Trendswatch 2020: Q&A with Elizabeth Merritt on addressing financial sustainability
Leisure Opportunities
Job search
Job Search
see all jobs
Latest job opportunities
Stockton-on-Tees, UK
Great Aycliffe Town Council
£28,672 - £29,577
Oak Leaf Sports Complex, Newton Aycliffe
Aston University
£20,130 to £22,417 per annum (pro-rata)
Aston University Main Campus, Birmingham
Vision Redbridge Culture and Leisure Ltd
Fullwell Cross Leisure Centre, Ilford, Essex
The National Museum of the Royal Navy
£22,350 - £23,950 (£21,718.24 - £23,273.01 pro rata)
Portsmouth, UK

Trendswatch 2020: Q&A with Elizabeth Merritt on addressing financial sustainability

Job opportunities
Hampshire County Council
£33,653 - £37,876
location: Calshot Activities Centre, Southampton, United Kingdom
more jobs
Even as the US makes progress towards containing the virus and rebuilding the economy, museums will find themselves in a new world when it comes to the business of running their organisations
– Elizabeth Merritt

In a time of financial uncertainty for the global museum community, this year's Trendswatch report from the American Alliance of Museums (AAM) and the Center for the Future of Museums (CFM) is seeking to provoke discussion and find viable solutions to these ongoing challenges.

The report, now available, explores important cultural, technological, economic, environmental and policy events. In this year's edition, financial sustainability is addressed.

"Here at the Alliance, we know that COVID-19 is inflicting severe damage on museums," says the report's author, Elizabeth Merritt, vice president of strategic foresight and founding director for the Center of the Future of Museums.

"Our sector is just beginning to assess the impact of closures, travel bans, cancellation of major events (including fundraisers), and the implementation of social distancing. In the coming year, museums will struggle to contain the financial damage of the pandemic while supporting their staff and their communities as best they can. But even as the US makes progress towards containing the virus and rebuilding the economy, museums will find themselves in a new world when it comes to the business of running their organisations.

"Serendipitously, this year’s edition of CFM’s annual forecasting report investigates the trends destabilizing traditional income streams, documents how museums are optimising existing revenue, and highlights emerging forms of support."

With the global health crisis continuing to unfold, Attractions Management's managing editor, Tom Anstey, spoke to Merritt to learn more about this year's report and how it can help the museum sector in both the short and long term

Why did you choose to look at finance in this year's edition?

When AAM was developing its current strategic plan, we asked museums to share their biggest challenges. Financial sustainability was one of the top three issues identified by museums of all types, and that is a well-founded concern. A survey we conducted in 2017 found that 29 per cent of museums had dipped into their reserves or endowment, in the past year, to cover operating deficits. Every major museum income stream was profoundly damaged during the 2008 financial crisis, and it may be unrealistic to expect that we will ever return to 'business as usual'.

What are the key steps museums can take to try and foster financial stability?The first step is to pay attention to information – internal and external – that can tell an organisation what is working, what is not working, and how their external business environment is changing. The second is to ensure that all staff – not just the people who work in leadership and accounting – know how to read a financial statement and understand the museum’s budget. Unless everyone – curators, educators, security staff, exhibit developers – are financially literate, how can they be expected to have ideas and make decisions that lead to financial success? The third step is to create a culture in which staff are encouraged to try experiments that may result in new ways of operating, including new income streams.

How is technology changing the way we generate funding?

Digital technologies open two massive areas of opportunity for museums – data and reach. By collecting as much information as possible on who comes to museums and how they behave, museums can tailor the experiences they create, their marketing, pricing, and their pitch for contributions in order to be as effective as possible. Social media can turn a museum’s existing fans into recruiters. Young people, in particular, are highly influenced by the recommendations of their peers when it comes to how they spend their time and money. And by providing meaningful, engaging online content, museums can win love (and support) from people who may never come through their physical doors.

What effect is unethical funding having on museums? First and foremost, museums are having to explore what constitutes “unethical funding.” Is it funding from a source that seems to be incompatible with the museum’s own mission? Is it any wealth that results from the exploitation of people or natural resources? Is it money from people who have behaved in questionable ways in their personal lives? Since we are nowhere near having consensus on this topic as a society, whatever a museum decides, it may find itself at odds with individuals or groups who are applying a different standard. Museums will be well advised to review their policies for accepting financial support, including donations and sponsorships, and ensure they can clearly present the reasoning behind their decisions.

How does museum funding affect the workforce?

Unfortunately, the norm for nonprofits is what some have called a “poverty mindset” – spending as little as possible on “luxuries” like decent salaries and professional development. Understaffing a nonprofit, or not paying staff a fair wage just creates stressed, overworked, disaffected staff – not a more efficient and effective organisation.

Nonprofits often respond to financial stress with layoffs, salary freezes, or by letting positions go unfilled. As I point out in the report, this is counterproductive—staff are one of a museum’s most important assets, critical to its financial success. Ideally, a financially successful museum use some of those earnings to pay good wages, and provide professional development, in order to cultivate the best workforce possible.

What steps can you take if a museum isn't making enough money? The first step is to identify who cares about what the museum is doing, and how that caring can translate into financial compensation. That might include behaving in a good capitalist manner, providing goods and services people are willing to buy at a price that supports your work. It may mean identifying the change that you can make in the world and finding a funder who shares those values. It may also require assessing how big the museum can be, and how much it can do, with the financial support it is able to muster.

What is the dominant type of philanthropy and how do you tap into that market or mindset?

Almost 70 per cent of charitable giving in the US comes from individual donors, and 20-30 per cent of that comes from people with a net worth of over $30M. The younger donors, in this pool of ultra-wealthy individuals, are less likely than their elders to fund the arts. There is an increasing tendency for funders to want to make meaningful change. Museums that can show how they contribute to progress in a cause bigger than themselves can tap into this support.

Coronavirus has had a significant effect on travel and attractions worldwide. How can a museum prepare for an event such as this in terms of finances?A healthy operating reserve is one of the best financial preparation for business disruptions! The typical advice is to have sufficient expendable funds on hand to cover at least three months of expenses. More generally, museums can always be looking forward in time, anticipating potential disruptions—whether that is a pandemic disease, severe storms, ransomware or social unrest. Integrating a little bit of foresight into financial planning can help ensure that a museum has a business model resilient enough to weather hard times.

Sign up for FREE ezines & magazines
In a time of financial uncertainty for the global museum community, this year's TrendsWatch report from the American Alliance of Museums (AAM) and the Center for the Future of Museums (CFM) is seeking to provoke discussion and find viable solutions to these ongoing challenges.

More News

1 - 15 of 43,386
30 Jul 2021
Industry body ukactive has joined the chorus of organisations across a number of sectors calling the government's new National Disability Strategy a "missed opportunity". While ... More
30 Jul 2021
German fitness operator BestFit Group has acquired regional gym chain EuroFit for an undisclosed sum. The deal will see BestFit add all five EuroFit clubs ... More
29 Jul 2021
The Jorvik Group has launched a major global art project which will connect 14 cities around the world. Working in partnership with the York Guild ... More
29 Jul 2021
The US fitness industry lost around 58 per cent of its revenues during 2020, due to the pandemic and the subsequent lockdowns and club closures. ... More
28 Jul 2021
Speaking exclusive to HCM, Ralph Scholz and Nathalie Smeeman have confirmed that B2B trade show FitnessConnected will go ahead this year as a face-to-face event. ... More
27 Jul 2021
The Pingdemic of people receiving notifications on their phones, telling them to self-isolate because of contact with COVID-19 cases, is threatening to create staff shortages ... More
Spa Life UK
Spa Life UK
27 Jul 2021
Xponential Fitness has completed its initial public offering (IPO), becoming the second major franchised operator – after F45 Training – to go public this month. ... More
27 Jul 2021
The Gym Group has extended its partnership with digital fitness platform Fiit, becoming the first budget gym operator to offer its members a hybrid club-in-club ... More
26 Jul 2021
The world's largest fitness trade fair, FIBO, has been rescheduled again and will now take place from 7 - 10 April 2022, marking a return ... More
23 Jul 2021
Rainer Schaller, founder of budget gym megabrand McFIT, says that the global fitness industry will have to prepare for permanent life with COVID-19 – but ... More
23 Jul 2021
The most high-risk and controversial Olympics of modern times begin today (23 July) in Tokyo, having been delayed for a year due to the COVID-19 ... More
22 Jul 2021
Further research into the levels of positive COVID-19 cases among those to have visited fitness clubs and leisure facilities is currently being developed by EuropeActive. ... More
Life Fitness (UK) Ltd
Life Fitness (UK) Ltd
22 Jul 2021
Planning approval has been granted to what is set to become one of the first Passivhaus-certified leisure buildings in the world. The new Spelthorne Leisure ... More
21 Jul 2021
Digital fitness content provider, Wexer, is launching a new wellness resource on its connected Web Player. Called Mind123, it will focus on wellness rather than ... More
21 Jul 2021
Leisure-net has revealed plans to transform its active-net business event from an annual face-to-face gathering into a monthly hybrid event. With a different theme each ... More
Les Mills
Les Mills
1 - 15 of 43,386
Les Mills International
Les Mills International