The dawn of the entrepreneurial museum

Picture this. You are walking around a water-recycling facility in Ventura, California, admiring its surprisingly forward-thinking public art. On the drive home, you spot an ad for the local symphony on a passing billboard. You walk through your front door, sit down on an $18,000 sofa by the Detroit-based designer Evan Fay and start scrolling Instagram, where you watch a dynamic video about MSC Cruises. What if I told you that these wide-ranging experiences had one thing in common? They were all brought to you by art museums.This is not a prediction of a faraway future. It is happening right now. The activities above come courtesy of the Contemporary Arts Museum Houston (CAMH), the Pérez Art Museum Miami (PAMM), the Walker Art Center in Minneapolis and the Andy Warhol Museum in Pittsburgh, respectively. In an effort to shore up their finances, museums across the US are engaging in unconventional partnerships and launching spin-off businesses that extend far beyond their walls, even across the country.For decades, art institutions of all stripes have relied on the same traditional tactics to raise money: dazzle donors, sell tickets, rent out facilities, operate a restaurant and gift shop. But at a time when costs are up, philanthropy is waning and government funding and museum attendance are down, many are realising they need outside-the-box solutions to secure their financial futures. Welcome to the age of the entrepreneurial museum. This year, PAMM will erect a digital billboard facing a highly trafficked highway on its campus. The screen will be used to promote the museum’s activities, showcase artist commissions and host advertising. The company facilitating the project, Orange Barrel Media, estimates that the latter will generate as much as $2m a year for PAMM—the equivalent of adding $45m to its endowment.There are bad ways to earn revenue, and there are unsavoury practices of patronage—but there are also good ones Mary Ceruti, director, Walker Art Center“Museums haven’t changed their business ventures since the 80s,” says Stephen Reily, the director of Remuseum, an organisation under the aegis of the Crystal Bridges Museum of American Art, Bentonville, that seeks to spur innovation. “How can they rethink earned revenue in a way that supports their mission financially and in practice?” (The term “earned revenue” refers to money museums generate, rather than money contributed by donors.)The dawn of the entrepreneurial museum brings two new challenges. First, non-profits must prove that their money-making activities are substantially related to their charitable missions in order to avoid paying additional taxes. (That is why you do not see museums spinning off, say, an investment firm or a tech start-up.) Secondly, museums need to get these ventures off the ground without siphoning resources, staff and energy away from the business of actually, you know, running a museum.Curating beyond exhibitionsCAMH began offering what it calls “curatorial services” to clients ranging from the Mayo Clinic in Rochester, Minnesota, to California’sVenturaWaterPure recycling facility in 2020. The museum’s director, Hesse McGraw, credits the initiative with increasing CAMH’s earned income from near zero prior to the pandemic to just over 10% of its annual budget in 2023. How does public-art consultancy align with CAMH’s mission to “present extraordinary, thought-provoking arts programming and exhibitions to educate and inspire audiences nationally and internationally”? McGraw says: “It’s an opportunity to create a larger platform for artists who want to work outside the frame of exhibitions, and it allows the museum to take up larger civic challenges.”Perhaps the most ambitious—and controversial—entrepreneurial initiative is taking shape in Pittsburgh, where the Andy Warhol Museum is developing the so-called Pop District. The $80m, ten-year plan involves redeveloping a four-block area with public art, an event venue and the Warhol Academy, billed as a creative-economy “workforce programme”. “This is based on Warhol the creative entrepreneur, Warhol the innovator, Warhol the disruptor,” says Dan Law, the museum’s associate director, who oversees the project.The Warhol Academy includes a fellowship programme for students and young adults as well as a boutique content-creation studio designed to generate revenue. The studio employs ten full-time producers and editors to create TikTok posts and other promotional videos for more than 20 clients including MSC Cruises, Dell and the Miami City Ballet. In 2023, the programme generated more than $500,000 in revenue to sustain itself; the museum’s goal is for it to generate $1m annually and contribute to the overall bottom line.“The Warhol is a learning institute, and it is an experience business,” Law says. (Asked if traditionalists freak out when they hear him say that, he confirms: “They freak out.”) While Warhol was the ultimate artist-entrepreneur, his museum’s approach has ruffled feathers. WESA, Pittsburgh’s National Public Radio affiliate, reported in December that five director-level staff members left shortly before or after planning for the Pop District began in 2021. “The museum has been taken over by the alien that is the Pop District,” one employee told the station.A decade ago, these sorts of developments would have sparked a lot more than a single local radio investigation. (Think furious open letters and outcry among professional organisations.) But times have changed. A wave of protests targeting toxic philanthropy, from the Sacklers to BP, made the public recognise that old-fashioned charitable giving can compromise a museum’s integrity as much as a business venture can.“There are bad ways to earn revenue, and there are unsavoury practices of patronage—but there are also good ones,” says Mary Ceruti, the director of the Walker Art Center, who hired a director of business development and launched Idea House 3, a store for high-end design on the museum’s grounds. (You can buy the $18,000 Evan Fay sofa there.) “It’s about finding the right mix,” Ceruti notes.Many of these entrepreneurial endeavours also happen to appeal to a rising generation of donors more interested in investing in people and ideas than in objects and buildings. Next-generation philanthropists want to see that museums “are driving capital to the changemakers in the community outside their walls”, says the philanthropy strategist Melissa Cowley Wolf.A few key questions remain in this grand experiment. Can museums accommodate additional activities without driving away already over-extended staff? (Few of the museums I spoke to had hired dedicated teams for their revenue-generating initiatives.) And can they funnel the money, buzz and donor goodwill generated by initiatives outside their walls back into the institution?The answers—whatever they may be—will have a large impact on the future of US art museums. But most stakeholders agree that something has to give. “Museums are realising that the ageing donors that have kept us alive are going to be moving on,” Reily says. “They need to find new donors and new audiences. The search for revenue is really related to the search for increased relevance.”• This is the second in a two-part series on the future of US museum fundraising