INDIANAPLIS, IND.- The Indianapolis Museum of Art announced today a strategic restructuring that includes an 11% reduction in personnel and a greater emphasis on donated and earned revenue. With a unanimous resolution of the Board of Governors, the IMA has put a plan in place to lessen the Museum’s dependence on its endowment. The total value of the IMA’s endowment was $326 million as of June 30, 2012, but the portion of the endowment that can be used for operating expenses was $203 million. Throughout the nonprofit industry, investment managers have recommended more conservative earnings projections, and the IMA’s efforts are in step with this conservative financial philosophy.
June M. McCormack, Chair of the Board of the IMA, noted that “As an institution, the Board wants the IMA to be recognized not only for the vibrant and engaging programming it brings to our constituents, but also for our exemplary stewardship of the financial resources that have been entrusted to us and are meant to be perpetual. The Board of Governors believes the vision put forth by our new Melvin & Bren Simon Director and CEO, Dr. Charles L. Venable, will achieve both these important goals.”
Since Dr. Venable’s arrival, the IMA has renewed its focus on audience engagement by creating new public programs that will enrich the visitor experience. Using new methods of research to better understand its current visitors and members, the IMA is crafting strategies for engaging a larger local and regional audience. Plans to relocate the welcome desk to the Efroymson Family Entrance Pavilion and a shift in training for the Gallery Guards to become Gallery Guides are meant to create a more welcoming atmosphere.
Last month the IMA announced the exhibition Matisse: Life in Color, an exhibition that should attract a large number of visitors and generate many new members for the Museum. While other initiatives designed to increase revenues and membership will be announced in the near future, the IMA implemented a reduction in force today. Eight open positions will not be filled, while 19 full-time positions and two part-time positions were eliminated across all departments of the Museum. The IMA is providing severance packages and outplacement services to those affected by the restructuring.
“These are difficult changes, but it is imperative that we reduce our reliance on the endowment so future generations can benefit from it,” said Dr. Venable. “In my opinion, endowments ideally should not be used to support more than 50% of operations as a rule with the other half being supported through donations and earned revenue. It pains me greatly that we have to make staffing reductions at this juncture, but it was clear that they were necessary. The IMA staff is very talented and the Board and I are grateful for the contributions of those who are leaving their employment at the IMA today, and we wish them well.”
Currently, the IMA relies on its endowment to fund more than 70% of its operating budget. Additional revenue comes from philanthropic giving, museum memberships, and earned revenue such as exhibition tickets.
