COUNT YOUR CENTS: MUSEUM INCOME

MUSEUM PLANNING AND MANAGEMENT
November 17, 2017

BY: EMILY WELSH

This week marked the transition in our course from Part 1: Project Planning and Management to Part 2: Museum Income and Fundraising.

Class Learning

A museum's income comes from four main sources:

1. Public - e.g. the government
2. Private - e.g. charitable gifts and fundraisers 
3. Earned - e.g. admission, memberships, gift shop sales
4. Investment - e.g. accrued interest

*See Reading Insight below for a discussion of percentages for each category.

Keep chasing those coins Mario. Make sure you are looking at all four sources of income. Source.

Charitable giving (in the private source above) can be received from four main sources:

1. Individuals
2. Foundations
3. Corporations
4. Bequests

The museum's board of trustees can aid the museum in obtaining charitable funds by personally contributing, matching other donations, hosting a party and petitioning friends and colleagues. Funding typically comes in the 80 - 20 pyramid concept - 80% of the funds will come from 20% of the contributors.

Accountability is key to securing funds from donors. To be accountable and increase chances of success, communicate to your donor what their monetary contribution will be used to pay for, how that cost is beneficial to the project, what benefit the project or museum activity contributes to the institution's mission, and how success and efficiency will measured.       


When fundraising, develop a plan! Before beginning, recruit board of trustees and volunteers, set realistic goals and determine the budget.

Reading Insight

Chapter seven, "Attracting Financial Resources," of  Kotler, Kotler & Kotler's Museum Marketing and Strategy provides an excellent overview of the four sources of museum income, tips for successful income generation, ideas for recruiting and managing volunteers as well as donors, and strategies for fundraising and planning.

The chapter provides examples from an international context but focuses on the United States museum context. For the four sources of revenue, the chapter examines the trends in percentages of income from each for 1989 to 2005 from the American Alliance of Museums (AAM). Over that period, the percentage of museum income from government sources decreased while that from private increased. Percentage of funds from earned increased and then decreased to return to levels similar to 1989.  Investment briefly increased and then decreased.

In class we looked at updated figures from the AAM from a 2009 report. This graph updated Kotler, Kotler & Kotler's discussion of 1989 - 2005 to 1996 - 2008. Since 2005, the percentage of income from private continued to increase, public (government) increased slightly, earned decreased, and investment increased. However the class noted that from 2008 onward we can expect that percentages from government and investment would decrease, the latter due to the economic crisis in 2008.

For a Canadian perspective, the Canadian Museums Association's 2016 "The State of Museums in Canada" report provides good context on Canadian museums' annual budgets and sources of funding. The report indicated that typically museums receive 60% of the their funding from government sources (25% Federal, 21% Provincial, 14% other), 9% from donations and 31% from earned revenue. These percentages differ from the American report which indicates US museums rely far less on government funding and more on private. The Canadian chart also neglects the investment source of income, of which I assume Canadian museums rely on as well. 

Happy Planning!

Resources

Canadian Museums Association. (2016). The state of museums in Canada: Brief to the Standing Committee on Canadian Heritage. Retrieved from http://www.museums.ca/site/reports.

Kotler, N. G., Kotler, P., & Kotler, W. I. (2008). Attracting financial resources. In Museum strategy and marketing: Designing missions, building audiences, generating revenue and resources (2nd ed.) (pp. 188-245). San Francisco, CA: Jossey-Bass.