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Feb. 15, 2005, 6:12AM BEQUEST TO MFA COULD SET RECORD FOR AN ART MUSEUM Oil heiress's gift ultimately may be up to $450 million By SHANNON BUGGS Copyright 2005 Houston Chronicle The Museum of Fine Arts, Houston, soon could be entered in the annals of philanthropy as the recipient of the largest cash gift to a fine arts museum ever publicly announced. Caroline Wiess Law, the daughter of one of Humble Oil Co.'s founders, made the museum the prime beneficiary of her estate. When all of Law's assets are sold and the legal proceedings conclude, possibly by the end of this year, the museum could net between $400 million and $450 million, said director Peter Marzio. "In recent history, this would be one of the biggest, if not the biggest cash gifts to an art museum," said Mimi Gaudieri, executive director, Association of Art Museum Directors in New York. "This money will help make Houston one of the most important museums in terms of programming and serving the public." Law's giving would rank as No. 1 in non-art donations to museums on a list compiled by the Center on Philanthropy at Indiana University, which tracks charitable donations of $50 million and more. Less pressure on budget The MFA already has plans to kick off a capital campaign in the coming months for designing and building a third structure on its campus to house 20th century and contemporary art, Marzio said. This comes after the museum raised $125 million to build the 200,000-square-foot Audrey Jones Beck building, which opened in March 2000. "If the Law bequest works out the way we want, " Marzio said, "there will not be as much pressure on the operating budget to build the new building as there was on the budget when we built the Beck building." Because the Law gift is endowed money, it is not meant to be spent. Instead, the cash will be invested by money managers Fayez Sarofim in Houston and Luther King in Fort Worth. The $165 million the museum has already received from Law's estate has raised the museum's total endowment to $545 million. A second check of $165 million is expected to arrive by the end of March, making the city's wealthiest arts organization even richer. "It's a magnanimous gift not only to the MFA but to the entire city," said Ed Wulfe, president of the Houston Symphony. "It ensures the long-term viability of one of our major arts organizations and allows it to continue to impact the quality of life of our entire city." An avid art collector, Law followed her mother's footsteps on the MFA's board of directors. She used oil industry inheritances from her parents and husbands to support the museum's growth. She was named a life trustee and was thanked by the board for her generosity over the years with the honor of her name being bestowed on the museum's main building designed by architect Mies Van Der Roh. "She felt that our family has been very lucky and that this city has been very good to us and that it is our privilege and duty to give back to the city and that this gift might inspire others to do the same," said Jim Elkins, Law's nephew and executor of her estate. Soon after Law died in 2003 on Christmas Eve and her 85th birthday, her estate gave the museum Law's contemporary art collection valued at between $60 million and $85 million. The 55 major works include pieces by Andy Warhol, Pablo Picasso and Joan Miro. The estate also distributed $25 million checks each to the museum, Baylor College of Medicine and the University of Texas M.D. Anderson Cancer Center. What was not mentioned in the museum's announcement about that gift was that Law named the museum the residual beneficiary of her estate. Anything not specifically given to a person or institution was to go to the museum, including all of the assets of her foundation, which is valued at $18 million and is scheduled to be dissolved by the end of the year. The endowment also allows the museum to use less of the endowment's income every year to run the fine arts museum and the central administration of an arts organization that also operates the Glassell School of Art and the decorative arts museums at Rienzi and Bayou Bend. The museum's budget requires a draw of about 5.1 percent of the $544 million endowment total return to generate one-fourth of the the $41 million needed to operate the museum this fiscal year, which ends June 30. History of efficiency Before this infusion of cash, the museum earned a reputation as an efficient charity by spending 88 percent of its budget on programs and services and paying only 4 cents to raise $1 in charitable contributions, said Charity Navigator, a Web-based evaluator of the financial habits of nonprofits. That compares with the average art museum's spending just 68 percent on programs and 13 cents on fund-raising expenses. But one area in which the MFA appears stagnant is in revenue growth. Over the past three to five years, the average art museum grew by at least 6 percent, deriving primary revenue from individual donations, corporate contributions and and ticket sales. The MFA's revenue in that time frame rose only 1.6 percent. Chronicle reporters Everett Evans, Purva Patel and Charles Ward contributed to this story.