Wednesday, March 25, 2009

Questioning Assumptions

Earlier this month I participated in a very interesting scenario planning exercise at the Smithsonian. The session was led by Peter Schwartz, a board member from the Long Now Foundation, an organization whose mission is “to creatively foster responsibility in the framework of the next 10,000 years.” Now there is long range planning to aspire to! Guiding us through two days of thought about the future, Peter emphasized that one weakness of scenario planning is people’s tendency to take certain things for granted. This makes it is tremendously important to recognize and question the assumptions we make about our organizations and museums in general.

Since CFM encourages museums to use scenario planning as part of their suite of planning tools, I want to begin an ongoing conversation about what museums often take for granted about their world. Here goes—I’ll start, and you weigh in.

Let’s start with an assumption that museums are already beginning to question:

Everything in the collections stays in the collections
Barring unfortunate circumstances (whale ovaries that prove to be at risk of exploding, material that inconveniently proves to have been illegally expropriated from its country of origin, the need to sell one Dutch master painting to afford an even better one) once an object entered the collections, it used to be presumed it should stay. Forever. The field is already revisiting this issue, if only due to the belated realization that collections storage is both finite and expensive. About seven years ago the Accreditation Commission instigated a national discussion on the need to engage in collections planning--the process of shaping the collection in a coordinated and uniform direction over time to refine and expand the value of the collection in a predetermined way. Now there is wide acceptance that having a collections plan is a best practice, and it is well on its way to evolving into a standard (something all good museums are expected to do.) That may make museums look, and operate, very differently in the future.

Everything that fits the plan goes into the collections
What is the next logical challenge to the collecting paradigm? Perhaps in the future there may be many alternatives to the “permanent” collection owned by and residing in the museum for the indefinite future. Are there collections that museums might consciously acquire for a finite period, and then pass along (into or out of the public domain) when they are no longer of use to their community of users? Might museums increasingly “curate” (identify, track, research, conserve and interpret) material that never enters their collections at all? Which museums like the Richmond History Center, Historic Annapolis and others already do, in effect, when they make whole neighborhoods extensions of their museums.

Growth is good, necessary and inevitable
Museums can hardly be faulted for embracing this value, which I think underpins the whole American way of life. How many directors and board chairs see the pinnacle of their achievement as being the capital campaign funding the museum’s new building or expansion? This is so ingrained in our thinking that even the Isabella Stewart Gardner Museum is jumping on the growth wagon, and they have as unimpeachable excuse as a museum ever had for NOT expanding. In fact, they had to go all the way to the Supreme Judicial Court of Massachusetts to determine it did not violate their founder’s intent in order to do so.

For a variety of reasons society as a whole is beginning to question whether growth is good and inevitable, or whether it is even sustainable. Taken to its logical extreme, it is obvious that of course it is not. Any system (ecological, financial or other) has a maximum carrying capacity. Sometimes we find a way to temporarily expand the pie (for example, increasing crop yields by using nitrogen based fertilizers—in essence spending solar energy that had been banked for millions of years as fossil fuels.) But in the end, we reach the limits of these new resources as well. We as a nation are contemplating what our society will look like, post-peak oil production. And this year we are wondering how many of our financial systems were, in effect, Ponzi schemes that created an illusion of sustainable growth. As a species, we need to assess the world’s carrying capacity, and create an economy in equilibrium with basic ecological support systems. As we do so, America, and American museums, will explore the rational limits to our growth and learn what it means to live within a steady-state economy, rather than one premised on unending growth. How do we reward organizations and individuals for sustaining a museum at the same, right size for decades? Or even celebrate a good decision to downsize it in response to changes in the community? Which is a good segue to the next assumption…

Museums as organizations tied to a particular place
On an historical timescale human populations have always been transient, and in this century the rate of migration may accelerate, driven by ecological, economic and political forces. Museums, anchored to their large, expensive buildings, their historical communities and their sense of identity, traditionally behave as if they are fixed and immovable. How do we reconcile these conflicting behaviors? Will the Detroit Institute of Arts continue to be a bastion of culture in a city that continues to decline in wealth and population? Who will support it? Who will it serve? Can it actually contribute to the revitalization of Detroit, to a scale comparable with its glory days of the auto industry? Does it face a future in which it downsizes to fit the needs and resources of a much reduced city? Or does it pick up stakes and move to a swelling population center that wants and can support an institute of its quality? If the majority of the population of New Orleans relocates to Houston in the next decade, should the New Orleans Museum of Art follow, and in order to continue to serve the community that built it?

Museums will always be tax exempt nonprofits
We are living in a world turned upside-down. Newspapers, in economic freefall, are closely watching their compatriot Mother Jones and considering going non-profit. Now that newspapers' traditional economic model of using advertising revenue to subsidize investigative reporting is busted, they are considering our model—finding people who value a service that provides a general good to society (in this case, acting as a watchdog on business and government)—and asking them to underwrite it. “Why should you support us?” Mother Jones asks. “Because "smart, fearless journalism" keeps people informed–"informed" being pretty much indispensable to a democracy that actually works.” Other services that have traditionally been delivered through nonprofit NGOs are exploring a for-profit business model, finding that it does their good work more effectively. For example, the Africa Netmark regional project teams the nonprofit Academy for Educational Development with the S.C. Johnson Company (a multinational for-profit producer of insect-control products) to distribute pesticide-treated materials to combat malaria. There are already a handful of for-profit museums (the International Spy Museum, the Newport Aquarium, the Museum of Sex.) What can we learn from their economics? What do they do (or not do) differently from nonprofit museums? Might organization, in the future, unbundled “profitable” functions such as exhibits from functions such as collections care, research, conservation that, like investigative reporting, are valued public goods and lodge them in separate organizations?

Your turn! What basic assumptions underpinning decisions made by your organization, or the field as a whole, bear reexamination in the future?

Wednesday, March 18, 2009

Killing Buddha

The Accreditation Commission is meeting this week here at the AAM offices in Washington, D.C. Each time I walk past the big glass walls of the board room I see the huge binders scattered across the conference table, and the long, long list of agenda items posted on a flip chart at the head of the room. Bear with me while I set the stage for explaining why this triggers in me a deep sense of the irony of my current job.

I used to be in that room. For almost seven years, as the director of Museum Advancement & Excellence at AAM, I read the self-studies and Visiting Committee reports. Three times a year I listened as the Commissioners debated not only the specific museums under review, but the broader implications of these cases for the field. I participated in, and in some small way helped shape the discussions that lead, in the end, to the codification of national standards and best practices for American museums. I was privy to long, fascinating discussions regarding what constitutes the museum’s “community” (as referenced in the standards regarding public trust and accountability.) Are your neighbors necessarily part of the community you serve, and if not, don’t you owe them some responsibility, too? (Yes, the Commission decided, a good museum should also be a good neighbor, and be considerate about such things as the effects of their parking, evening events, and signage.) I was deeply engaged in the extended exploration of the role and purpose of collections planning, and the debate over whether it should be a standard—something all good museums should be doing. (Not yet, the Commission concluded, but probably soon.)

One of my proudest accomplishments at AAM was pulling together the documents resulting from these discussions, explaining the reasoning behind them and exploring what they look like in application. It was my hope that the resulting publication—National Standards & Best Practices for U.S. Museums—would be useful in explaining the values that form the bedrock of our profession. Many museum practitioners have told me of their acute need to educate people entering the museum profession, as well as board members, policy makers and journalists, on these core values.

Hence the irony. The Buddhist master Línjì Yìxuán famously instructed his students: “if you meet a buddha, kill the Buddha.” He was encouraging them to question authority, to experiment and discover for themselves what is true and right. Having spent much of the past decade helping to codify and enforce museum doctrine, I now find myself in my role as founding director of CFM, encouraging museums to kill Buddha—to question the standards, experiment and discover for themselves what works.

Sometimes, in the course of hundreds of accreditation reviews the Commission encounters an innovative, even visionary museum that looks at some aspect of the standards and says “no, we don’t do that—we do this instead, and look! It works.” And the museum may stick to its guns and decide not to become accredited, rather than conform. From my new perspective, such museums are as important to the field as the valiant few* that complete the arduous process of getting accredited. Heck, they might be more important.

I floated a trial balloon along these lines here. Using an ecological metaphor, I discussed how museums have traditionally succeeded by operating in a very conservative manner, sticking pretty much to tried and true methods. This is a good strategy in a stable environment. But the best forecasting information available about all aspects of our future—economic, political, cultural, ecological, technological—suggests we are entering a profoundly unstable age. The old strategies may not work. In which case, the future of the museum field may depend on unorthodox, visionary rebellious institutions that meet the Buddha on the road…and kill him. By consciously and creatively choosing to reject the standards and testing for themselves what works and what does not, in this new world, they break trail for the rest of the field.

How, after decades of lecturing museums about the need to conform, does an organization like AAM encourage museums to disregard the standards? Maybe we need a recognition program to find these visionary museums and honor their work. It could be almost the opposite of accreditation, celebrating iconoclasm and heterodoxy. Such museums do a service to the field, whether their experiments succeed (providing models for the future) or fail (helping us understand what does not work and why.) It would be a hard program to design and administer—how do we tell the difference between a museum that doesn’t have written plans because it is lazy, and one that has truly found a successful new method of mindfully guiding the museums through the future, a method that doesn’t rely on codified documents? How can we recognize and reward “intelligent failures” without accidentally validating sloppy management? Maybe we start by modeling good behavior, acknowledging that such a program doesn’t have to be perfect to be useful. Maybe it would anoint some museums that, in hindsight, merely seem imprudent, impractical or even delusional. If that’s the worst that happens, in the course of finding and recognizing real innovation, we can bear the risk.

So, what museum would you nominate for the “Killing Buddha” award, and why? Weigh in…

*776 museums are accredited by AAM at last count—hopefully a few more after the current meeting

Wednesday, March 11, 2009

Will it Play in Peoria?

This article appeared recently in “There’s No Plan ‘B’ for Peoria Museum”. It reports on a town hall meeting about the proposed Downtown Peoria Riverfront Museum and Caterpillar Visitors Center. Being blissfully ignorant of this project, I am free to contemplate the article, and the responses from readers, as a fascinating mini case study of public attitudes and concerns regarding museums in these hard economic times.

Briefly (as gleaned entirely from this article): Caterpillar has promised ~$50 million towards a new museum complex, out of a total of $90 million that has been pledged. The cost is projected to be $136 million, and county residents will vote on April 7 on a proposed sales tax that would add 25 cents to every $100 of purchases (with certain exemptions) to make up the difference. The county estimates this will cost each resident about $17 annually, and in return they get a 15 percent discount on museum admission.

So, some things that struck me as I read:
  • What concerns should shape the design of a museum? One reader asks “if the museum should fail, what adaptive reuse do you envision for the structure (as currently designed)?” Interesting question. In a time of financial stress, should museums design buildings that can be downsized, as well as expanded? Plan space that can be easily divided, repurposed, and rented out? Consider what the community would/could use the structure for, should the museum close? “By creating architecture that can be readily and adaptively reused” says the same commentator, “the public is protecting its investment.”
  • What concerns should affect where we put a museum? According to another reader, the planned site lies in a flood plain. This is not a new issue, but in an era of increased climate instability such risks become both larger and harder to estimate. Is it responsible to build a museum in an area that in coming decades is likely to be threatened by rising sea level, severe storms, drought or other factors? The Ohr-O’Keefe Museum of Art in Biloxi, Miss. is building a gorgeous new facility, designed by Frank Gehry, a couple hundred yards from the ocean. OOMA already had a casino barge dropped onto it (literally) during Hurricane Katrina. It is valiantly rebuilding, but to what long term end? Many credible forecasts predict the Gulf Coast will be threatened by more frequent megastorms, and that it will continue to lose population in the coming decades.
  • What are a private company’s ethical obligations regarding its discretionary funding? Several people aren’t happy that Caterpillar would spend money supporting a museum when the company is laying people off. “Give your money to the poor instead,” writes one person “and really make a difference in someone’s life.” The company is slammed in the comments for not directing profits to their shareholders and for not investing in job placement and training for employees. What are a private for-profit company’s obligations to help build a strong civic infrastructure, relative to these other needs?
  • How do we balance supporting existing museums versus establishing new ones? Some readers express frustration that support does not go instead to an existing local museum--the Lakeview Museum of Arts and Sciences, an AAM-accredited institution. In a time when many museums are facing closure, and competition for funding is fierce, how do we weigh the benefit of putting public funds into a new museum (which may serve new audiences, revitalize a depressed area of a city, or experiment with new ways of operating) versus concentrating support into existing institutions? Especially ones with a track record of excellence that are probably (in these hard times) in need of additional support?
  • What is people’s price point for culture? $17 a year in taxes to support a museum. That’s less than two movie tickets. Or a dinner out (at a sit-down restaurant.) Or a designer dress from Target. If people are not willing to spring for $17 a year for a new cultural institution in their city (supported by their major local industry, however reduced) I think they must a) be really, really sure they would never go to the museum (even with their 15% discount), b) be convinced there is will be no economic return to the city from increased tourism, employment, etc. c) be royally ticked off by the whole planning process or d) all of the above. To change this calculation, do we lower the price point or increase value? Would people be willing to pay $5 a year for a smaller museum? Would they pay $17 with the guarantee that every child resident of Peoria would have a free pass good to age 18?
  • What are the funders thinking? I was floored by remarks from the Caterpillar project manager, as quoted in the article. Confronted with opposition at the meeting, he gave the verbal equivalent of a shrug, saying “it’s not critical to us…it would be nice to have.” Setting aside whether this is a strategic move to leverage support (the “threat” perceived by the commentator quoted above), what an attitude! Spending $50 million on something that is “nice?” I am happy that Caterpillar is willing to put its money into a museum project, but I hope museum funders can be more articulate about why they feel museums are critical to their communities and worthy of their support!
  • What does this mean for the rest of us? The article leads with a classic fallacy regarding sunk costs. “With so much money…already raised” says the author, “why…risk the whole project?” Economic theory says sunk costs don’t count. The question should never be “how much have we spent” (or in this case, “how much have we raised”) but rather “how much is it worth spending on this project from this point on?” Put this way, we might all feel uncomfortable. In the future, the economic question our communities ask themselves may not be “how can we let our 100-year-old museum go down the tubes,” but rather “is it worth the money it will take, from this point on, to save the museum?” If communities do start from scratch, building their budgets from the ground up, would your museum survive the scrutiny?

Wednesday, March 4, 2009

Forecasting the Financial Future of Museums Pt II: What are our Options?

Last week I wrote about “The New Borgias”—the uber-wealthy who may, in the future, be the most promising source of funding for museums. This week I share some thoughts on other funding models and explore how they, in turn, might influence museums’ behavior.

The 2006 AAM Museum Financial Information survey—the most recent available, pending the publication of the 2009 edition this spring—showed the following median breakdown of funding for museums by source:
-24% Government funding, mostly local (city, county) followed by state, then federal
-35% Private community or corporate foundations, individual donations, parent and support organizations, fund raising events
-31% Earned—admissions, food service, museum stores, space rentals etc.
-10% Investment income from endowments and retained earnings

Right now there seems faint hope of growing any of these sources. As tax revenue tanks, city and state government have fewer resources. What’s more, nonprofits providing for basic needs (like food and shelter) will place first call on the resources available. We saw this dynamic at work in the debate over the Federal stimulus bill: we only narrowly won the battle to keep most museums (and not zoos or aquaria) eligible for federal stimulus funding, and “eligible” doesn’t mean “funded.”

The situation for private philanthropy looks no better. Anecdotal reports suggest individual donations may be down in amount, if not in total number, this year. Foundations will be distributing less money as their own endowments have headed south by 40% or more. And fund raising events—at least, the high-ticket receptions at which the upper crust swan about in nice clothes, sipping champagne and nibbling elegant canapés before a nice dinner—may be less successful than in the boom years. After all, even if the traditional patrons still can afford the $5,000 (or $50,000) you charge per table, taking you up on your offer may still seem insensitive and inappropriate in a time of general economic hardship.

That leaves us with earned income—but earning more money in this economy may be difficult as well. True, museum admission is good value for money compared to other forms of entertainment, and admission revenue may actually rise. But will that be counterbalanced by fewer patrons eating at the museum café, or shopping at the store? Will there be fewer space rentals, as families and companies scale back on weddings, bar mitzvahs and holiday parties?

Looked at this way, the outlook for all four traditional sources of museum income is just plain discouraging. So let’s look at some other ways to approach the question, ranging from heretical to wacky.

Same amount of money, fewer museums
My observation, after thirty years of working in the field, is that museums have an amazing ability to survive in the most adverse environments. They are the cockroaches of the nonprofit world--sometimes it really does seem like you can’t kill them with an atomic blast. Most of the time some improbable deus ex machina saves the day: for example an unexpected cash gift or a free building. Mind you, this often only saves the distressed museum from closure—it does not cure the underlying dysfunction. The museum may simply struggle along for another ten years before the next potentially fatal crisis.

What if, in the coming decades, 20% of museums were allowed—even encouraged—to fail? (This line of thought is already being explored by the historic preservation community with regard to the bloated number of historic houses in the country.)

Let’s say for the sake of argument that the money that people/government/foundations put into museums is not affected overall by which museum it goes to. We all know at some level this isn’t true—there are passionate donors who will only support their own little historical society, for example. But overall, individuals and groups inclined to support museum-y type institutions will put that support somewhere. If that support is concentrated on a smaller population of museums, each institution could remain financially healthy even if the overall income “pie” were static or shrinking.

Then the question would become, what is the best roster of museums that society can afford to support? How could society, and the museum field, help this happen in a controlled and productive way? Lots of questions come to mind, including:
• How do we ensure that valuable cultural, scientific and artistic heritage in the collections are protected and remain in the public domain?
• How do we ensure that less desirable material (a.k.a. “crap”) that shouldn’t have been in a museum collection in the first place doesn’t get transferred to another museum that then has the financial burden of maintaining or deaccessioning it?
• What or who determines which museums close? The cockroach analogy dramatizes that simple natural selection doesn’t always work. Should museum professional associations actively discourage government and private funders from supporting museums that don’t meet national or discipline specific standards? Should the local community be asked to “rate” which museums best serve their needs? (One person = one vote = one dollar?) Should the federal government assess the mission and performance of nonprofits more stringently and apply higher standards to the award and retention of nonprofit status?

Radically change what we sell, and at what price
Museums almost universally charge access fees according to the traditional structure of daily admissions tickets and yearly memberships. What about other models, such as the yield-based pricing used by airlines? See Nina Simon’s excellent column in Museum about other ways to price what we sell so as to encourage more use and generate more revenue from the same products and services. She discusses on-line discounts, packages that discount tickets the more often you visit, free introductory visits, bundled tickets with other entertainment options and referral rewards, among other things. Is anyone out there already doing any of these things? Who is willing to road test some of Nina’s ideas?

And perhaps it is time to reassess the genteel boundaries we have drawn to protect our reputation and sense of independence. Nina’s final suggestion is that museums be free. Wouldn’t we all like that! Maybe we should shift our attention from selling access to our museums’ resources (which should be free) to selling access to our museums' audiences. The economy of free internet sites and services is already built upon selling access to users. And as information capture and analysis becomes more sophisticated, this becomes less obnoxiously intrusive and more potentially useful. As technology is introduced that enables us to track where visitors spend their time—it also pinpoints their interests. Would Amazon subsidize free admission in return for the opportunity to send visitors a suggested reading list, based on how they spent their time during their museum visit? Would visitors opt in to such a system, in return for free admission? I would actually be interested in receiving such a list, if it was compiled intelligently. Conversely, as a partner, Amazon might want to include “you might want to visit the following museums” in their suggested “reading” lists, based on people’s geographic location and buying patterns.

Create new forms of capital
Can museums use their assets to create a whole new economy, and what would this economy look like? The virtual world Second Life has a fully integrated economy built on the residents' ability to buy and sell their virtual creations. Residents are reported to trade USD $35 million each month, and the Second Life economy has grown to become one of the world's largest user-generated virtual economies. This reminds me forcefully of the fictional and arbitrary nature of value. Linden Labs, the creator of Second Life, literally created something out of nothing—thousands of people willing to convert US currency to “Linden dollars” in order to purchase virtual products for use by their virtual avatars. Anyone with knowledge of how to code such products and time to do so can set themselves up in business. What resources do museums have that might create value in the virtual world where they can access new audiences willing to pay for incorporeal goods and services? Can museums sell virtual replicas of their collections to adorn the Second Life homes of people’s online avatars?

I’ve run on long enough for one post, and barely scratched the surface. What about your ideas? Where do you think museums will find the funding of the future? Please, weigh in.