Nonprofits also need to make money

Contributing writerMarch 18, 2012 

A recent soggy Sunday afternoon didn’t seem to dampen the size or enthusiasm of the throngs of families willing to make the mad dash through intermittent downpours to visit the recently reopened Children’s Museum of Tacoma.

That there were so many people at the latest addition to Tacoma’s Museum District is good news for the Children’s Museum, which faces the challenge of sustaining interest and attendance as the novelty of a new facility wears off and the weather improves (one factor that might have contributed to the recent crowd). It’s also good news for Tacoma’s economic development strategy, especially for downtown, where hopes have been pinned on having a critical mass of attractions to, well, attract people. That strategy will add another critical component when the LeMay car museum opens later this year, joining the existing portfolio of the Washington State History Museum, the Tacoma Art Museum and the Museum of Glass.

And it’s a bit of good news, although hardly a signal of a return to healthier and happier times, for the museum business. Compounding the long-term threats of competition from other leisure activities and entertainment options, the industry has seen the recession slice admission counts and income from endowment funds.

The museum business may look like fun and games – especially to the kids happily clambering over the Children’s Museum’s playscapes and splashing in its water tanks.

But just as the tourism industry, of which museums are an important subset, is a serious business, so are museums. That fact tends to get obscured by the use of the terms nonprofit and not-for-profit, often used interchangeably to describe various charitable and philanthropic activities.

But those terms describe tax status, not a financial operating model. Museums need to make a profit, or something that resembles a surplus once expenses are deducted from revenues, if they want to have reserves to tide them over rough patches (such as a recession) or to finance capital projects. In other words, to have the money that assures long-term viability.

Without those resources, museums go out of business, no matter how interesting or valuable they might be. The Camp 6 collection of logging and railroad equipment at Point Defiance is being parceled out to other museums because of declining attendance, dwindling finances and no viable plan for recovery. In Bellevue, the Rosalie Whyel Museum of Doll Art, a privately owned collection housed in a building that itself resembled a giant doll house, closed earlier this month.

Museums are experimenting with everything from exhibit planning to admission fees to avoid the same fate. The Children’s Museum uses a “pay as you will” model instead of a fixed admission schedule. In its first six weeks of operation, 90 percent of nonmember families have paid something, at an average of $9.50 per family.

Such experiments will be watched closely for signs that Tacoma and the participating institutions in its fledgling museum district can address challenges and capitalize on opportunities.

For the individual institutions, do they have a plan to keep collections and exhibits refreshed so people keep coming back? For Tacoma, does it have a sufficient array of museums to bring visitors to stay and spend? Does it have a marketing plan sufficient to get those visitors here? Does the Museum District really feel like a district, something that visitors can’t experience in other towns?

Museums may not see themselves as financial entities. But that’s the reality they need to deal with if they expect to stick around. And as long as the community is making museums a part of economic development, they’ll need a plan based on something more solid than a string of rainy weekends to drive people inside.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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