap on the revenue the museum could earn from the sale, ensuring no additional works would be sold once proceeds reached that total.   

Selling for an estimated $25 million, Shuffleton’s Barbershop found a new home at the (George) Lucas Museum of Narrative Art in Los Angeles. Because the Lucas Museum would not open until 2022, the painting would spend at least two more years in Massachusetts on loan to the Norman Rockwell Museum, only 20 miles from the Berkshire Museum. The balance of the sales at Sotheby’s did not go as expected, however, as many of the works up for auction failed to bring in their pre-sale estimates, and it took longer than anticipated to achieve the museum’s goal.  

Despite the settlement, critics of the sale continued to voice their opinions. In addition to the protesters who gathered daily at Sotheby’s, the Association of Art Museum Directors issued a statement that made their position clear:  

Notwithstanding the decision by the Court, AAMD will continue to advocate for the highest ethical and professional practice standards in collections management and deaccessioning. And if the Berkshire Museum proceeds with its current plan for selling deaccessioned works and utilizing the funds for operating and capital purposes, AAMD will have no choice but to consider taking further action in accordance with its policy, which may include censure and/or sanctions.  

AAMD did, in fact, impose sanctions on the Berkshire Museum in May 2018, asking all of their 243 members to refrain from lending or borrowing works of art and also to refrain from collaborating with the Berkshire Museum on exhibitions. In 2020, AAMD altered its policy temporarily, placing a two-year moratorium on any punitive actions “in recognition of the extensive negative effects of the current crisis on the operations and balance sheets of many art museums.” AAMD also said a museum “might use proceeds from deaccessioned art to pay for expenses associated with the direct care of collections,” noting, “Each museum must determine its own definition of ‘direct care.’” In 2022, AAMD restored its pre-pandemic policy, a response not only to changed economic conditions, but also to equity-focused definitions of “direct care.”  

We can reasonably anticipate ongoing donor intent disputes in cultural institutions, and we will report on them as they arise. 

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