0.8 Chapter six: attempting a turnaround, 1988-1992  (Page 17/19)

The success of the various Society programs notwithstanding, it was clear to the board that without significant and regular government funding or a huge private gift, the Society simply could not sustain its current level of activity and remain independent. The 1991 fiscal year, the "make-or-break" year, ended with a $2.4 million deficit. Even though the board was evaluating long-term options, it had continued to operate the Society at nearly full capacity, with a large staff and a fairly complete set of programs. The total budget for fiscal 1991 was the Society's largest ever, with expenses at $8.2 million. However, no long-term solution had been found.

Norman Pearlstine, the Society's chairman, discussed the fact that the Soci­ety could no longer afford to continue in a "business as usual" mode. He em­phasized to the board that "it is crucial to seek some kind of partnership or other arrangement which will preserve the Society's collections and continue to make them available to scholars and the public." He then discussed a series of possible long-term options for the Society, including a possible merger with the Museum of the City of New York (MCNY).

A merger between the Society and the MCNY offered a variety of potential benefits. For one, the MCNY is a member of the CIG and therefore receives annual appropriations from New York City. In 1991, it received over 30 percent of its operating budget from the city's Department of Cultural Affairs. Presum­ably, a merged institution could expect to receive continuing operating support at a comparable level. Second, the MCNY's building and real estate are owned by the city, and a capital appropriation of $11 million had already been made to refurbish the physical plant. If the merged institution were to move to the Soci­ety's location, it presented the possibility for the MCNY building to be sold, for the $11 million capital appropriation to be transferred to the new entity to be used for work on the Society's building, and for additional capital to be raised through a sale-leaseback arrangement with the city. In addition, from an operating stand­point, both institutions estimated that there would be 25 percent savings in oper­ating costs as compared with the costs of the two independent entities. The final and, from a curatorial standpoint, most compelling reason for a merger was the complementarity between the two collections. The MCNY's strength in portraits, toys, and theatrical memorabilia would fit well with the Society's strengths, giving a combined institution a truly incomparable collection documenting the history of New York City and State.

Over the summer, Debs and her counterpart at the MCNY, Robert MacDonald, exchanged comprehensive and detailed information about all aspects of their institutions. Each agreed that nothing short of a complete merger would make sense and that such a merger would require significant financial support from both the city and the state. A special task force of the Society's board was established to evaluate the possible merger. The difficult job of addressing the Society's financial problems continued. For the third consecutive year, the Soci­ety's budget had to be approved by the executive committee and was not presented to the full board until September, even though the fiscal year began July 1. Once again, the budget relied heavily on grants and contributions for revenue, but significant cuts in expenditures were proposed for the first time since 1989. The 1992 budget was trimmed by approximately $1.5 million. The reductions were to be accomplished through layoffs and attrition; by closing the Society for an additional day each week (that is, operating only five days per week); by closing the museum shop, which had lost money on direct costs as long as it had been in operation; and by general belt-tightening across the board. Debs indicated that the 1992 bud­get was very thin and that it did not represent a healthy level of institutional operation on an ongoing basis.