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After closing for six months in 2020 and laying off 15% of its staff in October, the Nelson-Atkins Museum of Art in Kansas City, Missouri, is taking a slow approach to its pandemic recovery.
The city’s largest museum has seen a steady rise in attendance since it reopened in September, according to Mandy Stone, vice president of earned income. The number of visitors is currently about 70% of prepandemic levels because the museum is still requiring free timed-entry tickets.
“We’re trying to be very slow and cautious, but we’re very optimistic about the museum rebounding,” Stone said.
The Nelson-Atkins is considered a key part of the arts community and Kansas City, and it serves as a learning ground for students at the Kansas City Art Institute.
Still, the museum is continuing to look at ways to increase its revenue as it works to make up for lost funding normally earned through event rentals, fundraisers, ticketed exhibits, merchandise sales, parking fees and its restaurant earnings.
Increasing revenue as the museum reopens
Revenue from things like merchandise, traveling exhibits and parking generally follows attendance, Stone said, and has been increasing as people come back to the museum.
But not all areas of revenue have returned yet. Events bring in a lot of money, and the museum is still easing back into hosting in-person events.
The Nelson-Atkins hosted a small wedding in May and has several more in August that were rescheduled from last year. The museum will also host a corporate event in July.
“We’re starting to see people be willing to have events, particularly if they know that everybody in their group is vaccinated,” Stone said.
In June, the museum sent an email survey asking recipients what they would pay for individual aspects of the museum — such as lectures, art classes and parking. It also included a question about charging a general admission fee. Regular museum tickets are currently free.
“The survey was really to gauge earned revenue opportunities as a whole, not necessarily that we would change to an admission model, but more how perceptions change when there is or is not an admission,” Stone said. “Also, as part of that survey, we were testing whether people realize that we do not charge admission.”
Layoffs during the pandemic
Because the museum is a nonprofit organization, it’s required to provide its tax return information to the public. These documents show how much revenue the museum earns, how much it spends, how much it pays key employees and other financial information.
The most recent tax documents available from the Nelson-Atkins cover the May 2019-April 30, 2020, fiscal year.
Tax filings going back five years show that the museum’s expenses exceed revenue nearly every year. In the fiscal year 2020 documents, revenue was $11 million less than expenses.
But the filings provided to the IRS do not include money from the William Rockhill Nelson Trust. A full audited financial statement from the museum shows a more stable financial picture.
The trust was established by the will of one of the museum’s namesakes, William Rockhill Nelson, who founded The Kansas City Star. When he died in 1915, most of his $6 million estate went to purchasing art and establishing the museum. In today’s dollars, that’s roughly $160 million.
The combined financial statement of the trust and the museum shows total net assets near $480 million at the end of fiscal year 2020.
The museum draws its revenue most heavily from endowment, followed by contributions — which include gifts and donations, grants and memberships, Stone said. The smallest contributor is earned revenue, which is the money spent by visitors on site.
Prior to the pandemic, the Nelson-Atkins’ annual budget was about $34 million. Its budget is now $26 million, which Stone said is still sustainable.
The Nelson-Atkins laid off 36 staff members — 15% of its workforce — amid the 25% budget cut in October 2020.
The staff reduction was necessary because of earned revenue losses during the pandemic. The museum wasn’t able to use endowment funds to make up the shortfall because of guidelines limiting how much of the money can be used in any given year, said Kathleen Leighton, media relations manager.
“Any decision that adversely affects staff is always the most difficult,” museum CEO and director Julián Zugazagoitia said in a news release announcing the layoffs in October. “But while our staff will be smaller and our resources more limited, we are fully committed to providing transformative experiences with the extraordinary art collection that defines this museum.”
The museum anticipates filing its tax return for the most recent fiscal year, which ended April 30, after its board meeting in December, Leighton said.
“We’re really optimistic here about the museum being able to come back from this,” Stone said.
A cornerstone of the KC arts community
While the pandemic initially upended the arts community’s ability to generate revenue and connect with audiences, ArtsKC president and CEO Dana Knapp said there’s reason to be optimistic about the future of the arts industry.
“Everyone is really working hard to try to find their bearings and establish kind of a knowledge base to post-COVID participation,” Knapp said.
ArtsKC works to support artists and arts organizations throughout the region. The Nelson-Atkins is one of the flagship organizations of the arts community in Kansas City, Knapp said.
“They really are kind of a strong underpinning to bring people together to represent the industry in the arts, not only from Kansas City, but well beyond,” Knapp said.
The Nelson-Atkins is also a neighbor of the Kansas City Art Institute and serves as a place for students to learn. Students can take specialized tours of the museum’s collection, see how galleries are curated, research at the Spencer Art Reference Library and work in internships at the museum.
The proximity to museums like the Nelson-Atkins and the Kemper Museum of Contemporary Art can be a selling point of the school, said Michael Schonhoff, director of the KCAI Gallery: Center for Contemporary Practice.
“Even the idea of walking in the neighborhood — a student, if they have time, they don’t even have to go inside the Nelson, they could just stay outside in the sculpture park and have a cultural experience and art experience that affects their being in Kansas City and getting a degree at the Art Institute,” Schonhoff said.
Knapp said she’s elated and excited to see more organizations opening back up.
“I think what we’re seeing is that people are feeling more and more comfortable,” Knapp said. “The future is unknown, and I think that uncertainty brings about a level of caution for people to just completely go forward with no caution. I think what we’re going to see is our organizations trying to open up in a major and in a careful way. But nonetheless, open up.”