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In times when finances are under pressure from all sides, cultural entrepreneurship is a magic word that seems to solve everything. But this is not always easy to put into practice: non-profit organisations are expected to spot and exploit opportunities for additional funding, but on the other hand they would rather not take financial risks with taxpayers’ money. At the same time, most non-profit organizations are not eager to fully embrace a commercial path. What strategies can a forward-thinking museum explore to create financial breathing room, while staying true to its own mission or purpose?

‘Mission’ and ‘income’ do not have to be opposites: it is perfectly possible for a mission-driven organisation to still be alert to opportunities to improve the museum’s financial situation, in order to create space for new initiatives.

Several studies conducted by IDEA Consult in 2024 at heritage and art museums highlighted several key “levers” that a museum can adjust: subsidies, staff, visitor-generated income, financial partnerships, and the organizational model. The financial impact of these levers may vary from one museum to another, depending on its unique characteristics and context.

1. Grants

On the revenue side, grants remain museums’ most impactful source of income. Local government is often a major – or the main – structural funder, and also provides museum infrastructure. The second most important player is the Flemish government, which provides approvals as well as operating and project grants.

A well thought-out vision, mission and strategy is an important condition for convincing grant provders to let (more) money flow to your museum. As far as Flemish operating subsidies are concerned, it is essential for a museum to keep a close eye on expectations and evolutions in the decree framework when developing its vision, mission and strategy. After all, a lot is expected of museums: in terms of collection development and management, scientific research, public outreach, participation, infrastructure, business operations, as well as sustainability, diversity and digitisation. Now that there is a new minister of culture, it is a good idea to also be alert to new emphases that emerge in the policy paper, which could possibly play a role in how the next subsidy round will be assessed. Participation, for instance, is an important accent for Minister Gennez.

For supra-local cultural infrastructure such as museums, investment subsidies may be useful, but there are also opportunities in e.g. an Open Call with ‘Vlaamse Bouwmeester’, cooperation with tourism or immovable heritage, etc.

Project subsidies can provide additional flexibility and create new partnerships, but they can never be a solution for funding the ‘core operations.’ Finally, EU grants offer a lot of opportunities, but also serious challenges in terms of ownership and finding international partners. VLEVA offers a good first orientation to the possibilities.

• Staff costs

Wage costs often account for 50% or more of a museum’s operating costs. A well-thought-out HR policy is a key to both the success and the financial health of an organisation.

A critical look at the size and composition of the organisational chart is desirable. The team must be able to live up to its content and audience ambitions, but at the same time, the financial impact of pay mass in the long term is also an important consideration. When do you opt for a contract of indefinite duration, and when is a temporary contract the right choice? In what areas can you expand your volunteer work? As a museum, can you possibly rely on flexi-jobs? When do you opt for employment, and when for freelancers? Can you control labour costs by automating processes? Can a different division of labour lead to more efficiency? How can you develop a good working climate, so that employees feel good in their job, and at the same time you have to spend less money on staff turnover?

• Revenue through visitors

How can you increase the chance of effectively realising the visitor potential of your museum?  For this, it is important to actively work on a coherent positioning of the museum: who are we, in relation to the people we want to reach, and in relation to others who want to do the same?  Through a strategic marketing plan, you can respond well to context: e.g. how do we actively work on returning visitors from the surrounding area, and how can we appeal to visitors from home and abroad who are staying in the immediate vicinity? It is equally important to have an eye for creating a coherent visitor experience for various audience segments: what expectations do we create in the consideration phase, can we live up to them during the visit, and what does this yield after the visit? Do people want to come back, and do they encourage others to do the same, or just not? This will cause your visitor numbers to rise, and that in itself can ensure a broadening of your own revenue through ticketing.

Perhaps the museum could also get more revenue from visitors through smart pricing and price differentiation: many people pay a bit more without any problem, but at the same time, as a museum, you want to remain accessible to people who cannot. A collaboration with Museum Pass is a good idea for increased visibility among museum lovers and to returning visits, while UiTpas is a good tool to reach people who face financial barriers.

You can also offer incentives to increase spending per visitor, such as a combined package with coffee and cake, or a discount voucher for the museum shop for returning visitors. This doesn’t necessarily have to involve pure commercialisation: visitors are often very happy if there is a nice museum shop and a fine café or restaurant where they can have a drink or eat something. Running such services yourself requires a solid dose of entrepreneurship and expertise. Concessions are a good alternative, but require a smart approach to ensure that the museum and the concessionaire pull at the same sea and reinforce each other.

• Financial partnerships

Investing in patronage should be part of the DNA of every museum: many museums have wealthy fans and collectors in the area who are willing or able to contribute; the biggest challenge is often to spot them, ask them and build a lasting relationship. This requires sustained attention from all parts of the organisation, but it can yield structural financial returns. Sources of income such as a museum shop, a catering service and the organisation of events not only enhance the visitor experience, but are also essential for patronage operations.

In patronage, you give something back, but it remains clear who is supporting whom. With sponsorship, on the other hand, an equivalent return is expected. In sponsorship, it is not easy to find a good balance between structural and project-based financial cooperation, and the costs and benefits must be carefully monitored. Clear agreements must also apply in which (artistic) integrity is guaranteed, and in which there is a clear vision for sponsor selection, based on the values of the organisation and the ethical ICOM code .

Finally, developing paid services based on the expertise present in the museum could also potentially generate new income, which could possibly also be an element in a patronage relationship: e.g. making conservation and collection management expertise available to private collectors.

• The organisational model

The final issue is the legal structure of the museum. Some museums are city services, structured as an autonomous municipal corporation or an externally corporatised agencies. Or they take on the form of a not-for-profit organisation – not to mention the occasional private corporation. The choice of organisational model can have a major impact on finances.

A first crucial consideration is the degree of autonomy of policy and financial management: if cultural entrepreneurship is to be made possible in the museum, the museum must have an impact on policy choices that affect costs and revenues, and this at the same time requires fast decision-making structures. Commitments such as concession agreements are therefore best in the hands of the museum itself, so that not only the burdens (costs) but also the benefits (revenues) flow directly to the museum, and these can be balanced against each other

A second consideration is the possibility of VAT recovery, on the one hand for the construction project, and on the other for the exploitation. It should be noted that the tax authorities keep a critical eye on VAT constructions.

Thirdly, there are also opportunities to develop centralised services, e.g. for several museums or public-oriented organisations at the same time, e.g. via an autonomous municipal corporation: in terms of HR and other business services, building management, ICT systems for ticketing and reservations, etc. 

Finally, depending on the organisational model, the staff status and therefore the cost of staff may also differ (in Belgium: civil servant or parity committee 329).

It is important to realise that every construction has its advantages and disadvantages; there is no golden choice that is good for everyone, so the pros and cons must be weighed up each time.

Are you thinking: this is what I want to work on, but how? We will be happy to help you on your way. IDEA Consult has extensive experience in providing guidance on, among other things, strategic visions and plans, business models and funding for museums.