mga week 509 mhver
TRANSCRIPT
DATE TIME TOPIC CONTENT READINGS Week5 31st Oct
9-30am-12-30pm
Funding and Finances in the cultural sector
Government funding Grant funding Sponsorship and donations Free entry vs admission fees Financial Management
Reading 18.
12-30-1-30pm LUNCH
1-30pm- 4-30pm
Branding Marketing Conclusion Study Evaluation
Reading 19.
Funding and Finances
1. Where does the money come from?
2. How can you tell what an organisation is worth?
3. How do you plan an annual budget?
4. How do you manage the income and expenditure?
1. Where does the money come from?
Sources of funding:
• Public funds - Government
• Sales - goods and services
• Grants and contributions
• Investments/Endowment
Funding & Income (from DASR)
Trends in funding sources
• Public funds falling as proportion of income
• Increased emphasis on sales and diversification
• Increased emphasis on grants and contributions, with specialist staff and Development units
“Sales of goods and services”
Can include:• General admission fees• Special exhibition admission fees• Shop• Venue hire• Cafe and catering• Special programs fees• Consultancy/service fees• Loan fees - objects, exhibitions
“Grants and contributions”
Can include:• Grants from public funds• Membership fees• One-off gifts from individuals• Grants or donations from Trusts and Foundations• Sponsorship• In-kind sponsorship• Regular giving• Legacies
Two examples:
• General admission fees -sales
• Lottery funding - grants
General admission fees vs free entry
USS Constitution:• Small organisation• Large pool of potential visitors• 15% of income from admission fees• Substantially increased income from
other areas - shop, donations• No mention of increased costs of extra
visitors
General admission fees vs free entry
UK National Museums:• Large organisations• Potential visitors?• Around 10% of income• Government increased funding by GBP 27M • Museums complained of large increased
costs in wear and tear, programs, consumables
Selwood (2005) p 445
“Competition for people’s time - and people’s desire for novelty- is so great that, in general, museums that fail to improve what they offer to visitors can be seen to have experienced falling attendance.
Selwood cont
Our research suggests that if museums want to sustain - let alone increase - attendance they must constantly refresh themselves through new developments or attractive programs such as temporary exhibitions.”
2. How can you tell what an organisation is worth?
• Balance sheet and/or statement of financial position
• Shows Assets and Liabilities
• Usually find them in annual reports
• Show overall health of the museum or gallery
Australian Museum TrustStatement of Financial Position No. 4
as at 30 June 2006
Closing Balance Closing Balance@ 30 June. 2005 @ 30 June. 2006
$000,s $000,s
AssetsCurrent Assets
Cash 4,520 1,384
Receivables 1,958 1,821
Other Financial Assets 4,931 8,099
Inventories 289 281
Total Current Assets 11,698 11,585
- -
Non-Current Assets - -
Land & Buildings 146,450 148,344
Plant & Equipment 19,923 21,777
Exhibitions 1,761 1,315
Collections 530,301 530,331
Total Non-Currents Assets 698,435 701,767
Total Assets 710,133 713,352
Current LiabilitiesBank Overdraft - -
Accounts Payable 4,339 3,800
Interest Bearing LiabilitesEmployee Entitlements 1,214 1,170
Total Current Liabilities 5,553 4,970
Non Current LiabilitiesProvisions 390 679
Total Non Current Liabilities 390 679
Total liabilities 5,943 5,649
Net Assets 704,190 707,703
EquityReserves 154,000 154,000
Accumulated Funds 550,190 553,703
Total Equity 704,190 707,703
Other Financial Assets - T. Corp $7,888
3. How do you plan an annual budget?
Byrnes (2003), p 207
• “A budget is a financial expression of the plans of the organisation”
Expenditure
Three types of costs:
• Fixed costs eg Electricity bill
• Semi-fixed costs eg salaries
• Variable costs eg travel
Two types of budgeting:• Incremental budgeting - look at what
you spent last year, and allow the same again, or more, or less. Top down.
• Zero-based budgeting - build up complete budget for each planned activity or operation, include everything. Bottom up.
After Heller (2001) Top down vs Bottom up
Starting point last year zero spend
Basis last year +/- activity
Amount one sum best/worst
Needs awareness of
individual function
whole of business
People involved budget holder wide range
Time and effort less more
Frequency annual periodically
Alternatives none reviewed
Priorities not stated discussed
Annual Budget cycle
• Establish plan for year ahead• Estimates for new and ongoing activities
compiled by managers• Collated into draft budget• Compared with funds forecast to be
available/risk/cashflow by budget cttee• Amended and agreed• Implemented and issued to budget holders• Usually separate process for recurrent and
capital
4. How do you manage income and expenditure?
Two main systems:
• Cash accounting
• Accrual accounting
Regular reports
• Overall - income and expenditure
• By Department or budget
• Cashflow and cash position
No. 1
MTD MTD MTD MTD L.Year YTD YTD YTD YTD L.Year Year End Year End Actual Budget Variance Actual Actual Budget Variance Actual Forecast Budget Variance
Income119,091 123,740 (4,649) 146,648 Sales 1,598,397 1,661,000 (62,603) 1,802,752 1,611,000 1,661,000 (50,000)
424,213 196,647 227,566 292,282 Commercial 1,873,170 1,892,000 (18,830) 1,955,622 2,002,000 1,892,000 110,000 136,453 108,000 28,453 115,101 Admissions 2,042,205 2,200,000 (157,795) 2,447,832 1,950,000 2,200,000 (250,000) 430,514 34,500 396,014 322,594 Grants 1,524,368 645,000 879,368 1,519,590 1,417,000 645,000 772,000 55,000 70,000 (15,000) 55,000 Sponsorship 730,338 811,000 (80,662) 655,225 811,000 811,000 - 49,767 22,000 27,767 70,464 Donations 1,103,425 1,223,000 (119,575) 547,462 1,000,000 1,223,000 (223,000)
509,599 33,750 475,849 (28,327) Other Revenue 1,966,051 548,000 1,418,051 1,044,354 1,400,000 548,000 852,000 1,724,637 588,637 1,136,000 973,762 Sub Total 10,837,954 8,980,000 1,857,954 9,972,837 10,191,000 8,980,000 1,211,000 2,548,833 2,548,833 - 2,194,000 Confund 22,378,000 22,378,000 - 23,991,000 22,378,000 22,378,000 - 4,273,470 3,137,470 1,136,000 3,167,762 Total Income 33,215,954 31,358,000 1,857,954 33,963,837 32,569,000 31,358,000 1,211,000
Expenditure Fixed Costs
50,788 42,200 8,588 1,624 Rent 519,475 507,000 12,475 356,104 507,000 507,000 - 36,271 33,484 2,787 27,235 Electricity & Gas 435,995 402,948 33,047 386,601 402,948 402,948 -
- 3,000 (3,000) (7,400) Rates 44,394 36,000 8,394 34,829 36,000 36,000 - 88,272 88,330 (58) 99,151 Insurances 1,062,168 1,059,260 2,908 1,189,995 1,059,260 1,059,260 -
7,047 54,334 (47,287) 48,756 Cleaning 542,396 641,000 (98,604) 493,644 641,000 641,000 - 24,045 9,400 14,645 (35,249) Maintenance Contracts 143,620 74,800 68,820 62,772 115,000 74,800 40,200
206,423 230,748 (24,325) 134,117 Total Fixed Costs 2,748,048 2,721,008 27,040 2,523,945 2,761,208 2,721,008 40,200
Other Costs2,527,927 2,397,157 130,770 1,981,662 Salaries & Related Costs 19,133,248 20,533,000 (1,399,752) 18,201,857 19,050,000 20,533,000 (1,483,000)
21,539 12,430 9,109 41,124 Staff Development 135,489 129,095 6,394 156,976 129,095 129,095 - 65,518 7,000 58,518 57,373 Research 184,159 86,500 97,659 102,876 86,500 86,500 -
147,826 22,200 125,626 161,684 Exhibition Development 755,180 433,200 321,980 492,045 533,200 433,200 100,000 51,552 1,770 49,782 43,137 Plant and Equipment 158,231 34,290 123,941 132,657 34,290 34,290 - 55,990 46,500 9,490 12,779 Cost Of Sales 471,560 552,500 (80,940) 468,765 432,500 552,500 (120,000)
142,757 191,705 (48,948) 191,697 Marketing and Promotions 1,050,531 854,975 195,556 897,159 854,975 854,975 - 653,200 91,972 561,228 364,762 Fees-Contractors Etc 2,492,863 1,624,450 868,413 1,780,294 2,119,000 1,624,450 494,550
- - - - Grants - - 572,902 87,270 485,632 110,573 Repairs & Maintenance 1,776,215 1,157,789 618,426 1,224,574 1,878,789 1,157,789 721,000 10,904 22,280 (11,376) 26,312 Books, Journals 167,494 267,815 (100,321) 184,197 165,000 267,815 (102,815)
145,115 7,320 137,795 126,855 Freight 316,406 165,567 150,839 357,203 265,567 165,567 100,000 82,399 30,429 51,970 113,635 Travel 591,387 399,319 192,068 605,834 399,319 399,319 -
2,631 7,840 (5,209) 5,116 Fuel & Oils 87,034 90,600 (3,566) 78,594 90,600 90,600 - 27,270 15,689 11,581 (10,669) Telephone 162,906 188,550 (25,644) 189,749 188,550 188,550 - 26,435 22,518 3,917 42,473 Postal & Courier 273,040 238,902 34,138 240,429 278,000 238,902 39,098
103,762 45,290 58,472 152,050 Printing & Associated 431,256 482,754 (51,498) 599,731 442,000 482,754 (40,754) 295,783 131,966 163,817 269,780 General Operating Expenses 1,227,741 1,627,686 (399,945) 898,472 1,227,686 1,627,686 (400,000)
1,755 - 1,755 Nature Aust Refunds 79,378 - 79,378 100,000 - 100,000 - Special Projects - - -
5,141,688 3,372,084 1,769,604 3,824,460 Sub Total Expenditure 32,242,166 31,588,000 654,166 29,135,357 31,036,279 31,588,000 (551,721)
- Non Cash Expenditure - - 1,544 114,571 (113,027) 887,378 Salary Crown Costs 967,746 1,152,000 (184,254) 2,065,496 1,152,000 1,152,000 -
- - 5,140,144 3,257,513 1,882,631 2,937,082 Total Expenditure 31,274,420 30,436,000 838,420 27,069,861 29,884,279 30,436,000 (551,721)
(866,674) (120,043) (746,631) 230,680 Net Surplus / ( Deficit ) 1,941,534 922,000 1,019,534 6,893,976 2,684,721 922,000 1,762,721
Australian Museum Trust Income and ExpenditureStatement for Period Ended 30 June 2006
( Excluding Non Cash Expenditure )
Australian Museum TrustNo.18
Cash Position Trend
July 2003 to June 2006
Fleischmann Tams Business Grants Total Cash at Exhibition Development Total Operating / & Rankin Accounts Bank Risk Fund Cash Capital
Liability Fund Cash ( Note 1 ) ( Note 2 ) ( Note 3 ) Position
July 2003 13,397 121,790 881,367 1,782,650 2,799,205 996,556 996,556 (1,802,648)Aug 2003 13,397 121,790 877,748 1,694,044 2,706,980 892,058 892,058 (1,814,922)Sept 2003 12,297 121,790 872,509 1,713,377 2,719,974 782,260 782,260 (1,937,713)Oct 2003 12,297 157,336 843,875 1,801,216 2,814,724 806,239 806,239 (2,008,485)Nov 2003 12,297 157,336 828,081 1,774,210 2,771,924 554,595 554,595 (2,217,329)Dec 2003 12,297 157,336 769,966 1,771,656 2,711,255 923,820 923,820 (1,787,436)Jan 2004 12,297 157,336 648,291 2,081,687 2,899,611 784,142 784,142 (2,115,469)Feb 2004 12,297 157,336 647,020 2,121,869 2,938,522 1,148,656 1,148,656 (1,789,866)Mar 2004 12,297 157,336 686,621 2,054,273 2,910,527 (320,690) (320,690) (3,231,217)Apr 2004 12,297 157,336 664,955 2,069,251 2,903,839 61,179 61,179 (2,842,660)May 2004 12,297 70,790 662,621 2,070,618 2,816,326 (390,184) (390,184) (3,206,510)June 2004 12,297 213,085 622,369 2,239,707 3,087,458 (448,024) (448,024) (3,535,482)July 2004 105,862 414,889 633,885 2,201,196 3,355,832 496,682 496,682 (2,859,150)Aug 2004 105,862 414,889 622,949 1,756,360 2,900,060 461,048 461,048 (2,439,012)Sept 2004 105,862 194,051 598,234 1,709,450 2,607,597 (176,551) (176,551) (2,784,148)Oct 2004 105,862 251,795 599,615 1,776,712 2,733,984 (69,203) (69,203) (2,803,187)Nov 2004 105,862 251,795 593,224 1,977,845 2,928,726 467,526 467,526 (2,461,200)Dec 2004 105,862 184,570 575,404 1,816,361 2,682,197 1,902,581 1,902,581 (779,616)Jan 2005 105,862 207,586 584,336 1,820,966 2,718,750 1,543,136 1,543,136 (1,175,614)Feb 2005 105,862 177,212 580,244 1,864,564 2,727,882 2,211,192 2,211,192 (516,690)Mar 2005 105,862 177,212 584,079 1,916,137 2,783,290 2,105,902 2,105,902 (677,388)Apr 2005 105,862 181,751 585,705 1,933,269 2,806,587 2,454,537 2,454,537 (352,050)May 2005 80,079 107,611 589,094 2,032,962 2,809,746 5,478,318 0 5,478,318 2,668,572June 2005 80,079 180,956 522,345 2,027,970 2,811,350 9,044,172 0 9,044,172 6,232,822July 2005 110,649 180,956 532,314 2,110,503 2,934,422 6,955,879 0 6,955,879 4,021,457Aug 2005 110,649 183,979 532,021 1,811,246 2,637,895 6,760,334 0 6,760,334 4,122,439Sep 2005 110,649 183,979 566,654 1,765,279 2,626,561 6,819,049 0 6,819,049 4,192,488Oct 2005 110,649 213,291 566,556 1,685,898 2,576,394 7,888,038 0 7,888,038 5,311,644Nov 2005 100,649 217,367 566,017 1,759,311 2,643,344 7,589,606 0 7,589,606 4,946,262Dec 2005 100,649 231,089 579,215 1,651,466 2,562,419 5,374,588 3,000,000 0 8,374,588 5,812,169Jan 2006 100,649 231,089 577,110 1,777,378 2,686,226 5,640,310 3,000,000 0 8,640,310 5,954,084Feb 2006 102,917 241,385 575,388 1,664,265 2,583,955 5,144,472 3,000,000 0 8,144,472 5,560,517Mar 2006 102,917 290,563 588,556 1,642,239 2,624,275 5,712,566 3,000,000 0 8,712,566 6,088,291Apr 2006 102,917 298,691 597,263 1,845,992 2,844,863 5,953,654 3,000,000 0 8,953,654 6,108,791May 2006 102,917 303,315 604,148 1,706,579 2,716,959 5,569,384 3,000,000 0 8,569,384 5,852,425June 2006 194,841 292,782 636,148 2,100,569 3,224,340 6,271,806 3,000,000 0 9,271,806 6,047,466
( Note 1 ) Includes Lizard Island, Flieschman & Rankin Grants and Presidents Circle( Note 2 ) TAMS operate autonomously. The figure represents the cash at bank holding for the Society ( Note 3 ) Investment in T.Corp Hour Glass Facility to cover Grants Liability covered by Cash at Bank
Financial controls
• Agree standards - eg everyone will stay within budget
• Monitor - by regular reports
• Analyse - often manage by exception. Look for variances or differences from last year
• Action - sort out issues as arise
Internal controls
• Include - approval levels, separation of duties, multiple checks, limits on expenditure, reviews of risk areas
External controls
• Include - regular audit of accounts each year, agreed risk areas
Branding
Museum branding
Wallace (2006):
• “Branding a museum starts with identifying its mission, a promise that every member of the museum family can agree with and adhere to...
Branding
• ...Branding continues when the museum develops a personality, a way of collecting and interpreting and talking that has a distinctive style. Branding becomes truly effective when all the Museum’s constituents hold the same indelible image of the institution.”
Confusing language
• Corporate identity - what the organisation decides is its mission/essence
• Corporate image - what stakeholders see as the organisation
• Branding - what joins it all together
Maclean (1995):
• Communication is a museum-wide activity
Wallace (2006): Museum Branding
• Exhibitions• Education programs• Staff• Volunteers• Uniforms• Membership• Fund-raising
• Shop and Merchandise
• Website• Publications• Entrance• Signage• Cafe
Branding - issues
• Differing understandings of identity, brand and branding
• Lack of coherent strategic plan makes consistent branding difficult
• Silos or different activities can lead to proliferating and competing brands
• Branding exercises done by outsiders can seem superficial
• Cont...
Branding - issues cont
• Participation of staff important to understand relationship of mission to different activities
• Tension between reality and image that Museum or Gallery wants to portray
• Needs a watchdog to ensure consistency - usually Marketing and/or Design departments
Case studies
• Natural History Museum
• British Airways
NHM - Rebrand
British Airways 1
British Airways 2
British Airways 3
Marketing
P Kotler and Scheff (1997):
• Marketing is, “a means for achieving the organisations’ goals, and using marketing and being customer-centred should never be thought of as the goal in itself.”
Approaches to Marketing
• Product-oriented
• Sales-oriented
• Customer-oriented
Marketing plan
Aageson (1999) A marketing plan is built in five steps:
• Situation analysis
• Determining market opportunity
• Setting market objectives
• Strategy and program development
• Implementation, monitoring, evaluation
Case study
• Te papa resource
Exercise
Legislation/Constitution
Vision/Mission/Purpose
Strategic Plan
Operations Projects
Study Evaluation