Austin Museum of Art: Crunching the Numbers, Part II

(To read Arthouse and the Dallas Contemporary: Crunching the Numbers, Part I, click here.)

In 2009, the Austin Museum of Art (AMOA) cancelled its plans for a new building downtown for the third time. Last December, AMOA sold the land on which it had been planning to build and in February it announced it would shut the doors of its downtown Congress Avenue location. Dana Friis-Hansen, the museum’s director since 2002, stepped down. Then, also in Austin, Arthouse laid off its curator and announced a major budget shortfall and the The Blanton Museum of Art’s director Ned Rifkin, who had been at the organization for two years, stepped down. (Meanwhile in Houston, the journal ArtLies shut down due to lack of funding.) People are not only wondering what went wrong but also how we can build more stable art institutions the next time around.

In the wake of so much turmoil in the Texas art world, this series looks at the finances of a few Texas museums. For each article, I comb through the 990s of Texas art institutions between 2004 and 2009 and try to make sense of their finances. I’m reconstructing a story from numbers filed with the IRS, so take all my data and conclusions with a grain of salt. Should my analysis need correction by someone with more intimate knowledge of the organizations, I would welcome it. The first article in the series considered Arthouse and the Dallas Contemporary alongside the San Jose ICA. Here, I discuss AMOA and use the Tucson Museum of Art and the Museum of Contemporary Art Jacksonville as comparison cases. In the third and final article, I’ll look at the Contemporary Art Museum of Houston alongside the Museum of Contemporary Art St. Louis and the Contemporary Art Center New Orleans.

If Arthouse and AMOA merge (negotiations for such a merger were announced in the Statesman on May 26), the resulting organization will be have assets of somewhere around $40 or $50 million. That’s the size of Los Angeles’ MOCA, but without the collection to match. The non-collecting Aldrich Contemporary might be the most apt comparison to the potential Arthouse-AMOA museum; it doesn’t have the huge building and collection that distinguish most other museums. What the newly formed institution would do with its resources remains to be explained. Education—including the art school at Laguna Gloria—has been equally if not more important than exhibitions to AMOA’s mission, and the production and exhibition of really new artwork has been mostly limited to its underfunded New Art in Austin triennial. Arthouse, on the other hand, has focused on exhibiting new work by international and emerging artists. Its small education programs focus on teens, the demographic least served by AMOA’s programs. In addition, the “publics” to which the two organizations have catered has been completely different over the past decade. AMOA’s public has been primarily regional, even local and primarily families. Arthouse’s public has been “the art world” (artists, curators, collectors and arts supporters) state-wide and nationally. I guess if the new organization were to meet half way between where AMOA and Arthouse are now, it would exhibit not-too-contemporary contemporary art and cater primarily to a state-wide audience.

Before Arthouse and AMOA take the plunge, this article and my previous look at their financial performance shed light on what got them into this situation in the first place and make us think about how we can prevent the mistakes of the past.

After rummaging through the financials of all kinds of museums and arts organizations nationally, I can say one thing for certain: Almost everyone was scrambling to make ends meet throughout the 2000s. As we saw with Arthouse, capital campaigns for renovations and expansion provide brief moments of relief, but after they’re over, organizations often find themselves running deficits equal or greater than those that came before. AMOA, the Tucson Museum of Art and MOCA Jacksonville are the rule rather than the exception here. (By the way, I chose these institutions because they are in cities of a similar size and they didn’t undertake any major capital campaigns during the period, though Jacksonville was just finishing one up in ’04. Both museums are slightly smaller than AMOA in terms of assets.) Figure 1 below shows annual surplus or deficit for each institution.

AMOA looks no worse than many other art museums on a surplus/deficit basis. However, it really has had quite a bit more trouble raising money than other institutions, as the next figure shows. The graphs show dollars raised per dollar spent on fundraising.

Figure 2 is rather terrifying. Gifts and grants to AMOA have barely covered its fundraising expenses for quite a long time. Instead, other sources of income—income AMOA from “programs,” which include rental fees for its Laguna-Gloria grounds for private events as well as art school course fees, income it got from renting out the land it owned downtown as a parking lot (I think), and, to a lesser extent, income from its endowment—have been keeping it afloat.

Why couldn’t AMOA raise money more effectively, even for its new building? Arthouse managed to do it.

Some possible explanations for AMOA’s ineffective fundraising activities include:

  • AMOA lost credibility for its expansion after its first two failures to launch. A third attempt was ill-advised from the beginning.
  • Arthouse had already gotten a head start on securing the donor dollars for which AMOA was competing. (Then again, for the most part, the two institutions attracted very different sets of donors.)
  • Donors did not find AMOA’s mission and programming compelling.
  • Donors made promises to give to the campaign for AMOA’s new building that were never realized because AMOA was compelled to cancel the project.

No matter what the case, it is upsetting that AMOA didn’t rethink its strategy regarding both general fundraising and capital campaign giving when its strategy hadn’t been working for so long already.

Now that I’ve touched upon income streams, I’ll turn to expenses and budgets. Unfortunately, AMOA looks no better here. Figure 4 shows the breakdown of program expenses, administrative and managerial expenses and fundraising expenses.


Figure 1

Figure 2

Figure 3

 

Figure 4

Again, fundraising stats seem out of whack for AMOA. The museum spent about 19% of its budget on fundraising between 2004 and 2009—that’s nearly twice as large as the percent that MOCA Jacksonville and the Tucson Museum of Art spent on the same. Even more concerning is the proportion of AMOA’s budget that it spent on administration—and thus didn’t spend on programs. It would take more work than I’ve done to detail the reasons for this properly, but at first glance it looks like huge professional management fees (for example, those paid to project managers for building planning) are the most significant factor here. AMOA kept planning, and they kept paying planners. I can’t help but wonder whether they were counting their chickens before they hatched; it sure looks like they weren’t raising the project funding to justify all that spending. Affecting these numbers to a lesser extent, it also looks like a somewhat larger fraction of employee salaries were allocated to “administrative expense” than at other museums. This could be merely a product of different systems of cost allocation. Or it could be that more time was spent on administration relative to programming than at other museums. That’s not necessarily a bad thing. Most museum staffs are overworked and underpaid, right? So maybe AMOA was just doing right by its people.

Ultimately, these data and those discussed in the previous article suggest that despite flaws in Arthouse’s financial management, AMOA’s financial performance has been even more disappointing. Hopefully, the sale of the downtown property signals an era of greater prudence. Most striking is AMOA’s longtime inability to raise significant money from donors. If Arthouse and AMOA were “competing for the same dollar” as Mickey Klein suggested in the Statesman article mentioned above, Arthouse was winning by leaps and bounds. This would suggest that patrons prefer Arthouse’s mission and vision. If they were not competing for the same dollar, but depended on different donor pools entirely, then Arthouse would be bringing far more to the merger-relationship in terms of future donor-dollars—that is if that donor pool transfers its commitment to the new organization.

With the boards of both organizations behind it, the merger seems incredibly likely to occur. Two struggling organizations, however, do not make one healthy one. Yes, a $25 million endowment will make a difference. At 5% per year, that’s $1.25 million in income from the endowment.  That’s significant relative to the organizations’ expenses. In 2009, their combined expenses were $4.4 million. AMOA has shrunk and Arthouse has both grown and shrunk since then. In addition, the merger will be costly—lawyers, staff turnover, a decrease in productivity due to general mayhem, consultants to manage PR or strategic planning, mediators, and other unforeseen expenses. $1.25 million slips away before you know it, kind of like Arthouse’s money did only a few months ago.

My aim is not to be prescriptive here. I’m simply trying to figure out what happened. My sense is that the leadership of both organizations has little credibility among arts supporters right now. Whether you chalk it up to bad luck and the economy or to poor decisions and oversight, the distrust was palpable on my last trip to Austin. As I’ve mentioned before, transparency of process—for example, a public report on the state of both organizations, a strategic plan and a proposal regarding governing structures—could go a long way toward restoring trust. Or if confidentiality is an issue, bringing in an organization with a reputation for strengthening nonprofit finance, governance and mission-alignment (such as the Nonprofit Finance Fund) could do the trick.

A final thought on this subject. I recently heard one colleague console another about the merger, “A new DIY space like Okay Mountain will eventually arise to help fill the gap left in the Austin contemporary art world,” he said. The other replied, “Austin needs another DIY contemporary art space like it needs a hole in its head.”

I tend to agree. Spaces like Okay Mountain, Co-Lab, and Domy are wonderful. But they cannot anchor the Austin contemporary art world in the way that Arthouse has the potential to do. The loss of Arthouse would be a severe blow to the truly contemporary (emerging, experimental, risk-taking) art scene in Austin. It’s not the merger itself people are freaked out about. It’s the probability that the newly formed institution will not be a risk-taker. If the leadership could assure the community that the new organization will prioritize experimentation and politically and aesthetically challenging work, it would meet with little resistance from the artistic community. It could do this through a forward-thinking mission and vision and a carefully crafted strategic plan. The question is, will it?

*AMOA’s data come from the 990s of both The Austin Museum of Art, Inc. and The Austin Museum of Art Endowment Fund.

Claire Ruud has an M.A. in art history from The University of Texas at Austin and is pursuing an M.B.A. at The Yale University School of Management. She thinks a lot about feminism, queer theory, and financing contemporary art production.

also by Claire Ruud

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7 responses to “Austin Museum of Art: Crunching the Numbers, Part II”

  1. Claire,

    I’ve read the first two parts of this series with great interest, but something is bothering me that I’m hoping you can clear up: Did you reach out to any of these institutions for clarification or response? It seems to me that some of your conclusions simply don’t follow from the data presented, especially when one considers the differences between these institutions. I’m curious what the administration at Arthouse or AMOA had to say.

    Thanks,
    FC

  2. These first two articles in this series have been great, and I look forward to the third. But why stop there? This kind of “business reporting” is simply not done anywhere else, but should be of vital importance to the art community. (Admittedly, many art-types find their eyes glazing over at all this accounting and number-crunching… Not me, though!)In other words, I would love to see this become an ongoing feature.

    One hears a lot of chatter about Austin’s support of visual art relative to Houston or Dallas. Facts are hard to come by. However, one could aggregate the revenue numbers from the 990s of each city’s 501(c)(3) art spaces, normalize this for population, and come up with a number for each city that would be something like “artspace revenue per million people.” Such a number would be an incomplete but objective measure of relative financial support for each city. If you continue beyond these first three articles, this is something I’d be interested in.

    1. Robert,
      That’s a really interesting idea and thanks for your feedback. Claire is now our (Art) Business and Finance Correspondent, feel free to post or send us any suggestions!
      Best,
      Kelly

    2. “One hears a lot of chatter about Austin’s support of visual art relative to Houston or Dallas.” As has been pointed out elsewhere, the Texas Commission on the Art’s per-capita funding in Austin dwarfs that of other cities in TX. I think Austin has gotten the same $$ from them as Houston, despite the huge population disparity, and the disparity in the number of arts institutions. (Full disclosure: Glasstire is a TCA grantee.)

      1. “As has been pointed out elsewhere, the Texas Commission on the Art’s per-capita funding in Austin dwarfs that of other cities in TX.” But the TCA is just one grant-making organization. To make a good comparison, one would need to look at revenue from all sources–public, private, foundations, memberships, etc.–excluding maybe the sale of capital goods (like AMOA’s sale of land) or deaccessioning. Their 990s would provide the revenue information. (That said, it would be major complications in calculating this. Would tuition count? If so, then do you count art department tuition from UH, UT, Rice, etc.? What about institutions like the Blaffer Museum or the Blanton Museum that are part of larger institutions? In short, trying to come up with a single aggregate revenue number for all the art spaces in a given city would be tricky.)

      2. Just to clarify, the Texas Commission on the Arts has just one per capita funding program, Arts Create Subgranting:
        https://www2.arts.state.tx.us/tcagrant/TXArtsPlan/SUB.htm

        Houston, Dallas and San Antonio all receive more funding in this program than Austin. All these cities receive the award specified by our guidelines. This information is on our website and staff is always happy to help with any questions.

  3. FC,

    I’d love to know more about what conclusions don’t add up for you.

    Yes, in fact, I considered reaching out to Arthouse and AMOA. I didn’t, in the end, because that’s part of my point: left to our own devices (i.e. without institutional transparency), these are the kinds of stories we can piece together. They’re not complete, and they are deeply flawed. In fact, as I say in this article, I really hoped the institutions would respond with corrections. I’d love to be wrong.

    Also, part of what I’m interested in here is empowering members and smaller-scale arts supporters (who aren’t on the boards of these institutions) with the tools to respond to the decisions these organizations are making right now. The institutions have framed the conversation so that it is mostly about money. So I wanted to give people some ideas about what to think about and what to ask with regards to money. I wanted to empower the community to ask relevant questions.

    Maybe all this didn’t come through as I intended it. I hope I have been very clear that I’m not claiming to be “right,” I’m just looking at what the public data can and can’t tell us.

    Finally, it’s interesting to note that when the first article came out, CAMH immediately wrote to me to offer to answer any questions I might have. I sent them the numbers I was looking at and my questions–so the third article in this series will incorporate their responses.

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