"The lack of money is the root of all evil."
Recently, articles about two well-known historic houses have brought issues of financial management, expansion and audience to the fore. The Mount, Edith Wharton's home in the Berkshires, is facing extreme difficulties and earlier this year, defaulted on a $4.3 million loan from a local bank. Determined efforts may yet rescue the site. From the Mount's blog, the following announcement on May 13:
"The agreement of Berkshire Bank and our other major creditors to grant the six-month extension represents a significant milestone in our determined fight to resolve our problems and establish The Mount on responsible financial footings going forward. This extension allows us to capitalize on the Berkshires' peak tourist months to generate much needed operating revenues while at the same time provided a realistic time frame to achieve our $3 million fundraising goal....We have a considerable way to go and do not underestimate the enormity of the challenge." (Mount Trustee, Gordon Travers).
In today's New York Times, a story details the dire financial straits of Mark Twain's home in Hartford. The staff has been cut to 17 from 49, and despite a bank's forgiving of a loan for new visitor center construction (at a total, unanticipated cost of $19 million), the museum still faces significant shortfalls and possible closure.
What does this all mean? These are great houses, with tremendous stories of their inhabitants, well-documented, in good locations. At both places, professional staff have worked hard to creatively interpret the house and to engage audiences.
So what's the problem? I think, as my mom says, "Your eyes are bigger than your stomach," or in other words, the leadership at these organizations had a vision far beyond their means. $19 million visitor center, $2.5 million to buy Wharton's library back--if your organization has to accomplish this with a loan, somehow assuming that you'll be able to persuade donors to support the fait accompli, it seems pretty clear that it won't happen.
Whenever I read articles like this, I'm always curious about what board members think? Would they take this kind of risk with their own business or home? Are they just not paying attention and assuming someone else is?
In my work I spend alot of time encouraging organizations to think more broadly, to envision a new future for their museum or historic site. However, unless that creative thinking is paired with realistic organizational and financial planning, big ideas appear doomed to failure.