The Detroit Institute of Arts
(DIA) announced a 20% reduction in its staff, which combined with expense reductions has resulted in an approximate $6 million decrease in its $34 million annual operating budget. In addition to cutting $1.6 million in operating costs and some additional projected savings, the museum will eliminate 56 full-time and seven part-time positions for a savings of $3.6 million in the coming fiscal year.
In spite of the DIA’s remarkably successful grand opening in November 2007 and attendance exceeding 615,000 in the subsequent months, the museum continues to face considerable financial challenges, complicated by the deepening worldwide recession. In order to address these challenges the DIA has fundamentally restructured its operation to significantly reduce expenses while preserving an engaging visitor experience.
“It has been extremely painful to work through these changes, which ultimately affect so many of our dedicated colleagues,” said Graham W. J. Beal, DIA director. “The DIA has experienced extraordinary fundraising success in the past, but we have been unable to permanently close an annual gap between operating expenses and revenues. This is the first critical step in addressing an issue that has plagued the museum for many decades. We are continuing to explore a number of other ways to reduce expenses and increase revenues, and we anticipate additional actions in the months ahead.”
Beal, his administration and staff, working closely with a special committee of the Board of Directors, have been engaged in an intensive process to explore all options to reduce costs and increase revenue in order to control the DIA’s financial future. This critical effort has been undertaken at a time when Detroit, the State of Michigan and the entire region have been severely affected by economic and financial challenges not experienced for decades. Today’s restructuring affects every department in the museum, including Curatorial, Conservation, Learning and Interpretation, Building Operations, Communications and Marketing and Accounting. In spite of the significant reductions, the museum’s management team is confident that the visitor experience will not be adversely affected.
“Losing about 20% of our staff has meant a reduction in some public programs, but we will maintain a strong exhibition schedule and our Friday night and weekend programs will be maintained with few changes,” Beal said. “Our challenge is to maintain the incredible momentum from our grand opening and to meet the public’s expectation for an outstanding art museum experience.”
The expense reductions have been calibrated to ensure that the museum remains attractive to both visitors and funders. Many programs have been reduced in number rather than being eliminated. For example, exhibitions in Prints, Drawings and Photography will follow a new schedule of six exhibitions every 24 months rather than12, and all exhibitions will feature works from the DIA collection. These exhibitions—free with museum admission—will be supplemented by exhibitions in the Central Exhibition Galleries off Rivera Court to ensure there is always something new on view in addition to the DIA’s world class collection.
The $6 million reduction in the DIA’s annual operating budget will help the museum weather the current economic downturn and will likely be viewed favorably by current and potential donors. “The DIA Board of Directors and management team are determined to move the museum toward true financial stability,” said Eugene A. Gargaro, Jr., DIA Board Chairman. “While these cuts are very difficult, we are making an important statement about our strong commitment to getting the museum’s financial house in order.”
The museum has raised $123 million in gifts and pledges of a $180 million campaign. These funds have been designated to support annual operations, endowment, and the recently completed expansion and renovation of the DIA. The museum’s expansion, renovation and the reinstallation of its collection was completed at the end of 2007 so the museum is now giving high priority to building its operating endowment. Like most for profit and nonprofit organizations, the DIA has experienced a decline in the value of its investments due to market instability, and is further confronted with the difficulty of soliciting support from individuals, corporations and foundations, which have experienced similar declines. In addition, with the City of Detroit and the State of Michigan both experiencing severe economic crises, much-needed public support has also been discontinued.
“The situation confronting the DIA is being played out across the country,” Beal said. “As with thousands of businesses and cultural institutions we have been driven to painful decisions, but we remain optimistic and we are exploring every option to ensure that this museum remains open for students, families and individuals from the southeast Michigan region and beyond.”