New Fine Arts Museums director outlines funding, collections and urgent chiller need as comptroller audit nears

Max Hollein, director and CEO of the Fine Arts Museums of San Francisco, told the Government Audit Committee on Oct. 26 that the museums operate with a relatively small endowment, a large and diverse collection, and several urgent facilities and conservation needs that will require continued city support and philanthropic growth.

Hollein said the two museum buildings—the Legion of Honor and the de Young—total about 410,000 square feet but only roughly one‑quarter of that space is devoted to public exhibition. He gave the museums’ collection size as 126,257 objects and said the de Young holds about 30,000 items while the Legion holds roughly 90,000. "Only about 3% of our total operating budget is covered by endowment support," Hollein told the committee; he described earned revenue, philanthropy and city contributions as the other primary funding streams.

Hollein identified city funding as a material share of the operating budget (he cited roughly $18–19.2 million in recent remarks and said city support covers about 25–27% of annual operating costs) and said increasing philanthropic contributions is a priority to make the museums financially resilient. He also asked the city for immediate help replacing a failed chiller at the Legion of Honor, saying a loss of temperature control poses a risk to sensitive works in the collection. "We need the city support to replace the chiller at the Legion of Honor," Hollein said.

The director described collection‑care practices and oversight: about $3.3 million a year is allocated for collection care, the museums hold American Alliance of Museums accreditation and the institution participates in U.S. government indemnity programs for major exhibitions. Hollein said the museums carry insurance (he referenced roughly $200 million of insurance coverage and an additional umbrella policy) and that government indemnity covered a very large portion of insured value for recent major shows.

Several supervisors pressed Hollein on governance and accountability. Supervisor Yi asked who hired Hollein and to whom he reports; Hollein said a board search committee recommended his hire and the board—represented by its president—conducted the appointment, but he also serves as a city employee in his CEO role. Committee members and other speakers discussed the museums’ three‑entity structure—the public trust established by city charter, the Fine Arts Museums Foundation (endowment/foundation functions) and COFAM (the nonprofit operational entity)—and noted the trustees governing the public trust are largely self‑perpetuating. Chair Aaron Peskin referenced a 2012 government performance audit that recommended stronger practices for object oversight and term‑limit reforms; Hollein said he will review that report.

Kate Chock, Audit Manager in the Comptroller’s Office, told the committee the office plans to issue its audit report on the Fine Arts Museums tomorrow and will present results at the next meeting but could not share findings prior to issuance. "We're planning to issue [the report] tomorrow," Chock said.

No members of the public testified on Item 2. The committee moved to continue the item to the call of the chair for follow‑up with museum staff and the Comptroller’s Office, and adjourned.

Next steps: the director said he will review prior audit recommendations and governance materials; the Comptroller’s Office will issue its audit report the following day and present the findings at a future committee meeting.