1. American Association of Museums - 2009 Conference Session Chair: Ted Silberberg, Senior Principal, Market and Financial Planning, Lord Cultural Resources Speakers: Laura Kleinman, Director of Shared Services, University Circle Inc., Cleveland Van Romans, President, Fort Worth Museum of Science and History Ted Silberberg Innovative Ideas and Practices in Revenue Generation and Cost Control

2. Lower attendance levels Reduced admissions, retail, membership, and other visitor-generated revenue Fewer functions have lowered rentals income Endowments tied to investments have lost value Diminished corporate and other donations Governments have imposed grant reductions Lower revenues result in layoffs and reductions of hours, programs and major exhibitions. Many Museums Have Been Adversely Affected by the Current Economic Downturn

3. …Particularly Important Today but are Always Essential for Museums First Case Study: Cleveland Cultural Collaborative Laura Kleinman, Director of Shared Services, University Circle Inc. Revenue Generation and Cost Control Strategies…

4. Cleveland Cultural Collaborative An experiment in creating sustainable collaborative initiatives Presented by Laura Kleinman, Director of Shared Services University Circle Inc.

5. Cleveland Cultural Collaborative History and Background

6. CCC History and Background 2004: A formal museum collaboration –Cleveland Museum of Natural History –Cleveland Botanical Garden –The Western Reserve Historical Society 2005: Hire Lord Cultural Resources to investigate possible initiatives and make recommendations in Planning for the Implementation of the Cleveland Cultural Collaborative in early 2006.

7. CCC History and Background 2006: Consortium of 7 local funders provides 2 year grant to hire staff and move forward with Lord’s recommendations. University Circle Incorporated (UCI) becomes fiscal agent and home for CCC –Development –Service –Advocacy

8. CCC History and Background The “Lord Report” –44 Recommendations –5 Categories: Build organizational capacity for improved effectiveness Maximize savings in purchases and services Increase earned income and attendance Increase contributed income Enhance the visitor experience Other recommendations –Phase I and II –Some recommendations required institutional investments

9. On your mark, get set, go!

10. Governance Meet the players, gain trust, understand their goals and objectives – how can you help meet them? Cultural differences, different fiscal years, changes in leadership Change is slow……

11. Accomplishments

12. Increase public awareness Enhance visitor experience (Increase earned revenue) Increase organizational capacity Decrease costs, increase efficiencies

13. Accomplishments Increase Public Awareness

15. Reaching out to Life Long Learners –Senior Circle Sampler to test interest –Coffee with a Curator, a partnership with local community college

16. Senior Circle Sampler

17. Accomplishments Enhance the Visitor Experience Almost 4,000 hoppers in 18 months Spike in July/August 2008 from Cleveland Museum of Art opening $23,500 in earned revenue

18. Accomplishments Increase Organizational Capacity Raiser’s Edge Training –Raiser’s Edge 3-day local training –16 individuals –25% of the cost normally incurred for out of state travel and housing, associated with most Blackbaud Raiser’s Edge training sessions. –Approx. $2,000 per head savings, or $8,000 for the CCC members.

19. Accomplishments Decrease Costs, Increase Efficiencies Shared HR Manager –Shared between 2 of 3 organizations –Cleveland Botanical Garden and The Western Reserve Historical Society –Approximately 50% savings for each organization Office Supplies –Align with large university –Overall savings of 27% –Rebate stream back to CCC

20. Accomplishments Decrease Costs, Increase Efficiencies Telecommunications Service Baseline data revealed significant CCC spend with AT&T ($125,000+) Identify cost savings and up front payment to CCC with different vendor WRHS signs 3-year contract Estimated Savings: 34%

21. Lessons Learned Understand stakeholder expectations, define success More time on change management Governance structure with appropriate roles and responsibilities Develop a business case (sustainability) Importance of scale

22. Future University Circle Inc. is home to former CCC and new department of Shared Services Scale up to include all 42 member institutions and businesses Form shared services committee with appropriate roles and responsibilities Focus on sustainability

23. Second Case Study: Fort Worth Museum of Science and History Van Romans, President, Fort Worth Museum of Science and History

24. Extreme Collaboration Innovative Ideas in Revenue Generation and Cost Control Van A. Romans April 30, 2009

27. Cattle Raisers Museum

28. National Cowgirl Museum & Hall of Fame

29. Fort Worth Aviation Museum

31. Other Ideas and Examples Ted Silberberg, Senior Principal, Market and Financial Planning, Lord Cultural Resources

32. Management Agreements Among Museums Does every new or small museum require its own Director or other senior positions? 5-10% of senior staff time to manage smaller or new museum in return for payment of percentage of staff costs + management fee =access to experienced staff at much lower cost than own staff positions =revenue generator for the managing museum =funders should love it

33. Museum Mergers Dallas Museum of Natural History Dallas Children’s Museum The Science Place Dallas Museum of Nature and Science

34. Time-Shared Ownership/Operation of Museum Building with School District Spaceport Sheboygan to include science museum/center Sheboygan Area School District wants Magnet School with space science focus Share Building: =Magnet School 100% School District =Science Museum time-shared based on 22% of time by School District, pays 22% of capital and operating costs

35. Focus Even More on Resident Markets in a Recession Fewer Longer Distance Vacations Substitution of Things to Do Closer to Home = Incentives for repeat visitation and membership among core audiences: –more rotation of permanent collection with dynamic themes that “feel like” special exhibitions –half-price for second visit within 60 days creates exposure to revenue centers –weekday afternoon strategy –bad weather strategy A challenge is getting the word out!

36. = Target non-traditional audiences: –distribution of free admission tickets to entice lower income/education markets as alternative to free admission periods –communicating with teenagers –museum as community center Focus Even More on Resident Markets in a Recession

37. Consider Museum / Non-Museum Collaborations “Value Added” Admissions Packaging as Alternative to Museum “Passports” Hilton “Manhattan Museum Package” all of 2009 and $20-30 more than regular price –Several Hotels - One Night –American Museum of Natural History –Two Free Tickets –Skycraper Museum – 2 for 1 Deal –Ripleys Believe it Or Not - $4 Discount –Madame Tussaud’s - $5 Discount –10% off two restaurants

38. Find the Right Balance in Admission Charges Adding Value Often Better Strategy than Lowering Admission Charges Balance to Take Into Account: –nature and quality of visitor experience –length of stay –charges at other museums What about Increasing Admission Charges Substantially? –implications to attendance and earned income –implications to contributed and grant income

39. Recognize Importance of Contributed Income: Where the Money Comes From

40. What Do Funders Want? Focus on mission Seek to widen access –guest passes from upper level members provide access to visitors who can’t afford Avoid unfair competition with the private sector –prices for space rentals Meet wider community needs –admission as full-day pass to eat, shop, return

41. BAD News / GOOD News Bad News: Worst economic downturn since 1930’s. Good News: Museums have survived recessions. Some were built in the Great Depression Museums to emerge in best shape not those cutting the most staff and public services It will be those museums that maintained existing audiences and grew new ones And utilize revenue generation and cost control strategies, including some discussed here today

42. Discussion