Jan 7, 2009 5:03 pm US/Central
Field Museum Hit Hard By Market
Layoffs And Salary Cuts Abound; 'Lucy' Exhibit Not Coming
CHICAGO (CBS) ―
The tanking stock market has hit the Field Museum's endowment, which has dropped about $95 million -- 30 percent -- leading to salary cuts, layoffs and buyout offers to scientists and other employees.
While most of the planned upcoming exhibits will be presented as scheduled, financial belt-tightening contributed to the museum's decision not to present Lucy, a 3.2 million-year-old fossil of an ape-man species that was to debut here this fall, Field president John McCarter said Tuesday.
"We're trying to buckle down,'' said McCarter, who is taking a 20 percent pay cut from his $450,000 annual salary.
Ken Burger, CEO of Charity Navigator, which monitors nonprofit groups, said the Field Museum has no choice.
"It's very painful and very unfortunate but if they're going to be able to survive, they're going to have to make these very tough decisions now," Burger said.
Nonprofit institutions here and elsewhere, which rely on revenues from investments to help cover costs, are grappling with endowment declines, said Gary T. Johnson, president of the city's museum group, Museums in the Park.
Typically, nonprofits transfer about 5 percent of the value of their endowment to help cover operations, Johnson said.
Johnson, president of the Chicago History Museum, compared museum endowments to retirement funds.
"If you're years away from retirement, losses are paper losses. If you're a nonprofit, you're like the retiree who is living off their savings,'' he said. Johnson doesn't foresee any Chicago museums closing.
McCarter said the Field's endowment fell from $315 million to about $220 million in the last six months.
Sixty-eight employees were offered buyouts, and 23 took them, he said, though five were curators who were given emeritus standing and will continue working while they collect retirement benefits instead of regular pay.
Since August, 14 employees have been or will be laid off. Starting this month, employees making more than $75,000 will take a 3 percent pay cut; employees earning more than $85,000 will take a 5 percent cut, McCarter said.
Selling assets is out of the question as museums generally use the sale of objects to rebuild collections, not support operations, he said.
The Art Institute of Chicago's endowment has also dropped according to a spokeswoman. However, its modern wing will open on time in May and no layoffs are planned there.
A spokeswoman for the Field Museum insists visitors won't see any changes at the popular exhibits, but in addition to the layoffs and salary cuts, the museum is opening an hour later, at 10 in the morning. It also recently raised its ticket prices by a dollar.
The good news, according to Charity Navigator, is that the Field Museum did a good job of managing its money, putting a lot of it away during the good times.
CBS 2's Jim Williams and the STNG Wire contributed to this report.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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