The purpose of this essay is to more clearly understand Museums as a financial vehicle. I argue that because of the way nonprofit organizations in the United States function, they principally benefit wealthy donors. While not entirely inappropriate, keeping admission free and making certain that educational programs are part of their basic programming, museums can better balance the “benefit” that society receives.
A 501c3, is the typical museum or museum-foundation vehicle. The 501c3 nonprofit is an IRS designation making an organization a financial vehicle that cannot generate a profit. That’s pretty much the end of what “non profit” means. It doesn’t mean that staff don’t make high salaries, nor does that predicate the salaries must be disclosed to the public. As long as the board and leadership approve, generally speaking nonprofits have indiscriminate spending authority. For state organizations, or organizations that receive a large amount of grant funding this is a bit different. Points being – you don’t know where the money goes, how much is needed, or what the institutional priorities are.
It’s all about the internal budget and long term strategy, and that kind of information is never discussed publicly. But actually, as John Q Public, you can still glean a thing or two about the art landscape and how a museum functions based on something like a museum charging admission – be it $5 or $50.
The decision to charge for admission usually boils down to a mix of a few critical issues – the board not doing their job in fundraising properly; the leadership making the difficult concession that some access with admission is better than no access without admission. And at the same time one cant underscore the high variable costs associated with running an exhibition, even if it is from the museums permanent collection. In the LEAST the museum has to cover any staff salaries, any security cost which might include human labor, or video surveillance, heat, electricity, special hardware to curate an exhibition, climate control, etc. etc. Art isn’t cheap, ok, we get the picture. On most exhibitions, museums “lose” money if you look at it from a standpoint like this.
Thus most of the large museums you’re familiar with get the bulk of their yearly budgets/funding from two principal sources – foundations, and grants. Almost all of the “big name” museums have some kind of large foundation which subsidizes most fixed elements of operations heavily or completely. This is how most museums run. Some that are connected to the state (for example, a state university museum) MAY have a portion of staff salaries covered by state appropriations (tax dollars). At the same time, a museum MAY have a portion of long term grant funds available from the state or federal government which cover specific things like a large renovation or a specific specialized staff to conserve a portion of a collection. For example, an expert on 17th century Japanese lacquerware.
What I’m trying to get at is, running a museum is an expensive venture and the opportunities to bring in money are relatively small. This is why muesums have to resort to charging for admission. Once the appropriation, foundation or grant money is gone or doesnt exist in the first place, what’s the alternative? There aren’t a lot of good ones.
NOW with all that said let’s get back to the main point – exhibitions should be free. Let me rephrase this question – with a lack of yearly cash flow, how do you make an exhibition free – especially one that you have to pay for? I have two answers.
One: It’s the principal job of the board of directors to fundraise for the museum. Oversight of museum operations is important, but fundraising is paramount. If you’re on the board and you aren’t pulling in a consistent amount of donations in terms of actual cash (not acquisitions; more on that later) you should not be on the board.
Two: All permanent acquisitions should come with a money to both maintain them, and to show them once in awhile. Donors get a tax break based on item valuation. So should it be that the museum receives money to take care of the asset. Here you have the chicken and egg scenario – without a good collection, cant get donors, and without donors, you cant build a good collection. So here you have a statement about museum strategy – if long-term funding isn’t available to maintain a collection, a piece shouldn’t be acquired. I guess that’s as clear as I can see it at this point.