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End Of The Year Thoughts On Museums And Money

PAYARTFORWARD_bannerToday, and for the last week, I’ve been getting emails from museums and other non-profits asking me to give to the annual fund. Likewise, when I visit museum websites in recent days, many carry a banner asking for a hand. (In fact, I am surprised when I visit a website in these final days of the year that doesn’t ask for donations…). Here’s one from LACMA, cropped, at right.

This all reminded me that way back in March, I promised here that I would be back here elaborating on an article I wrote for the Museums section of The New York Times. And then I promptly forgot about it. In the article — Country Music Temple Stays in Financial Tune – I explored the business model of the Country Music Hall of Fame and Museum in Nashville. Year in, year out, the Hall gets some 80% to 90% of its budget from earned income.

What’s the applicability to art museums? The answer isn’t simple. A percentage anywhere near that high is clearly out of the reach of art museums, and rightfully so. Country music is a far more popular art form than museum-quality art — and the Hall does things that would not be acceptable at an art museum. And yet, given the economic turmoil of the last few years, which has dried up some sources of contributed income and government support, art museums must strive to maximize earned income. When money is needed, trustees generally push for museums to earn more before they reach deeper into their own pockets.

Pretty much everyone agrees that income is tied to attendance, which unfortunately leads to shows that directors tend to call “populist” but really mean “commercial.” That’s why we’ve had more exhibits lately like Jewels by JAR at the Metropolitan Museum*, which Roberta Smith eviscerated in her recent NYT review; and there have been plenty of others. 

So where does this leave art museums — which are criticized (including by me) when they do something too commercial and yet pushed to boost attendance as the be-all and end-all, the solution to money problems.

I’ve nothing against attendance, but it isn’t the whole solution. The “gate,” as we all know, provides a small proportion of earned income — though it does drive shop and restaurant expenditures. I agree with a point made by Kyle Young, the Country Music Hall’s director, in my March article, that “museums could be a lot more creative about the way they do earn money.” To a certain extent, that may mean — certainly at some museums — better management of costs. It may also mean negotiating better terms with restaurateurs (or managing in-house), selling more wine, changing operating hours, etc.

If that sounds impractical, I can only suggest a re-read of the article I wrote last January for The Wall Street Journal, about the financial model at the Peabody Essex Museum, in which director Dan Monroe laid out a vision that is nearly the opposite of the Country Music Hall of Fame. By 2018, the Peabody Essex expects to get 24% of its budget from earned income. Instead:

By 2017, when the campaign is complete, the Peabody Essex expects to finance 58% of its annual budget (projected at $35 million, up from $23 million in 2012) from the endowment. That compares with 25% in 2011.

I prefer the PEM model for art museums. But it means changing the mindset of donors. I hope that really starts happening in 2014.

Photo Credit: Courtesy of LACMA

*I consult to a foundation that supports the Met

Comments

  1. You neatly summarize the bind for museums. But “changing the mindset of donors” is going to be a tall order. Probably the strongest motivator for big donors is to see their name on a gallery, a building, an exhibit. (At the Metropolitan Opera even the drinking fountains have names on them.) And I have read that when a donor suggests anonymity, the institution often argues that the publicity of the naming process will encourage other potential donors. Of course, critics then criticize the institution for selling out.

    It seems it’s a double-bind whatever they do.

  2. Traditionalist says:

    What would be really great is a “museums tax” on high ticket art sales. I’m no economist, but perhaps this type of “luxury tax” with the proceeds directed in a structured way toward worthy museums could boost government support of the arts, if properly thought through.

  3. Bill Ivey says:

    Having helped establish the Country Music Hall of Fame’s earned income business model, I am one who is convinced that all museums should talk a close look — especially at the recent alliance linking the Hall of Fame with Nashville’s new convention center and equally-new convention hotel. This is an approach that could work for any museum. I am puzzled the unsubstantiated assertion that the Country Music Hall of Fame “does things that would not be acceptable in an art museum.” After all, the Hall of Fame was the first AAM accredited museum in the city of Nashville and it has maintained its accredited status for more than three decades. As a museum, research library, educational programmer and agency of historic prerservation, the Hall of Fame has hewed to the highest professional standards, and that includes the way it such treasured visual art treasures as Tom Benton’s “The Sources of Country Music.”

    Bill Ivey

    • Thanks for your comment, Bill — Interestingly, I don’t think that the partnership to which you refer, which structurally connects the Hall to a hotel, would be acceptable for art museums (AAM has different accreditation rules, and so be it). I reported that story a year ago, and so don’t have my conversations with Kyle Young fresh in my mind, but as I recall there were other small things that he even admitted would difficult for art museums to follow. Nonetheless, I admire the Hall’s business model — or else I would not have written the story!

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