In October, M&T Bank and Wilmington Trust convened a panel of leaders of cultural organizations to discuss how they are navigating their financial challenges, adapting to reopening and addressing diversity and inclusion amid the emergence of critical social justice issues. The latest in our award-winning series, Managing Through Challenging Times, the event was a follow-on to a conversation held in July with other leaders of cultural organizations.
The panel featured:
- Doris Meister, Executive Vice President, Wealth Management at Wilmington Trust and board member of the Museum of the City of New York
- Whitney Donhauser, President, Museum of the City of New York
- Steve Dubnik, President and CEO, Strong National Museum of Play
- Dennis Kois, Executive Director, Burchfield Penney Art Center
Doris Meister opened the event by underscoring the importance of cultural organizations, particularly during times of social disruption. “Our cultural institutions [are] a very critical and vital part of every one of our communities,” she said. “We at M&T Bank view ourselves as a community bank and join with our cultural institutions…to make our communities as vibrant and healthy as we can.”
Creating greater financial flexibility and foresight
The pandemic-mandated closures of all types of cultural institutions has exacted a heavy toll on the ledgers of these non-profits. Although many of them have reopened in a limited capacity, doors being closed for months significantly decreased revenue from admissions, retail sales, special exhibitions and the like. Moreover, the level of paid memberships has fallen, and donors’ contributions have shrunk. Meanwhile, obtaining grants, traditionally a major source of revenue, has become much more competitive.
However, savvy leaders have responded to these challenges with ingenuity and determination.
They have worked more closely than ever with long-time donors to support revenue on two fronts. One is to appeal to donors’ philanthropic ideals to help financially during this unprecedent crisis. Another is to collaborate with donors to alter their restricted giving covenants so that donations can be used to cover operating costs and urgent unmet needs, as well.
Deaccessioning, or selling, museum pieces to raise revenue became a viable option in April, when the Association of Art Museum Directors (AAMD) announced it would not sanction museums that redirect funds from deaccessioning pieces to “direct care” of their permanent collections. Under normal circumstances, AAMD standards mandate that funds from deaccessioning be used to buy other works.
Some leaders have had to revamp their spending, seeking board approval to use higher-than-normal levels of their endowment fund to pay for operations. Others have overhauled budgeting. Steve Dubnik of the Strong National Museum of Play in Rochester, NY, explained that his 2021 budget includes three different forecasts for revenue, ranging from pessimistic – based on the pandemic continuing – to optimistic. Dubnik is aiming for the middle road, with contingencies based on first-quarter performance. “If we’re tracking down to the low case, we’ll have a series of actions already preplanned that we’ll implement at that point going forward,” he said. “If we’re tracking towards [the high case], we’ll have the ability to start investing more back into the museum. So, with the level of uncertainty, we’re taking a multi-prong approach to how we go forward.”
The Road to Reopening
During the shutdown, many cultural institutions pivoted to a digital strategy to keep stakeholders engaged. For example, Whitney Donhauser explained that the Museum of the City of New York created a digital hub where visitors could connect with all the museums’ existing and new offerings from a single source. New experiences included a “Curators From the Couch” virtual program and artists meetings with patrons via video. These digital programs will continue to grow even though the institution is now open to visitors. “That’s been exciting for us to give people that level of convenience,” she said. “The amazing thing about it is that we’re getting 30 times our visitorship than normal [on the website].” While it has been a challenge for many organizations to monetize digital programming, today’s investments position the institutions to drive revenue in the future.
As far as reopening physically, leaders are prioritizing the safety of staff and visitors. They have invested significant time and resources into ensuring the use of PPE, cleaning and social distancing. Dubnik’s museum convened a panel of community advisors, including board members, parents, medical experts and a child psychologist, to plan reopening and adapt exhibits. Some museums now require patrons to preregister for visiting so they can obtain information for contract tracing. Contactless ticketing and admissions have quickly become the norm.
However, perhaps the biggest task – and opportunity – for reopening has been meeting the moment, connecting staff and visitors to a world that looks very different from the one when museums closed in March. “To me, that was the biggest challenge,” said Dennis Kois of the Burchfield Penney Art Center in Buffalo, NY. “How do we shift our programs and what we’re providing for our audiences to reflect this particular moment?”
Rising to the occasion
Despite the many issues they have faced in 2020, many cultural institutions have doubled down on becoming more relevant than ever by interpreting and reflecting on the issues of today, ranging from the fear and isolation of the pandemic to the anxiety of a national election and the growth of the Black Lives Matter movement. Kois called it “rising to the occasion.” He added: “We were thinking about how do we help our visitors make meaning of what they are collectively going through when they come back.”
Donhauser described her museum’s upcoming exhibition, New York Responds. It will feature highlights of more than 20,000 social media submissions to the institution detailing how New Yorkers have lived through the pandemic and the wave of social justice concerns.
Dubnik’s Strong National Museum of Play created an exhibition, Women in Games, to feature the contributions of women in the video game industry. What was planned as a six-month program has become part of the museum’s permanent collection. Located in a national hub for game design, the institution also invited leading women in gaming to speak at the museum and connected them with younger mentees at local schools.
Kois’ organization has established an underrepresented artists fund to enhance support and visibility for a more diverse group of creators. He and his colleagues in the field have been inspired, he said, by the actions of leaders at institutions like the Everson Museum of Art in Syracuse. In October, the Everson sold a 1946 Jackson Pollock painting for $12 million. The proceeds will be used to buy works produced by artists of color, women artists and other underrepresented creators.
“It’s been…an exciting moment. We know that this is something that will help more people feel like their voices and their own communities are represented within our galleries,” Kois said. “That’s one way that we can all be stronger and better as museums: reflecting the communities around us.”
Please review the content discussed in this important webinar and reach out to your Not-for-Profit Banking Relationship Manager or email Janet Farrell directly for questions regarding the challenges you may be facing during these unprecedented times. Be sure to revisit our Managing Through Challenging Times microsite at mtb.com/managing to access other episodes you may have missed within our series.
This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.
The information in this article has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. The opinions, estimates and projections constitute the judgment of Wilmington Trust and are subject to change without notice.
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