USC Price School of Public Policy

Incoming Cornell President, Elizabeth Garrett, pens paper on cultural institution-university partnerships

April 24, 2015

Museums increasingly are seeking to collaborate with universities in order to navigate growing economic and environmental pressures.

By Matthew Kredell

Pacific Asia Museum

Photo courtesy of Pacific Asia Museum

Elizabeth Garrett

Elizabeth Garrett

Highlighting lessons gleaned from leading the USC negotiating group in the successful acquisition of the Pacific Asia Museum in Pasadena (PAM) while Provost at USC, Elizabeth Garrett explains the added value universities bring to museums as nonprofit allies in comparison to a for-profit corporate partner. Universities can provide a new, younger audience for a museum’s collections, and both share an educational component in their missions, according to the paper.

Although associations between universities and museums often make sense, Garrett notes that they are frequently difficult to achieve. Deals need to be seen not only as a financial rescue but also as a collaboration that will allow both institutions to accomplish more together than they would separately.

In negotiating these relationships, Garrett lays out the three key issues critical to a successful merger: control and governance, culture and identity, and finances. She says trust is also a needed component as museums give up substantial autonomy and universities expend valuable resources to fund exhibitions and collections, building renovations and expansions, and programming. Mergers usually involve an administrative consolidation that provide cost savings but also eliminate jobs at the museum and possibly the dissolution of the museum’s fiduciary board, which can create concerns about loss of culture and identity.

Garrett recommends the parties start negotiations by drafting a letter of intent laying out their understanding of the likely resolution of the crucial terms of the deal, resolving potential deal breakers and determining whether a deal is possible, and to agree on a series of covenants that assure the museum will continue to have an identity that allows for its visibility and success within the framework of the university.

“There is a belief that mergers are a way to strengthen nonprofits, yet they are often only seen as a means of survival. In this paper, Beth provides a first-hand account of the benefits, challenges and best practices involved in merging between two nonprofits with shared interests but different scale, scope and cultures,” says James M. Ferris, Director of the USC Center on Philanthropy and Public Policy, which published the paper.

One of the major goals of a partnership like the PAM merger is to create an endowment for the museum that can assure its self-sufficiency. Incorporating the endowment within the university’s long-term investments allows the museum to get a broader array of investment opportunities and a chance for better returns.

In the crucial transition period following the agreement, Garrett advises the creation of a transition team to develop integrated practices that allow both partners to achieve the benefits of the relationship. The PAM transition team was comprised of four museum board members, four USC administrators, faculty involved in Asian studies and a top provost office administrator with broad experience in budget and organizations. Utilizing the university’s audit services, insurance and some facility services resulted in savings of 5 to 6 percent of the museum’s budget.

“Efforts to ensure a successful integration cannot be short-lived but must be institutionalized,” Garrett writes, “and both entities must deliberately pursue avenues for collaboration so that the affiliation brings the value to both that prompted the deal in the first place.”

Garrett is a member of the Price School faculty, and will become President of Cornell University on July 1.

The paper is available for download at http://bit.ly/1JvopT2

About The Center on Philanthropy and Public Policy
The Center on Philanthropy and Public Policy promotes more effective philanthropy and strengthens the nonprofit sector through research that informs philanthropic decision-making and public policy to advance community problem solving. Through its research and commitment to driving the conversation around these issues, The Center transforms philanthropy in its scope, reach, and impact – making a crucial difference in the quality of life in communities everywhere. For more information about The Center on Philanthropy and Public Policy, please contact Nicholas Williams at 213.740.8557 or npwillia@usc.edu.