Bell moved to take advantage of the positive glow that surrounds new leadership. In an article in the New York Times headed "How a Small Museum Puts on Its Big Shows," Bell called his institution "the best-kept secret in New York." The article pointed out that "few people" visit The New-York Historical Society. "A lot of people don't know what's in it. Some people have never even heard of it.'
Robertson (1983).
The article then attempted to augment the Society's reputation by discussing its valuable collections and its many different exhibits. In addition to describing how a small museum differs from a large museum, the article also gave Bell an opportunity to discuss his future plans for the N-YHS. He said the Society was going to "take off in new directions," mounting more theme exhibitions and paying more attention to what he termed "neglected collections" such as the extraordinary cache of architectural drawings.
Bell aggressively enlarged and expanded the Society's services and programs, but he did so with little apparent regard for how these initiatives would be financed. Perhaps he and the trustees believed that development of the Society's real estate was the answer to the fiscal predicament. Without sufficient current revenues available to support the new initiatives, the Society continued the policy that had been established in the late 1970s, spending realized gains in excess of the established limit of 5 percent of the market value of the endowment. In fact, the expansion undertaken by Bell required the Society to withdraw more from its endowment than it ever had before. After six months with Bell as director, the Society's total unrestricted operating expenses for the year had increased 11 percent, while operating revenues decreased 4 percent. To pay for this expansion, the Society spent $1.9 million in proceeds from the endowment, a staggering 16.9 percent of the endowment's total value.
The Society’s 1982 audited financial statements show an operating surplus of $268,000. If one imposes a 5 percent limit on investment income, the year actually ended with an operating deficit of just over $1 million. As was stated in Chapter Four, this analysis will use the 5 percent investment income limit when presenting the Society’s operating results. See Table C.5-1 in Appendix C.
Society leadership was aware that it had to generate more funds. As 1982 drew to a close, the Society issued its first "annual appeal," a mailing sent out to the membership encouraging end-of-year contributions. It was the first time the membership had been systematically canvassed for funds beyond the standard dues. Response to the appeal was positive but did not have a significant impact on the Society's financial situation. During 1983, and on a nearly monthly basis, the Society's treasurer, Margaret Platten, repeatedly warned her fellow trustees of the growing gap between revenues and expenditures.
This and other unattributed assertions in the text are based on the minutes of New-York Historical Society board meetings or other internal documents.
In January 1983, she urged the trustees to consider hiring a professional to help with fundraising. She repeated her plea in trustee meetings in February and March; finally, in April, George Trescher, a fundraising consultant, was retained. In May, Platten reiterated her concern about the budget gap and spoke of the Society's urgent need for revenues. In July, she was critical of the steps being taken, saying that "fund-raising efforts are, at best, modest." As members of the board grew increasingly worried about the financial situation, Bell, too, became concerned: the burgeoning deficit limited his ability to offer the programs he regarded as important. The library had urgent needs, Bell contended. He explained to the trustees that the library "needs space, has personnel problems, and is in need of defining again its collecting and acquisition interests." Bell also reminded the trustees that the recommendations of the 1956 Wroth report had never been pursued. Bell also pointed out that the Society's problems were not limited to the library. He asserted that "the museum department was not properly funded to carry out its work, although more than 98 percent of the visitors to the Society come to see the various exhibitions." Within the Society, responsibility for the budget seemed to remain, at least at this point, a board matter. There is no evidence that Bell was criticized or was even held accountable for the growing budget deficit. Bell's monthly reports to the board consisted of discussions of the progress of programs, not the progress toward financial stability.
OpenStax, The new-york historical society: lessons from one nonprofit's long struggle for survival. OpenStax CNX. Mar 28, 2008 Download for free at http://cnx.org/content/col10518/1.1
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