A Balancing Act: How Museums Balance Cost Cuts with Theming Decisions

Posted by Elizabeth Alton on Wednesday, July 2nd, 2014

Museums sell off collections

One of the major trends highlighted in this year’s Center for the Future of Museum’s 2104 TrendsWatch report was increasing pressure on museums to diversify their income streams. Many institutions are facing a triple threat to their incomes: federal funding is shrinking for museums and other cultural institutions, private donors hit hard by the recession are reducing or eliminating charitable giving, and attendance revenues are dropping.

According to the American Alliance of Museums, two thirds of museums are reporting some level of financial distress at their institutions. In light of these funding issues, museums are facing two challenges: how to balance financial demands with curation and theming decisions and how to generate new sources of revenue.

As a result, there are a number of different case studies that offer insight into how museums are affected, as well as how they’re coping with the challenges that lay ahead. One area is through increased scrutiny. A number of institutions are setting targets at a curation cost per visitor ratio. One op-ed in the LA Times noted that some exhibits at the Los Angeles MOCA had reached $100 per visitor, a figure that was deemed far too high. The piece goes on to say, “In today’s economic environment, museums must be fiscally prudent and creative in presenting cost-effective, visually stimulating exhibitions that attract a broad audience.”

Many institutions are tackling cost savings initiatives at the operational levels first. Steps are being taken to reduce programming, cut staff hours, and reduce salaries and benefits. In other cases, museums such as Brandeis University’s Rose Art Museum have spoken publicly about plans to liquidate their collections or even close their doors publicly. These very logical approaches to reducing expenses unfortunately fail to address the underlying problem: non-profit models are only sustainable as long as there is outside funding. In any context where funding is constrained, from a slow economy to a government leadership that doesn’t prioritize the arts, these organizations remain vulnerable to outside forces.

Lower Museum Incubator

Small institutions are particularly vulnerable to economic downturns. As Michael DiPaolo of the Small Museum Association noted in an interview with the Huffington Post about talks at an industry conference, “There was a lot of discussion of the need for a more diverse revenue stream, such as creating or bolstering an endowment, striving for more memberships, expanding sponsorship opportunities and using the Web to solicit donations.”

As a result of the vulnerabilities created by outside economic forces, many museums are taking a different approach. The goal is to lower expenses without sacrificing the quality of the experience, or to actually enhance the experience in order to generate more revenue. As one interesting article notes, more museums are tapping into staff expertise acquired in the commercial sector (such as arts galleries or private antiquities collections). The idea of “the gallery as museum, and the museum as gallery” opens up several interesting possibilities for how museums think about their collections and interact with the public.

Another approach is partnering with for-profit companies that can sponsor exhibits or partner with the museums on programs that align with the company’s and the museum’s shared interests. And still others are finding creative ways to monetize aspects of their business model. Manhattan’s Lower Museum is offering a business incubator/co-working space where creatives and entrepreneurs pay rent to work. The Smithsonian created the SparkLab! National Network, a program through which it licenses out hands-on learning content to other museums. The historic Gore Place estate in Massachusetts is operating a small farm to generate a profit.

In each of these cases, the institution has evaluated its assets and worked to final a solution that uses its unique positioning to create diversified revenue streams. Each of these cases is a hopeful indicator for the museum world at large. Whether the goal is to scale programming in a sustainable way, diversify partnerships, or put assets to work for the museum generating money, there is significant hope for cultural institutions even in the most constrained financial environments.

Image sources: NJ.com, Art In America Magazine, The Art Newspaper





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