From various bits of information emerging around the internet on the Rose Museum closing, there’s a chance Brandeis is using art to fill their budget gap because of the accounting. Judith Dobrzynski covers the particulars of Brandeis’s endowment losses and the harsh choices the school must face to deal with them. She also makes this point that Brandeis can only spend capital gains:

But by Massachusetts law, French said, Brandeis can only spend gains, not capital, from the endowment—and it will be some time before there are any of those. Brandeis’s reserve fund, which is included in the endowment for management purposes, is projected to run out in about 18 months.

As luck would have it, Felix Salmon has discovered from a Brandeis official that the art in Rose is carried on the endowment’s books at a value of $1.

Nathan also said something else which was extremely interesting to me: apparently all of the Rose Art Museum’s artworks are considered to be assets of the university endowment, valued at $1 each. All the proceeds from the sale of any artwork, then, is automatically a desperately-needed capital gain for the endowment.

That means that any value realized from the sale of art can be treated, for the university’s accounting purposes, as a gain and spent directly on the school’s operating buget.

If this is true, it would explain some of the schools actions and the remorselessness with which they’ve undertaken those decisions.

Brandeis on the Brink (The Daily Beast)

How Deaccessioning Rules Doomed the Rose (Market Movers/Felix Salmon)