The Board of Regents recognized the museum in 1966, when it was awarded a permanent charter under the name Museum of American Folk Art. Despite steady growth in museum attendance and membership, the second half of the 1960s was fiscally challenging and marked by continued discussion of procuring a permanent exhibition space, as well as the idea to partner with a larger institution that would be interested in housing an increasingly impressive specialized collection. Though the board struggled with these decisions, over thirty exhibitions were displayed before 1970, including satellite and traveling exhibitions, and membership grew to over 500 people. However, Due to financial difficulties, the Board of Trustees considered closing the institution's doors forever in 1971.
If there were few reasons to celebrate the beginning of the museum’s second decade, there were at least several reasons for encouragement. A grant from the National Endowment for the Arts funded a series of exhibitions that helped sustain the museum’s reputation as an innovator and drew more visitors than any of the exhibitions held during the institution’s first decade. The museum also received a grant from the New York State Council on the Arts; this funded the planning and organization of a series of Bicentennial exhibitions on the folk arts of New York State.
Wallace E. Whipple, director from 1971 to 1972, explained that the many encouraging developments masked a more serious reality, and the financial strain on the institution was intense. Consideration was given to the sale of the museum’s collection at auction. This was a controversial proposal; ultimately, the museum retained ownership of the most important works of art in its collection, including the Alastair Martin decoy collection, St. Tammany, Angel Gabriel, Father Time, Flag Gate, Turtle and William Matthew Prior painting.
Through these years were marked by controversy, they also established the museum as innovative and relevant. The National Endowment for the Humanities grant funded three exhibitions in a series called “Rediscovery of Grass Roots” which presented historical context for contemporary themes. In 1971, the museum publication the Clarion was created as a newsletter, but by 1975, was being published as a magazine. By 1974, membership had doubled to 1,000 individuals, an internship program was established with Bennington College, and education programming for children and adults is prioritized, including house tours, quilting and rug hooking classes.
The brief but brilliant directorship of Bruce Johnson (1975–1976) helped bring a renewed sense of purpose to the organization. Shows presented during his tenure broke all attendance records. The museum also produced a series of illustrated catalogs and books during this period. The momentum that Johnson inspired continued beyond his tragic death in a motorcycle accident at the age of twenty-seven.
Mary Black (1964-1970)
M.J. Gladstone (1970-1971)
Wallace E. Whipple (1971-1972)
Joseph P. Doherty (1973-1974)
Bruce Johnson (1975-1976)