More on Museums and the Economy

Over the past several months I have had posts on the AW Blog about museums and how they are dealing with the economic downturn. Some institutions are in dire straights and have, or are planning rather extreme acts to survive. This includes deaccessioning, such as what has recently happened at Fisk University, the Corcoran and the National Gallery.

Jason Kaufman of The Art Newspaper recently had a good article on how some of the larger US Museums are dealing with the new economic realities. The article gives a short synopsis on the Getty, (hiring freeze due to a 25% endowment loss), the Metropolitan Museum of Art (revenue is down, looking at budget cuts and revenue enhancements), the Museum of Modern Art (cut 10% from budgets across the board), the National Gallery of Art (endowment loss, and reworking the budget), the Smithsonian (recruitment freeze, but like the National Gallery, much funding is dependent on the Government), the Cleveland Museum of Art (planning no cuts and operating as usual with plans for expansion), the Museum of Fine Art Boston (slight budget cuts, and is looking to increase revenue through traveling exhibitions), the Kimball Art Museum (has suffered some investment loss in its endowment, but plans on expansion).

Very interesting to see how some of the institutions plan on cutting back and others, look to operate as usual. I wonder how much proper museum management has to due with the decisions.

Kaufman also has another related article in the Art Newspaper about how many museums are making cuts. He states Nevertheless, the scenarios revealed by the survey are grim. The museums reported that state and local governments are already dealing with their deficits by reducing funding. Corporate, charitable and private support is also expected to fall off. (US foundations shed $200bn in value from the market peak in late 2007, according to a November report in The Wall Street Journal.)

Plunging endowments are the most ominous indicator of museums’ circumstances. The affect of shrinking portfolios is incremental because most museums annually draw down around 5% based on the average value over the previous 12 quarters. But if the markets do not rebound the impact eventually will be severe.


To read the Art Newspaper article on the large museums, click HERE, to read the article on museum fiscal reductions in general, click HERE.