SMALL MUSEUMS CAN PROSPER

We must help our local, autonomous, museums if they are to survive. Why? Because in an ever-fast evolving environment, we need to refresh and collect the memories of our past. To do so, however, requires commitment of time, effort and money. This article focuses on the money issues facing most non-profits and museums.

Approximately 33 % of American museums offer free admission as a branch of a local agency, foundation, church or government.

A 501(c)3 museum is defined by its tax status in that the organization does not have to pay corporate income tax on its revenue. Being a “nonprofit museum” is a tax status, not a business plan, and that making a profit is fundamental to the health of art organizations. Income must be greater than expenses or growth will not occur.

Government agencies at all four levels (federal, state, county, city) help by allocating surplace funds, if they become available. In some cases, small municipal museums are budgeted to showcase their particular contribution to the nation.

The largest share (38 % - 60% depending on type of museum) comes from private donors. Their desire to generate a message, create an exhibit of interest and memorialize a person or event triggers them to offer grants to complete the project.

Often targeting a particular exhibition or initiative. , much is allocated by grants from Governments. In some cases, they collectively contribute 24%.

Less than 1/4th, however comes from the federal level. These are channeled through grants from one of more than 20+ U.S. Departments.

The third source is earned revenue from admissions (2% - 5 %), which explains the low cost of entry to see valuable artifacts and displays. Earned income typically accounts for 40% of a museums’ sales of merchandise, gift shops and educational programs.

What sets apart those museums that seem to thrive and expand in both size and scope? Why is it that museums that collect beyond the capacity to exhibit, while others expand beyond their collections and holdings?

Museums can be profitable, but first must reach a break-even status of costs and income. Some incorporate small cafes which can be slightly positive in museums capturing visitors for more than 2 hours duration.

Educational programs have traditionally been good sources of income as long as the instruction is done by skilled volunteers. Crafts tend to attract the younger crowd, and seminars the older set. For example, having a series of PowerPoint seminars on “how to increase intelligence” have attracted those both young and old.

Merchandising can be as simple as a counter or in a separate sales room. Markup has to exceed 40% in order to break-even.

Corporate sponsorship can be a great boost in income without sacrificing quality in independence.

In summary, the more offerings a museum can generate, the greater probability that a financial break-even can be reached.

Louis J. Finkle, PhD, CFP retired

Biloxi, MS USA