I’ve long wanted to learn more about the very few museums in the US that operate as for-profit organizations. Why did their founders choose not to go the more common route of incorporating as a nonprofit? Are they actually making money? Today on the Blog, I interview Dan Gluck, founder of the Museum of Sex in New York City. The museum launched in 2002 as a for-profit company. Turns out there isn’t as much difference between the economics and motivations of this for-profit museum and its nonprofit brethren as you might think.

–Elizabeth Merritt, VP Strategic Foresight and Founding Director, Center for the Future of Museums

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Elizabeth Merritt: Dan, what was your goal in founding the Museum of Sex?

Dan Gluck: Our mission is to advocate for open discourse about sex and sexuality, and to present the best current scholarship about sex and sexuality to the widest possible audience. I wanted to educate and inform the public about subjects they may not otherwise engage with and I wanted to do so in New York City, which has a sexual history unlike any other city. The sexual diversity of New York has come at a high personal and legal cost to many—their stories deserve to be heard.

EM: What is the legal structure of the museum?

DG: We are structured as a Limited Liability Corporation (LLC), which is a partnership of a group of investors. This structure protects the partners from being personally responsible for the LLC’s debts and lawsuits. (If an LLC files for bankruptcy, the partners don’t have to use their personal money to pay the company’s debts.)

I also created an advisory board that currently includes Ruth Abram, the founder and former president of the Lower East Side Tenement Museum; and June Reinisch, director emeritus of The Kinsey Institute for Research in Sex, Gender, and Reproduction. Our advisory board is a resource for exhibition development, networking, and general advice and guidance.

EM: Why did you decide to incorporate the Museum of Sex as a for-profit organization?

DG: We had to in part because of subject matter—the State of New York didn’t want to charter us as a museum with the word “sex” in our name! Also, we felt that funding and donors might be problematic. We could have gotten money from the porn industry, but we didn’t want it. And at the time, it was hard to raise philanthropic gifts because very few people would lend their name to the organization. That might be different now.

Also, not being nonprofit offered a certain freedom. When we launched, there were protests from the Catholic League (echoes of protests to the Sensation exhibit at the Brooklyn Museum twenty years ago). And frankly, if we were a tax-exempt nonprofit, the people who objected to our work could have a valid claim as taxpayers about how their money is used. Within the context of a private venture, there is nothing people can do about it.

Besides, there are some creative advantages to being a private company. Nonprofit status comes with certain bureaucratic complexities, including the need to navigate the concerns of the people on the board. We felt that the subject of sex is so politically charged that it might be difficult to do what we wanted to do. For us, being a private company affords the ability to be more creatively nimble.

EM: And is the museum “profitable?”

DG: For many years after we launched, we were just trying to stay alive. We’ve had steady growth over the years, but we need another few years of growth to be truly sustainable in the way we want to be.

Many for-profit businesses aren’t there to make money; money is just a way of growing whatever it is you want to do. We had next to no money when we started, and a low-quality space. We’ve reinvested over the years to build it into the world-class space it is today. We started with ten thousand square feet total, now we are up to twenty-four thousand with a new gallery coming in the next six to seven months.

We incurred a lot of debt to start up and to grow, and our next financial challenge is that we have to be able to show we can pay off that debt in a reasonable time. Then we can start eyeing what happens next—maybe opening another location. The costs to operate a second site could be significantly less. Right now, the work we do for a given exhibition has a short shelf life—with more than one site, exhibitions can circulate to reach more people.

EM: What has the museum been like for you personally, as a financial venture?

DG: I gave up a lot to start the museum! I worked full-time on the museum when we launched, but I couldn’t pay myself for a number of years, so the museum had to become a part-time job. I used the money we took in to pay the staff. Then, as we grew, I could build in a salary for myself, and now I’ve been full-time for the past ten years.

I know that sometimes nonprofit museum professionals think that they have a harder deal than people in the for-profit sector. But people starting a private business often make less money, with no benefits, than people with a nonprofit job. Doing this work is taking a chance on the future. Most small business people make sacrifices to create their companies and build it up to a point, but it may never pay off.

EM: What are your thoughts about the long-term future of the museum and its collections?

DG: We created the nonprofit Muse Foundation, which holds the title to what collections we do have. But as it turns out, we are not really a collecting museum; we are more like a kunsthalle. Collections are costly to acquire and maintain, and it’s hard to do a good job caring for them. Also, our subject matter is so broad it would be hard to assemble a collection that addressed the subject as comprehensively as we envision. Our model is to work with other museums and other collectors to recontextualize their work. At some point, we might rethink this. Right now Muse is just a shell, with very little activity, but my hope is that it might eventually be a place to house the collection, a base from which they could travel at some point, and might include a research library. Some of the funds the museum generates could be allocated to support the foundation. On the other hand, we could give the money we raise to an existing organization, like the Kinsey Institute. They already have extensive collections and archives.

EM: What’s next for the museum?

DG: We are about to launch a major exhibition called Super Funland. The Museum of Sex combines educational content with immersive experience. It balances the tension of high and low. Some but not all our exhibitions are purely didactic, but all have an emphasis on design and experience. We hope Super Funland will become an attendance driver. It’s being created by a world-class group of designers, and will explore the sexual origins of the Carnival: from the Roman bacchanal, through its evolution during the millennia including Bartholomew’s Fair to the more contemporary community of sexual outcasts. There is one gallery that explores its licentious history, then two floors of commissioned art pieces. We challenged designers to create sexually charged carnival games. Just like Cirque de Soleil rethought the whole model and created a new kind of circus, the Museum of Sex is rethinking the carnival.

We don’t have an endowment. If Super Funland is successful, we can use the income it generates to fund the other stuff we want to do that may not have mass appeal. Super Funland could become the attendance driver, and then in the same space we have exhibits on serious issues, like sex and religion. Other museums have done similar playful installations—like the giant slide Carsten Höller created for the New Museum, or the courtyard installations created for PS1 each summer through their Young Architects Program. Exhibits with a popular draw can finance mission.

EM: What about the long-term future?

DG: In the future, the biggest role for museums like the Museum of Sex may be to showcase hidden and important collections from other museums and collectors. Traditional museums can specialize in preservation and use organizations like the Museum of Sex as a revenue source which is fully in line with their missions.

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