Detroit Institute of Arts Secures Nonprofit Funding

Culture is an important part of cities, and the arts are an important part of culture. That’s why cities like Detroit need to protect museums and galleries even when money is tight.

Recently, a federal judge approved Detroit’s bankruptcy plan, which allows the city to eliminate $7 billion in debt, paying creditors pennies on the dollar. While that plan does harm pensioners, they have faced worse cuts in previous models, and this plan is working in part because the city no longer needs to worry about the Detroit Institute of Arts (DIA).

The DIA is an important part of the city’s cultural heritage and is home to numerous works of art. All together, the institute is valued at roughly $4.6 billion. Rembrandt, Van Gogh, Matisse, Bruegel the Elder. It’s an impressive collection, but it’s also expensive to maintain. In 2013, the city’s emergency manager said that the DIA would have to chip in $500 million to help with Detroit’s debts, which would no doubt involve selling some of those works.

But the museum went on a fundraising spree and managed to raise $800 million—$300 million of which came from nine nonprofit foundations. $200 million came from the State of Michigan, though Governor Snyder has sworn up and down that he wouldn’t bail Detroit out. That’s a small gesture in the grand scheme of things, but the state and the city have a complicated relationship, in which the state likes to pretend that the city isn’t its responsibility.

But now the DIA is being placed in the hands of a charitable trust, which will allow it to operate without worrying about municipal finances in the future. This is a huge relief to the museum and to the people who love it. Detroit may be making progress on its money problems, but it’s still bankrupt. Perhaps nonprofit solutions can address some of the cities other problems as well.