FOR ALL PRESS INQUIRIES AND REQUESTS:
Claire Whittaker
The Kreisberg Group, Ltd.
130 West 25th Street
New York, NY 10001
212-799-5515 (telephone)
212-799-5535 (telefax)
Claire@kreisberggroup.com
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Summary of the Barnes Foundation's Petition to Amend its Character and Bylaws
Summary of Facts
The Foundation is a nonprofit charitable institution dedicated to promoting the advancement of education and the appreciation of fine arts. Nothing in the petition is intended to change that central purpose or any part of the Charter and Bylaws that expresses that central purpose. The Foundation's founder, Dr. Albert C. Barnes, believed that education and an appreciation of art could benefit and transform the lives of working men and women. In accordance with this belief, Dr. Barnes assembled an unparalleled collection of paintings, sculpture, decorative arts, and antique furniture dating back more than 3,000 years, purposely representing a diversity of cultures, periods, and styles.
The Foundation functions as an educational institution. It has a three-year program in horticulture and a two-year program in art and aesthetics with a one-year optional seminar, using methods established by Dr. Barnes and John Dewey, The Foundation's first Director of Education. Classes are held on the grounds and in the gallery. A portion of the art collection is currently housed in a gallery that Dr. Barnes erected for its display at the Merion facility.
In 1992, the Court found that The Foundation's Merion gallery was in a state of disrepair and greatly in need of renovation and upgrading. It also found that the works of art should be removed during the necessary renovations. The Foundation requested permission to place a portion of its collection on tour in order to raise funds needed for the renovations. Ultimately, the Court approved the tour and the three-year renovation project began. The renovation of the Merion facility, and the heightened public interest that resulted from the tour, brought about an increase in the number of people wishing to view the Gallery and Arboretum. Concerns about increased traffic and congestion provoked an adverse reaction from the Merion facility's neighbors and township officials, who sought to restrict access through zoning citations and lawsuits. In just the three years following completion of the renovations, The Foundation was involved in at least fifteen hearings before the township zoning board, as well as three appeals to the Montgomery County Court of Common Pleas.
As a result of the restrictions placed on The Foundation by local zoning authorities, the substantial costs of litigation, and the Bylaws' detailed covenants in such areas as Board size and lending of works, The Foundation has been required to use its entire endowment for legal expenses over the past few years, leaving it in a precarious position of deficit spending and without any permanent long-term source of funding. An August 2002 financial report by Deloitte & Touche indicated that The Foundation had incurred $1.36 million in losses from its operations in 2000 and 2001; that The Foundation is projected to operate at a deficit of more than $800,000 this year; and that The Foundation likely will run out of cash by the end of the year. Without a new and immediate infusion of financial support, The Foundation may be on the verge of insolvency.
Because of its fiscal crisis, The Foundation's Board and management have explored opportunities to reverse its financial decline. As a result of these efforts, The Foundation has been presented with an unprecedented opportunity not only to escape its poor financial predicament, but also to expand its programs and facilities and to fulfill its mission in a way that has not been possible since Dr. Barnes's death. This opportunity consists of a very generous offer from The Pew Charitable Trusts and The Lenfest Foundation to provide The Foundation with short-term financial aid, as well as assistance in raising $150 million to: build a new facility on or near the Benjamin Franklin Parkway in Philadelphia to house the Gallery's collection; relocate that collection to the new facility; and establish a substantial endowment that would help to ensure The Foundation's financial security into the future.
While Pew and Lenfest have assured The Foundation that they are committed to maintaining its independence and its 80-year old mission of promoting education and arts appreciation, they have also made clear that they would carry out their offer only on the condition that The Foundation become more able to sustain its mission by moving the Gallery collection out of Lower Merion and eliminating those elements of its governing documents that restrict its ability to serve its public and educational purposes. They also asked that The Foundation change those provisions that inhibit The Foundation's ability to raise funds - particularly the limit on the number of Board members. In short, the changes contemplated include relocation of the gallery collection from the Merion facility to the City of Philadelphia; expansion of the Board of Trustees from five members to fifteen members; and modification or elimination of those Bylaw provisions that prevent The Foundation from becoming self-sufficient and from fulfilling its primary purpose of promoting the advancement of education and the appreciation of fine arts, particularly among the working people of the Philadelphia region.
In view of its precarious situation and given the unprecedented offer from Pew and Lenfest, the Board undertook a thorough analysis of the steps necessary to reverse The Foundation's financial straits. In doing so, the Board considered a number of options. The Board focused on those actions that could be taken to ensure The Foundation's long-term financial health while offering the greatest likelihood that The Foundation's central purpose would always be fulfilled. Following its analysis, the Board concluded that the only viable option for accomplishing its goals was the offer by Pew and Lenfest. The parties have entered into an arrangement that is conditioned upon approval by the Court of the changes sought by The Foundation in the present petition.
A significant factor in the Board's determination was that the offer by Pew and Lenfest not only would rescue The Foundation from its present financial crisis, but would enable The Foundation to fulfill Dr. Barnes's mission in a way that has not been possible until now. The proposed funding would permit The Foundation to expand its educational programs and increase public and scholarly access to its art collection and archives. The proposed funding also would enable The Foundation to hire the necessary staff to serve the public and scholars, as well as to assess, restore, and catalogue The Foundation's art collection and archives.
Finally, with proper funding and support, the acclaimed collection of artworks now in The Foundation's Merion Gallery could be displayed in a larger, more user-friendly gallery, offering state-of-the-art security and fire protection and a welcome viewing experience for students and seasoned and novice visitors alike - as well as added classrooms and ancillary services (food, storage, gallery shop, etc.) that are more appropriate for The Foundation's collection than what now is available in Merion. This vibrant model for The Foundation thus would build on and expand the vision of Dr. Barnes and his experiment in democracy and education.
Summary of Argument
While the specific relief that The Foundation seeks in the petition appears broad, The Foundation's underlying goal in coming before the Court remains simple and directed to ensure that it can continue to fulfill Dr. Barnes's primary intent in creating The Foundation and its highly valued collection of art. That primary intent - promoting "the advancement of education and the appreciation of the fine arts" - is currently imperiled by The Foundation's shaky financial condition, the depletion of its endowment, and the prospect of indefinite litigation between The Foundation and those with whom it has had to do battle, including the residents and officials of Lower Merion Township.
If the Bylaws changes sought through the petition are not permitted, the downturn in the fortunes of The Barnes Foundation will continue unabated and its eventual demise will be inevitable. These changes are justified by the law of both deviation and cy pres. The doctrine of deviation permits the changes sought by The Foundation because recent events and circumstances unforeseen by Dr. Barnes have made adherence to many of the administrative conditions in the Bylaws impractical and, in a number of cases, impossible, if the primary purpose of The Foundation is to be fulfilled. No part of
The Foundation's petition will change or affect any central purpose for which The Foundation was founded, but if it did, the doctrine of cy pres would justify a modification of that purpose to ensure that The Foundation's indisputably paramount purpose - advancing education and the appreciation of fine arts - can be accomplished.
The Foundation is currently presented with a unique opportunity not previously available to it during the past fifty years and likely unavailable in the future. It seeks the approval of the Court to make the necessary modifications to its governing documents that are required to seize this opportunity and to guarantee that generations to come may enjoy and learn from Dr. Barnes's spectacular collection of art and that Dr. Barnes's unique vision of education and fine arts can continue to be carried out by The Foundation he established eighty years ago.
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The Barnes Foundation
300 North Latch's Lane
Merion, PA 19066-1729
610.667.0290
info@barnesfoundation.org
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