Securing public and private funding and managing teams are serious challenges for museum boards of directors in a time of financial precariousness.
(This article has been translated from French.)
The closing of museums in mid-march 2020 due to COVID-19 had a direct impact on their management. Concerns quickly arose among staff, and those who work in museums are well aware that survival of their institutions is directly link to self-sustained income. A closed museum generates no box-office revenues, and other revenues melt away as well. It is then not possible to solicit money from funding partners for exhibitions or educational activities, as the contribution of philanthropists and sponsors is based on the visibility they offer.
In some cases, museum boards of directors have chosen to suspend part-time and regular staff contracts due to lack of financial resources. The quarantine has been also an opportunity to reflect on working conditions and to challenge current practices. At the Montreal Museum of Fine Arts (MMFA), the board of directors has dismissed its executive director, Nathalie Bondil, sparking a major controversy. However, this event must be placed in the current social and economic context of museums, especially since it has also led to a reassessment of the governance of these institutions.
Museum and funding models
It has to be understood that there are different models of governance because there are different models of museums. Not all of them are alike; far from it. Unlike some European countries, not all museums in Quebec, as elsewhere in Canada and the United States, receive support from the state. In 2018, the Observatoire de la culture et des communications du Québec (OCCQ) identified 406 museum institutions in the province. Among these, in 2019, the Ministry of Culture and Communications approved 150 of them in the 17 major regions of Québec. These regional museums and small museum institutions meet the requirements for good governance and receive financial support.
Public grants (federal, provincial and municipal) account for 65 percent, on average, of their total budgets. To survive, they must rely on self-sustaining income (31 percent) and private financing (4 percent). There is as well the contribution of volunteers and friends of museums, without whom they could not fulfill their mandates. Nevertheless, the majority of Quebec museums are private, not-for-profit institutions.
For three national museums, the Musée d’art contemporain de Montréal, the Musée de la civilisation et the Musée des beaux-arts du Québec, the situation is different. In their case, public funding accounts for 77 percent of their budget, while self-sustaining revenues and private financing cover only 19 percent and 4 percent of their expenditures.
Le MMFA is a special case. Although it is funded at the same level as state museums, it is a private museum. However, its self-sustaining income as well as sponsorships are the highest in Quebec. There is a long tradition of patronage by collectors and patrons at the MMFA that goes back to its founding in the mid-19th century. At the same time, the museum crisis affects it more than state museums, as self-sustaining revenues and sponsorships will be virtually nil in 2020 and could result in a significant deficit, while national museums will receive financial support from the state.
For accredited museums, the gap between public and private funding is even greater in English Canada and the United States, where the state provides very little funding to museums. These gaps are larger for society and science museums, while art museums, according to surveys, are more attractive to patrons and financial partners. Therefore, in evaluating a museum’s financial health, the type of museum it is must be taken into account.
The Cultural Property Export and Import Act of Canada is indirectly used to fund museums that do not receive financial support for acquisitions by allowing them to obtain works by donation. Donors benefit from tax deductions equivalent to the works’ fair market value.
This societal choice has had the consequence of creating close links between museum directors and major collectors. We saw the effects of this law in 2018 and 2019, with the sale of a Chagall painting and then in the Caillebotte case. In a unanimous decision, the Federal Court of Appeal overturned the controversial Manson decision on the export of works of art in 2019, which limited the acquisition of international works. It is interesting to note that Nathalie Bondil is the person who mobilized Canadian museums in this cause.
As a result, the funding method determines the governance of each museum institution. All levels of government and municipal administrations encourage museums to generate self-sustaining revenues and develop financial partnerships. Overall, this model has proven its worth over the past two decades given the growth of self-sustaining revenues, even if this context creates a strong competition between museums to attract patrons, collectors and businesses.
Governance and socio-economic reality
It’s worth remembering that the self-sustaining revenues of museums allow them to plan program activities in the medium and long term. These revenues are an essential condition to maintaining specialized professionals and teams of technicians, and providing good working conditions. When revenues decline, the working conditions become usually precarious. As a result, there is great staff movement, especially in small museums, with employees often looking for better conditions elsewhere.
As for the boards of directors of Canadian museums, they face two major governance challenges: ensuring public and private funding of the museum and ensuring good management of teams in a context of financial precariousness. The primary concern of the board of directors is to secure the support of the different levels of government, taking into account the change, over time, of the political parties in power. Similarly, each museum director must have and maintain a constant relationship with collectors and patrons, often giving them a seat on the board of directors. These key players are an integral part of the Canadian museum ecosystem, which depends on their support.
This context tends to create distortions between the museums’ public interests and partners’ private interests. The museums’ and boards of directors’ codes of ethics allow for managing the tensions between the two. While all museums are aware of governance regulations through the Governance of Museum Institutions Guide by the Quebec Museum Society (QMS), with the Act to modernize the governance of national museums, passed in 2016, and, for the MMFA, the Act respecting the Montréal Museum of Fine Arts, they still have to deal with a much more complex ecosystem.
The balance between public and private interests is not easy to figure out. This public health crisis seems to have called it into question. Our team at UQAM’s research chair in museum governance and culture law is closely monitoring the changes that are revealing the strengths and weaknesses in the museum sphere.
I would like to thank Lisa Baillargeon, professor in the Faculty of Accounting, and Pierre Bosset, professor in the Faculty of Legal Sciences, both from Université du Québec à Montréal, for their collaboration in this paper.
This article is part of the The Coronavirus Pandemic: Canada’s Response special feature.