There’s a saying in the museum world: “There’s always a work in progress.” But for the first time, the industry is entertaining a future where that once-safe job of raising money for an arts institution may not be so safe after all. Although museums need more money than ever, the traditional philanthropic model is no longer what they can rely on. Rising generations aren’t as interested in supporting these institutions as their parents were, and the prospect of declining donations is keeping arts leaders up at night.
For more than a century, American museums have been sustained by donors with a very particular idea of what philanthropy looks like. “It used to be that one of the hallmarks of becoming a community leader was giving to the foundational institutions where you live: the local food bank, the museum, the orchestra,” says Catherine Crystal Foster, vice president of Rockefeller Philanthropy Advisors.. Contributions from private donors typically account for the largest share of museum operating income (about 40%, on average, in 2016), according to the American Alliance of Museums.
But younger generations have a very different relationship to both philanthropy and the arts. According to a 2023 CCS Fundraising surveywhile arts and culture is second on a list of priorities for baby boomers, it’s not even in the top three for Gen X, Millennials or Gen Z. awareness of the arts and the cultural landscape, both from new money, particularly from the technology industry, and from younger generations whose parents supported museums,” says Leslie Ramos, philanthropy advisor and author of the book. Philanthropy in the arts: a game of give and take.
The question of how to engage young donors is not new. The Museum of Modern Art in New York established its first junior patrons board in 1949. The strategy was widely adopted in the early 2000s as the issue became more pressing. Now, it’s existential. Over the next 20 years, according to investment bank UBS, more than 1,000 baby-boomer billionaires are expected to pass $5.2 trillion to their children in what has become known as the Great Wealth Transfer. “It’s kind of like the climate crisis: It feels so big that nobody knows what to do about it until suddenly you’re forced to act,” says Mary Ceruti, the director of the Walker Art Center in Minneapolis.
Computation is slow: it is an erosion of energy, acquisitions and programming
Adrian Ellis, founder of AEA Consulting
To make matters more difficult, museums are much more expensive to run than they used to be. Attendance hasn’t returned to pre-Covid levels, but day-to-day costs — from shipping to food service — have skyrocketed. Ambitious expansions have left museums with a considerably larger footprint than before, while government funding continues to dwindle. In addition, social media provides a constant stream of information about disasters and crises around the world that feel considerably more urgent than the health of the local museum. In recent months, this perfect storm has precipitated ticket price hikes and layoffs at institutions like the San Francisco Museum of Modern Art and the Solomon R. Guggenheim Museum. “The calculation is slow – it’s an erosion of energy, acquisitions and programming,” says Adrian Ellis, the founder of AEA Consulting, which works with museums and other cultural institutions. “It’s a story of energy seeping out.”
Part of the problem is that what museums once thought would attract younger audiences—populist shows, big lobbies, exclusive parties—isn’t resonating as much as they hoped. Foster says, “We’re not seeing our clients come in and say, ‘Wow, I went with my spouse to one of those events after the night at the museum, and now I see it’s such an extraordinary institution, I’d love to fund it.'”
Instead, new-generation donors want to tackle big global issues, from climate change to racial justice. And those who recognize the capacity of the arts to strengthen social cohesion, improve health outcomes and encourage critical thinking are likely to eschew legacy institutions in favor of smaller organizations where their money can have a greater impact. Jeff Bezos’ ex-wife MacKenzie Scott, who has an estimated net worth of $27 billion, has funded smaller, culturally specific museums such as New York’s El Museo del Barrio. and the National Museum of Mexican Art in Chicago, as well as grassroots arts organizations like the Laundromat Project in Brooklyn. Notably, no arts organizations appeared on their list of 360 beneficiaries from 2023.
Change matters more than status
Many emerging donors also want a different relationship with the institutions they support than their parents had. Instead of getting a seat on the board or getting their name on a gallery wall, they want to use their influence to push institutions to change—to engage more deeply with community members, for example, or to think more entrepreneurially. “Young high net worth people don’t want to use the word philanthropist,” says philanthropy strategist Melissa Cowley Wolf. “They prefer investor, donor or partner.”
Cowley Wolf points to the example of Abby Pucker, a member of the prominent Pritzker family, which has a long history of cultural philanthropy in the US. With her company Gertie, which offers its members a guide to Chicago’s cultural scene, Pucker is taking a different approach to fostering engagement with the arts. In addition to promoting local arts organizations, Gertie joined the nonprofit organization Breakout to fund community leaders in fields ranging from sustainable agriculture to restorative justice.
So what exactly should museums do to engage the next generation of donors? Although there is no single solution, some good practices have emerged. Build relationships with community leaders and ask them what they need and how your organization can help. Develop new ways to measure impact beyond tickets sold or items purchased. Create mission-driven endowment funds that specialize in supporting the work of low-income local artists, conservatives of color, or formerly incarcerated arts workers. And redouble efforts to expand audiences by improving the visitor experience. The larger the audience, the larger the pool of potential donors.
Ceruti says: “There’s a shift in thinking about fundraising not as old-school social charity giving, but more like a sales job. It sounds corny, but really good fundraising makes sure someone else sees that what you’re offering has enough value that it’s worth investing in.” In other words, the development departments of the future may look different, but there will probably still be jobs there.
- This is the first of a two-part series on the future of museum fundraising. The second will examine how museums are developing new ways to generate income beyond philanthropy.