At 01:18 AM 4/11/96 -0400, you wrote:
>I am staff attorney for a county in SC which has a small museum featuring
>local history/culture, etc.  Until now, the museum has been wholly funded by
>the county through property taxes.  In an effort to hold down costs, our
>county governing body has been seriously considering "privatizing" the museum
>over a period of years.  They realize that it is unrealistic for them to
>expect the private sector to immediately step forward and assume the entire
>budget immediately, and they are concerned about museum staffers losing
>public retirement benefits if they proceed too quickly with their efforts to
>privatize.  What they would like to see, however, is examples (if any exist)
>of written agreements between public and private entities who are in some
>fashion jointly responsible for the budget and/or operation of a museum.  If
>any of you have copies of such an agreement (or know where I can obtain one)
>I would appreciate it if you would contact me by e-mail, s-mail, fax or
>phone.  Thanks for your consideration.
>
>John C. Zilinsky
>Horry County Staff Attorney
>103 Elm Street
>Conway, SC 29526
>
>Phone:  803-248-1292
>Fax:      803-248-1378

This question is coming up with increasing frequency as governmental
agencies seek to "unload" museums. What is interesting, is that they rarely
seek to privatize zoos, libraries, and other cultural entities. Museums,
however, seem to be regarded as "ace" tourist attractions.

I am currently working to restructure a museum that is 85% self-supporting,
and have in the past created an arrangement for a city/county history
museum. Some of the "biggies" that operate under such agreements are the
Milwaukee Public Museum, L.A. County Museum of Art, Dallas Museum of Art . .
. I have agreements for about a dozen on file.

Most of them specify a private 501(c)(3) organization enter into an
agreement where the government entity owns the collections and building and
the private entity operates it. Lengths of agreements run from 25 years to
99 years; subsidies run from less than $100,000 to as much as $4 million a year.

Key questions are:

(1) Does the 501(c)(3) have the expertise to run the museum and do the
trustees REALLY     know what they face? In most cases, no.

(2) Are the government entity and the 501(c)(3) prepared for the fact that
the agreement     could be a failed experiment requiring
re-governmentalization? Who will be the fall     guy(s)?  Are there
provisions to avoid the collections being "at risk?"

(3) Are the parties ready for the fact that the focus may have to be on
"earned income"     rather than education, research and preservation? Can
they cope with the pressures     to "Disneyfy?"

(4) Do the theme of the museum, the location, the collections, the expertise
level of       the staff and the attendance numbers support popularization
and marketing adequate      to generate income? Is there a healthy budget to
produce exhibits people would be       willing to spend $6 -- $8 -- $10 --
$12 --- $15 to see?

(5) Is there adequate capitalization; do the parties KNOW that the reason
most small
    businesses fail is undercapitalization? [Museums ARE businesses and the
product is
    education.]

After studying this issue intensively for four years I believe that there
are ways of privatizing that will work. However, there are many more
pitfalls waiting for those whose motivations are getting away cheaply,
looking for massive short-term savings, and who approach it with no business
sense. The fact is, most museums do NOT have the themes, spectacular
collections, money to create draw-dropping exhibitions or "McDonalds"
locations to make it on more than a starvation survival basis. Period.

Lawyers and IRS agents love tests. O.K. -- Would YOU bet YOUR assets and
financial security on the museum in questions by taking on a proposed
management contract? If not, better reconsider.

----------------------
Byron Johnson, Director
Texas Ranger Hall of Fame and Museum
P.O. Box 2570
Waco, Texas 76702-2570
E-Mail: [log in to unmask]
Phone: 817-750-8631
------------------------------
"...Unless a people are educated and enlightened it is idle
to expect the continuance of civil liberty or the capacity
for self-government."   - Texas Declaration of Independence,  March 2, 1836.
 -- Texas Rangers 175th Anniversary 1823-1998 --