Category Archives: Performance measures

Improving Museum Financial Performance

Organizing the “Big Tent” of the Museum Field

Imagine taking a road trip to visit Independence Hall.  It would be impossible to get there if you don’t know where you are (are you starting in Boston? Chicago? Los Angeles?). Yet most museums and historic sites find themselves in this same predicament—but they don’t know it.  

Knowing your museum’s financial position within its larger context can more clearly improve performance.  We’ve witnessed how demographic shifts, a global pandemic, and social issues have affected all museums in the last year.  Identifying which museums are responding well or poorly is largely based on rumor and anecdote, resulting in an incomplete picture of the field—and potentially misleading if a museum bases its decisions on them. Instead, we are following the advice of Karen Berman and Joe Knight, authors of Financial Intelligence (2013): “The art of accounting and finance is the art of using limited data to come as close as possible to an accurate description of how well a company is performing.”

Thanks to the availability of financial data from the Urban Institute’s National Center for Charitable Statistics (NCCS), Engaging Places will help history museums and historic sites better identify their peers and their position among them.  Armed with this information, organizations can do more than benchmark against previous years.  Museums will be able to financially position themselves geographically and by museum type. They will be able to evaluate their performance against their financial peers to identify strengths and weaknesses. By understanding their position, they can move forward with greater confidence.   

Assisting with this endeavor is Colin Gliniecki, who recently received his master’s degree in Museum Studies at George Washington University and his bachelor’s in both Business and History from Indiana University.  He has managed and analyzed development data for the National Society of Colonial Dames of America and has spent time with the National Air and Space Museum, Shedd Aquarium, the Chicago History Museum, Children’s Museum of Indianapolis, the Glenn A. Black Laboratory of Archaeology and is now tackling this national data on museums for Engaging Places.  

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 Engaging Places Museum Mapping Project (EPMMP) takes a similar approach, allowing for a wide array of institutions to fall under the umbrella. Allowing so many institutions into this “tent” has its benefits, but it also can create confusion.  Without a more detailed understanding of what’s inside the tent, you may be comparing yourself to institutions that don’t have meaningful similarities to you (e.g., local house museum vs. George Washington’s Mount Vernon or “apples vs. oranges”).  The unfortunate reality is many boards and staff members rely on inappropriate comparisons (why can’t we be like Colonial Williamsburg or Mount Vernon?), resulting in unreasonable expectations, mission creep, unnecessary risks, and unstable finances. The Museum Mapping Project will help museums make better decisions during planning and evaluation, and ultimately increase their sustainability and impact.  

To begin our “apples vs. apples” analysis of museums, we rely on how organizations are identified by the Internal Revenue Service in the Form 990, 990-EZ, or 990-PDF according to National Taxonomy of Exempt Entities (NTEE) codes. For example, art museums are identified as A51 and history museums are A54.  Not only do NTEE codes define the museum field according to a national standard, but they also allow us to deconstruct it into subsets of museum types for greater clarity.  Although most museums have made their financial data available for years through the Form 990, the data has not been analyzed meaningfully to understand the shapes, trends, and behaviors of the different corners of the field. 

The two charts below illustrate how an analysis by NTEE codes can help museums gain a clearer perspective of their peer institutions. Figure 1 shows the composition of the museum field according to type (e.g., art vs history), while Figure 2 displays the field by combined revenue per type (e.g., total revenue for art museums vs history museums). Art Museums (A51 in orange) represent 5 percent of the museum field, yet attract 34 percent of the revenue.  By contrast, Historical Organizations (A80 in magenta) and Historical Societies & Historic Preservation (A82 in violet) collectively represent nearly 60 percent of the museum field but only capture 20 percent of total revenue? Is this suggesting history organizations are becoming less financially sustainable?  Which museums have successfully broken this national pattern and have managed steady growth?

Figure 1. Source: Internal Revenue Services and NCCS

Figure 2. Source: Internal Revenue Services and NCCS

In the coming months, Engaging Places will post a series of articles analyzing museums by type, region, and over time with our recommendations. These articles will investigate what the average institution in these museum types looks like and which direction these museum types look to be heading. For details on our methodology, see Museum Mapping Project. In the meantime, we recommend Understanding Michael Porter: The Essential Guide to Competition and Strategy (2012) by Joan Magretta.

Who Knows How COVID Affected History Organizations? AASLH Will With Your Help.

Photo by Sora Shimazaki from Pexels

Visitation at history organizations was flat from 2018 to 2019, according to AASLH’s 2020 National Visitation Report. More than 1,100 institutions across the country found almost no change in visitation from 2018 to 2019. But what will be the impact of COVID-19 on visitation in 2020?

According to AAM and Wilkening Consulting, their “National Snapshot of COVID-19 Impact on United States Museums” in October 2020 survey of museums revealed that nearly one-third of executive directors believed there was a “significant risk” (12%) of closing permanently by fall 2021 or they “didn’t know” (17%) if they would survive. Secondly, it showed that “museums are operating at, on average, 35% of their capacity–an attendance reduction that is unsustainable long-term.”

It’s now nearly six months later and time for the field to share our annual metrics to understand what actually happened, not rely on predictions. AASLH is now collecting data for the 2021 National Visitation Survey—it closes on Wednesday, March 31. It takes ten minutes to complete and all survey respondents will receive free, advance access to the results later this year. You will need on-hand your visitation data for 2019 and 2020, and your institution’s budget and staffing for 2020. More details and the survey are available at

A Mixed Prognosis for Regional Museum Associations

In the United States, museums are served by six regional museum associations that are associated (allied?) with the American Alliance of Museums (AAM):

While AAM is doing well with about $10 million in annual revenues and net assets of $2 million, the regional museum associations are much much smaller by comparison. Their annual revenues range from $70,000 to $600,000, which is 1-7% of AAM’s annual revenues (see Figure 1).

Figure 1. Chart of revenues for regional museum associations in the US, FY 2014-16.

That might be acceptable given these associations serve a few states rather than all 50, but a further analysis of their financial condition in fiscal years 2014-2016 suggests that their health is decidedly mixed: Continue reading

How a Briefcase Led to a Clever Way to Conduct Visitor Research Online

Bolt Brief by WaterField Designs of San Francisco.

If you want to conduct visitor research for a potential exhibition, school program, or tour, you might want to check out WaterField Designs in San Francisco, who has been designing and manufacturing bags and cases since 1998.  A few months ago I purchased a Bolt Brief from WaterField. It’s a great bag and I recommend you check it out, but more importantly, I’ve become very impressed with their customer research and prototyping for new products, especially if the customers are all over the country. It’s an idea that can be easily adopted by museums and historic sites if they have Continue reading

Is Twitter Effectively Engaging Your Audiences?

twitter-afpWith the new year on the horizon, I’ve been evaluating my projects from the last year to determine how I can help historic places better connect to their audiences. For the past two years, I’ve used Twitter to share news about history, historic sites, historic preservation, and history museums.  Each morning I scan the New York Times and other newspapers for stories, aiming to tweet about three stories daily to my @maxvanbalgooy account so that my followers can quickly learn what’s happening.  The result? I have created 4,180 tweets and attracted nearly 500 Followers since I joined Twitter in June 2009.  This blog, on the other hand, has 1000 subscribers, so it seems my time is better spent on my blog than Twitter.  It could be very different for you, but how do we decide if Twitter is effectively engaging your audiences?

A useful place to start is with the metrics that Twitter provides: Followers and Likes.  Likes are a low level of engagement because they only require that readers support a specific tweet or find it especially useful or enjoyable—but that’s it. Followers are a mid-level form of engagement because it means that a reader wants to engage with you and read everything that you tweet (“read” is probably overstating things; “scan” is more appropriate for Twitter). Retweets engage at a high level because your Followers share your tweet to their Followers (did you follow that? it’s about the impact of the multiplier effect)—unfortunately, there’s no easy way to measure Retweets (but boy, we would have more impact if we promoted Retweeting instead of Liking).

To better understand how effectively Twitter can engage audiences, I collected statistics for a variety of major history organizations to measure Tweets, Followers, and Likes as of today (December 8, 2016) to develop the following chart: Continue reading

Video: Evaluation Consultant Randi Korn on Impact

In this 2:01 video, Randi Korn explains how museums and historic sites can define impact and how an “impact statement” integrates personal passion, the organization’s strengths, and the audience’s interests and needs.  And to measure impact you have to go beyond the usual numbers involving attendance and income and instead look at the experience that people had.  This is one in the “Questions of Practice” video series produced by the Pew Center for Arts and Heritage.

Visits to Historic Sites are a Humanities Indicator, says AAAS

Percentage of Americans Who Visited a Historic Park or Monument* in the Previous 12 Months, by Age, 1982–2012. Humanities Indicators, 2012.

Percentage of Americans Who Visited a Historic Park or Monument in the Previous 12 Months, by Age, 1982–2012. Humanities Indicators, 2016.

As part of their Humanities Indicators project, the American Academy of Arts and Sciences just released their analysis of visits to historic sites.  It shows that, “the percentage of people reporting at least one such visit in the previous year fell by more than a third from 1982 to 2012, with declines across most age groups.” At first, I saw this as a corroboration of the widely reported Survey of Public Participation in the Arts (SPPA), which the National Endowment for the Arts has conducted since 1982, but when I looked more carefully at the data, I realized it was based on the SPPA. So while there’s no news here, it does provide a useful summary:    Continue reading

Stanford Offers Webinars on Non-profit Management

Stanford Social Innovation Review Fall_2015Everyone knows that Harvard University has the Harvard Business Review, but did you know that on the opposite coast, Stanford University has an equivalent for non-profit organizations called the Stanford Social Innovation Review?  Both have been useful to me because along with the magazine, they offer webinars led by authors of their articles or who are leaders in the field.  Here are a couple coming up from the Stanford Social Innovation Review that you might find useful for your museum or historic site:

Overcoming the Overhead Myth

Presented by Jacob Harold, Ann Goggins Gregory, & Jan Masaoka
September 2, 11 a.m. – 12 noon PDT / 2 – 3 p.m. EDT

A dangerous myth prevails among funders that overhead can be used as a proxy for efficiency. In fact, research shows that under-investing in administrative overhead is often linked with poor performance by nonprofits. Ann Goggins Gregory and Don Howard dubbed this process “the nonprofit starvation cycle” in the eponymous Stanford Social Innovation Review article. In this webinar you will learn:

  • Why the nonprofit starvation cycle exists in the sector
  • How organizations that invested in administration subsequently improved their programmatic work
  • Strategies for explaining to funders the importance of overhead costs for future success
  • Tips for evaluating whether grantees are skimping on crucial investment areas in their budgeting

Price: $49, which includes access to the live webinar; unlimited access to the webinar as many times as you’d like for twelve months; and downloadable slides. Learn more about this webinar and register here.

Valuing Frontline Work

Presented by Lehn Benjamin, Katya Fels Smyth, Maria Peña, & Jesús Gerena
September 23, 11 a.m. – 12 noon PDT / 2 – 3 p.m. EDT

An increasing focus in the social sector on performance-driven frameworks can make it difficult for direct-service organizations to measure their impact. Some nonprofits are using creative strategies to measure and communicate their work’s value to funders. This webinar will:

  • Explain how some of the most popular performance models used in the nonprofit sector fail to measure the true impact of what nonprofit professionals do
  • Examine the reasons why it can be so difficult—yet so important—to recognize the value that on-the-ground work delivers to beneficiaries and their communities
  • Explore examples of nonprofits that have succeeded in capturing and conveying the full value of frontline work

Price: $49, which includes access to the live webinar; unlimited access to the webinar as many times as you’d like for twelve months; and downloadable slides. Learn more about this webinar and register here.

HBR: Where Boards Fall Short

HBR 2014 JanBoards aren’t working. A mere 34 percent of the 772 board members of historic sites surveyed by Engaging Places in 2013 agreed that the boards on which they serve fully comprehended their museum’s strategies. Only 22 percent said their boards were completely aware of how their museums fulfilled their mission and just 16 percent claimed that the board had a strong understanding of the dynamics of the museum field. When it comes to strategy and planning, organizations emphasize the short-term at the expense of the long-term.

You’re probably not surprised by these results–but you may be surprised that this actually describes major corporations based on studies conducted by McKinsey and Company, a national consulting firm. Governance is not just a challenge for nonprofits but the business world as well.

So how can the situation improve? In “Where Boards Fall Short” in the January-February 2015 issue of the Harvard Business Review, Dominic Martin and Mark Wiseman claim that a fundamental issue is that boards don’t understand their “fiduciary duty,” which consists of two core components:

  • loyalty (placing the company’s interest ahead of one’s own)
  • prudence (applying proper care, skill, and diligence to business decisions).

“Loyalty and prudence” encourages boards to focus on the long-term to help the organization thrive for years into the future. Keeping in mind the big distant goal (otherwise called a vision) clarifies choices and directs board actions. From my observations of nonprofit boards, there’s often confusion about fiduciary responsibilities and rarely a vision (but usually a mission–but so vaguely worded to be nearly useless for making decisions). To help clarify fiduciary duty, it’s a good idea to explain it during recruitment and orientation (don’t assume they’ll support it) and consider an annual commitment agreement and planning retreat for both board and executive staff.

In addition to addressing fiduciary duty, Martin and Wiseman suggest four ways to improve board performance.  Here are their key ideas from their article along with my translation for the non-profit environment):

1. Select the right people. “Having a diversity of perspectives and proven experience building relevant businesses as well as the functional knowledge is critical. But if our surveys are any indication, too many directors are Continue reading

Upcoming Workshop on Understanding Audiences

If you want to engage your audiences to build support and increase your impact, you first need to understand their interests, needs, and motivations.  In today’s busy world, the traditional tactics of advertising, rackcards, and signs are no longer sufficient to attract visitors to museums and historic sites.  We have to refresh our understanding of today’s audiences and develop new approaches that will engage them.

On September 22, 2014 from 9:00 am to 4:00 pm, I’ll be facilitating a one-day workshop on Understanding Audiences at the Middlesex County Community College in Edison, New Jersey.  Sponsored by the New Jersey Historical Commission and New Jersey Historic Trust, this is part of a series of three workshops on engagement for nonprofit history organizations.  The workshop will be based on the Standards and Excellence Program for History Organizations of the American Association for State and Local History.  Registration is $20 (a bargain) and includes breakfast and lunch (even better!); deadline is September 18.