If you’ve not yet entered the Wu, lest you think that this is a song about the get-money lifestyle and touting the joys of capitalism, I’ll tell you right up front that C.R.E.A.M. is a reflection on the unfairness of systemic racism and poverty that keeps certain people down while lifting others up. Wtih this 1993 classic, Wu Tang sought to distance themselves from their hip hop peers who glamorized fistfuls of dollar bills and diamond grills. Hip-hop was born from the hustle, but while talking about chasing money to escape hard times, a lot of rap ended up glorifying the wealth that disenfranchised communities were systemically denied. There’s a deep divide between those who make it and those who are striving to make it, and the appearance of the drip versus what it takes to get there.
Before I make my comparisons, make no mistake, there is no real comparison here. Jay-Z is the first and currently only rapper to reach billionaire status. Rap artists are not the mega-rich, unlike those who run the art market, and many of those who sit on the boards of major art museums and use the art market as their playground.
Art museums claim to be (and often are) underfunded. Yet, they have to support to the appearance of wealth because they have expensive habits and their origins of elitism has created a facade of opulence. You can revisit the 10/5/20 post for a refresher on why this is, and how it affects museums today. This leads to a schizophrenic world where cash truly rules everything: the pursuit of it, keeping up appearances of having it, but also making sure you don’t appear to have too much of it. Trying to exist through the Covid pandemic has complicated this even more for museums. How can some museums morally choose to make new acquisitions while others lay off 50% of their workforce? How can funding organization justify giving to cultural organizations when there is so much need at the bottom of the Maslow’s Hierarchy Pyramid right now? Do museum employees deserve to lead a fraught existence in which their jobs are never safe because they went into something as frivolous as the arts? And the biggest question that’s been swirling around while cultural institutions struggle to stay afloat – why can’t they just sell artworks to pay salaries?
WHAT IS MUSEUM FINANCE
Fine art is crazy expensive and the art market is a multibillion-dollar industry, and a playground for the mega-rich. So there is understandable cognitive dissonance between seeing multi-million dollar artworks hanging on the walls and staff being paid minimum wage, sometimes even for full-time work. How do art museums get their money? Those of you who are art museum “people” will likely already have an understanding of the following and can correct anything I miss – also I hope some day I read a similar breakdown about how the for-profit world works, cause I don’t understand that at all. This is all pertaining to public museums – as opposed to private – which is their own whole thing.
TAKE A DEEP BREATH. THIS IS GOING TO BE LONG.
1. Endowments & Funds. Your endowment situation dictates the level to which cash rules everything around you, as an art museum. An endowment is money that has been invested some time in the past, often during the early days of an institution. The purpose of an endowment is to insure the longevity of the institution by providing stable funding for operating expenses and possibly acquisition funds. Museums with an endowment typically pull 3-5% of it per year for about half of their operation budget. You might think, times are tough, why not pull more? The reason is because it’s like your 401K – but if you expected to live for hundreds of years after retirement. There needs to be a significant amount of money to make more money in the market, and if you draw down too far, you won’t have the money for the following year. Museums will pull a bit more, maybe up to 7% during hard times, but it’s imperative not to draw that endowment down because what if the next year is a difficult one as well? And the next? In the spring, several articles pertaining to endowments and museum finance popped up. The Chief Communications office from the Met sums up why endowments can’t just be tapped to cover us through this season of lean times:
“Endowment gifts are inter-generational gifts — they are a profoundly generous and important way that donors of one era ensure that an institution’s mission can be everlasting. Here at The Met, literally half of all we do — the dozens of exhibitions, the welcoming of hundreds of thousands of students, the publishing of scholarly work, the global scientific research – is funded by our endowment, which was slowly, and assiduously built, one gift at a time for over a century,” Kenneth Weine, Chief Communications Officer at the Met, told Hyperallergic.
“If an institution spends from its endowment corpus, it is literally taking funds from every subsequent year of its operating budget,” added Weine.
Endowments are like your retirement savings – but the other way in which they dictate how cash rules your life is that they are also like trust funds. Think about Alexis Rose. Was she beholden to anyone while sneaking out of entanglements with Saudi Princes? No, she was wealthy, and so she was able to pursue her own life and be a little bit Alexis. However, many museum employees and art world writers argued through the spring that an endowment is more like having a trust fund tied to an overbearing parental figure who forces you to work for the family business and date the suitors of their choice: because endowments come with restrictions. Some museums were wise enough to adapt and use common sense to understand that those restrictions were meant for times that were precedented, but others have been too rigid, demonstrating yet another area for growth in the museum world. A heavily restricted endowment feels just as suffocating as those pesky wealthy donors.
2. Which brings us to…contributed income. Contributed income refers to donations of all sizes, from the $100 gift you send in when you renew your membership to the $50,000 yearly grant from the NEA. Some museums, usually your larger guys (100+ staff) receive corporate funding from businesses with connections to their area, such as the Minneapolis Institute of Art and Target, a Minnesota company, for example. Many museums receive sizable grants every year from their local arts commissions or community foundations that stay stable from year to year – think in the 10’s of thousands. Your museums might be a line item in your state’s arts’ budget, also likely a 10’s of thousands situation. You’ll probably receive some funding related to school programs as an institutional organization – sometimes, this makes up the bulk of the contributed income the museum receives, soliciting shade between departments as the fundraising department pulls out all the bells and whistles that sometimes negatively impact the educational programs. Think artworks being de-installed for a gala because they can’t be in a room with food and drink. There are also many smaller grants that museums apply for from year to year, some in the thousands, some in the hundreds, from corporations such as local banks or small-chain grocery stores, or arts councils, and other small funds that give to non-profits. Contributed income usually feels nice because it is often more local and community-based.
3. Revenue. Revenue comes from program ticket sales, admission, shop sales and I believe some places categorize memberships as revenue rather than contributed income as well. Big museums – ESPECIALLY those without an endowment – were hit super hard through Covid because they are dependent on the revenue from their admission ticket sales. There are museums who had previously seen 10,000 visitors per day, with a fairly high entrance fee – it doesn’t take long for your business model to fall apart after that becomes impossible. Ticket & shop sales and admissions are ways of diversifying your bottom line and covering smaller costs. A museum might have $900,000 in operating expenses between salaries and benefits, utilities and contractors, and other non-negotiable costs, all of which are covered by the endowment and contributed income. Now perhaps the staff would like to bring in an exhibition that costs $5,000 more than a typical traveling exhibition, or wants to offer a workshop where the facilitator’s fee is $1,300. Charging an extra fee for that exhibition or workshop allows that to happen without breaking the bank.
Trying to Get a Clutch
Hi, did any of that help you to make heads or tails of why so many museums can’t manage to pay people a living wage? No? No. Especially when a museum has a healthy endowment – there is no argument as to why you can’t increase what your yearly operating expenses need to be in order to just pay people well.
It is very degrading – speaking from experience – to be forced to rub elbows, as if you inhabit the same world, with people who have the ability to make all of your problems disappear with an amount of money that they would find utterly insignificant. Meanwhile, you’re eating the cheese and crackers at the event as two of your meals for that day to make your grocery haul for the week last longer. This is especially difficult if there IS mismanagement of funds going on – if an endowment has been drawn a little extra to fund a pet project of a leadership staff member, or program revenue is elusive due to a disconnect with audiences. I won’t make any further comparisons between hip hop & museums because as well all know, often even those who can’t afford to live on their museum salary are still from an incredibly privileged echelon.
Of course, if things don’t change, it will always be only the privileged who manage to stick out those degrading, difficult years to eventually secure a decent wage. They’ll tell the next generation that they have to “pay their dues.” The C.R.E.A.M. cycle will continue, and the field will forego attracting talent for attracting people who can fit into the appearance of the drip. If we do this, the museum field will continue to lose relevancy until they themselves become relics.
It’s not really the funding that’s the issue – it’s the interpretation of how the funding structure should work and of what our appearances should be. We have to add more seats to the table and stress that taking care of the employees at the bottom of the institutional hierarchy is equally important to the opulence on display for the most wealthy participants. We should be diversifying what “development” looks like, by taking cues from OF/BY/FOR ALL, the non-profit founded by Nina Simon of Museum 2.0. Much like a healthy endowment, an OF/BY/FOR ALL model frees a museum from having to rely on questionable sources of income, because it invites the community to buy-in to your museum and spend their resources on you.
The most ideal situation, like most of the issues we are facing from climate change, to mass incarceration, would be that our tax dollars actually invested in our communities. I’m interested in the idea that things should be free. I don’t know why things should be free – we should pay people enough that they can afford things. Wu Tang wouldn’t have had to be pointing out how young black men needed to participate in the unsanctioned economy if there were resources poured into their neighborhoods. Imagine if instead of being either a) the butt of a joke about low-paying jobs or b) assumed to be a high paying job because of the perceived drip, the museum jobs that do not require specialized knowledge were good-paying, stable jobs. Imagine if our country had UBI and a higher minimum wage that would mean that art museums are not for the elite, and contribute to the economy because average families would be able to afford an admission ticket.
This has been a breakneck speed dive into museum finances. In the future we can cover acquisitions – how museums actually get the work they own, why is it hard to diversify collections, what do you do when people try to give you the junk from their uncle’s attics. We can also dig deeper into the dehumanization of working as someone with specialized knowledge and experience for full-time for less than a living wage amongst the fancy facade of the art museum life. We can question why art remains linked with wealth when art is the most basic method of human self-expression. We can talk about how contemporary artists are just making things that will fetch a high price at auction and how capitalism totally “breeds innovation” lol. Ok, we should say goodbye now? Ok. Until next time, remember than Presidents are temporary but Wu-Tang is forever.