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The Path to Financial Recovery and Resilience: An #AAM2022 Keynote by Michael Bobbitt

Category: Alliance Blog
Michael Bobbitt speaking behind a podium

Michael Bobbitt, Executive Director of Mass Cultural Council, opened the Financial Wellness focus area of the 2022 AAM Annual Meeting & MuseumExpo with his keynote, “The Path to Financial Recovery and Resilience,” followed by a Q&A with Dan Yaeger, Executive Director of the New England Museum Association. Watch the full video or read a transcript below.



Announcer:

Good morning and welcome to the American Alliance of Museum’s 116th Annual Meeting and MuseumExpo. Please welcome to the stage Dan Yaeger, Director of the New England Museum Association.

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Dan Yaeger:

Good morning, everyone. As we begin our time together, I’d like to acknowledge the place in which we are gathered and honor the Indigenous people who have called it home. Boston is the traditional homeland of the Massachusett and Pawtucket peoples. Let us acknowledge these and all Indigenous nations as living communities, their elders both past and present as well as future generations. We recognize that our museums and cultural institutions were founded within a colonizing society which caused the exclusions and erasure of many Indigenous peoples. Thank you for helping us challenge these practices by disrupting and dismantling the ongoing legacies of settler colonialism. Thank you.

Once again, good morning, and I hope you’re enjoying the Annual Meeting and MuseumExpo so far in my hometown. Boston, as you may know, has many nicknames. It’s been called Beantown, the Cradle of Liberty, the Athens of America, and just to demonstrate its humility, the Hub of the Solar System, but thanks to you all, this week Boston is very definitely known around the world as Museumtown, and I hope you have a little free time in the next few days to tour around and find out why. A quick note of gratitude, thank you to Smith and Howard CPAs and Advisors for their generous support of this keynote. Let’s take a look at this short video from Smith and Howard.

Kimberly Bland:

Hello, I’m Kimberly Bland.

Sabre Linahan:

And I’m Sabre Linahan. We are part of a seven-person team from Smith and Howard here at the American Alliance of Museums Annual Meeting and Museum Expo. This is our first time attending the Annual Meeting. We’re excited to be a sponsor and to be with you all this weekend.

Kimberly Bland:

Smith and Howard is an accounting and advisory firm headquartered in Atlanta. We specialize in serving arts and culture organizations, including nationally recognized museums. After a time of disruption due to the pandemic, museums across the country are facing a wide range of challenges and opportunities. We look forward to learning from you about how you’re addressing the current and future state of the museum industry. We are optimistic about the future.

Sabre Linahan:

We are also pleased to offer a session in the MuseumExpo theater as we lead a conversation on how we’ve seen our museum clients adjusting for the future. We hope you will attend and share your stories with us.

Kimberly Bland:

In the meantime, enjoy the conference.

Dan Yaeger:

Let’s give it up for Smith and Howard. Thank you so much for your support, and don’t miss their presentation on “Future Proofing Your Museum” at two o’clock today in the MuseumExpo Solution Center. If you haven’t already done so, please be sure to download the Slido app to share your questions during the keynote. I’ll be back to pose a couple of your questions at the end of this address.

And now, I have the pleasure of introducing our keynote speaker, Michael Bobbitt, who as Executive Director of the Massachusetts Cultural Council is our state’s highest ranking cultural official. Michael has dedicated his professional career to arts leadership as an award-winning theater director, playwright, and choreographer. His great passion is equity and access in the arts, and he’s made an incredible impact at MCC by reorienting its operations and grant-making to provoke long-term systemic change in our field. Michael is very definitely a person that values action over talk, and he’s been an inspiration to me and countless others for his diplomatic yet relentless pursuit of building a scaffolding for anti-racism in our region and beyond.

For all of you who showed up for an 8:00 AM Saturday morning session on financial recovery and resilience, good for you, but I suspect that this keynote is not going to be a dry presentation about balance sheets and income statements. Michael’s philosophy is that racial equity and diversity work are driving factors in how cultural institutions can maintain both relevance and revenues. DEAIJ is not just the right thing to do, it’s good business practice too. He’s an intersectional leader, an inspirational intellect, a compassionate change agent, and a terrific speaker. Please join me in welcoming my friend and colleague Michael Bobbitt.

Michael Bobbitt:

Oh my god, those stairs were painful. My trainer kicked my ass yesterday. Hello friends. Oh, it’s going to be a long hour if I don’t hear from you. I’ve been up since 5:00 AM practicing this for you. Hello friends. Great. Put these [glasses] on. These are not for fashion. These are for reading. Thank you to Laura Lott and the whole team at American Alliance of Museums. It’s so great to gather here in a place, in a place, a real place to have these conversations. And thank you so much, Dan. Please text me your Cashapp so I can pay you for the introduction.

So, after talk, Dan’s going to come back up for Q&A, so I hope you will sort of think of questions, but one of the things I wanted to do, and one of the things I like to do is to help us make each other comfortable. So, I want to share with you a bunch of things about me so you know a little bit more about me. So, here’s a short list. I’m from DC. I live in Cambridge now. This summer I turned 50 years old. Thank you, cocoa butter. I co-wrote a musical with Bob Marley. I’m adapting Monster Mash into a musical. I lost a hundred pounds about eight years ago. I just went through some very painful skin removal surgery. I love spinning to Taylor Swift songs on Tuesdays and Thursdays, Taylor Swift, Tuesday, Thursdays, I only eat whole food plants. I want twerking lessons from Lizzo. My auntie was a pitcher in the Negro Leagues. I have a crush on Idris Elba. I know. My husband’s okay with that.

Don’t tell my brothers, but I’m pretty sure I’m the favorite child of Dorothy and James Bobbitt. I don’t like sports ball, sports ball. I worked at the Smithsonian. I wrote plays for Marjorie Merriweather Post’s Hillwood Museum. My son, who was adopted as a baby from Vietnam, just finished his junior year studying marine biology with a 3.5 GPA. I’m two more things. Thank you. I’m obsessed with drag competition shows and home improvement shows, and the most important thing is I have an unhealthy love of the arts and culture sector and want nothing more for it to be sustainable and well-funded. It literally saved my life.

Okay. So, now that we know each other, how many of you came here because you are concerned about the financial stability of your organizations? Ah. And how many of you came here because the resilience and the recovery and the relevance of your organization, given the fast-paced, ever-changing world, is something that you’re concerned about? Good to know. We’re going to talk about that today. Can we handle anything more? A pandemic, a racial reckoning, the rapid deterioration of the climate, the great resignation, extreme political unrest, severe inflation, international war, and the Oscar slap. Seriously, sometimes it feels like OG Old Testament God is smiting us. Tomorrow we should fully expect locusts.

So, the title of this keynote is “The Path to Financial Recovery and Resilience,” and the answer is simple. So super simple. Get more money. We’re good? I can go? Right, just get more money. So, as Dan mentioned, this is not about spreadsheets, budgeting, accounting practices, though we are extremely grateful to the key sponsors, Smith and Howard CPAs and Advisors. Thank you for the money. So, in fact, I’m going to digress for a minute before I go into my stuff and offer up some questions about financial practices, just so we are doing a little bit of touching on that.

So, considering the fast pace of the world, the numerous crises of the last two years, doing short-term budgeting and innovative program where we only did three or four months of planning, right, because we had to pivot, why are we going back to annual programming and budgeting? Why are we going back to practices that leave us vulnerable to fickle audiences, pandemics, fires, floods, and any number of crises? Does that make sense? Did it ever make sense? Were these ever best practices? Did we not observe and absorb the inconsistencies and maybe poor financial models that plagued the nonprofit sector? Did we somehow actually discover the ability to magically seize six to 18 months into the future? Why do our boards ask us for this? Are there more effective ways to manage how we finance our mission-based charitable organizations?

I don’t have the answers and I’m sure our sponsors are like, “What is he talking about?” But maybe the nonprofit sector needs to devise new ways of financial management. I only know that if I was running a nonprofit again, there is absolutely no way that I would go back to those old and dated models. They don’t work.

Okay, digression over. Here is the phrase I’d love for you to take with you through the rest of the conference, and when you go home, be the museum of the future now. Be the museum of the future now. Can you say it with me? Be the museum of the future now. Friends, leaders, professionals in the creative sector, don’t wait until the future come to be a museum of the future. That’s too late. You’ll be in crisis trying to catch up to it. Do it now. With the multiple issues that are plaguing our industry, now is the time to reinvent, redesign, and use the creative tools that you have at your disposal. Be the museum of the future now.

So, as I prepared for this keynote, I combed the interweb for a minute researching the history of museums and reading definitions for museums, and here’s how museums are generally described. The purpose of today’s museums is to collect, preserve, interpret, and display objects of artistic, cultural, or scientific significance for the study and education of the public. I’ll read it again. The purpose of today’s museums is to collect, preserve, interpret, and display objects of artistic, cultural, or scientific significance for the study and education of the public. Do we generally agree with that?

Okay. It is so interesting to me and maybe others that this definition prioritizes things over people. Things are first in this phrase, in this description, and people are last. In fact, the last word of this description is about people. Here’s another. A museum is a place and an institution that collects, takes care, and interprets objects, artifacts, and other material evidence of human history as well as of nature and makes them available for viewing by the general public. Things are first and people are last. I found 10 definitions of museums that all prioritized things over people. Not one listed people first. I found this very curious.

So, what’s interesting is that the origin of the word is in many ways the opposite of the modern definition. The word museum comes from the ancient Greek, which meant seat of muses, and it was used for philosophical discussion or for a place of contemplation. So, what is the very definition of the word of what a museum is changes or goes back to its roots? What if the definition of museum is led by something like a place where community convenes, et cetera, et cetera? A people’s meeting house for meaningful engagement, et cetera, et cetera. A civic center that celebrates the contributions of people and their diversity and uniqueness, et cetera, et cetera. Is reimagining the purpose of museums of pathway to recovery and resilience? Is a business function that was designed in the 15th century, 6,000 years ago, relevant in a modern world?

Well, to reimagine it, it means that we cannot consider that anything museums have done in the past as sacred cows, and let me be clear. I’m not suggesting that museums aren’t relevant. I’m suggesting that maybe the definition and business models that museums function under may need to be revised and adjusted to create more relevance for today’s consumers. Museums want ultimate relevance, and relevance equals value, and value equals capitalization, and missions must change when the world needs you to do something different. I’ll say it again. Missions must change when the world needs you to do something different. So, the question is, what does the world need the museums to do in this very moment and in the future? Mission-based organizations exist to make the world a better place for people, and I encourage you to ask yourself and your organizations, what is being centered? Is it people, or is it things?

One might assume that engagement with the past might inform and shape conversations about the future. My grandmother, Mary Geneva Millhouse, often said, “How you going to know where you’re going if you don’t know where you’ve been?” Anyone have grandmothers that told them that? Right? But our grandmothers didn’t make a statement for us to sit with, they posed a question. They engaged us. They asked us what we thought. So, the people first idea requires people to be baked into every aspect of your organization. How does reframing the purpose of the museum shape your programming, your marketing, your business model, and how you capitalize and curate? Is it possible that more consumption can come from a reimagining of the purpose of museums that builds relationships with people, not transactions?

I know that these are big ideas, and it would be really interesting if a collective of museums, an alliance even, could find the time to reimagine it together. I wish I knew of such a thing. Ideally, in a thousand years, when humans are teleporting all over the place using their flux capacitors and they read about museums of the 21st century, our institutions don’t look and function like they did 6,000 years ago. Museums must reassess their public value to ensure their financial viability and vitality. Relevance is absolutely tied to financial viability. Kodak refused to consider digital photos. Toys R Us refused to consider e-commerce. Blockbuster decided not to go into video on demand. Nokia didn’t think apps were anything special. And where are they now? Be the museum of the future now.

To be that takes an investment. This investment comes in the form of innovation, and I’m not going to dwell on innovation right now because the incredible Jake Barton is giving a talk on innovation at 1:00 PM today in this room, but I will say this, if you aren’t innovating, you are dying. Be the museum of the future now. To do this, you must adopt a change-friendly culture, and you must free up time and resources, pause a program or two, create. You creators have the tools already in your bodies. What you have in your minds and your hearts and your eyes and in your hands is something that only a few select people have, a few chosen people. You, you amazing creators, have the gift of imagination, and that gift is what makes the world evolve. Imagination is seeing the world differently. Creativity is bringing imagination to life, and art and culture is the product of creativity. You are experts of imagination.

Michelangelo said, “I saw the angel in the marble and I carved it until I set him free.” What? He saw the angel, just like the painter saw an abstract on a blank canvas, and the writer saw a poem, a song, a book, a play, a movie on a blank piece of paper. Creators, you in this room have worked your whole life to perfect your ability to imagine and see the world differently. You already possessed the goods you have to reimagine how your museum functions. Be the museum of the future now. And if there’s baggage or fear or bandwidth issues or lack of creativity or creative capital to innovate, bring in folk, bring in futurists, and entrepreneurs, and artists, and engineers, and social scientists, and imagineers to support these efforts because if you are not innovating, you are dying.

While I’m on this subject, I hope you are still developing and innovating around the digital consumption of your collections. For many, both producers and patrons, we considered the at-home digital consumption of art and culture in your collections as a stopgap, and neither was willing to invest a lot in it. Often the quality and the content was lacking creativity because we were only doing it until the collection was over. Right? Sorry, until the pandemic was over. Right? We all said this. Friends, when we make advances in technology, we don’t usually go back. 8-track tapes, Polaroids, and even CDs are things of the past. Now is the time to lead and innovate around the consumption of your collections. There is a magical and beautiful world, an informative world that exists in a place where the living world meets the digital world, and I think we have only begun to explore it, to take advantage of it.

I know that there is a fear that people won’t come in person if they’re watching it at home, but let’s explore that for a moment. Let’s explore what happened to the sports sector, and I don’t know, because I don’t like sports ball, but when sports started streaming into people’s homes, what happened to the popularity of the game? Did the sales at the arenas and stadium suffer? No. In fact, attendance skyrocketed, and the games grew. And not just professional games, but amateur games and school sporting events saw an uptick. I went to so many Little League games where nothing happened, like hit something please. But things like Super Bowl parties and tailgating and Monday Night Football became part of the zeitgeist because of streaming.

Let’s have Monday Night Museums, and the cool part is that the creators of the streaming knew that they had to deliver something different and much more interactive and engaging because every person who viewed it had a front-row seat, and it couldn’t be the same as seeing it in person. It couldn’t. So, we had to reinvent. We had to make it visceral for them to see it at home. So, you got colorful commentary, and instant replays, and drawing on screens, and pop-up biographies, and creative sponsor ads, and close-up cameras, and data scrolls, and so on and so on and so on. The streaming of sports in your home became much cooler than going to the stadiums. Millions of people saw it, millions, especially those that couldn’t get to the arena or didn’t have the resources to pay for the tickets.

Imagine the possibilities if we explored the innovation around digital consumption or our collections that go beyond slide shows. How can we incorporate the digital world when we are inside your museums too? When people come, how can we incorporate the digital world? The filters are on those apps are really, really cool. This is an opportunity, my friends, to engage so many more. Curators may need to train up on what digital consumption looks like. Marketers may need to train up on learning how to convert digital patrons into occasional in-person patrons. Don’t wait until your competitor does it. You lead in innovation.

Here’s another reason. Americans spend around 4.5 hours a day on their little computers in their pockets. Millennials and Gen Zs are on their phones 5.7 hours a day and baby boomers five hours a day, and there are studies out there that show that BIPOC people, people of color, use their phones even more. Now, I’m also aware that sometimes people can be convinced to want something that they don’t know they want or need. Right? For example, in most places in this country, tap water is fine, but we’ve been convinced that we need melted snow, mountain spring, misty, bottled water, and we pay $4 for it. So, is that the solution to recovery and resilience? Convince people that don’t frequent museums that they are missing out? Appeal to their FOMO, their fear of missing out? Double down on promotions or reframe or rebrand our messaging? How is that working?

Now, one tactic is to expand who we are marketing to, seal the deal on a transaction with people that you don’t have a relationship with. Marketers in the house, does that work? The other opportunity we have towards the path of financial recovery and resilience, and I’ll add relevance, is by diversifying. If you are not diversifying, you’re also dying. We’ve seen the census reports, the statistics project that the nation will become minority white by 2045. During that year, whites will comprise 49.7% of the population in contrast to 24.6% for Hispanics, 13.1% for Blacks, 7.9% for Asians, and 3.8% for multiracial populations. My friends, 2045 is only 23 years away. If you are not diversifying, you are dying.

Let’s not be Kodak or Toys R Us or Blockbuster. Let’s not ignore the metaphoric writing on the wall or the literal writing in the census report. Let’s reexamine our mission so that we can be responsive to what the world needs us to do. Now, to do this, to do this work and really see a swell of engagement by diverse audiences, first, you must confess and accept that if your museum is predominantly white, it was designed to be that way. Maybe not out of malice, but the truth is it was designed by whites whose lack of perspective results in it being a place for whites. It should not be a surprise. The people designing the business model lacked perspective to design a model for a diverse patron and donor base, and if the census is right and diversity is good for business, well, not diversifying may send you to an early grave.

If you want a multicultural patronage, then the business model, operations, programming, and especially governance where most of the decisions happen must be redesigned with multicultural people. You cannot do diversity work without people of color. It’s impossible. And the value of our perspectives is beyond what you can imagine, and maybe some day, some very smart person can actually put a number to it because sometimes numbers make us more comfortable. But one of the things that makes me a person of color, a Black man is that art and culture is embedded in the definition of being Black. If you ask me, “Michael, what makes you Black?” I will say the music, and the dance, and the art, and the fashion, and the language, and the expression. This is the same for many BIPOC people. In fact, some Native Americans don’t even have a word for art because it’s not separate from their everyday life. It is embedded.

So, if you want to expand your audience, the largest opportunity you have is engaging with people of color, and not solely through programming or a few policy shift, but through a total redesign of every aspect of your organization, and it can be done. I don’t mean to dwell on the growth in your business that people of color can offer because I truly believe that diversity, equity, inclusion, access, anti-racism, anti-oppression, anti-white supremacy and the all words that fall under the social justice movement are truly acts of love, actions that show love to people who have never been loved by this country. Actions, not solidarity statements or beliefs, but actions that exorcise all forms of racism from your institutions, actions that move your institutions to a culture where there is 0% tolerance of any and all forms of racism from patrons, staff, volunteers, donors, and board members. And when you build and execute these actions and redesign your business model, you will see more engagement from the BIPOC community. And when that engagement comes, not only will you see a spike in earned revenue, you’ll see a spike in contributed revenue.

Indiana University’s Lilly Family School of Philanthropies released a report called Everyday Donors of Color. You can Google this, it’s a great report to read from Indiana University’s Lilly Family School of Philanthropies. It’s called Everyday Donors of Color; they state that 46 to 67% of people of color make contributions compared to 74% of whites, not far behind. Donors of color give significant donations directly to those in need and faith-based organizations. Donors of color give to people they know or they have a cultural connection with, another reason to diversify your staff and your board. They support social and racial justice, which is becoming a priority in most philanthropic foundations and rooms that I’m in. They give in other ways. They contribute time, expertise, talents, exposure to their networks and goods. They give through collectives like fraternities and sororities and giving circles, and affinity groups. They give through crowdsourcing, because of the ability to see the collective impact of their contributions, and their giving has increased significantly since 2020. If you are not diversifying, you are dying.

As I wrap up, I just want to say what we know about the past is mostly documented in art, books, poems, photos, songs, dances, visual arts, plays, and so on, often displayed in our museums. This is one of the ways humans can stay connected to the past. Jerry Saltz says, “Museums are wormholes into other worlds.” Because of this, museums are inherently social justice vehicles. You give voice to the voiceless. So, how can your museum be a place and a concept, a public square and a public forum? And I’ll leave this with you, this one last thing, when all of this is said and done, what side of history do you want to be on? Be the museum of the future now. Thank you. [Photographer takes a picture.] My mom will like that photo. Oh, yeah, I’ll leave this here.

Dan Yaeger:

Great. Thank you. All right, Michael. That was awesome. Thanks. Give it up again for Michael Bobbitt. All right. Let’s stretch out here and relax and get down to some business for a little bit. A little bit of housekeeping though for y’all, keep the questions coming, and if you haven’t downloaded the app and given your questions through that, there are little pads of paper on your chair, if you want to raise that and we’ll have some runners going back and forth from time to time and pick those up and they’ll drop them up here for us. So, before we get started though, on the audience questions, I have one simple question for you directly. Are museums businesses?

Michael Bobbitt:

I think they are. Absolutely, they are. I don’t know, what else do you want me to say?

Dan Yaeger:

Well, all right, so I say that because business models are of course the essence of the business, and I think that how we are approaching our business models these days has been affected by the pandemic, I think, and all of the ancillary crises and things that have happened during this time period, with racial equity, with wage equity that’s percolating, with a whole lot of different things, we’re trying to investigate how is a museum sustainable in this environment, and we’re, I think, of necessity challenging the ways we do business, and of course the business model is traditionally you’ve got income and you’ve got expenses, and how do you approach either one of those. And too often, our businesses approach things from sort of a deficit model. Let’s just save money, and what that’s done of course is really suppressed wages, and it’s kept us in this poverty mentality.

You’re suggesting a bit more of a how can we open things up, how can we find new sources of income, expand the business model so we’re not constantly saying, “We got to cut staff or we have to underpay staff,” and so forth because that’s part of the issue. So, the business models.

Michael Bobbitt:

Yeah. I think that, well, listen, I’m not in your business every day, so I don’t know how you fully function, but my experience, and I am into my new job in the last year and a half, I’ve gotten a chance to visit maybe 75 museums in Massachusetts, what I will say is that I wonder, and this is again, my keynote is really hypothetical, but I wonder if the business model is a place for people to gather, to observe collections and discuss how the lives of the people and the things reflected in the collection affect how we move forward.

There’s a difference in going to a museum and looking at an artist and just talking about the artist and the art, rather than how that artist lived and what’s in the art and how it’s affecting the world that they lived in, and what have we learned from that that can take us to the future. I don’t know. I’d have to sort of work at a museum to have a better philosophy about this, but I definitely think if it’s in the business of people and that it’s about building relationships with people, I think you’ll do better.

There’s a practice in the real estate development world—the old practice was a developer would go into a community, find a piece of land, build a building, and then the community would be upset because no one asked them what they wanted in that building, or if they wanted that building. And so, developers started doing this thing called consensus organizing, whereby they would go into a community about a year, a year and a half in advance, they’d find someone from that community, and they would hire that community member to organize the community to work with the developer to find out what that community wanted and needed. And at the end of this, it was a win-win because the community felt like they participated in building that building, and the developer got a building that was well-used. And so, I encourage you to consider that when you’re looking at what you’re doing in your museums.

Dan Yaeger:

Well, I have to say your experience in the performing arts is really intriguing to many of us in the museum field because there’s a bit of a paradigm difference in some ways where performing arts, you consider your performances as perishable products, literally. If you have a performance where every seat is not filled, that’s a wasted opportunity, and in so many museums, because of the nature of our collections and whatever, it’s like it doesn’t matter whether sometimes the idea that the museum’s not full, in fact, we don’t expect it to be full every day. And that’s kind of an interesting difference because from the financial standpoint, why isn’t there a sense of urgency, why isn’t there a sense of engagement, but the way that you, in a performing arts situation, you’ve got performances that bomb, and those are all about just a very direct connection with are they buying it, are they selling it.

Michael Bobbitt:

It’s a fickle industry. This is why, again, I challenge you to rethink how we do our budgeting and finances and predictions, and the performing arts are plagued with lots of issues. I mean, there is an inventory issue, right, and when a show does well, you can only sell a certain amount of seats, and the product is what it is. You can’t do a string quartet with two people. Right? The costs are the costs. The performing arts has lots of problems, but I also think, again, when we think about our museums and the capacity that museums have… Here’s a philosophy. When we design our marketing departments, typically, the head of the marketing department is the director of marketing, right, as if that’s the most important thing, but what is that department there for? Isn’t it about audience development and engagement? So, shouldn’t the lead person in the department be the director of audience development and engagement, and then marketing is about supporting that, and PR is about supporting audience engagement, and communications are about supporting audience engagements?

That’s another way, again, we get trapped into models that were designed way back when, and so I kind of believe that the audiences that you can have is fairly endless. You just have to find out who’s not coming, and spend your resources. We spend so much time cultivating people that already come. We spend so much time. We do subscriptions, and we mail to people that are already on our mailing list and already frequenting our museums, and we don’t spend that much money on people that haven’t been there.

Dan Yaeger:

Right.

Michael Bobbitt:

The last theater I ran, I reshifted the way we spent our resources. I got the town that we were in to allow me to stick a flyer into the tax letter they mailed out to offered every single resident of that town a free ticket, but they don’t come by themselves. They come with three or four or five other people. Right? We did acquisition campaigns. My business card, the back of my business cards had a free ticket offer. We did so many things to engage new people, and that theater had a half a million dollars deficit, and by the time I left only 16 months later, it had a half a million dollars in reserve.

Dan Yaeger:

Well, it’s a good segue to one of our audience questions is give an example or two of arts and cultural organizations that have had newer, innovative models, and why is it innovative and why was it successful. So, maybe it’s building off of some of your own experiences, but any other thoughts out there about some of the things that are really working out there in the field?

Michael Bobbitt:

Yeah. Well, I think the arts and culture field is slow to move. We don’t have enough information to talk about the things that have really worked, but here’s one of the things I was working on. I think subscriptions are not good financial models. I think they can be racist. If we think about it, who has the resources to buy years’ worth of tickets six months in advance, and what privileges do we give them? In the theater, they get to pick their seats first, and often, we incentivize them by offering them a discount. So, people that actually could pay full price, we’re giving them a discount on the best seats in the house, and when they come, we say in front of everyone, “Stand up so we can tell our subscribers how much we love them more than the people that can’t afford to be subscribers.” And the people that can’t afford, have to sit in the back and the sides.

So that’s one thing. Two, when we do our subscription campaigns, we hijack our marketing departments, pulling them away from marketing the thing that they’re actually doing, we spend all this money on brochures and marketing, and often, like in theater, you market your season, right, but you can’t really sell a single ticket to that show that may be eight months away. You’re only selling to the subscribers. So, you have to remarket that show when that show is about to open. So, you’re wasting resources. Subscribers, maybe even members can be automatically renewed. We’re all used to this now. Right? I can go on and on and on, on and on and on.

So, we were looking at a Netflix model where we were asking our patrons to pay 20 bucks a month. They would get all access to everything that we offered. We had plenty of empty seats so we even thought about free refill on theater. So if you like the show, you can come back, see it again, we’ll give you a discount to bring another person. Right? But because of the digital world, we were exploring digital-first rehearsals, digital backstage tours, digital talk backs, and so even if you weren’t at the theater and you were at home, you still had other things you could actually use. And then the marketing department didn’t have to renew 500 people. It only had to think about getting 10 new members a month or something like that. So, I left before we got to test it out, but I hear other people are using the model and it’s working really well.

Dan Yaeger:

Well, let’s talk about digital for a minute because that was one of the things of course that really came to the fore during the pandemic, and the question of monetization is something that is at the top of people’s minds. I think we all have a sense that some form of virtual programming, some sort of virtual presence is going to be essential moving forward, but the question is like, we’ve never made any money at it, or we haven’t so far, and that’s at the top of our minds. And so, this is one of the audience questions here. While many museums understand the importance of digital, it requires a lot of resources for the infrastructure, training, and so forth. What are your suggestions for getting financial support to make this happen? Is it donations? Is it a user fee model, pay-as-you-go kind of a thing?

Michael Bobbitt:

Sure. Sure, if you think of the digital work you’re doing as a moneymaker, perhaps it’s more about reaching audiences that you can’t get to. Again, it’s about reframing it. I also think that during the pandemic, it was a stopgap because we didn’t know when we were coming back, and I think now that we see there’s value in it, if we go deeper in it, maybe people will pay to see it. But again, I wouldn’t think of the digital world as a moneymaker. I would think of it as a relationship-building tool.

Dan Yaeger:

Well, so you used the sports analogy and I’ve used this before as well. We’ve been in this position of the baseball field in 1960 or whatever. When they started broadcasting games, the owners were aghast, people aren’t going to come to the ballpark, and of course, they found that was a way to build the audience. And now, of course, baseball players are being paid a gazillion dollars a year, and it’s with every sport, that’s happened. At the very beginning, it was just local stations broadcasting it, not a lot of money into it, and the audiences developed, and now you think about the model, the business model of how are those players actually paid those kinds of salaries, it’s not off-the-gate income of individual games. It’s because of the media revenue. Right?

Michael Bobbitt:

And sponsored.

Dan Yaeger:

Yeah. I mean, you talked about years ahead. Looking back, I’m thinking that could be monetized at some point, if there is some methodology of figuring out what the audience actually wants. So, I’m not…

Michael Bobbitt:

And at the same time, the value of sports because of its accessibility became wild. I mean, in Massachusetts, people attend cultural events five times more than they attend sporting events, but the value that we place on our national teams here in the Commonwealth is, in many ways, a lot higher because of the visibility of that arena. I think it’s worth a try, my friends. I think dig into it, make the space. If we all do it collectively, I think people will start seeing a better value, and have fun with it. Don’t let it be a chore. Let it be an opportunity.

Dan Yaeger:

Yeah. Again, it’s that innovation piece of it is like keep your eyes open and try to figure out what is it the audience is going to want, and we’ll see what happens.

Michael Bobbitt:

You can also ask them.

Dan Yaeger:

True, yeah. No, that’s very true. All right. Here’s a great one right in your wheelhouse, and we have not gotten into the board discussion too deeply here, and we’re about to.

Michael Bobbitt:

My favorite, my favorite discussion.

Dan Yaeger:

So, is it possible to cultivate inspiration and creativity with boards and funders that are stuck on old models of museums, or should we blow it up and start all over? Really? Okay. Go for it, Michael.

Michael Bobbitt:

Blow it up and start all over. Please, yeah, please. It doesn’t work. The best practices that we have used to define how boards of directors function doesn’t work. How many more courses, workshops, webinars, articles do we have to take that examine the dysfunction of boards before we decide to let it go? How many? We invest so much, and sometimes we’ll say, “Well, we just need to train them.” Right? And so, we spend all this money training them and then it doesn’t change. It doesn’t work, my friends. The model doesn’t work. We have a group of people who do not necessarily represent the community that we’re trying to serve making the rules. It doesn’t work. The board should be filled with people of the community that can hold you accountable. I mean, there’s so many things I can say about this, but-

Dan Yaeger:

It’s a different keynote. It’s a different keynote.

Michael Bobbitt:

But there’s so many things to say, but we have to invest in it. And truthfully, if you don’t know the statute, the 501(c)(3) statute and what rules actually exist in the law, it’s worth looking at because there are very few in the federal law and there are few more in states. But what if we just crossed the Ts and dotted the Is, and just did that thing? Put three people on the board, we met once a year, we filed our financials, we kept minutes. That’s about what’s in the law. What if we did that? How much time would staff have back?

I toggled this. Remember the app Toggl? I toggled it. On average, I spent 10 hours a week managing my board. 10 hours a week. That’s 40 hours a month. A whole week out of my month managing a board. That’s three months out of the year. If I had that time back, the things I could do, the money I could raise. And so, often I go into rooms and I say, “Why do we need boards? Let’s reexamine that. If we had the ability to go, ‘Nope, no more boards,’ what are we losing out on? Why do we need them?” And the first question that we get is always the fundraising. Right? Anyone fear of losing the fundraising if you get rid of your boards?

Let’s examine that for a second. Three months out of your year. That’s just me, not to mention the other staff that’s part of that. So, we can put dollars to that. The time we’re spending managing the board is taking us away from new contributions that we could get. So, we actually can put dollars to that. Boards typically raise about 9 to 10, maybe 12% of the contributed revenue, not the earned, but just the contributed revenue, 9 to 10%.

I think if you did all the math, boards are losses, and not loss leaders, because most of them don’t represent the community so they’re not helping us pull people in, which I think is another thing you can put value to. If they’re not helping us engage the community or get more people in the community, then there are sales you’re losing. Right? I think they are losses and I hope some smart, smart, smart people will actually do some math and help us see that the way it works right not doesn’t work. It doesn’t work.

Dan Yaeger:

Let me ask you this because you mentioned value just a minute ago, and that’s a loaded phrase in so many ways, and riffing a little bit on the board issue. So many of our boards and so many of our institutions are structured around basically the notion that there is no mission without money and it’s sort of this shibboleth, right, and the idea though of how do we actually measure our institutions, the foundation of them, and that’s why I asked you is a museum of business or any cultural entity is that, well, we’ve got to have a foundation of finance. How do you measure though? I mean, is that true?

There’s a dynamic there that we wrestle with because when we get into this field, we’re not going into it because we want to make a lot of money. We want to change people’s lives. We want to uplift our cultural heritage, our art, our dance, whatever it is that we actually engage in, and yet our boards very frequently, the model is we’re fiduciary and we need to insist on bottom lines and growth every year and so forth. How do we get our hands around that? How do we change it? Is it in fact blowing up the board and being more responsive to our communities and our audiences? Is that an issue?

Michael Bobbitt:

I think you just answered it.

Dan Yaeger:

All right.

Michael Bobbitt:

Honestly, if we fill our boards with people that are concerned about the finances, then we shouldn’t be surprised when they’re only concerned about the finances and not the mission in helping people. That’s a model that we set up. We set that up. We have coined best practices. We put out list of the 10 things that board should be doing. We did that. The nonprofit sector did that. We gave them the power to do that. So, we can go back and talk about serving the community and helping people, making the world a better place for people, despite the finances, and again, it’s scary to think about that, but there are tons of organizations out there doing impactful work on a dime.

Dan Yaeger:

But how do we measure the value then? You’re a funder. Right? And I’m noting here, of course, AAM, and there’s a question here about accreditation and so forth. Financial best practices are all about… That’s one of the big tenants of all of this. Don’t you as a funder need to see a return on investment?

Michael Bobbitt:

Yeah. Well, as Dan mentioned, I’m a change agent so I’m blowing all that up at Mass Cultural Council. We are relooking at all of that stuff because I get it. I mean, I was the lead fundraiser and the executive director of several nonprofits, and so I get it, and I was that person that would call a funder and going, “Why are you asking me this question? How’s that going to help you make a decision about grant money? This is not important.” It’s hard to value the qualitative. At Mass Cultural Council, we’re going to bring someone in to help us define what we mean by public value and impact because I don’t think we know as an industry. We all have different definitions. If we polled you all, you’d have a different definition. I think it’s hard to qualify. I will say that the value of me participating in my community arts organization when I was eight is huge impact, huge impact, had nothing to do with money.

Dan Yaeger:

You think about cultural institutions as part of the community, similar to other institutions in the community or part of an array. We have our libraries, we have our banks, we have our churches, we have our museums, historical societies, whatever the case might be, and we have our businesses, and you know, what’s interesting is that each of those offers distinct forms of value to the community, but they’re not all quite measured the same. So, the question is why do museums and cultural institutions perhaps generally fall into the idea that we’re going to be lumped into the business category same as the dry cleaner or whatever, bottom line? It’s very simple in a business. You succeed or fail based on whether you’ve got strong enough finances. Museums put themselves into that category.

One of the questions here was talking about shouldn’t museums, shouldn’t arts and culture nonprofits have at least six to 12 months of operating cash reserves on hand, for example. These are things that we worry about. We stress about this. We lose sleep at night over this as opposed to are we serving our public better. Do ministers lose sleep over whether they have six to eight, six to 12 months of operating cash, religious institutions? I don’t know.

Michael Bobbitt:

Again, I go back to saying we set this up. This is what we decided. In all those nonprofit books that we’ve read, in the courses we took when we were studying, this is stuff that we taught ourselves. And so, we can go back and relook at it. I would just say that my success that I’ve had in my life was focusing on the public, people. People first. People first and the money was always there, and maybe that’s blind faith and a little naive, but it was always there.

There is, and I’m still studying up on this, trying to figure out what this is, there is another way to position the value of arts and culture to community, and I haven’t figured it out. I just know that oftentimes, we go in talking about the economic impact and sometimes the quality of life, and as I talk to legislators, I can see it going in, glazing over, and leaving. And so, I’m trying to figure out what the other thing is. I don’t yet know what that is, but I’m going to beta test a bunch of things, and I’ll get back to you all on that.

Dan Yaeger:

Well, so how do we get from A to B? There’s a certain sense of we know change is coming. Are we going to be part of the change? Are we going to be blown apart because of the change? How do we actually position ourselves to adapt in this regard? And in some ways, it’s natural selection, I suppose, but bottom line, you got to be responsive to the community.

Michael Bobbitt:

Yeah. So, a couple of things, one is that the only constant is change. Right? Change always happens. Two, I think that people, it’s not that people are afraid of change. They’re afraid of loss. Right? Change happens all the time. We get our new iPhone iOS update and we’re like, “Apple,” and then the next day, we don’t even remember. Right? The question I would throw back at you is how is it working for you by not changing? How is it working? We’ve got to try new things. We have got to pressure our philanthropists and our donors to be change-friendly, to value risk, to value innovation, to value progress, and progress will not happen without a fight, but fight.

Dan Yaeger:

On the value people too, and I’m thinking here, the change is coming actually from within, a lot of it. We think about the pressures from outside, the protests and the news and whatever, and we feel compelled to respond to that, but in museums and I dare say, cultural organizations generally, workers today and new generations of workers are coming in with a different expectation of the institutions that they participate in from a standpoint of values, from a standpoint of wages. I mean, so many of us that have been in the field for a long time, there’s been a sense of a vow of poverty. We are like people of the church where in exchange for doing the Lord’s work, so to speak, we accept potatoes for payment kind of a thing, and that’s changing now.

We are in a moment where our workers are saying, “This is not what we want. This is not what we signed up for. We demand better working conditions, living wages, equity in our workplace, fitting in with our values,” and that’s going to be a tough thing to reckon with, or it is a tough thing to reckon with because that has everything to do with your business model, frankly.

Michael Bobbitt:

Yeah. Friends, if we go back to the way things were after all this, this last two years would have been a massive failure, just a failure, and it’s sad to think about that, but if we go back to the way things were, we have learned nothing. We have learned nothing, and you’re right. The reckoning goes beyond just racial. It’s about wage. It’s about quality of life. It’s about wellbeing. It’s about so many things beyond, beyond… It’s just about so many things. And so, now is the time to innovate, to try something new, to throw something out, to go somewhere else, to do something. I don’t know. I could go on and on and on.

Dan Yaeger:

Unfortunately, Michael, our time is up.

Michael Bobbitt:

No.

Dan Yaeger:

But we’re happy to talk to folks offline for a few minutes here, of course, as usual. Thank you everybody for showing up at the early morning hour of eight o’clock for this conversation, and thank you to Michael Bobbitt for your inspiration and leadership. Thank you, Michael, friends.

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