JANUARY 14, 2010

The Vanishing Benefactor
By James Panero

The six-month disappearance of Harvey S. Shipley Miller, the sole trustee of the Judith Rothschild Foundation, reported in Wednesday's New York Times, shows us the perilous nature of charitable governance and the surprisingly limited oversight through which foundations, especially charitable trusts, can operate.

Before a little-known abstract artist named Judith Rothschild died in 1993 at the age of 71, she tapped Mr. Miller, her best friend, to be the one trustee of her multimillion-dollar charitable trust. Its mission was to promote her reputation and support artists of her generation. The appointment left Mr. Miller with a six-figure salary, free room and board in the artist's Park Avenue townhouse, several million dollars in cash to advance the foundation's mission, and several million more in real estate and fine art that could be liquidated for foundation purposes. The story seemed to have all the hallmarks of a feel-good movie. But it has taken an unpleasant turn for the people who were promised the foundation's help.

According to the Times story, Mr. Miller had neither been seen nor heard from by his grantees from July of last year until this month, and none of the foundation's 17 grants for 2009, totaling more than $100,000, have been paid. Grantees discovered that the Rothschild Foundation's telephone was disconnected and that registered mail was being returned. Emails to Elizabeth Slater, the foundation's grant-making officer and its only other employee, bounced back. Ms. Slater, the Times reported, had been dismissed in a cost-cutting move early last year. Meanwhile, the foundation's troubles have refocused attention on a controversial foundation gift of drawings to the Museum of Modern Art. Mr. Miller's curious behavior has renewed scrutiny of how this charitable trust has been managed, with the New York state attorney general's office having contacted the foundation's attorney.

"We are a very small institution," says Tim Detweiler, who runs the James and Janie Washington Foundation, a 2009 grantee based in Seattle dedicated to the work of James W. Washington Jr., a self-taught African-American artist. "It would have been very helpful to have that $4,000. They have done a lot of good, but with no communication you fear the worst—that someone ran off with the money."

The primary mandate of Rothschild's bequest has been the promotion of her posthumous reputation through the exhibition and sale of her art, followed by management of other art in her collection and "facilitating and funding the acquisition by public galleries and museums of work primarily by contemporary American artists who died after Sept. 12, 1976 and before March 6, 2008"—artists of her own generation—according to the foundation's tax returns.

As the foundation's only trustee, Mr. Miller enjoyed broad discretion to use the funds as he saw fit. With the power to buy, sell and donate art, he became his own cultural force. Since he assumed his position at the foundation, MoMA and several other major institutions invited him to join their own boards of trustees.

Between 2003, when he joined the MoMA board, and 2005, Mr. Miller used foundation funds to buy 2,500 drawings by nearly 700 mainly contemporary artists. He hand-selected the works—by very well known older artists such as Cy Twombly and several hundred younger artists entering the MoMA collection for the first time—through an $18 million run through commercial galleries and art fairs. His supermarket sweep, subsequently gifted to MOMA, became the Judith Rothschild Collection and the subject of the show "Compass in Hand," which closed at the museum on Jan. 4.

"Judith Rothschild was concerned with a community of artists she could have known," says Christian Rattlemeyer, the Harvey S. Shipley Miller Associate Curator of Drawings at MoMA and the show's organizer. (Asked about the endowed curatorship, a MoMA spokesman said it was funded with a donation from Mr. Miller's personal funds.) The collection is in the spirit of "a community of living artists who have a dialogue with each other." Erik J. Stapper, the attorney for the foundation and Rothschild's estate, concurs that Mr. Miller's actions were consistent with the foundation's mission. "We had long discussions with the attorney general's office about this kind of program: How do you advertise an underrecognized artist? Judith had the fullest confidence that Harvey would be the one to do it."

Not all observers familiar with Rothschild's life believe it fulfilled the spirit of her wishes. "This was the worst of the excesses of art-market gambling, of young artists and helping their careers and putting them in the museums," says Wendy Snyder, who represents the estate of the artist Sam Glankoff. "Nowhere does the mandate mention gleaning public recognition for Judith Rothschild by giving drawings of young contemporary artists to one of the most elite museums in the world." Other than the mention of her name, visitors to "Compass in Hand" were left with little sense of who Judith Rothschild was or what she had done.

Natalie Edgar, director of the Pavia Trust, was moved to contact the New York state attorney general, whose office has oversight over charities and foundations. "Harvey Shipley Miller [has] been spending foundation assets on a shopping spree to buy 2,500 drawings of emerging artists," Ms. Edgar wrote shortly after the new year. He could not pay the grantees, "but he could spend millions on the shopping spree for the MoMA."

Unusual for a donation of this kind, the manic speed with which the gift took shape and entered the museum presented its own problems. Even Mr. Rattlemeyer remarks on the unorganized assortment he first confronted. "If you acquired 2,500 works in two years, you acquire three or four a day, which means they come, they go to a warehouse, and they move to the museum and the museum received 2,500 pieces at once."

Finally there is the question of a single trustee leveraging resources of one charitable organization to benefit another where he also maintains a board seat. "When you are sitting on the board of two different organizations, you really ought to be careful to avoid even the appearance of a conflict of interest," says Raymond Dowd, a lawyer at Dunnington, Bartholow & Miller who specializes in art law. "Usually that is resolved by recusing yourself or getting an independent judgment of counsel."

Just this week, Mr. Miller re-emerged after several more grantees began filing notice with the Charities Bureau of the New York state attorney general's office. But the circumstances of his disappearance remain murky. "He was very seriously hurt in a car accident," just before Christmas, Mr. Stapper says. This account contradicts Mr. Miller's own account of his convalescence. In a phone conversation on Tuesday from his home outside Philadelphia, he said he had slipped on a waxed floor. "I fell in my house. I broke my neck. Then it turns out the halo they put on my neck didn't work. Then they had to operate with bone chips harvested from a corpse. Oh my God, I am Frankenstein! Really, it was just insane. I was so out of it."

Mr. Miller says the checks did not go out earlier because the foundation's assets are mainly illiquid and he was waiting for the proceeds from the sale of work. He now promises to honor the grants within 30 days. "Our big problem is we have assets but we can't sell them easily. I haven't been paid since [last] January." Neither story takes into account the months of silence from Mr. Miller.

What is clear from this episode is the danger of unaccountability in single-trustee charities, which lack the kinds of checks and balances provided by the presence of a full board of directors. "It is really difficult when you have a board of one," says Mr. Detweiler. "A lot of things can happen. That's why most nonprofits have larger boards, so decisions are not made on personalities."

To his credit, Mr. Miller has fulfilled his mission of bringing greater attention to the legacy of Judith Rothschild. Just not the way she fully expected.

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