Author Archives: cgliniecki

Nearly 50% of History Museums Operate on Less Than $100,000

A financial review of more than 1,300 History Museums in 2017 reveals that nearly 90 percent operate on less than $1 million annually, and nearly half on less than $100,000 (see Figures 1 and 2). History museums are financially fragile, but an annual increase in revenue of $5,000 to $10,000 could have a tremendous impact on their capacity and impact. How might this be achieved?  Hints of potential solutions are revealed in the changing revenue patterns of larger museums.  

Figure 1. Annual revenue for most history museums was less than $1 million in 2017, the most complete recent data available.  Source: Internal Revenue Service and National Center for Charitable Statistics.
Figure 2. Annual revenue for most History Museums was less than $1 million in 2017, the most complete recent data available.  Source: Internal Revenue Service and National Center for Charitable Statistics.

A closer look shows that most History Museums derive about 60-70 percent of their revenue from “unearned” sources (i.e., contributions, grants, investments, fundraising events, membership dues), but the mix changes according to size.  Museums with less than $10 million in revenue received 4 to 6 percent of their income from investments, which doubled or tripled in the largest museums to 11 percent. While asking for support from people and foundations (i.e., contributions and grants) remained steady, there seems to be increased attention on making money from money (e.g., interest, dividends, sale of securities, drawing funds from endowments). 

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What are “Museums”?

Like art, efforts to define “museum” are challenging and controversial.  The American Alliance of Museums takes the “big tent” approach to defining museums—“if an organization considers itself to be a museum, it’s in the tent” (AAM 2008, 3). The Internal Revenue Service, however, takes a different approach, which can be puzzling to the field.  It assigns the type of charitable organization (e.g. history museums, elementary schools, forest conservation) with no guidance or approval from the organization.  Among the categories is  “Museums” (NTEE code A50), which is described as, “Organizations that acquire, preserve, research, exhibit and provide for the educational use of works of art, objects or artifacts that are related to the study of zoology, biology, botany, mineralogy, geology and other natural sciences; history; archeology; or science and technology.”

An analysis of IRS Forms 990 of museums identified as NTEE code A50 reveals the incredible diversity of the field as well as challenges our notions of “museum” (see list of examples in Table 1; a complete list is available as a pdf).  Consisting of roughly 18 percent of the entire museum field, Museums (A50) are the third-largest type behind Historical Organizations (A80) and Historical Societies & Historic Preservation (A82) (see Figure 1). While large in number, Museums (A50) have fewer resources than the average player in the field, but are growing faster.  They hold average net assets of $3,501,000, which is 28 percent lower than the museum field as a whole, but their average net assets increased 11 percent year over year compared to the 4 percent average of the entire museum field.  They are also united by their smaller scale and resources rather than subject matter with more than 85 percent of institutions receiving less than $1 million in revenue each year (see Figure 2), confirming the value of providing targeted services to small museums, such as the Small Museum Association, or funds, such as NEH’s Preservation Assistance Grants.

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