There are about four or five thousand museums in the United States. The large ones include the Smithsonian institution next to Capitol Hill in Washington. The content covers multiple fields such as art, history, astronomy, etc. The small ones may be just a room in a rural town, and only collect local crafts. According to the main body of the museum, more than 70% are private museums. These museums, whether public or private, are positioned as non-profit in the United States. The diversity of revenue sources in American museums determines that they are less affected by the government than other countries and have a greater say in museums themselves.
Compared with American museums, domestic museums can cover most of the costs or make profits by relying on independent operations. This article mainly analyzes the sources and characteristics of American art museums from the perspective of funding from the composition. In subsequent articles, we will introduce some museums that have done well in recent years and have characteristics in some aspects for everyone to read and refer to. At the same time, we will also conduct in-depth research on why American museums can attract a large number of private donations, how the US government regulates, and the reference significance of domestic museums, etc.
Generally speaking, the income sources of American museums mainly include three components: government funding, donations from enterprises, foundations or individuals, and museum self-operated income.
Government funding
In the United States, museum public funds come from federal, state and local government financial funds.
At the federal level, there are four institutions: Museum and Library Services Agency (IMLS), National Foundation for the Arts (NEA), National Foundation for Humanities (NEH), and National Science Foundation (NSF) representing the government to provide public funds to museums, and there are also direct special grants from Congress. In 2006, the federal government gave the museum a total of just over $149 million. Of these, 44% came from Congress’s special grants, 23% came from NSF, 21% came from IMLS, 8% and 4% came from NEH and NEA, respectively.
The mechanism and level of state-level funding museums vary from state to state and are very inconsistent. It is mainly used for operating expenses and infrastructure expenses such as exhibitions, education, collections, etc. The latter is often the main purpose of state-level special funding. The funding of local governments below the state is mainly for children's museums, zoos, aquariums, botanical gardens, etc. The local government funds received by these museums account for half of the total public funds; they are mainly used for general operating expenses and basic construction expenses.
If subdivided by discipline, the proportion of public funds at all levels varies greatly among different types of science and technology museums. The Science and Technology Museum receives the most public funds, of which the federal government accounts for more than 50% of all public funds.
However, since the late 1980s, government funding for museums has been reduced day by day.
Currently, the government’s direct funding space is very limited, generally accounting for about 10%-20% of the annual income.
In 2018 , the total revenue of New York Metropolitan Museum of was US$380 million, of which the financial subsidies from New York City Government accounted for less than 7%, and the funds raised by themselves reached 93%. The money-making ability of New York Metropolitan Museum is far ahead in the museum industry.
Social donation
American museums donate to public welfare, although there is a wealth of private funds, the government's policies are also an important reason, and a trend has been formed for a long time. For example, enterprises that donate to public welfare projects such as foundations and museums can be deducted from their income and are exempt from income tax (the donor's estate tax can also be deducted); it stipulates that foundations must donate more than 5% of their assets every year, etc. This form of public support for abandoning taxes allows museums to make full use of social donations and enrich their finances as the economic development of . AAM's survey data show that the main sponsors of museums are individuals, foundations and businesses. Taking the 2001 data as an example, individual donations account for 75.8%, foundations account for 12.2%, bequests account for 7.7%, and enterprises account for 4.3%.
All museums need to comply with relevant requirements when using fund . Generally, they can only use part of the interest and investment income generated by the principal of the fund, and cannot use the fund principal. When the fund interest and investment income reach a certain proportion, they will also require these income to be enriched into the principal to ensure stable growth of the principal.
Museums in the United States are led by the board of directors, and these directors can be regarded as volunteers, basically without compensation, and will raise or donate for the agency's activities. Take New York Modern Art Museum as an example. Its board members include 42 directors and 15 lifelong directors, and the average donation of each director exceeds $7 million.
In the 2018 operating income summary released by the Metropolitan Museum of the United States, various donations, grants, transfers and permanent endowment funds investment income accounted for 62% of the total operating income. The data disclosed by the Metropolitan Museum of China shows that in terms of income-generating ability, the flexibility of using social donations is probably the only way for museums to generate income.
Museum self-operated income
In addition to the above various funding sources, operating income is also a very important way to raise funds in the development of American museums. Typical income generation of American museums mainly includes tickets, membership system, sales of goods, restaurants and rentals, sales of collections, exhibitions and other activities.
1. Tickets
Ticket revenue is the core of self-operated income, and it also represents the museum's operating performance, or its contribution to society and its social influence. Therefore, in recent years, ticket pricing strategies have been increasingly valued by the museum industry. In the United States, many museums implement a ticket fee system. For example, the ticket prices of the Modern Art Museum in New York are: $20 for adults and $10 for students. Guggenheim Museum Ticket price: $18 for adults and $15 for students. Metropolitan Museum of Fine Tickets: $20 for Adults and $10 for Students. In addition, the museum has a fixed weekly admission date. For example, the Modern Art Museum of New York is open to audiences for free every Friday.
Ticket revenue is closely related to customer flow. According to incomplete statistics, the annual passenger flow of the New York Museum of Modern Art, the Guggenheim Museum and the Metropolitan Museum is about 2.5 million, 3 million and 5 million respectively. Basically, the huge passenger flow makes ticket revenue occupy an important position in the entire museum revenue. For example, in 2006, the annual ticket revenue of the Modern Art Museum in New York accounted for about 15%, and the Guggenheim Museum accounted for about 20%.
2. Membership fee
In the United States, basically all museums have their own member organizations, and the member organizations of large museums are astonishingly large Metropolitan Museum of Art has nearly 120,000 members, New York's Modern Art Museum has about 100,000 people, and the Smithsonian Association has more than 70,000 people. These members constitute the museum's "circle of friends". They are important objects of museum financing. Through them, they have established a core support group in all walks of life and fields, which has immeasurable value in providing various help to museums. In return, the museum provides members with various benefits, including free visits throughout the year; discounts on spending in museum shops, restaurants, and cafes; free use of other museum facilities such as libraries, cinemas, parking lots, etc.; free delivery of museum publications, such as exhibitions, picture albums, etc.; participation in activities specially organized for members, such as previews, receptions, concerts, lectures, etc. Usually, members are divided into different levels according to the amount of membership fees paid. The higher the membership fees, the higher the benefits you enjoy.
, such as the Museum of Modern Art in New York, members are divided into ordinary and contribution levels. The ordinary level is divided into individual, double and family members, with annual fees of US$75, US$120 and US$150 respectively. The contribution level is divided into 7 levels, with membership fees ranging from US$300 to US$10,000. The revenue of
is already quite large in the United States. Take the Modern Art Museum in New York as an example, its membership income accounts for about 10% of the total income. In addition to paying a certain amount of membership fees to the museum every year, members often have to contribute to the museum's annual fundraising.For example, the Metropolitan Museum of China's membership income in fiscal 2018 was 28.65 million, which is equivalent to about 60% of ticket revenue.
3. Sales of goods revenue
American museums are not only a place for carrying history and culture, but also through the development and sale of cultural relics derivatives, so that more people can get close contact with culture and bring culture home. Through these activities, the museum spread human civilization and obtained funds.
(1) Books, magazines and postcards are sold. This is the initial business model and the main source of business income. Since the 1960s, many museum stores in the United States have become the main place for people to buy art books and publications. The Metropolitan Museum of America has a collection of more than 185,000 books, and is regarded as one of the best places to sell art books in the country. It also opens branches of 24 museum stores at home and abroad, forming its own brand in publishing, cultural product development, etc., bringing more than 100 million US dollars in revenue to the museum every year.
(2) Art reproductions and souvenirs for sale . Relying on the historical and cultural resources it collects, the museum develops and produces exquisite replicas and souvenirs, which have practical, appreciation and collection value, contains the essence of history and culture, and stimulates people's desire to buy. Not only that, some museums will open shops in airports and other places, using high-end goods and elegant places to attract consumers. Modern Internet technology has brought opportunities for online sales, and many museums have carried out online shopping activities to facilitate more consumers.
For example, the American Museum of Natural History, according to the museum's financial report ended in June 2019, the museum's revenue has been approximately $197 million in the past year. The "Auxiliary Action" including gift sales revenue was US$29.66 million, accounting for 15.1% of the total revenue. "Auxiliary Action" including gift sales revenue was US$29.66 million, accounting for 15.1% of the total revenue. The Metropolitan Museum of Annual Report 2018-2019 shows that the museum's total revenue reached US$388 million between July 2018 and June 2019, of which the total revenue of tickets and membership fees totaled US$84.15 million, accounting for 21.7% of the total revenue. The "retail revenue" mainly based on cultural and creative products exceeded the tickets and membership fees, reaching US$85.84 million, accounting for 22.1% of the total revenue.
4. Catering and facilities rental
For museums, there are two sources of income that are small but relatively stable: one is restaurant income, and the other is facility rental. Internationally, many well-known museums not only have their own restaurants, but also incorporate museum culture into the restaurant decoration and even dishes.
Let’s take the Metropolitan Museum of Art as an example. We can see that in 2018, the rental income of “restaurants, parking lots, auditoriums” and other places was US$36.58 million, accounting for about 10% of the total revenue.
5. For sale collection
For some museums, museums may decide to focus their characteristics on art from a period or a country, so they will sell some items that fall outside the selection range and use these income to purchase additional works that meet their characteristics. Take the Walker Art Center for example, which focused on contemporary art, especially American art in the 1980s. At the Sotheby's auction in New York in May 1989, it took 22 very good 19th-century American paintings and announced that it would use this $10.5 million to buy works that better reflect the museum's artistic mission.
In recent years, due to the impact of the epidemic, the revenue of many museums has dropped sharply. Museums themselves have to consider how to maintain daily operations. After the Art Gallery Association relaxed restrictions on the sale of collections in April 2020 and announced that it would "will not punish museums for selling art to ease the economy." Many museums began to sell collections to alleviate the crisis in the museum. For example, in September 2020, Brooklyn Museum implemented the first round of collection sales plan, auctioning the collection at Christie's auction house, and finally sold 10 collections for a total of $5.4 million, which was far higher than expected. On October 28, the second round of sales started, with a total of more than 10 million US dollars.There are also the Baltimore Museum of Art, the Everson Museum of Art in Syracuse , the Palm Springs Museum of Art in California , and the Metropolitan Museum.
6. Exhibition activities
American museums carefully organize many exhibitions every year, which not only spreads culture, educates the people, but also obtains certain sales revenue. For example, with the support of the Ministry of Culture of China and the State Administration of Cultural Heritage, in 1998, the Guggenheim Foundation in the United States cooperated with the China Foreign Art Exhibition Center and the China Cultural Relics Exchange Center and held the "5,000-Year Civilization Art Exhibition of China" at the Guggenheim Museum in New York, USA and the Guggenheim Museum in Bilbao, Spain. Every day, the crowds are everywhere, creating a miracle in the history of world exhibitions. The exhibition ticket revenue exceeded US$10 million, and the exhibition organizers earned a lot of money.
Take 2010-2015 as an example. Tour fees and royalties account for the largest proportion of the Guggenheim Foundation's revenue and the growth trend is obvious, fully demonstrating the Guggenheim Foundation's good economic benefits and strong operating capabilities.
7. Other income
For example, the Metropolitan Museum of the United States will help other small and medium-sized museums to obtain income from selling goods on behalf of others. The Smithsonian Institute Asian Art Museum allows other agents to use their own brands and designs and charge a certain "copyright fee". Museums can provide pictures of collections for use by publishers, researchers or scholars, and charge a certain fee. The museum also uses superb cultural relics restoration technology to provide restoration services to the society to obtain income, etc.
