August 17, 2012
TT: What to do when the cash runs out
The Detroit Institute of Arts, a major encyclopedic museum whose collection includes such masterpieces as Vincent van Gogh's "Portrait of Postman Roulin," has just weathered a serious funding crisis. In today's Wall Street Journal "Sightings" column I talk about what happened to the DIA--and what lessons other arts institutions can learn from its experience. Here's an excerpt.
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The DIA, as Judith H. Dobrzynski recently reported in the Journal, no longer receives public funding from the city of Detroit or the state of Michigan, both of which have been hit brutally hard by the current economic downturn. Because the museum's operating endowment is so small, more than half of its operating expenses are directly funded by its donors--a model which, as Ms. Dobrzynski wrote, "is simply not sustainable." DIA director Graham Beal responded by hacking away at the museum's budget and raising enough money to retire its current debts. But he knew that the DIA was doing no better than running in place, and that the fiscal road ahead would soon grow sharply steeper.
What to do? Mr. Beal went to the voters, asking the residents of Michigan's Macomb, Oakland, and Wayne Counties to pass a modest 10-year-long dedicated property-tax hike known as a "millage." It would supply up to $23 million in public funding each year for the next decade--91% of the DIA's annual operating budget--thus buying time for Mr. Beal and his colleagues to build up the museum's operating endowment to the point where it can bring in sufficient income to pay the bills.
Sounds great, huh? But how do you get suburban taxpayers to pony up in support of a museum located in the heart of a city on which most of them long ago turned their backs? That's the beauty part: Mr. Beal announced that the residents of every county that passed the millage would be admitted free to the DIA. Otherwise, he said, the museum would be forced to close on weekdays and lock the doors to half of its galleries.
Having offered voters this stark alternative, Mr. Beal and his staffers rolled up their sleeves and started working the phones...and all three counties passed the millage.
What lessons can other arts organizations learn from the DIA crisis?...
• Don't ask the public for more money unless you can prove that you're not wasting the money you're already spending.
• Keep the needs of your clientele in mind at all times.
• When the world changes, change with it....
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Read the whole thing here.
Posted August 17, 2012 12:00 AM