Strategies to keep museums healthy

Financial sustainability and flexible management are challenges facing museum managers

Independence or Death, by Pedro Américo, is the only painting that will remain in USP’s Paulista Museum during the renovation of the building

Léo Ramos Chaves

Managers at the University of São Paulo’s Paulista Museum (MP-USP), better known as Museu do Ipiranga, have invited experts from Canada, Mexico, Portugal, and other countries to discuss strategies that can help Brazilian museums to achieve financial sustainability and address challenges in management. The international conference, set to take place in São Paulo on October 17 and 18, was already being organized before the fire at the National Museum, but the tragedy, and the heightened perception of the neglect and vulnerability of many of the country’s museums, has added a sense of urgency to the debate.

Canadian Norman Vorano, a researcher at Queen’s University who has served as curator of contemporary Inuit art at the Canadian Museum of History, has been invited to speak about the approaches used at university museums in Canada. Home to institutions such the Musée de la Civilization in Quebec, which receives 1 million visitors a year, including 160,000 children, Canada has a strong record on museum sustainability. Last year, around 2,700 Canadian nonprofit museums generated revenues of 2.5 billion Canadian dollars, or R$7.2 billion, with 49% coming from government agencies, 21% from private donations and proprietary activities, and the remainder from admission fees.

These approaches can potentially be used to advantage by Paulista Museum as it implements a major transformation. The 123-year-old building, which has been closed since 2013 due to seepage from the ceilings of some halls, will only be reopened in 2022 on the 200th anniversary of Brazil’s independence, following a modernization and renovation program that is estimated to cost around R$80 million. The museum’s entire collection—comprising thousands of objects, furniture, and works of art of historical importance, many from the nineteenth century—is being transferred to facilities leased by USP, where they will remain until a dedicated building is constructed for storage.

Léo Ramos Chaves Part of the Paulista Museum collection has been moved out to storage facilities leased by USP…Léo Ramos Chaves

When it reopens, the palace currently housing the museum will be used for exhibitions only. A USP team is assessing options to raise funds for the renovations and provide MP with other sources of steady funding to supplement the annual maintenance budget of R$10 million from the university. “We’re mapping all possible options to secure public and private funding—from government agencies to corporates and individual donors—and to revitalize the museum,” says economist Rudinei Toneto Júnior, a professor at USP in Ribeirão Preto who heads the university’s Partnerships Office, a body created in 2018 with a mission to make private money available for museum projects.

The director of MP, historian Solange Lima, is optimistic about the prospects of renovating the museum through private donations. “Plenty of corporations would be keen to link their brands to Brazil’s most visited museum and an important part of the country’s heritage,” she says. The bigger challenge, she fears, will be getting funding post-renovation. “We are learning from international experience and although there is no single, right approach, it is clear that good university museums tap multiple sources of funding including public funding agencies, endowments, and donation campaigns,” she says.

Diliff/Wikimedia Commons …and part has been stored in halls within the historic buildingDiliff/Wikimedia Commons

Supplementary resources
Lima cites the Pitt Rivers Museum at Oxford University, in the UK, as an example. With a collection of more than 600,000 archaeological specimens, it derives 34% of its budget from the university. Another 40% comes from government agencies, such as the Higher Education Funding Council for England (HEFCE). The rest of its revenues are from endowment funds and commercial activities. “The collections we manage are largely owned by the university, which benefits from our education programs and exhibits of high historical value and social impact,” says museologist Laura van Broekhoven, director of Pitt Rivers. Archaeological museums like Pitt Rivers are somewhat challenged in raising funds, she explains, so the museum has instituted a Risk Fund—a kind of emergency reserve—to cover unexpected expenses and repairs.

While universities and government funding agencies typically support the day-to-day operation of museums, with corporates sponsoring exhibitions, individual donations are an equally important supplementary source of funding for both operating expenses and to help expand collections. In Brazil, however, attracting individual donors is not so easy a task. A survey run in 2016 by the Institute for the Development of Social Investment (IDIS) showed that while Brazilians are no slouches when it comes to giving—77% of respondents had given to a cause or charity in the previous year—they rarely donate to museums. “Brazilians are quick to give when they see an immediate, short-term need: they donate money to people or institutions in dire situations, such as victims of disasters or other types of suffering. But they are less inclined to giving when it comes to long-term programs, such as preserving cultural heritage,” says economist Paula Jancso Fabiani, president of IDIS.

There are exceptions, however, such as the Rio de Janeiro Botanical Garden (JBRJ). Donations from the nearly 2,000 members of the Association of Friends of the Botanical Garden—who pay monthly donations and get unrestricted access to the visitation area—generated revenues of R$713,000 in 2017 that can be used for repairs or urgent renovations, says the director of the institution, economist Sérgio Besserman Vianna. Revenues from admission fees paid by approximately 650,000 visitors per year and from special events, such as an orchid exhibition that attracted 15 thousand people on a weekend in September, go to the Brazilian National Treasury—the institution is linked to the Ministry of the Environment.

A Smithsonian Institution campaign mobilized 535,000 donors and raised US$1.8 billion in the US

In the US, the Smithsonian Institution, comprising 19 museums in Washington, created a particularly successful strategy for raising money from individual donors. A campaign that mobilized more than 535,000 donors from 107 countries between 2014 and 2018 generated more than US$1.88 billion in private funds, with 93% of donors giving less than US$100. The money will be used toward exhibitions, new additions to the collection, renovations, and education initiatives. There are many different ways to donate to Smithsonian museums. On the Smithsonian website, donors can choose to make one-off or monthly contributions starting at US$35. Donors choose which museum, research center, or institutional program they want to give to. Another option is to become a member of a program called Friends of the Smithsonian, in which donors offer an annual amount of between US$1,000 and US$25,000. In return, they gain benefits that range from exhibition catalogs to dinners with directors and exclusive visits to research centers not open to the public. “The contributions came directly from individuals, foundations, and companies,” says Smithsonian spokeswoman Linda St. Thomas.

Most museums and cultural organizations in the US are funded by a combination of public funds and private philanthropy. “As a national museum, Smithsonian derives 64% of its revenues from the federal government,” says St. Thomas. Announced in March, the institution’s federal appropriations budget for fiscal year 2018 is US$1 billion, US$96 million more than it applied for. In 2017, federal appropriations were US$863 million. Smithsonian opened its new National Museum of African American History and Culture in 2016, and is currently carrying out a major renovation of the National Air and Space Museum, which in May received a donation of US$1 million from an airline. With admission free at all Smithsonian museums, other avenues have been created to raise funds, in addition to donations. In 2017, more than US$200 million was generated from proprietary activities such as museum shops, cafeterias, leased space, and theaters. Another US$72 million came from returns on a large endowment fund.

DILIFF/Wikimedia Commons One of the busiest in the world, the Oxford University Museum of Natural History receives an average of 713,000 visitors each yearDILIFF/Wikimedia Commons

A long-standing patronage tradition explains the success of public and private endowment funds in the US, with beneficiary institutions often drawing only on accrued dividends. Harvard was the first education and research institution in the US to create such a fund, in 1643 (see Pesquisa FAPESP issue no. 219). The income is invested in science programs, infrastructure, and grants. In 2017, 74% of funding for the Museum of Comparative Zoology (MCZ) came from such funds. “Federal support for private universities in the US is less than needed for core museum activities, like maintaining collections. Most of Harvard’s funding is from endowments, which is standard for universities like ours,” zoologist Jim Hanken, director of MCZ, told Pesquisa FAPESP.

Endowments have been a subject of interest among Brazilian museum managers for some time, and there are a number of related bills now before Congress. One bill regulates the use of private endowment funds at universities. The bill has cleared the Chamber of Deputies and is now in the Senate. One week after the fire at the National Museum, the federal government issued two executive orders dealing with the management and funding of museums. The first establishes a regulatory framework for raising private funds through endowments. If approved, endowment funds will be a permitted method of raising, managing, and allocating funds donated by individuals and corporates to public-interest programs and projects, a practice not currently permitted for federal public institutions.

The second executive order will create a National Museum Agency (ABRAM) to manage the 27 museums previously under the auspices of the Brazilian Institute of Museums (IBRAM). The agency will also oversee the reconstruction of the National Museum.

Museologist Marcelo Mattos de Araújo, who served as director of IBRAM between 2016 and August 2018, says that the tangible effects from any newly created endowment funds will likely only be felt in the long term, simply because a substantial amount of principal is needed to generate income that can be drawn on for operational activities. “It can take years and requires a considerable initial investment,” he explains.

Social organizations
The National Museum tragedy has also ignited debate about the extent to which public universities are able to manage and financially sustain their research museums. “A single government body is unlikely to be able to cover the full spectrum of costs of running a museum, which is expensive to maintain,” says Carlos Roberto Ferreira Brandão, director of the Museum of Contemporary Art at the University of São Paulo (MAC-USP). Somewhat of an exception, MAC has successfully developed parallel revenue streams by monetizing its facilities—a building designed by architect Oscar Niemeyer in a premium location adjacent to Ibirapuera Park. Museum space leased to two restaurants, a bar, and a cafeteria injects an added R$600,000 in revenues into the institution’s annual budget of R$23 million.

Léo Ramos Chaves An African elephant greets visitors in the rotunda at the Smithsonian Institution’s Museum of Natural History, in WashingtonLéo Ramos Chaves

For the National Museum, one proposed solution was to transform it into a “social organization” (organização social, OS), a type of public-private partnership. In this arrangement, the government would entrust the management of the museum to a private, nonprofit organization—such as an association or foundation—which would be able to manage the museum with greater flexibility than is allowed for a government entity.

OSs were introduced under a federal act in 1998 and were used extensively in the field of culture in the early 2000s, particularly in the state of São Paulo. The São Paulo Symphony Orchestra (OSESP) was the first to migrate its management structure to an OS, Fundação OSESP, in 2005. The following year, the São Paulo Pinacotheca was placed under the management of Associação Pinacoteca Arte e Cultura (APAC). Founded in 1992 as a private-law civil society, APAC had already played a supporting role in the operation of the museum since it began facing administrative difficulties in the 1980s. “When I became director of the Pinacotheca in 2002, museums run by the São Paulo State Government were in a very critical situation,” says Marcelo Araújo, who headed the institution until leaving for a position as head of the São Paulo State Office for Culture in 2012. “They were severely understaffed,” he says.

Leading international museums typically tap multiple sources of funding, says Solange Lima of Paulista Museum

Benefits and drawbacks  
The situation became worse when Banespa Serviços Técnicos e Administrativos S.A. (BANSESER)—a subsidiary of the defunct government-owned bank BANESPA created in 1973, which could hire staff without competitive examinations—was wound up under the Mário Covas (1995–2001) administration. BANESER employed more than 18,000 staff between 1988 and 1995, but was dissolved by order of the State Audit Court. Araújo estimates that as many as 83 of the Pinacotheca’s 90 employees had been hired via BANESER. All museums under the Office for Culture were in a similar situation. “The discontinued relationship with BANESER led the government to explore new approaches to management,” says Araújo. “With social organizations, the 18 museums run by the Office were able to professionalize their staff.”

JBRJ Director Sérgio Besserman Viana sees advantages in the OS model and is considering whether adoption is feasible. “While it is certainly not a cure-all solution, it could facilitate hiring new researchers,” he says. “We have to be creative; there is no such thing as a one-size-fits-all model for research institutions.” Many experts take issue, however, with placing public museums under the management of private organizations. “In recent decades, the Government has taken less responsibility for managing cultural heritage in Brazil. The problem with this is that the OS model is based on the notion of streamlining government programs, but what it does is remove the political factor from decision-making by interposing a private organization between government and citizens,” says social scientist José Veríssimo Romão Netto, a researcher at the USP Center for Public Policy Research.

Tomaz Silva/Agência Brasil Opened in 2015 in Rio de Janeiro, the Museum of Tomorrow is run by a “social organization” and partly relies on municipal appropriationsTomaz Silva/Agência Brasil

Netto, who has published extensively about cultural management, says that government policy in this area is an important agent of civic engagement. He cautions that, as social organizations become increasingly mainstream, pressures to generate revenues may lead to the adoption of market-based strategies designed to attract investment by providing greater visibility to sponsors, while neglecting core activities such as documentation and collection preservation. “In this model, a museum’s goal is to quickly and efficiently deliver a product to citizens, who are now seen as mere consumers,” says Netto.

Museologist Maria Cristina Oliveira Bruno, a researcher at the Museum of Archaeology and Ethnology (MAE) at USP, recommends that governments include a set of requirements in their management agreements with OSs. “Governments should set targets and deadlines to be met by OSs, and require them to implement measures to ensure transparency and accountability,” says the researcher. Marcelo Araújo explains that the Government has developed ways to identify organizations with the capabilities to manage museums. “Many museum management organizations in São Paulo were formerly associations of friends that had developed the experience and synergies to understand the intricacies of management,” he notes.

Léo Ramos Chaves The permanent exhibition From ape to man at Museu Catavento, in São PauloLéo Ramos Chaves

One important drawback, he admits, is that while they have more leeway to seek out alternative sources of funding, OSs are sensitive to financial crises affecting states and municipalities. The Catavento interactive science museum, run by the Office for Culture, is an example. Last year, 62% of its budget derived from government appropriations paid to Catavento Cultural e Educacional, the OS managing the museum. But government funding then declined by 20% between 2015 and 2017. This was fortunately offset by an increase in OS-raised private funds from R$1.37 million to R$3 million over the same period. The Museum of Tomorrow, in Rio, is also managed by an OS—the Institute for Management Development, which administers a budget of R$39 million, of which R$12 million came from the City of Rio de Janeiro and R$27 million from admission fees, venue rental, and donations from corporates.

Solange Lima, of USP’s Paulista Museum, says the purpose and structure of a university museum is difficult to reconcile with the OS model. “University museums are institutions intended to generate knowledge. Supporting this mission are staff engaged in research, education, and a kind of community outreach that extends beyond the entertainment provided by a non-university museum. An alternative model is needed that combines university appropriations with other sources of funding,” she says. No USP museum is run by an OS, but the university uses other avenues to seek out private partners. For the MP renovation, the Support Foundation of the University of São Paulo (FUSP) participated in competitive bidding rounds to raise funds through tax incentives, such as under the Rouanet Act.

Contributors Carlos Fioravanti and Fabrício Marques