In January a group of New York arts journalists gathered at an upscale Italian eatery in SoHo to learn about the San Francisco Museum of Modern Art’s upcoming exhibitions and planned $24 million rooftop sculpture garden. In his address to the group, the SFMOMA board chair and investment guru Charles Schwab insisted that prudent stewardship would protect the museum from any recession fallout.

But strong leadership alone may not be enough to protect institutions from a daunting array of problems, from budget gaps and staff cuts to shrinking corporate and individual patronage and flagging capital campaigns. Worse, Wall Street’s troubles have eaten away at museum endowments. The mighty J. Paul Getty Museum, in Los Angeles, had lost 25 percent of its almost $6 billion endowment by the end of the last fiscal year. In a terse all-staff memo issued in mid-December, the Getty Trust chief executive James Wood warned his team that "it is essential that we significantly reduce spending, which will have an impact on staffing, programming and operations." A hiring freeze is in effect at the Getty as well as at other major institutions, including the Museum of Modern Art in New York, where department budgets were trimmed by 10 percent, and the Indianapolis Museum of Art, whose endowment fell 24 percent, to around $300 million.

"We’ve cut out overhead and administrative costs, and we seem to be okay," says the IMA’s director, Maxwell Anderson. "But if the endowment doesn’t recover some significant value in the next year, we won’t be." The IMA has already pruned its budget by 9 percent, reduced special exhibitions from three to two a year and pushed back the opening of its $25 million Virginia B. Fairbanks Art & Nature Park from September of this year to spring or summer of 2010. Layoffs are possible if the economic climate remains bleak.

Some institutions no longer have reserve funds to dip into. By the end of 2008, according to a New York Times report, the Museum of Contemporary Art in Los Angeles had spent most of its $50 million restricted endowment. That news was followed by the resignation of Jeremy Strick, its director of nine years, and the appointment of a temporary chief executive, Charles Young, to steer the museum back to solid financial footing. The megapatron Eli Broad has promised to invest $30 million to save MOCA.

Straitened circumstances are nothing new to Graham Beal, the director of the celebrated though chronically cash-strapped Detroit Institute of Arts. "We’ve been living with recessionlike conditions since 2001, 2002. So we’re known for being in trouble," says Beal. He claims he’s raised an average of $100,000 a day since he took the helm at DIA, in 1999, which adds up to a whopping $350 million, but he notes that, "we can’t go on raising money at the rate that we have been."

Beal points out that the problems are only emerging. "Everyone is just beginning to feel it." The first thing a director worries about, he says, "are the people who are not able to fulfill the pledges that you have actually included in your planning." This extends to corporate support — the city’s struggling auto industry can no longer provide dollars — and Beal also mentions one "very generous donor" who apologetically told him that the amount he had originally hoped to give would have to be reduced.

It is a quandary in which more and more institutions find themselves. "The e-mails from brother and sister directors changed dramatically a couple of months ago," says Beal. "I have a lot more company than I did last summer in terms of cuts."

Beal’s general sense of sympathy for his suffering brethren does not extend to the National Academy. In late 2008, the 184-year-old New York institution raised cash for operating expenses by selling two of its Hudson River School paintings to a private foundation. The works, Sanford Robinson Gifford’s Mount Mansfield, Vermont, 1859, and Frederic Edwin Church’s Scene on the Magdalene, 1854, were parted with in exchange for $13.5 million. This move violated a long-standing Association of Art Museum Directors (AAMD) policy requiring that funds from deaccessioning be used only "to acquire works of art and enhance a museum’s collection." The academy withdrew from the AAMD shortly after the transaction, but did not escape censure from the organization. "I would never have been able to allow the institution to close in order to take the position of not selling the paintings," says Carmine Branagan, the museum’s director as of last December. "The academy really had no option but to sell." Beal compares the academy’s latest deal to its unloading of several works a dozen years ago, before it was an association member. "The [directors then] said they had to sell them in order to survive," says Beal. "What it actually did was enable them to avoid making some really tough decisions, and now they’re arguing that they made a tough decision by [deaccessioning] again. In fact, they’re just perpetuating a failing institution."