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Fortune Magazine: Free Admission To Art Museums Causes Lost Revenue!

by Jerome Weeks 1 Jun 2015 10:50 PM

Fortune magazine reports a surprising drawback to free admissions policies at art museums: They lose ticket revenue! The DMA is a leading example – except the museum’s larger plans (and its successful fundraising efforts) are mostly skipped over.



An article today on Fortune magazine’s website seems to have uncovered a surprising drawback to the policy of free admission to art museums. It, um, kinda loses ticket revenue, doesn’t it?

Really? It’s not like this was not a known factor from the get-go with the Dallas Museum of Art. Admittedly, the income from admissions is not a large percentage of a museum’s revenue. Nationally, the average is 4 percent. In 2014, when the DMA went to free admissions, it was around 5 percent, or $1.2 million, of that year’s $24 million budget.

But how do museums make up that lost revenue? It’s still a significant hit on the budget in a non-profit world. Other museums have made this switch  — occasionally because they received a grant to do so. Yet as Fortune notes, finding new sources of grants is not easy. At the same time, it’s tough to switch back to charging visitors. For many people, the museum looks like it’s pulling up the drawbridge and cutting itself off from them. But:

On the federal level, those grants are harder to come by. Funding from the National Endowment for the Arts and the National Endowment for the Humanities both dropped to $146 million in fiscal year 2015 from $167.5 million in 2010 while the Office of Museum Services funding was cut to $30.1 million in 2015 from $35.2 million in 2010.

Fortune cites the positive side to this switch for the DMA: major increases in minority visitors, for example. Latinos now account for 26 percent of museum attendance.

But oddly, the article only makes a quick mention of the potentially significant side benefit with DMA director Maxwell Anderson’s plan for free admissions, which makes it different from other museums that simply threw open their doors. Anderson made signing up for museum membership free as well. The hope is that the digital audience data collected from the electronic sign-ups will be valuable info when it comes to persuading major donors, foundations and the city to increase their giving. This is essentially the Facebook Funding Plan: The bulk collection of visitor data will ultimately be worth more than charging any fees, and with museums, gathering any data on visitors is practically virgin territory because so little audience research has ever been done.

Yet Fortune does not follow up on whether Anderson’s plan is actually working. Instead, it simply cites museums where free admissions has turned out to be a headache — particularly in England. There,  national support for the arts in general plummeted as part of the conservative government’s austerity measures. But since the DMA launched free admissions in January 2013, it has received two grants to continue its program: one medium-sized one from the Meadows Foundation and a sizable $9 million donation (more than one-third the museum’s entire budget) intended to support both the free admissions and Anderson’s plans on going digital.