Funworld March 2008

Finding the Money

by Keith Miller

Museums grapple with project planning amid fund-raising uncertainties and share some creative solutions.

For most attractions, deciding whether they can afford a large capital project like an expansion or renovation, or even a smaller undertaking like adding a new showpiece, is often just a matter of determining whether earnings on sales will cover costs.

But for many museums, the decision process is more complex. They often can’t fund the cost of such efforts through sales alone, so they must some-how plan expansions and renovations— or just routine exhibitions—in a climate of uncertain funding.

“Our largest source of funding is individual giving, and I think that’s true of many museums,” says David Reese, executive director of the Bakken Museum in Minneapolis, Minnesota, a science center that focuses on the role of electricity and magnetism in life sciences and medicine. “Small museums have trouble generating the revenue they need, and even many large museums get about half their budget from earned income. We depend largely on charitable contributions, so we have to work very hard.”

Reese says nonprofit funding generally follows economic cycles, and the challenge for museums is creating awareness of themselves and instilling a sense of urgency. “It’s about having sufficient visibility and ensuring that donors have awareness of who you are and what your mission is,” he says. “Also, museums are a little different from something like a cancer research clinic because we’re not life or death. So the challenge is to communicate the urgency of your mission, and for us, it’s the urgent need for young people to be exposed to science.”

For smaller museums in particular, it’s not just about convincing potential donors of the value of their missions, but having the resources to find the funding sources in the first place. “The main challenge is finding out where the money is,” says Henry Cole, director of the Insights Museum in El Paso, Texas, “which is as daunting as going after it once you know where it is. You need to develop a good network so you know for sure where funds can be garnered.” He says funding for most museums comes from private and corporate donations, admissions, grants, government funding, and sponsorships.

Insights’ most recent featured exhibition explored amusement park science and was just replaced by a new exhibit on the nature of holograms. But Cole says Insights has a history of fund-raising difficulty for such projects, and that problem was exacerbated by the loss of its major benefactor, who died in 2006. Cole was hired by Insights last year to improve the museum’s funding situation and save it from having to close its doors.

Planning Amid Uncertainty
In the midst of such funding uncertainties, one wonders how museums can develop ideas for new exhibitions, much less plan for capital projects like expansions and renovations. “That’s a good question,” says Cole. “You take a leap to some extent. Anytime you do a capital fund-raising campaign, you have to get everyone in on it at ground zero.”

A big part of sustaining funding so a museum can fulfill its mission is maintaining a sense of excitement among its supporters, according to Mary Kellogg-Joslyn, co-owner of the Titanic Museum in Branson, Missouri, which has hosted more than 850,000 guests in the past 21 months. “The challenge is to try to keep the story fresh, and for us, that means not being a passive museum—we are an active museum,” she says. “To be successful, you have to continually engage your guests.”

Kellogg-Joslyn says the Titanic Museum projects its funding five years in advance to budget and plan for exhibitions. Interestingly, she doesn’t let funding uncertainties affect that planning. “I come from a philosophy that money should not dictate a good idea,” she explains. “If you have a good idea, go ahead and creatively develop it because you can always scale it back if you need to. I had the best training in the world working for Walt Disney, and that was the philosophy there.”

Reese agrees: “Certain projects are so absolutely essential to our mission that we’ll move forward with those even when we’re less certain of our situation; with others, we won’t move forward until we have the money in hand. Over time, you get better at predicting what your funding situation will be. If it doesn’t materialize, you scale back.”

Lauren Avery is the director of development and fund-raising for the Pacific Aviation Museum in Honolulu, Hawaii, and she gives another compelling reason for creatively planning projects first, before the money is raised: “We come up with the vision of what we want to do and then present it to [supporters], rather than waiting until we have the money first.” She says this is crucial because it helps prospective donors visualize, and become passionate about, a museum’s plans, which drives fund-raising.

For its four project phases, the aviation museum is drawing on a variety of funding sources. The first phase was restoring Hangar 37 on historic Ford Island, and that’s completely paid for. The hangar survived the Dec. 7, 1941, attack on Pearl Harbor, but its restoration cost $14 million. The U.S. Department of Defense provided $8 million, the state of Hawaii gave $1 million, and the remaining $5 million was provided by foundations, corporations, and individuals. The museum is now restoring a second hangar at a projected cost of $33 million.

Creative Fund-Raising
To compete for the contributions that make their exhibitions and projects possible, some museums have had to get creative in their fund-raising. “Each institution has its own unique assets or missions, and the creativity comes with finding a good match between what you have and your potential donors out there, matching a person’s or company’s desires and goals to your mission,” says Reese. “You have to find the common ground, and sometimes that’s not obvious, and that’s where the creativity comes in.”

Many museums do this with special events. Though the Bakken Museum has a major appeal to kids, it engages adults with its “Bakken Evening Out—Electrifying Fun for Grown Ups.” At $7 per person, the second-Tuesday-of-the-month events celebrate everything from the irresistible appeal of chocolate, to Ben Franklin’s birthday, to St. Patrick’s Day.

The Titanic Museum holds a “Titanic Princess Tea Party” for 1,200 girls twice a year at a cost of $12.50 per person. Among other events, they host an ice-carving event and a “Sweetheart Month” of celebrations of the characters Jack and Rose from the 1997 movie “Titanic.” Additionally, the museum allows people to “rent the Titanic” for family and corporate events of up to 300 people.

Others museums partner with neigh-boring attractions with which they share something in common. “We’ve partnered now with the USS Arizona, the USS Missouri, and the USS Bowfin Museum,” notes Avery, “and now we’re called ‘the four historic partners’ and are working collaboratively in many ways.”

The Internet not only offers museums an avenue for accepting donations, but also provides a channel for presenting their plans. The Pacific Aviation Museum currently has a colorful site concept for its planned restorations of Hangar 79 and Hangar 54 on its web site.

Cole says the Insights Museum wants to use its web site to garner support for its plans, too: “We’re working on it now, actually. This museum happens to be in very precarious financial trouble, and one thing we’re doing is trying to put that information on our web site to get support.”

Insights is also contemplating a celebrity golf tournament to raise money and is considering ways to use 250 acres of land that was donated to the museum for fund-raising, and where evidence of dinosaurs has been discovered.

Reversal of Fortune
What Cole is hoping to accomplish with the Insights Museum has already being done by the Circus World Museum in Baraboo, Wisconsin. One of the museum’s big events—the Grand Circus Parade—was a tradition for more than 40 years, but organizers were unable to raise funds in 2004 and 2005 to hold the parade in its traditional site of Milwaukee. Attendance at the museum then slipped 15 percent, and rumors abounded that Circus World would have to close.

But the museum is in the midst of a remarkable turnaround and has a good story to tell. “This year we were able to expand and open up one of our first new exhibits in probably 10 years,” says the museum’s executive director, Steve Freese, who was hired in January 2007 to get the museum healthy again.

“In the past, it was really difficult for the museum to plan new exhibits and [capital projects] because of the loss of attendance, so it was in a holding pattern,” Freese says. “I told the museum board I wanted to raise attendance by 6,000, and we’ve already gone way beyond that in one year, up 16 percent.”

Freese says the two keys to the turn-around have been operating the museum on a market-oriented funding plan, which allows it to more accurately project its revenue, and generating excitement among supporters. “We are reliant on what our visitors want to support,” he says, “because about a third of our revenue is from admissions and not quite a third from large annual contributors.”

Last year, the “Circus of Chefs” was the museum’s big fund-raiser. “We sold tables, and we had five who took $10,000 tables, four who took $5,000 tables, and about 20 who took $1,000 tables,” says Freese. “We raised $155,000 on only $5,000 in expenses— it was one of the most successful fund-raisers in the nation.”

Freese adds that generating excitement about a museum’s plans also gives confidence to its largest individual donors in making big contributions, noting that Circus World’s four largest individual donors collectively contributed $225,000.

Putting it simply, Cole says, “If you can’t transform your visions into plans that everyone can identify with and get behind, you’ll never get off ground zero.”