Who's Paying? Funding Sources in the Cultural Sector

This week, my classmates and I are reimagining how funds can operate within the cultural sector. We'll be discussing the different sources from which museums and other historical institutions generate revenue, how that money is managed, and how that revenue can best reflect needed expenditures.

This is a timely conversation to have, since at the beginning of this year, the Metropolitan Museum of Art announced it will be changing its admissions policy. The institution, which has been "the only major museum in the world that relies exclusively on a pure pay-as-you-wish system or that does not receive the majority of its funding from the government" will only continue that pay-as-you-wish structure for New York residents -- visitors from out of state will pay flat rates, such as a $25 ticket for adults.

External facade of the Met. Image courtesy of sailko on Wikimedia Commons

Who pays for the arts?

There was an immediate uproar. Some questioned the logistics of the arrangement -- Will visitors be carded? How will this affect undocumented immigrants? Others questioned the ethics of the situation -- All museums should be free! How can you charge when you just installed a multi-billion dollar fountain at the entrance?

Questions of the latter kind indicate a public misunderstanding of how museums acquire and use funds. They also indicate the necessity of a larger conversation we must have as a society: Who pays for the arts? Is it the responsibility of individual visitors, private donors, or the government?

In an American context, we have been having this conversation since the founding of our country. In the 1790s, Charles Willson Peale founded his Peale Museum, considered to be the first publicly accessible museum in the United States. By the early 1800s, Peale needed funds beyond admission to operate the museum, and he appealed to Congress for supplementary funding. Despite the museum's overwhelming popularity, including among the country's leaders, Thomas Jefferson replied that Congress could not agree whether institutions not named in the Constitution could be funded. Soon after Peale's death in 1827, it closed.

This debate is still happening. While there have been occasional exceptions -- like the Federal Art Project, a federal program to create jobs as part of the New Deal -- the government has repeatedly indicated that it is not interested in funding museums to the degree needed. While the NEA and NEH often fund large projects hosted or organized by museums, the current administration has considered cutting those programs altogether during past budget talks.

Poster advertising the Federal Art Project. Public domain image
courtesy of the Archives of American Art, Smithsonian Institution

Who wants to pay to keep the lights on?

Many museums turn to private donors for a large portion of their fundraising, such as through annual appeals. However, these donors often are not interested in funding operating costs, as opposed to new exhibits and programs. In a manual for direct mail fundraising, Kay Partney Lautman and Henry Goldstein state that donors may acknowledge operating costs like the electrical bill, but discussing those needs will not pique donors' generosity. Direct mail fundraising letters should instead name an enticing cause that demands immediate action. Not only does this preference lead to earmarked funds that can only be used for the project rather than operating costs, but it also encourages unhealthy financial attitudes that prize growth over stability.

This prioritization partially applies to grants as well, which often center around specific projects. While grant applications can ask for money for broader causes, such as part of the salaries of staff involved in the given project, or could apply to behind-the-scenes projects like facility maintenance, basic operating costs like the electric bill are often still not covered.

During conversations about the Met's updated policy, many people brought up the idea of corporate sponsorship of museums. Large corporations with millions of dollars in profit would easily be able to pay for non-profit organizations' operating costs, and they would likely be interested in the publicity of having their name associated with cultural organizations. However, with the funding credits that would likely accompany this type of donation, would the public be comfortable going to, say, the Coca-Cola Philadelphia History Museum?

Visitors' burden

Of course, we can't expect visitors alone to carry a museum financially. In fact, admissions only accounts for 14% of the Met's total revenue. However, many supporters of free museums argue that admission costs further the exclusivity of the cultural sector. Cost creates a barrier to many potential visitors who cannot pay admission fees. These costs also support and further the museum world's history of systematic oppression such as white-centrism and colonialism, which can make people of color, immigrants, and other marginalized groups to feel unwelcome to begin with, even if they could pay.

So what's the answer here?

Of course, there is no easy answer to this conundrum. While I agree with many other public historians that museums should be free, this is often an unrealistic goal for many institutions, especially smaller and non-urban ones. Museums and other historical institutions must find their own particular balance between seeking federal funding, private donations, grants, and admissions fees, based on their audience and their mission. They must also develop the financial literacy to manage the funds they do have well. But as we move forward in this conversation, we should keep in mind that someone must bear this financial responsibility, and ask ourselves: What is ideal? What is realistic? And how can we compromise between those two answers?

Sources:
Hart, Sidney and David C. Ward. "The Waning of an Enlightenment Ideal: Charles Willson Peale's Philadelphia Museum, 1790-1820." Journal of the Early Republic 8 no. 4 (1988): 389-418.

Lautman, Kay Partney and Henry Goldstein. Dear Friend: Mastering the Art of Direct Mail Fund Raising. Washington, D.C.: Taft Corporation, 1984.

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