There were some reactions of shock and awe last week as the Milwaukee Public Museum made public its deep deficit, and the draconian cuts and mission-shifting it was making to get out of the hole. The organization is now planning to cut 45 percent (or more) of its payroll, and transition from a research-focused natural history museum into a ‘science center’ focused on public displays.
But these planned cuts don’t solve the looming cash crunch, which is leaving the large institution (with a staff of 240) short on its next payroll.
According to this article, Museum President Michael Stafford pinned the monster deficit on a full palette of problems:
Stafford says a ”perfect storm” of factors has put the museum’s 2005 budget into a projected $4 million hole. He has blamed unrealistic budgeting, shortfalls in private fund-raising that supports the bulk of the museum budget, the sluggish economy, too-rapid growth at the museum and freeway reconstruction for the ongoing deficits. Other sources said increasing health insurance costs played a role.
Still lacking a certified audit for the last fiscal year (which ended in August), president and board are now beating the bushes for cash to make payroll, and financial support to stay open in the longer term.
It will be interesting to see how a $4 million hole can go undetected for so long (that’s about 18 percent of the total operating budget), or if it was detected and left unannounced until now. The Charity Governance weblog is tracking the story and providing analysis. I’ll be watching too.
This certainly isn’t the first case of Executive Directors not paying attention is it? Not being accountable for and aware of the daily pulse of the museum’s well being just seems wrong. . . Urge the Milwaukee Public Museum Board to listen to its staff — to brainstorm ways to keep their work alive, keep people in their jobs, and preserve the integrity of the museum. Leaves of absence, paycuts, etc. are viable solutions. Boards don’t seem to care about the lives of those they hack away — it can be devastating on many levels. Beware the business model! Don’t let the board make the decisions alone!
1/5 of the proposed deficit has come from the Retail Operation. Who is managing that department and who in there right mind can lose money while selling things?