by Daniel Grant
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In 2008 and 2009, the museum world held its breath as institutions cut back on hours, staff and programming, raised admissions, looked to sell objects from their collections to pay for operations or just closed for good. But in 2010, museums largely exhaled. Many U.S. museums have taken steps over the past two years that have apparently stabilized their finances—at least for now.
Those cuts and restructuring moves may have helped institutions facing red ink start to move into the black. A number of museum officials note that attendance has remained strong and that longtime donors have stepped up to counteract the drop in endowment earnings and smaller gifts. “We’re seeing some improving signs,” says Janet Landay, executive director of the Association of Art Museum Directors.
Staffing has been a primary cost-cutting target since it typically represents the largest single area of expenditures. At the Metropolitan Museum of Art in New York, 70 percent of the institution’s budget goes toward salaries and benefits. Like the J. Paul Getty Trust in Los Angeles, the Met reduced its workforce by 14 percent (205 and 357 jobs, respectively) in late 2008 and early 2009. The Philadelphia Museum of Art cut its staff by 30 members (or 7 percent of its workforce) during the same period.
Other budgetary aspects have gone on the chopping block, too. The Minneapolis Institute of Arts reduced its annual operating budget by $1.7 million by producing 20 percent fewer exhibitions, eliminating 11 full-time and eight part-time positions (or 6 percent of its total staff) and cutting salaries for administrators. These moves resulted in a balanced budget. Spokeswoman Anne-Marie Wagener says, “We will be in the black and … we do not anticipate any changes this time around.”
Similarly, the Akron Art Museum in Ohio reduced its operating budget from $4 million to $3.2 million in early 2009 by cutting staff, staff hours and exhibitions. The museum is now closed on Tuesdays. Director Mitchell Kahan says that these cuts will remain in effect for the time being; the net result has been a “happy surplus” of approximately $300,000 for the past fiscal year. “Just as satisfying, I don’t foresee any additional cutbacks,” he says.
Difficult times call for difficult decisions. The San Diego Natural History Museum, which saw its Moody’s Investor Service rating downgraded four levels in late 2009, shored up its expected budget deficit through a 10 percent staff salary cut (with senior staff taking a 15 percent reduction), a freeze on retirement plan contributions and a staff reduction from 120 to 105 positions. In all, the museum saved $1.2 million. The museum could have avoided eliminating staff by withdrawing its normal interest income from its endowment, but President Michael Hager says they did not want to further deplete an endowment already hit hard by the plunge in the stock market. “We were concerned about the long term,” he says. Memberships and smaller gifts were down, but major gifts increased to just over $5 million—more than the $3.5 million that had been expected. “We went to long-term friends, and they were very generous,” Hager says.
Difficulties and the ability to overcome them were not exclusive to the largest institutions, although scale does matter. “Small museums are smaller in terms of their endowments and staff, and their operating budgets are pretty bare-bones as it is, so there isn’t a lot of fat to be trimmed,” says Michael DiPaolo, president of the Small Museum Association and executive director of the Lewes Historical Society in Delaware. The largest problem for many of the association’s 500-plus members is that they rely on funding from government agencies that are also slashing budgets. At the association’s annual conference, DiPaolo notes, “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.
But smaller institutions may have one advantage over their larger counterparts: They have less paid staff, relying on unbenefited part-timers and volunteers to a far greater degree. “Most of our staff is part-time,” says David Beck, president of Nicholls House in Boston. “We can use people more or less depending upon visitorship.”
Larger museums report good results from cost-cutting and restructuring efforts. For example, in 2009, the Detroit Institute of Arts saved $6 million by laying off 20 percent of its staff, reducing hours of operation and postponing some traveling exhibitions. “That money we saved bought us some breathing space, as long as we can raise money at a serious rate,” says Director Graham Beal. Significant funding will be available starting this fall if four surrounding counties agree to a property tax levy dedicated to the museum. “If we get everything, we could be looking at $18 [million] to $20 million,” he said.
The Albright-Knox Art Gallery in Buffalo, N.Y., saw a drop of 10 percent in membership and 20 percent in its endowment between 2008 and 2009. It saved $250,000 through two-week staff furloughs, reductions in marketing and advertising spending, and cutting morning hours. “We weren’t getting audiences before noon anyway,” says Director Louis Grachos, adding that because of these measures, “no furloughs are planned in the next year.”
The Los Angeles County Museum of Art, which drew $100 million less in donations in 2008–09, cut its 2008–09 budget by $6 million to approximately $54 million in the past year. That austerity plan consisted of a hiring and salary freeze, staff cuts through attrition, renegotiated contracts with vendors and a sharply reduced staff travel budget. The result was a surplus of $300,000 for the fiscal year ending this past June. Barbara Pflaumer, a spokeswoman for the museum, says, “We hope that the cuts we made will be sufficient.”
The Metropolitan Museum of Art’s cutbacks were also directed internally “so that there would be no discernible change for the experience of visitors,” spokesman Harold Holzer says. “There was no cut in hours. We continued our concerts, lectures, programming a nd global marketing.” In this past fiscal year, the museum’s attendance reached over 5 million—the fourth highest total in the Met’s history and the first time visitorship has topped 5 million since 2001. In addition, membership reached 138,000, which is the highest level in the museum’s 140-year history. The Met also reorganized its merchandizing operation, reducing store outlets and staff while emphasizing catalog and online sales, resulting in budgetary gains.
Apart from the anecdotal, there may be some statistical evidence to support a brightening financial picture at museums and throughout the nonprofit sector. The Johns Hopkins Nonprofit Listening Post Project conducted a survey of more than 1,100 nonprofits in early April, finding a slight increase in hiring (0.4 percent) between October 2009 and March 2010. That contrasts with a 0.4 percent decrease in private sector jobs during that same period. Most encouraging, more than three-quarters of the respondents reported that they expected to keep employment levels constant or even hire more staff over the next six months. The survey found that respondents in the arts had “increased their reliance on volunteers” and that, additionally, between 42 percent and 51 percent of them were employing more part-time and contract workers.
Not every museum has been able to turn the corner through shaving staff, hours or spending. The Cincinnati Art Museum, which laid off half a dozen staff members and reduced the number of traveling exhibitions that it rents, still needs to “be more aggressive in terms of fundraising,” says David Linnenberg, deputy director of institutional advancement. Even then, “we may have to borrow from our reserves to balance the budget,” he says.
Both the Indianapolis Museum of Art (IMA) and the Art Institute of Chicago (AIC) have announced a second round of cutbacks. IMA, which eliminated 15 full-time and six part-time positions in a $1.7 million reduction of its operating budget in early 2009, announced in June an additional $2.5 million budget cut that will result in more layoffs and restructured departments. In the past year, AIC delayed several capital projects, reduced the operating budgets of its curatorial departments, cut staff by 3 percent, slashed the museum director’s pay by 10 percent, froze other salaries and required a week’s unpaid furlough for all staff. It also increased admission fees from $12 to $16. In an e-mail, spokeswoman Erin Hogan says the museum nonetheless “continues to face a budget shortfall for fiscal year 2010 due to endowment losses” and will be implementing “further cost-cutting measures throughout 2010, including deeper reductions of departmental operating budgets, continued salary freezes and staff reductions.”
Museums, of course, are subject to the financial troubles of their communities. Chicago, for example, has seen a drop in tourism and convention bookings citywide, contributing to a 10 percent decline in attendance and admissions at the Field Museum. The museum also has seen a decline in foundation and corporate giving, as well as in smaller donations, but this was more than offset by an increase in “major gifts from our board and from our closest friends,” Croft says.
He notes that this is a difficult year in which to plan ahead: Will major gifts continue to come in at a rate that offsets other losses? Will admissions rise to the $12.2 million level where they had been just a couple of years ago? The museum did add to its advertising budget in hopes of “keeping the name of the institution and its programming before the public,” says Croft. Between 35 percent and 40 percent of visitors come between Memorial Day and Labor Day, leaving staff to wait and see what the future holds. “If attendance and admissions continue at the same trajectory, there will have to be some reaction to that in terms of a reduction of people or of programming,” Croft says.
Perhaps the best news for museums is that following a financial crisis that recalls the 1930s and a recovery that can only be described as weak, many are finally able to catch their breath, look ahead (a little bit) and start making plans again. |
