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Are nonprofit organizations that are given land or other special privileges by the public held to enough scrutiny?

I remember when I first moved to New York City just after graduating from college. I was on a budget, and went with a friend to see the Metropolitan Museum of Art. While waiting in line for admission, I noticed that the fee charged to visitors was “recommended.” I asked the cashier exactly what that meant. And she seemed a little reluctant to tell me. After a little pushing, I found out that the only amount I had to pay was a penny. I don’t remember how much I ended up paying but it was much less than the recommended fee.

Two museum members have recently filed a lawsuit claiming that the museum’s policy “defrauds” visitors. According to the suit, under the terms of the museum’s lease with the city (signed first in 1878), admission was never supposed to be charged. Or at least no admission was to be charged between Wednesday and Saturday from the time the museum opened until a half hour before sunset. According to an article in the New York Post, the museum began charging a dollar in 1970 as a kind of “experiment,” presumably because the museum (and the city) was hard up at the time.

But that is clearly not the case now. As the Post points out, the museum has $3 billion in assets and a annual revenue of $300 million.

Lawyer Michael Hiller, who is representing the plaintiffs in both suits, charges the Met is a public institution that "behaves like a private business that lavishes exorbitant salaries and perquisites among its executives. . . . The museum does not need to charge; it chooses to do so, and when it does, it does so on the backs of members of the public."

The museum says that the city was well aware that it had been charging admission all these years and even approved periodic price hikes. But there is little documentation to support any of the museum’s assertions. Meanwhile, the museum has paid its employees very well and the Post notes that it even maintained an empty Fifth Avenue apartment for more than five years at a rent of $5,100 a month.

What’s interesting is how long this situation was allowed to continue before anyone objected. How many visitors have noticed the “recommended” sign? How many have inquired about what it means? It makes you wonder about other nonprofit organizations that are given land or other special privileges by the public. Are they being run like public institutions or private ones? Do some of them start acting a little bit more like private institutions and then slowly add more and more to their coffers hoping no one will notices? Without significant oversight it is hard to see how such situations will be avoided in the future.

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