Skip to content

Why Not To Run Your Museum “More Like A Business”

Category: Financial Sustainability
People line up to enter into a solid white image. other solid white images also line the walls

This article originally appeared in the May/June 2017 issue of Museum magazine.

Many elements that make businesses successful do not work for museums.

First, some relevant credentials. I have been involved in five capital campaigns and cut the ribbon on nine museum buildings, three renovations, and a sculpture garden and trail. I have doubled attendance and operating budgets and quadrupled a membership program and an educational program. I have become an undisputed agent of growth. And now, as I enter my third decade as an art museum director, I have come to realize that my like-minded colleagues and I may have been as much a problem as a solution.

Earlier in my career, my Ph.D. in art history seemed to shine very little amid the glittering constellation of art museum leaders. Then, I earned an MBA, and search firms dubbed me a “rising star!’ Why? Because so many museums today operated by boards of trustees stacked with leaders of industry, entrepreneurship, and civic wealth-want their institutions to be run “more like a business.”

No one disputes that nonprofits must be efficient, control costs, generate income, and cultivate donations to fuel their programs. Nor do we generally disagree that museums should maximize their capacity: fill galleries with visitors, offer programs to many people, and even operate successful stores and restaurants within the confines of the not-for-profit mission. We all want energy and excitement, and to offer meaningful experiences that enrich lives and enhance communities. But while many basics of revenues and costs, HR management, strategic planning, and even law and ethics apply equally well to for- and not-for-profit enterprises, the elements that do not align should concern us greatly. These include measures of success, perspectives on time, employee incentives, the value of our people, and the prominence of reputation-in short, the things we truly value.

Success and the Siren Song of Growth

Ambitious museum directors, like me, take pride in growth: increasing attendance, membership, participation in programs, collections, and budgets and building new facilities. We also understand that pure numbers belie the value of our endeavors. We know that adding a few first-rate collection objects is far preferable to taking in volumes of second-tier work, and that enriching audiences with inspiring educational programs is more fulfilling than entertaining crowds with superficial fluff. But when annual reports get compiled, and when we make our cases for funding support, we also understand that attendance stands as a proxy for success and for our public value.

This explains blockbuster shows, popular programs, and the urge to grow and expand. We know the trade-offs and compromises museums make to attract crowds: favoring popular genres such as Egyptian pharaohs, impressionist paintings, and contemporary glass, and promoting known names from King Tut to Monet to Chihuly. Many balance these exhibitions with shows of refinement, taste, and scholarly heft. But assets and attention lean toward what’s popular in an effort to build excitement in the press and crowds in the galleries; sometimes to the point that patrons can barely see the objects they came to admire. You know the challenge. But is bigger really better? I believe it may be worse.

Collection Mania

A quasi-gravitational force brings collections to museums. Part of it concerns altruism and patrons’ genuine desire to share. Another derives from ego and the need to be known publicly for having owned important things. And part of it, at least in America, comes from the tax code and the incentive to write off the appreciated value of donated possessions. Add to these donations the annual contributions and restricted endowment proceeds that many museums use to buy precious artifacts, and it becomes clear that an influx of objects-however important, attractive, or valuable-threatens to overwhelm museum storage facilities, if not gallery spaces.

In the world of corporate measures, growth is good. More collections make a museum better, as it becomes known as the go-to place for artist x, y, or z or as the regional, national, or global leader in a subject But where does this lead?

If you think about the most memorable museums you’ve ever visited, what springs to mind: the number of items you saw? No, you probably remember only a few of the very best pieces. We all know the principles of supply and demand We raise supply to meet demand or raise prices to control it; unless we operate museums where supply, or the volume of objects that donors want to give and that museum leaders crave to accept, drives decisions independent of visitor demand. We museum professionals hunger to succeed in this endless quest for more, even as it weakens our institutions for the long run.

Very few museums have crafted deaccession policies as ambitious as those for acquisitions. Few museums project the limits of their storage capacity and the costs of accepting each object. Instead, staff celebrate their new trophies, congratulate each other on strengthening their collections, and pass along to future generations the costs of housing all this stuff These costs likely will drain staff and funding away from galleries and programs and lead some collections to become abandoned, safe in closed storage but orphaned from the display and scholarly study they merit But you don’t have to forecast this future. See it for yourselves in the storage facilities of many a natural history museum today. Some of our finest have been built over decades of archaeological digs and species collecting, with rooms holding thousands of collections. They are ripe for study and display, but bereft of scholarly care as financial pressures constrict the expertise necessary to bring these objects to life.

Before building facilities to accommodate such growth, we need to consider a number of things: Very few new wings lead to sustainable visitation growth anywhere near enough to pay for their operations. When funding new museum architecture, an enterprise almost guaranteed to go over budget, the prudently estimated funds for operational endowment me almost never raised and may get consumed in cost overruns. The operational requirements of climate control and security are rarely included in the endowment components of building campaigns. And the need for more mission-critical staff will always (and I mean always) come last and are usually deferred. I would submit that many expansions may weaken, rather than strengthen, a museum’s long-term, mission-fulfilling prospects.

Quarterly Goals Shorten Long-Term Perspectives

The problem with growth for its own sake is that it poses a strategy without
a conclusion. In business, this is not a concern, as companies work toward their own consumption or transformation. With success comes a buyout, merger, or in exceptional instances, enough growth to render the company a “cash cow” that spins off quarterly dividends to shareholders. Given the mandate to grow, quarterly announcements and annual reports have established short-term time horizons for business. But what is the purpose of museum governance if not to preserve its treasures in trust; not quarterly nor annually, but across generations? And museums have been very good at this.

The Dow Jones Industrial Average, a measure for the accumulated value of corporate stock. was first published in 1886. It contained 12 companies. How many are left today? Only one: General Electric. But had someone created a benchmark for America’s 12 leading museums of that time, how many by now would we have lost? Probably none. Not the Metropolitan Museum of Art in New York. not the Museum of Fine Arts, Boston, not the Cleveland Museum of Art, nor Andrew Carnegie’s museums in Pittsburgh…you get the idea And were we to look abroad, to Europe, the long-standing success of museums to simply endure would be even more impressive, sustaining through world wars.

The mindset of quarterly reports drives frenetic activity-new programs, more shows, and the ever-popular “innovation” to produce original research and publish catalogs; all of which take time, perseverance, and thought. The end goals of museums and businesses are fundamentally different. Companies work toward “exit strategies”; museums must develop strategies to exist. Why? Because most shareholders of your museum’s mission have yet to be born.

Misaligned Incentive Plans

Having frowned upon the value of pure growth and cast suspicion on the time horizons of corporate objectives, turn with me toward another value. That is values themselves. We know from the business world how incentive plans work: hit targets or exceed goals and receive a bonus or a raise. The problem with museums is we don’t have these. Worse, we really don’t want them.

Don’t get me wrong. Museum employees will not stay for long if exploited or underpaid, nor should they. But if salaries are fair and high enough to live a decent life, raises generally do not motivate museum employees. They labor for a nobler purpose.

Notwithstanding such idealism, a business-savvy motivator might suggest that a hearty two or three percent raise could lift the spirits and energies of any employee. Until you ask: three percent of what? For most museum wage scales, the salary base is so low that the percentages generate tens of dollars per paycheck Although often couched as “merit raises:’ they amount to nothing more than cost-of-living adjustments. Such raises probably make the board members who approve them feel better than those who receive them.

Beyond dubious mathematics, cash does not address the reasons people entered the museum field, nor why they pursue their passions now. Business-based incentive plans should address careers themselves. Travel and training, two of the first line items to be cut in any budget-tightening process, should be the last. What dedicated professionals want is validation of their profession and investment in it: travel to a conference, tuition for career development, and support to learn new skills.

My suspicion is that we directors sometimes become so caught up in managing the boardroom that we forget the true sparks that fuel our passion. It is not so much that the business leaders have forcibly foisted their thinking on us, it is that we have so willingly accepted it, even at the cost of our own convictions.

Confusing Expenses with Vital Assets

Salaries and benefits account for more than half of most museum budgets. So, some museum directors decide to cut staff to control expenses. Diminishing the ranks makes business sense. That is unless we care about what our collections mean. Through the knowledge and understanding of the objects we preserve for current and future generations, curators are the links that make our collections valuable to people.

Through years of study and practice, training and experience, research and reflection, curators can tell us why their collections matter, how they relate to cultural understanding, and ultimately, how they shed light on our existence as human beings. They are the interpreters of the treasures we hold in trust. Diminishing their ranks reduces our ability to fulfill our mission as it undermines our commitment to collections in the first place. Yet, reduced to numbers on an annual budget, these assets appear from a business perspective as an expense. Curatorial line items often are cut and often substantially over time. The deforestation of the curatorial ranks that some museums have perpetrated in recent years diminishes the value of the collections under their care, as learning and discovery become replaced with the values of a warehouse.

One can make a similar case for educators. conservators. and other mission-contributing professionals. ‘Those personnel who serve as a link between collections and the public constitute vital assets of a museum. They are. in business parlance. the research and development branch of the enterprise. Whatever fiscal prudence there may be in diminishing such R&D in the short term, it is only a trade-out for the future.

Structural Flaws Skew Museum Balance Sheets

One of the most basic measures of a business’s value is the balance sheet. The statement that lists the assets and liabilities of the enterprise. But missing from the balance sheet are two enormous items so central to the institution that they render the document fundamentally wrong. First is the collection. Museums do not list the value of their collections, for important reasons. Numbers of objects don’t mean very much, because the aesthetic quality, historical importance. rarity, or scientific: import simply cannot equate to monetary value. Even in art museums, where object prices are discernible through the art market, monetary values could mislead even if listed. Worse, the market value might incentivize selling off collections to pay expenses-a violation of museum ethics. So, the museum’s balance sheet purposefully omits this core asset.

The second missing item is just as important: reputation. Museums are respected for their authority. The knowledge that they share about their collections and all that those objects tell us about our place in the world. It is museums’ credibility, their integrity of exhibitions, quality of programs, refinement of aesthetics, and judgment of scholarly pronouncements, that makes these institutions special and vital to their communities.

Reputation is also the currency museums use among themselves when deciding with whom to collaborate and who should represent a standard for excellence. It is the most important brand we own, and it is supported by the reputations of our staff members. In the corporate world, there certainly exists a power in product brands and value in a company’s reputation, but businesses account for this as “goodwill,” a fuzzy term for the amount someone would pay for the company on top of its hard assets. In museums, reputation is as real as any depreciable asset, but it is often elusive and undervalued. Museums are about people and values, not money. Their output is experience, learning, and wonder; outcomes to be measured by human understanding and emotion, not dollars and cents.

What Really Matters

All of you in the field, through the sacrifices made to pursue your career paths, have personally demonstrated that the humane values museums represent are more, not less, important than the values of business. Yes, we know we must balance budgets and strengthen financial positions. But we must also act with the resolute understanding that unrestrained growth undermines our sustainability, that under-appreciating staff devalues our collections, and that compromising institutional integrity can fundamentally threaten our futures.

If you share my belief that museums must hold their own values above those of business, then you will share my vision of a future in which we:

  • celebrate new endowments as festively as new wings
  • temper measures of quantity with the matrices of quality and impact
  • treat salaries not as expenses but as mission-critical investments, supported by staff development, travel, and training
  • value reputation as much as any asset on the balance sheet

Stated another way, you will consider the way collections are used to be as important as the objects you own or how many people come to see them. Most of you, probably all of you, already do.

As I look back on a career as a turnaround specialist and institution builder, my fondest recollections have little to do with any of this. I’ll give you one. Some years ago, as director of a small museum in Nashville, Tennessee, I organized an exhibition of Andrew Wyeth’s illustrations of Maine; a chronological series of beautiful and emotional watercolors. They spanned the artist’s life from his early 20s, on the very day when he met the woman he would marry, to a time years later, when two dear friends (a brother and his sister who would become the model for his famous “Christina” painting) passed away only a few days apart. It was a moving exhibition, as much a love story as an aesthetic tour de force. As people proceeded through the images, they learned to read the symbols in the paintings, to appreciate how objects in still lifes stood for beloved people in the artist’s personal life. Toward the end, as viewers experienced renderings of the lonely final days of Christina and her brother Alvaro in the frigid winter of northern Maine, emotions of sadness, loneliness, and loss fell upon many a visitor.

One day, a colleague rushed into my workspace and told me with giddy excitement that a star of country music was walking through the display. I hustled out to the museum’s rotunda. with a clear view of the last few watercolors in the show, ready to introduce myself and bask in the glow of celebrity. I watched this musician as she passed before the final images, staring in rapt silence into sorrowful, empty scenes of passing, memory, and love. And on her cheek, in profile, I witnessed tears streaming. There was nothing to say. I turned and walked away.

Each of you has a story just like this. No attendance clicker can measure it, and you will not find it in the annual report. But it is the essence of what we all do.


John Wentenhall is director of The George Washington University Museum and The Textile Museum and concludes his service as an AAM board member this month.

AAM Member-Only Content

AAM Members get exclusive access to premium digital content including:

  • Featured articles from Museum Magazine
  • Access to more than 1,500 resource listings from the Resource Center
  • Tools, reports, and templates for equipping your work in museums
Log In

We're Sorry

Your current membership level does not allow you to access this content.

Upgrade Your Membership

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *