Jan 22, 2021

Museums experience financial impacts and job losses

The American Alliance of Museums (AAM), an organization representing the entire scope of the museum community, reported museums are losing millions while operating on slim reserves, leaving about one-third of all institutions at risk of permanent closure. As we’re witnessing increases in COVID-19 cases across the country and the potential for re-closures looming, museum directors fear that their institutions will not be able to recover from another lockdown as over half have less than six months of financial savings remaining, the new survey finds.

“The financial state of U.S. museums is moving from bad to worse,” said Laura Lott, president and CEO of AAM. “30% of museums remain closed since the March lockdown and those that have reopened are operating on an average of 35% of their regular attendance—a reduction that is unsustainable long-term. Those that did safely serve their communities this summer do not have enough revenue to offset higher costs, especially during a potential winter lockdown. Without financial help, we could see thousands of museums shutter forever.”

Conducted by AAM and Seattle-based Wilkening Consulting, the October survey of 850 museum directors asked the same questions as the June pulse of the field, and gathered some new data and benchmark metrics for members. Museum directors responded to the AAM survey on behalf of their organizations, representing a broad cross-section of the field geographically, by size, and by discipline.

“The new survey provides a window into the museum field during the pandemic and how institutions of all sizes are dealing with the financial crisis and how local communities are affected,” said Susie Wilkening. On average, individual museums through October lost about $850,000 in revenue in 2020 due to the pandemic. By the end of the year, directors anticipate losing the equivalent of 35% of their annual operating income.

“The current situation is not sustainable especially when over half of museums have less than six months of financial savings left to survive,” Wilkening said. “While museums are creatively finding ways to replace the traditional revenue model, they are falling short of in-person visits and events. As an example, on average, virtual fundraising events fell short of goals for the original in-person events by 34%.”

Eight months into pandemic-related shutdowns in the U.S., nearly 30% of museums remain closed and most do not have plans to reopen in the near-term. For those museums that did reopen, each museum spent an average of about $30,000, with some as much as $750,000 to reopen safely. More than half of responding museums have had to furlough or lay off staff. Overall, respondents indicate that approximately 30% of staff are currently out of work. Museums most frequently listed the following positions as being affected by the layoffs: frontline (68%), education (40%), security/maintenance (29%), and collections staff (26%).

Museums are not only stewards and interpreters of our culture, they are vital sources of employment and economic engines. Prior to the pandemic, museums supported 726,000 direct and indirect jobs and contributed $50 billion each year to the economy, according to AAM research.

“As museums are filling critical education gaps across the country, they are pleading with their federal, state, and local governments to provide the much-needed support to recover from this crisis,” Lott said.

With public support for museums being robust regardless of political persuasion, advocates across the country have sent nearly 55,000 letters to their elected officials about the desperate need that exists to ensure the future stability of our economy, our educational system, and our communities.

Read the summary of findings and the full report.

For more information on AAM, visit www.aam-us.org.