Gearing up for Success in Detroit

Strategy: Balance Your Budget, Be Creative (More with Less)

Type of attraction: Historical Society, Museum/Historic Site

Summary: When the City of Detroit decided they could no longer fund the Detroit Historical Museum, the future of the museum looked bleak.

When the City of Detroit decided they could no longer fund the Detroit Historical Museum, the future of the museum looked bleak.  The city had provided $4 million a year to operate the museum in partnership with the Detroit Historical Society, which provided an additional $800,000 annually.  Determined not to let the museum close, the Historical Society negotiated with the city, taking over the management of the museum in 2006. 

“On that first weekend I had my dad staffing one building and my husband staffing another,” says Michelle Wooddell, chief operating officer of the Detroit Historical Society.   “We had to start over to rebuild from the ground up.”  The museum did stay open with a reduced operating budget of $1.9 million.  During the year of negotiations, the Historical Society made it clear to their members and donors that they intended to take over the museum—and that they would need help.  The Detroit Historical Society ran a transitional campaign starting in late 2005 called “History is Forever” which raised $350,000 in six months.  Over the next two years, the museum built the operating budget up to $2.6 million a year through strong financial management.  In 2007, the Marketing and Communications Department was reorganized as the Sales and Communications Department to emphasize the bottom line.  “It’s not enough to distribute brochures, it’s about whether the brochures generated additional earned revenue,” Wooddell explains.  Then, in late 2008, the economy turned sour.  

“We had been operating with a balanced budget, but we realized that we were facing a deficit after eight straight years of balanced budgets,” recalls Wooddell.    Monthly furlough days and a wage freeze were instituted for all staff; because of these cost-cutting actions, the budget showed a small surplus rather than the projected deficit at the end of the 2008-2009 year.  Wooddell notes that because the staff was already so lean, cuts were minimized.  The museum had lost their historical experts when the city pulled their support, but created a “History Advisory Council.” The best and brightest of local universities and historical societies filled the gap, and many curatorial jobs were outsourced.

Another positive factor was having many smaller contributors rather than a few large patrons.  As Detroit’s corporations struggled with the economy and cut back on charitable giving, the museum lost some contributors but was able to compensate.  With other Detroit institutions deciding not to launch fundraising campaigns, the Historical Society recognized an opportunity.  “We looked at the museum operations and calculated we really should have $3.4 million a year to run the museum the way we wanted.  So in 2009 we launched a comprehensive campaign with a $21.6 million goal,” says Wooddell.  Campaign funds targeted improvements for the museum, new educational programs and operating funds.   

A new approach was taken to focus on the next generation of Detroit’s leadership.  An Advisory Committee with established leaders was created to help open doors, but the real work of the campaign was done by the Steering Committee, which consisted of thirty young leaders in the 30-50 age range.  Rather than aiming for a traditional “pyramid” with a few large lead gifts, the campaign is a “square”: most gifts are in the $5,000-20,000 range.   Wooddell explains: “We weren’t looking for one-time gifts.  We were looking for young leaders who wanted to make an investment and a long term commitment.”  The campaign is off to a successful start. In the first year, the campaign hoped to raise $3.1 million and actually brought in $3.4 million.