Donations, the main financial power source for art museums, dropped again in 2011-12 at L.A.'s Museum of Contemporary Art, marking declines in each of the first two years of Jeffrey Deitch's tenure as museum director.
This time, the fall — a $270,000 decline — wasn't as bad as the $4.5-million drop in 2010-11, the first year at the helm for Deitch.
The fundraising figures are part of the audited financial statement MOCA released Friday for the fiscal year that ran from mid-2011 to mid-2012, providing a more up-to-date glimpse of the strained financial conditions that led to the recent swirl of speculation about the downtown museum's future.
The year ended with either a $430,000 surplus, counting only MOCA's regular spending, or a $536,000 deficit, if — as the CPAs who handled the audit did — the hidden estimated cost of wear and tear on the museum's buildings and equipment is factored in.
MOCA's financial hardships had prompted some MOCA trustees to approach the Los Angeles County Museum of Art, which responded about a month ago with an offer to absorb MOCA while keeping its name and two downtown buildings, while raising $100 million as part of the deal.
But the MOCA trustees announced that the museum intends to remain independent and earlier this week embarked on a campaign to build its endowment to $100 million and establish new financial resilience.
MOCA's current endowment, stagnant at slightly less than $20 million during Deitch's first two years of tenure, according to its financial statements, will grow past $60 million when recently received campaign commitments are paid, the museum announced.
Contributions to the museum in 2011-12 totaled $14.6 million, accounting for 82% of revenues, according to the financial statement.
Museum spokeswoman Lyn Winter said attendance for the calendar year 2012 was 218,558, down almost half from about 402,000 in 2011, when it benefited from a record-setting turnout for its "Art in the Streets" survey of the graffiti and street art movement.
Box office income is a comparatively minor factor for art museums; MOCA earned about $1.5 million from admissions and profits from its museum store and cafe operations in 2011-12, down from nearly $2 million the previous year.
Renting out its Geffen Contemporary building to Mercedes-Benz last spring so the automobile company could sponsor a free art, music and food festival helped the bottom line: An earnings category that includes rental income totaled $908,000, up from $139,000 the year before.
The audited financial statement also shows that Google is paying the museum $1.25 million to cover its costs for the MOCAtv YouTube channel that was launched last October. The museum did not say Friday how long a period the money will cover; it said MOCAtv has generated nearly 2.9 million views to date and has 87,000 subscribers.
Meanwhile, MOCA confirmed Friday that the budget for the current 2012-13 fiscal year that ends June 30 is $14.3 million, down from the $17.5 million budget the museum reported in its 2011 financial statement.
That represents the museum's leanest spending since 1998-99, when MOCA also spent $14.3 million — although that much is worth $19.9 million in today's dollars.
Winter declined to say whether projections call for a deficit for the current fiscal year, saying only, "It is our fiduciary responsibility and the goal of the board to operate a fiscally sound museum. We won't speculate about what the specific numbers will be at the end of the current fiscal year."
The statements show that MOCA improved its bottom line if depreciation, an expense that exists only on paper, is overlooked.
The question of whether MOCA had a deficit or ended in the plus column in 2011-12 and the previous year depends on which accountant you talk to, said Gayle Whittemore, a Studio City CPA who does consulting for nonprofit organizations.
Many nonprofit boards look at cash expenses only and ignore depreciation, she said. At MOCA, that would mean a surplus of $430,000 in 2011-12, rather than a deficit of $536,000 if depreciation is counted.
"The goal for any organization is to bring in money to cover its expenses, including depreciation," she said.
If those hidden costs are ignored, Whittemore said, "over a period of time you're probably going to end up with an organization that's cash-strapped" when it's faced with no choice but to pay for the deferred building repairs and new equipment that are accounted for year by year as depreciation.