DATELINE: November 19, 2008, Chicago
Yesterday, the Smithsonian Institution held its first public board meeting—sort of. In the morning, the Smithsonian’s regents held a closed board meeting. In the afternoon, they held a public forum. Jacqueline Trescott of the Washington Post reports that the public meeting was almost as popular as the Air and Space Museum during Spring Vacation week. Smithsonian Fields the People's Questions, November 18, 2008. The Baird Auditorium was 80% filled, according to Trescott. That puts attendance at well over 400. The high turnout makes one thing clear: The public is...
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--these pay increases were determined at least a year before our current economic woes. Senator Grassley, who is a big advocate of spending university endowments on the current generation of students, should recall that the stock market was at an all-time high when the compensation he is now complaining about was set. We suspect that next year's survey will reflect the economic downturn. The fact that conditions can deterioate so quickly is one reason Senator Grassley should stay out of the business of telling nonprofits to spend their endowments.
interested in nonprofit governance, which is why newspapers will continue to find nonprofit screw-ups to be good fodder.
Questions came up about the diversity of the board, why the board had not resigned following last year’s scandal involving Lawrence M. Small, the former head to the Smithsonian, and how the stock market’s decline has affected the Smithsonian’s endowment. Endowment has dropped from $1 billion to $800 million, which actually is not too bad given the circumstances. But what appears to have been most on people’s minds was admission fees, or more aptly put, the lack of admission fees.
There was a strong voice for continuing the Smithsonian’s current free-admission practice. The politicians on the board agreed, which is why we continue to believe it is time to get the politicians off the board. Senator Christopher Dodd told the audience he was ”resistant to that.” Rep. Sam Johnson agreed, exclaiming that “The artifacts belong to the taxpayer.” Trescott reported that “applause erupted” following Senator Dodd’s comments.
Newest board member, John W. McCarter, Jr of the Chicago’s Field Museum, subtly showed his hand. He said he found the policy acceptable so long as the Smithsonian is not “under-investing in other needs.” President Obama may want to consider Carter for Secretary of State. His diplomatic comment obviously came from head of an international natural history museum who must balance a budget while running a first class museum. McCarter appears to be playing his cards close to his vest, but we suspect he supports admission fees. Last year, we heard a lot about governance and Chairman Small, but we also heard a lot about the major renovations to Smithsonian facilities that are necessary to protect those artifacts from water and other damage.
Good governance is more than holding open meetings, whistleblower policies, and meeting minutes. Fundamentally, it is about directors, trustees, and regents protecting assets and running a financially sound institution. The politicians on the Smithsonian’s board do what politicians do best—create unrealistic expectations and give stuff that costs money away for free.
Last year, the Smithsonian Museums and the National Zoo had 26.8 million visitors. At a modest admission fee of $5, the Smithsonian would take in close to $135 million a year. That would go a long way toward needed renovations. Here are the reasons we think the Smithsonian should charge admission fees:
1. It’s Your Stuff. Rep. Johnson argues that it’s our stuff. That is not entirely true. Some of it is our stuff, but some of it has been contributed by the private sector. More importantly, when someone views his stuff, he isn’t going to a warehouse to look at a bunch of objects sitting on shelves. He is looking at curated displays. It cost money to curate exhibits.
2. Entertainment Isn’t a Safety Net Issue. Many people share a common belief that government should provide a social safety net. The current safey net includes Social Security, Medicaid and Medicare, and unemployment insurance. We, however, do not believe entertainment (even though it is educational entertainment) is a safety net issue. People do not have a right to be entertained.
3. The National Parks as an Analogue. The National Parks are “our” land, but the Park Service charges admission fees—we just paid somewhere around $10 admission at a National Park outside of Santa Fe. The trails have to be maintained and we liked the fact that there was a clean bathroom. We used the park and we are happy to cover the cost. The Smithsonian is no different than a park.
4. Museum Tax Subsidy. There has been a lot of discussion in recent months about reconsidering what constitutes a charitable activity that is worthy of subsidy. With the economy as it is, some argue that subsidies should be tilted toward nonprofits that provide human and social services and away from cultural institutions. We strongly disagree with trying to redefine charity, but if Congress does consider legislation that reduces tax subsidies to cultural institutions, it should, as part of the discussion, think about reducing the direct subsidy that it provides to the Smithsonian, with the expectation that users contribute to the cost of maintaining the institution.
5. Strengthening the Smithsonian. By allowing the Smithsonian to charge admission fees, Congress would be moving toward privatizing the Smithsonian. Historically, publicly-funded museums have had difficulty to establishing an endowment because potential donors are reluctant to donate to a government-controlled institution. By charging admission fees, the Smithsonian might be able to attract more donors who would view it as a private institution.
6. A Time of Budget Deficits. Senator Dodd is very concerned about the Detroit autoworkers, as are many politicians. We suspect the Big 3 will get a bailout, as will many others. There will also be a stimulus package. And then there is health care and a national energy program. Don’t forget the War on Terror. What about the plight of state and local governments?
In a time of escalating budget deficits and national debt, we need to give serious consideration to spending cuts. Somebody always loses when the government stops spending on a particular program. In the case of the Smithsonian, we see a continued role for government subsidy because of the importance of the museum to our national heritage and culture, but there is justification for shifting some of the operating to those who visit the museums.
7. Still a Bargain. A $5 daily admission fee to all the museums on the Mall is still a bargain. The Museum of Modern Art is charging $20. We haven’t been to Disney World in many years, but its daily admission fee appears to exceed $50 for a 3 to 9 year old. Hey, movies are now $10.
8. No Discernable Impact on Attendance. We’ve been reading about Friday nights at the Hirshhorn. There is an admission fee, but there apparently are lines. It also is hard to image that the family of four flying in from Nebraska is going to go elsewhere because the Smithsonian is charging $20 a day for the family. They are spending $1,500 on airplane tickets and at least $150 a night on hotels. They can go to the Spy Museum, but general admission is $17 for children ages 5 to 11. The price adults jumps from $20 to $27 if they want a combination ticket. This year everybody wants to go to the Newseum, but mom and dad must pay $20 for admission. If the kids are between 7 and 18, the admission is $13.
We like the open meetings, but being a director is not about winning popularity contests. It’s time for the Smithsonian to start charging a modest admission fee for visitors who can afford to pay it. We hope Mr. McCarter, the newest regent, becomes less diplomatic.
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