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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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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!
. 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.
@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.
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.
This article,impeccably reported,made me physically ill.
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...,
Isn't Brandeis known for its Business School? Seems a bit ironic...
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.
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.
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.
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.
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.
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.
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!
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.
using a Brandeis credit card does not charge the school, it acts like a fundraiser for the school. The school gets a cut of the charges. Almost every college and other nonprofit has this. You show your support for the cause and raise money at the same time. Win-win.
I'm an alumnus, I got the alumni-wide email about this. I understood right away--no qualms from me. Made sense--obviously they are more desperate than they let on. It is not a college's mission to run an art museum, it is the college's mission to educate and do research. The art is an asset, You sell off your assets when you have a financial crunch. It's sad and there may be legal issues re: wills and things like that, but really if someone donated art, it has value, and the value of the art is still donated and put to good use. You can't pay rent with a painting, only if you sell it and use the proceeds. Your house maybe be worth a million dollars, but you can't use it to pay college tuition unless you refinance. Sell your house and you're homeless. Sell art and you have money and perhaps barer walls, but I'll take the money. They can't undermine the teaching mission. A country can have as part of its mission to preserve cultural artifacts. Selling off the Smithsonian is nothing like selling a college art museum collection.
This comment has been removed by The Daily Beast's editors.
"brandeis was created during a time when jews and other minorities were not being accepted into ivy league schools because of their nationalities/religion."
-I totally agree. We should pretend like it's 1948 to justify our 2009 racism.
In fact, I would vote for less kids going to college at all, less brainless parents psycho on SAT's, less kids robotically going away to "school", less requirements by employers for certain BA's, MA's, credentials and other mindless hoop-jumping...
Long live free thinkers!
Viva el presidente!
The first thing that needs to be done is fire Peter French. He is the chief operating officer for Brandeis and this is his proposed first line of defense is to sell the art collection. Mr. French has no business advising anyone since he was one on the people in charge who allowed the situation to happen. Oh yea, before you fire him, check and see if he gave himself a bonus. Check the art work and make sure he didn't take a Rauschenberg home to keep it safe.
If the alumni of Brandeis allow this art raid to happen then you have no one to blame than yourselves, well other than the incompetent Mr. French and others in the head office. Get busy alumni. Fire French and anyone who says selling the art collection will fix the problem.
I am sorry to hear of the troubles Brandeis, and no doubt other private universities will likely experience due to the larceny of Bernie Madoff. However, when I ready some of the sums of money quoted in this article it is difficult to muster too much sympathy. These institutions sit atop massive endowments of hundreds of millions of dollars. We have successfully made higher education another profitable enterprise for the privileged. Meanwhile, kids from the middle class find themselves saddled with massive debts as they leave state schools where they had to borrow to attend. This does our society a great disservice. We are discouraging the best and the brightest from pursuing an education that can allow their intellectual gift to blossom because of the onerous expense. Congratulations America, we have again succumbed to the siren song of capitalism. I find myself tied to the mast, incredulous that so many people treat the word socialism as an obscenity while we stand by and watch the perverted acts of capitalism's naked greed rape our society.
Great article. I don't doubt that Brandeis is on the brink --maybe driven there by its own actions or inactions, not just by the actions of Bernard L. Madoff.But washing the school's dirty, dirty linen in public may be about the stupidest thing that the chief financial officer (Mr. French) could do. Maybe he's enjoying his 15 minutes of fame (rare for someone in his position), but by shouting from the rooftops the sky is falling --and that Brandeis will be forced to fire most of its teachers and close 40% of its buildings if the problem is not fixed quickly-- Mr. French is shooting himself and Brandeis in the foot, scaring away high school students who might be interested in Brandeis (applications are already down by a lot) and causing donors to flee to worthier, better run, more stable institutions. Mr. French, here's a free public relations suggestion: after you extract your foot from it, keep your mouth firmly shut and do the job that you're paid to do.
Franklin,
I am a member of the Brandeis University class of 2013, as I have been accepted Early Decision and plan to begin this fall.
It frightens and disgusts me to read that you believe Brandeis is a racist institution. Displayed proudly and bluntly on their homepage is a link to their "four pillars" -- two of which directly refute your claim.
Brandeis (unlike two of the other Universities you cited -- BYU & Regent) is a nonsectarian university. This means that while it may have a higher percentage of Jewish students than other schools and may not deny its Jewish roots, Brandeis also in NO way denies applicants based on their religious values.
Also, Brandeis is staunchly committed to social action. In a way your argument ironic because in all likelihood, your values on "racism" are not much different than those of Brandeis students, professors and administrators -- it is a liberal environment that has a long history of missions to end injustice.
In case you'd like to acknowledge the facts:
http://www.brandeis.edu/pillars/index.html
Franklin,
I'm confused by how you can call yourself a free thinker and accuse a university of racism. One would hope that you'd consider that a university is made of up many minds, much of them often dissenting with the administration, which is one reason why schools offer tenured positions for professors.
I am a recent graduate of Brandeis University who worked at the Rose during my time there--let me say that there are students on both sides of many issues (I am assuming you are referring to something Arab/Israeli related with your comment about racism, but will speak generally). They are nearly constantly in dialogue with each other, in speech & text, as in the way they contribute to the community and what they promote. It is also important for you to understand that your comments sound, to me and many others, like those that would come from a racist.
I am guessing that your comment is either rooted in some learned anti-Semitism, or just an absence of familiarity with the university based on anything other than it's website. It is very important that you, or anyone for that matter (especially LLSB19, since you will be going there soon, and congratulations on your choice), recognize that universities are made up of two constantly changing forces, the administration and everyone else, and that they often disagree with each other. It is a sort of checks and balances system that allows them to change.
It also seems like you are bitter with the idea of higher education and its accessibility to individuals without the money to pay for it. I don't disagree with you, but the manner in which you assert your opinion is completely ineffective, as it does not serve to change anything or inspire others to do so.
I feel like it is worth saying, because if I don't and you choose to respond I'm sure you reference it, that I am undecided on the Palestinian/Israeli problem. I don't think anyone is headed in the right direction, but I've mostly agreed with Tom Friedman (a Brandeis alumn) in his idea that the Palestinians need some serious economic assistance. I'm also not really a huge fan of the Israeli approach to retaliation, although I understand it intellectually.
LLSB19, you are going into the Brandeis world at a time when it is crucial that you be open-minded to everything that's going on at the school. It is a great place. There are problems. You can do something to help change your environment. You probably should, when you get there.
Also, to respond to TierraDelFuego, certain rogue members of the Brandeis administration have tried to cut the arts before. The students usually do a remarkable job of telling them to shove off.
Finally, some of my friends from the school, both current students and alumni, have expressed an opinion which is a major outlier on the scale, that Brandeis is doing this as a massive, free, press stunt in order to try to scrounge up some new donors. I doubt that this is true, but it's an interesting thought.
~J
Oh, and I forgot to mention that the Rose owns a Matisse. Not sure if it's of any note, but I'm almost positive that Jehuda keeps it in his house, and that it hasn't been in the museum for a while. Can anyone verify?
Thank you.
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