How to Evaluate the Museum Operating Budget

Regardless of your role within the museum, it is important to understand the museum budget, how it is made, and how it affects your work. 

The focus for this series is how the budget can both reflect and communicate what the museum values. Last week’s post What a Museum Budget Says About Museum Values explained how a museum’s budget communicates its values, outlined how easily a gap can occur between the museum budget and its values, and how a trigger event is often needed to force a budget evaluation and meaningful revision. This week we’ll learn the basics for how to evaluate the museum operating budget.

Where’s the Budget?

First things, first. Where is the museum budget? 

• If the museum is municipally funded… then the budget is public record and most organizations are proactive with posting the budget online or at least viewable by request with the records department. 
• If the museum is operating as a nonprofit… then the majority of nonprofits operate with some transparency in order to be accountable to their donors and grantors. 
• If the museum is privately or corporately funded… then there isn’t necessarily anything compelling the museum to share the budget publicly. However, high-level budgets are usually released and reviewed with departments annually. The trick here is to find who in your department has access to the budget. In these cases, it’s not necessarily that the budget cannot be shared with employees, it’s that there’s no compelling reason to share it proactively.

These budgets may not be detailed, but you should still be able to see total incoming and outgoing as well as budgets allocated to departments and large programs.

Budgets by Department

In addition to museum building space and utility costs, museum budgets are most often broken into departmental budgets with the following as sample departments or budget areas:

• Frontend (admission, retail, security)
• Executive (executive leadership and administration)
• Exhibitions (design and construction)
• Collections Management (registrar, archivists, digital asset managers, item handlers)
• Conservation
• Curatorial
• Development (fundraising, grant writing, donor relations)

An initial evaluation can be conducted while viewing the budgets assigned at a department-level. This can be an especially interesting exercise to run now; the impact from the COVID-19 global pandemic has changed the way many museums assign their departmental budgets. For example, prior to COVID, many museums assigned the most robust budgets to the exhibition areas, demonstrating that exhibitions were clearly the top priority. Now, after navigating the first years of COVID, museums have since shifted prioritization to include digital programs.

Budget Categories within the Department

Each department budget will break down into main categories:

• Staff
• Collection, exhibition, conservation supplies
• Equipment
• Office supplies
• Programs

The Areas to Evaluate

There are two areas within the budget that are ripe for evaluation when attempting to determine the museum’s values: staff and programs. 

Staff: Evaluating where staff are distributed helps to indicate which museum departments are at or below capacity. It’s not necessarily about which department has the most staff. Instead, it’s: “Which departments have ample staff to successfully perform the workloads they’ve been assigned?”. Departments that meet or are close to meeting their capacity goals are the priority departments as viewed by the museum leadership. 

Programs: Programs can fit both within a department’s purview (and budget), or span several departments and therefore receive their own assigned budgets. For this evaluation, you may need to look in both places in order to effectively evaluate all museum programs and determine museum leadership’s prescribed prioritization. For example, the DEAI program (if not its own department) will typically exist outside a specific department. The same is likely true for a paid internship program. How much funding is assigned to these programs compared to other museum programming?

A note on paid internship programs: Both internships and paid internships have existed for a long time. However, for museums, the *paid* internship program is fairly new. 

Conclusion

Now that we understand how a museum budget (intentionally or not) communicates its values, and how to evaluate a museum budget, we will next explore how to create an improved, values-supporting budget by using DEAI principles.