There are some surprising differences in how galleries and museums on either side of the pond generate income, as Kate Carreno discovered on a fact-finding mission to New York and New England.
In April 2007, I undertook a ten-day research trip to the US before the opening of the Sainsbury Centre’s Francis Bacon exhibition at the Albright Knox in Buffalo. I wanted to look at fundraising, membership schemes and retail. Time and budget limited me to visiting the Frick, MoMA and Whitney Museums in New York; the Yale Center for British Art, New Haven; the Peabody Essex, Salem; the Fogg Art Museum, Harvard; the Clark Institute, Williamstown and the Albright Knox, Buffalo. I interviewed development directors, but also talked to marketing and retail managers. All were generous with time and information and had an impressive grasp of museum economics and industry benchmarks.
Leading cultural economist Magnus Von Wistinghausen has pointed out that UK and US museums operate on a similar economic basis, with 70 to 80% of revenue coming from contributions and the balance from earned income. However, in the US, contributed income is provided mainly by endowment funds and donations, whereas the UK’s main source is the public purse. As in the UK, US museums struggle with the ever-widening gap between costs and income. US museum directors’ energies are focused on building endowments. The UK focus is maintaining public investment. On both sides of the Atlantic, there is an increasing interest in developing ‘unrestricted’ income, earned or otherwise. US staff teams were bigger, suggesting there may also be a bigger hidden subsidy in the UK from overworked staff and volunteers.
Marketing to local audiences appeared to be less of a priority than developing relationships with benefactors and donors, and this was reflected in marketing campaigns and materials. All the US museums I spoke to recognised this as a risk to long-term sustainability – given that admissions represent precious unrestricted income, and the success of a museum’s annual fundraising drive each November (when not-for-profits compete for the tax-break dollar as Americans complete their tax returns) depends on its ability to demonstrate that it is delivering community benefit.
With the notable exception of MoMA, trading activities were seen as less of a priority than in equivalent UK museums. Development directors were clear about the reasons for this. Catering and retail are not core business and at best make only a marginal contribution to the bottom line compared to fundraising activities. MoMA’s huge success in this area has had an impact, and there is a growing sense that if there are trading opportunities to be had, the museum should exploit them rather than allowing third parties to cash in.
Americans also have a different attitude to giving. A good citizen gives back to the community without expecting direct benefits in return. At the Francis Bacon fundraising dinner at the Albright Knox, the menu was fun, but modest. The cost of my dinner was covered by my table host, not by the museum. Everyone was there to show their support and make a contribution.
Sponsorship is a relatively new field for US development directors, and a number were using UK models to develop their corporate offers. There was also evidence of direct UK competition. During my stay, National Museums Liverpool hosted a reception for American donors at the Frick, First Site had a drinks party at the British Consulate in New York, and the American Patrons of Tate hosted a dinner in mid-town Manhattan where guests paid $25,000 for supper and the chance to have drinks with Tony Blair before he left office. The Guggenheim’s Director suggested the Brits were not playing fair, observing to the press that this was an example “not of true philanthropy, but of ‘give us some money, give us some art, and we are going to give you something back.’”
The endowment model that underpins the US cultural economy is not easily transferable to the UK. It is not driven by tax breaks alone, but is based on a spirit of community-building philanthropy that does not exist here. This means that US fundraising practice is far more developed than in the UK, and all senior museum managers in the US have an admirable understanding of the economics of their sector. The UK’s strengths lie in sponsorship, marketing and retail, and best UK practice in these areas is at least as good as its US equivalent.