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Brandeis on the Brink
In a Daily Beast exclusive, a top Brandeis official opens up about the university’s financial collapse—including a potential $79 million deficit. The stark choice: Fire more than half of the faculty or sell the Rose art collection.
Brandeis University, which claims Irving Howe, Thomas Friedman, Christie Hefner and Walt Mossberg among its alums—and trustees such as Michael Steinhardt, Vartan Gregorian, and John Rosenwald—has incurred the wrath of the art world for deciding to shut down its Rose Art Museum and sell off its famed collection, which was valued at $350 million in 2007.
Other museums have sold off works before but never a whole collection. And selling into a down market struck some people as irresponsible.
No one could understand why, with what was said to be a $10 million operating deficit over five years, the university’s trustees would take such a drastic step. Even the museum’s director went on attack, saying the Rose, which according to the university’s own website “houses what is widely recognized as the finest collection of modern and contemporary art in New England,” not only pays its own way but contributes to the university’s funds. The collection, largely donated over the years, includes seminal works by Willem de Kooning, Jasper Johns, Roy Lichtenstein, Morris Louis, Matthew Barney, Cindy Sherman, and Richard Serra, among others.
But in an exclusive interview, Peter French, Brandeis’s chief operating officer, explained that the university’s situation is far more dire than it appeared in news accounts, which extrapolated the $10 million figure from published documents. He objected to the word “bankrupt,” but what would you call an institution with a projected deficit of $79 million over the next six years, a tapped-out reserve fund, a shrunken endowment and “quite a number” of big donors hit hard by the Madoff scandal?
Brandeis has already cut expenses and staff this year and last, and raised tuition and fees. French said the alternative now was either a drastic shrinking of the university or selling the art. Faced with the prospect of closing 40 percent of the university’s buildings, reducing staff by an additional 30 percent, or firing 200 of its 360 faculty members—any of which, French said, would drastically change the university’s mission and essentially cripple it—“We’d rather use Rose.”
Before finalizing the decision, French explained, the university made an emergency appeal to donors, only to confront the Madoff losses. Earlier this month, Brandeis President Jehuda Reinharz noted in a fund-raising letter that Madoff’s victims included many “staunch and generous” donors to the school. Among the biggest donors are the philanthropist Carl Shapiro and his wife, Ruth; their family foundation lost an estimated $545 million in Madoff’s alleged Ponzi scheme, according to The Boston Globe.
Making matters worse, French added, the university is in the middle of a huge capital campaign that has raised $820 million of its $1.2 billion goal. Most of that went to operating programs or is earmarked to construct new buildings, which are “fully funded” and will continue going up, despite the downturn. Only about $240 million of the campaign funds went to the endowment, which is down to $530 million, from more than $712 million last June, and is projected to drop a bit more this year.
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Franklin
This is great.
A good lesson for individuals to think for themselves instead of resorting to fears and keeping to their own kind.
I hope Brandeis, Howard, BYU, Regent University and every other racist institution goes under.
Long live free thinkers!
flyoverland
. Madoff may have single-handedly vaulted state schools past the elite, private institutions. We've had dopes in government running our money for years. We're used to it.
htiduj
@franklin: how can you call a school whose credo is "social justice" a racist institution?
brandeis was created during a time when jews and other minorities were not being accepted into ivy league schools because of their nationalities/religion. its purpose was to be a place where anybody, no matter who they are or where they came from, or what color their skin was, can get an education comparable to that of an ivy league university.
hardly a racist institution.
magicman
This particular piece is excellent simply because it gives the Reader the true scope and horror of the Crimes committed and the effects it has on others.
Charles1234
This article,impeccably reported,made me physically ill.
Zorkadork
Being a visual artist-type, the first thing I noticed about this article was the painting of Bernie, and I thought it was a painting of George Washington, with the hair and taciturn, straight-lipped expression.
A memory then, came of a time during the eighth grade where a student plastered the picture of Old George, which seemed to be hanging in every classroom, with a huge spit-wad. This was one of those spit-wads that only a teenager could create from an entire piece of notepaper, and it stuck on the glass
right on Old George's forehead.
So, the idea came, that Brandeis could have a school fundraiser featuring the painting of Bernie in all his splendor.
For a dollar a shot, audience members could heave their own spit-wads at his royal likeness, and those who did not want to chew up their own ammo could pay another dollar to have it
pre-mixed.
Just a thought...,
Aqualuna
Isn't Brandeis known for its Business School? Seems a bit ironic...
ChristopherMason
Excellent piece. A numbing installment in the chronicles of the carnage wrought by Bernie. A minor correction: The Carl and Ruth Shapiro lost $145 million, not $545 million as reported here. The latter sum has been cited by the Boston Globe, and other sources, as the combined losses of the Shapiros' foundation and their personal monies with Madoff.
usernome
A couple of years ago I wasin line behind University President Jehuda Reinharz at a Starbucks in NYC with his wife and some others. He whipped out a credit card with Brandeis's name on it with which he paid the bill for all the lattes. I'm sure that as part of Reinharz's $600,000/year salary he could have paid for those drinks himself, but I suppose he decided Brandeis ought to pick up the tab for his wife's soy cravings.
It is interesting to note that Reinharz stated a couple of weeks ago that he would commit to cutting his own salary by 1 percent ... only after 30 percent of the faculty taken a pay cut. Six whole grand -- what a mansch he thinks he is.
What now? Does he really think that his abysmal oversight is worth so much money? Even 99% of his curent salary seems far too high.
tmelnick
Every alumni of Brandeis, every friend of Brandeis, every American Jew should be digging into his or her pockets and sending a donation to the Brandeis University annual fund. This is America's only nonsectarian institution of higher education sponsored by the Jewish community. The only one.
It can not be allowed to become crippled or to fail. Madoff or no Madoff, it must be rescued.
drkaza12
What's the attorney general doing weighting in on this. Is he legal counsel for the school. isn't his dig when there's a crime committed, not when he thinks there's a precedence.
SueMohn
First - excellent article. Second, those who would condemn an educational institution for selling an art collection when the only other choice is firing 60% of their teaching staff is simply missing the point.
The first and most important mission of an educational institution is to educate. The art collection, while important, is, ultimately, an investment. When the school finds itself in unexpected debt, either through mismanagement or through a steep downturn in the economic conditions that normally support them (from their own investments to traditional large donors), it is incumbent upon the leadership to *do* something other than close the doors or fire 1/2 the teaching staff.
If Brandeis' president is, indeed, responsible for this situation through mismanagement, then he needs to be taken to task for that. But killing a major institution of learning is to be avoided where possible and selling off the art collection is, however sad, a fiscally responsible choice.
hammer
I find it hard to believe that with an alumni base as distinguished as Brandeis and the wealthy Jewish community they would have a tough problem raising $13MM each year for the next 6 years to cover their operating expenses.
It might not be a bad idea to shutter a few of the weaker departments and reduce the scope of the academic offerings. It might not be a bad idea to temporary mothball some of the buildings. It might not be a bad idea to charge more fees for activities. These are a few of the things that could reduce the cost side. Selling the museum is like the US saying we need the money and will have to liquidate our Smithsonean collections over the next few years.
Be creative find ways to raise money and cut cost to increase the operating margin before you sell your heritage and things you can never recover.
Mjolnir2k
I fail to understand why a University taking a fiscally responsible approach (seeling down assets, as opposed to accumulating added debt) is a bad idea?
If I were faced with losing my home, but inside my home was a Monet that I could sell to save my home...bye, bye Monet.
That would be the responsible thing to do, not ask my neighbors for hand outs so i could keep my monet AND my home.
These are tough times for all of us and it's refreshing to see an entity taking a "pay my own way" approach.
Anyone who thinks this is a bad idea, feel free to write a check for $75 million, payable to Brandeis University and the problem will be solved. Until then, stop whining!
StellaLuna
I'm the lone voice voting to sell the art collection. If the school goes under, the museum will as well. I disagree that the school would be selling its heritage; rather, it would be keeping alive the tradition of a Jewish school that opens its doors to all.
This debate is going on in other schools as well. In my home state, a small, struggling college is fighting alumni in court to sell an art collection. The alumni have openly stated they'd rather see their alma mater go under than put the art on the block. I'm puzzled -- seems like choosing death by gangrene rather than amputating the infected limb.
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