I also recommend the Giving USA report that came out this spring, reporting the figures for 2013. The good news is that giving to Cultural, Arts and Humanities (which included museums), increased over 7% last year. That is twice the average increase for giving overall. So not only are museums rebounding, rebounding, we are rebounding faster than others in the nonprofit sector. Indeed, The Alliance’s annual “Conditions of Museums and the Economy” report confirms the continued improvement in the field’s vital signs (attendance, financial stress) since 2008, and most museums reported an increase in philanthropic funding. However, more than one director noted “fundraising continues to be very difficult.” As the 2013 report says “even those [museums] that experienced notable increases in donations last year argued that philanthropic support has become less predictable.” Museums need to understand and adapt to the new shape of giving, and/or place less reliance on philanthropy and more on other income streams.
Museums can also take an active role in shaping the expectations of donors. Last year GuideStar, Charity Navigator and BBB Wise Giving Alliance published an open letter to the “donors of America” combating what they dubbed “the Overhead Myth”–the undue importance granted to the ratio of administration and fundraising expenses to program delivery. As the Myth campaign pointed out, too much focus on this one ratio devalues other critical measures of performance. And in fact many nonprofits spend too little on overhead–underpaying staff and failing to invest in critical infrastructure. Obsessing on their overhead ratio is as counterproductive as asking someone with anorexia about their weight. Now the Overhead Myth coalition is preparing to launch a second letter, this time directed at nonprofit organizations, calling on them to be “more proactive about communicating the story of their programmatic work, their governance structures, and the real costs of achieving results…[and] to recruit nonprofits to help us retrain donors to pay attention to what matters: results.” When this letter is released, I hope the director of your museum will share it with your board of trustees, and lending your support to the campaign.