LA CONNER — For the past three years, the Museum of Northwest Art has operated at a loss.

In 2015, MoNA was down $172,735. The next year, it was down $104,257. In 2017, the deficit was an estimated $277,762, according to a financial trends sheet provided by the museum’s Board of Trustees.

Current and former board members agree fundraising during those years was not sufficient to meet the museum’s needs. However, there is disagreement over whether financial mismanagement occurred.

“There was no financial mismanagement,” current board member Joanne Fredrich said.

Six board members who stepped down Dec. 2 say otherwise. They said they felt they could not carry out their responsibilities to the 36-year-old museum given the leadership of the executive director and president of the board.

In their letter of resignation, they questioned how finances were being handled and whether leadership was serving in the best interest of the museum.

Improper use of funds and inadequate fundraising were among the major critiques from the former board members.

The six are among 14 board members and staff who stepped down in 2017.

Executive Director Christopher Shainin and Board of Trustees President Gary Molyneaux will be stepping down on March 31.

At odds over spending

Former board members Gretchen McCauley, Bruce Bradburn and Earlene Beckes say restricted funds — money reserved for specific purposes — were not used for those purposes and that the money was spent without full board oversight.

“All restricted moneys were spent on operating costs,” McCauley said. “The (board) finance committee knew nothing.”

MoNA’s restricted funds included money set aside for education and for the preservation of a William Cumming mural that was found in a barn in Skagit County in 2014.

Though balance sheets from 2017 list education, the mural and six other items under the title, “Net Assets — Temp Restricted,” Shainin denies the mural funds were restricted and says the museum has never had a financial structure in place that would segregate restricted and unrestricted money.

Molyneaux echoed Shainin’s statement.

“There’s no such thing as a restricted account in this museum,” he said.

Instead, funds such as those raised at MoNA’s auction in the Fund the Future campaign for education just go into a bigger pot, said current board member David Hall.

“The rule is not this exact dollar has to be spent in this exact way,” Shainin said. “It’s that you have to perform the function that you said you were going to perform.”

According to Foundation Group, a company that consults with nonprofits, donations received through direct solicitation for a particular purpose must be used for that purpose.

“In and of itself, that makes the money restricted,” Bradburn said.

Beckes, who served on the board from 2010 to 2016, said there is a lack of transparency about how restricted funds have been used.

In response to board members’ claims that they were being closed off from decision making Shainin said all board members had the opportunity to voice their concerns during meetings and everyone received the same information.

“The board is completely aware and engaged in all the financial issues,” he said.

The bottom line

MoNA received three major donations in 2014, totaling over $600,000.

Instead of going toward much-needed building repairs or being put into endowment where it would generate income, the money was used to pay off the museum’s storage facility and cover outstanding operational costs, Bradburn said.

The current board says they misjudged how far they could stretch the donations.

“That surplus gave us time, we thought, to change the business model, to look toward major donors as well as community-based donors, and to put us on more of a footing for sustainability,” Molyneaux said.

But the next year, MoNA operated at a $172,735 loss, according to a financial trends sheet handed out by the board.

From 2014 to 2015, operating expenses rose, while income fell in all but two categories: endowment and store operations. The most dramatic drop in income came in membership and individual contributions, which fell from $665,596 in 2014 to $97,593 in 2015.

Seeing the need for considerable fundraising, the board went on a retreat in October 2016 where members discussed a potential $7.5 million capital campaign.

At a minimum, $600,000 needed to be raised by the end of 2017 to cover costs, including $300,000 for building repairs.

But when spring 2017 rolled around, nothing was happening with the campaign, Bradburn said. He enlisted a colleague he knew from Intiman Theatre in Seattle — where he had co-chaired a capital campaign — to help organize an effort to raise the $600,000 minimum.

A contract was drafted with consultants Eleanor Hamilton and Sherry Prowda to do an assessment of MoNA’s ability to raise the funds. The contract was approved by the board May 26.

Then four months went by with no board meetings, Bradburn said.

It wasn’t until the next meeting Sept. 27 that Bradburn noticed how tight finances had become.

An analysis of MoNA’s balance sheets from August to October showed restricted funds — donated for the purposes of preserving the William Cumming mural and for the museum’s education programs — had been spent on operations.

In an effort to get the $600,000 campaign moving, Bradburn said he planned to go out into the community, show passion and raise funds in person.

All he needed was a list of who had already donated to the capital campaign, so he wouldn’t ask them to donate again.

But when he requested the list, Bradburn says Shainin told him he couldn’t have it because the donations were anonymous.

A few weeks later, Molyneaux asked Bradburn to stop fundraising and to resign for acting outside the board’s oversight.

“He couldn’t tell me who he was going to talk to or how much he was going to ask for,” Molyneaux said.

Molyneaux also said he doubted Bradburn’s ability to raise the funds, claiming Bradburn took longer than expected to procure money for the Cumming mural.

Bradburn said he previously co-chaired two capital campaigns for Bishop Blanchet High School in Seattle that raised $10 million and co-chaired another for Intiman Theatre, which raised $4 million.

“Anybody who had any disagreement with Gary (Molyneaux) or Christopher (Shainin) on just about any subject was marginalized,” Bradburn said.

When the six board members resigned in December, MoNA had raised about $140,000 of its $600,000 goal.

Prior finances

Former Executive Director Susan Parke remembers how strict the museum once was about its finances.

“Debt free was the guiding philosophy for me and early boards,” Parke said in an email. “Balanced budgets were required. Staff and programs were only added when there was an assured path to their continued funding.”

Parke became the museum’s second executive director in 1990 when it was called The Valley Museum of Northwest Art. In 2003, she changed roles to become curator of collections and exhibitions, where she remained until retiring in 2007.

During the few years the museum faced an operating loss under her tenure, Parke said “belts were tightened and expenses trimmed.”

McCauley, who served on the board for nearly 16 years and whose mother was a founding board member, said money has always been tight, but there has always been a solid core of donors who have supported the museum.

To keep MoNA going, a line of credit has historically been drawn and paid back after the museum’s summer auction. Parke remembers the line of credit being about $70,000.

Today, current board members say the line of credit is about $150,000 and is not entirely paid off following the auction.

Volunteer-driven fundraising events such as MoNA Style — a show featuring wearable art and home fashions by Northwest artists — and Taste of Art and Architecture once helped the museum meet its financial needs.

Those events are no longer held.

McCauley estimates MoNA Style brought in about $20,000 at its height with the last one being held in 2015.

What lies ahead

The museum will have new leaders at the end of the month. Shainin’s and Molyneaux’s resignations will be effective March 31.

“Christopher (Shainin) offered up his resignation to move forward,” Molyneaux said. “The board did not ask for it. It’s a very positive move that we all accepted and are moving forward with. It’s a change, but in my 40 years of nonprofits, change comes.”

Following his resignation as board president — a position in which he served for two years — Molyneaux plans to remain on the board until his three-year term ends in March 2019.

Shainin, after serving five years as executive director, will move on to be a statewide representative for arts, heritage and cultural advocacy.

A month ago, the museum board opened themselves up to input on the future of MoNA through a series of stakeholder workshops. There, they presented three options for the museum: maintain, expand, or close/revise.

The first option aimed to stabilize the museum through repairs to the roof, siding and HVAC systems.

The second included building classrooms, presentation and meeting facilities and a space for on-site collection storage. It also called for enhanced workshops and expanded galleries.

Option three was to close or revise MoNA where collections could be donated to the Tacoma Art Museum or other interested entities.

The board says it will pursue the first option by talking to major donors, building MoNA’s membership and speaking with the community about the importance of the museum.

The board recognizes the museum’s future will depend on donations cultivated over time, and not just from La Conner but from the greater Northwest region, said current board member Hall.

Board members say they have already seen donors step up in recent weeks to support the museum.

For the next month, Shainin will work with the board, staff and docents on choosing an interim director.

“We have a renewed effort after hearing from the community,” he said.

All six who resigned in December are willing to get involved with the museum again, though not necessarily as board members, McCauley said.

“For any one of us to go back, we would have to be invited by the current trustees,” she said. “We are certainly willing to volunteer in other capacities as well.”

— Reporter Leah Allen: 360-416-2149, lallen@skagitpublishing.com, Twitter: @Leah_SVH

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