THE FUNDAMENTALS OF MUSEUM FUNDING - Motivations, selection processes and performance measurement methods

Owing to the present economic climate, measuring performance has become a central issue in all sectors, including that of culture. Especially non-profit institutions are challenged by those who support them financially to present their effectiveness. Sponsors and donors increasingly require museums to submit program assessments and the possible returns that can be obtained. Despite this trend, little is known about the evaluation process and what factors are taken into consideration when appraising museum activities. This study aims to contribute to bridging this scholarly gap via two research questions: (1) How do entities financing museums measure the performance of the activities they support? (2) How do measurement methods differ between private and non-private organizations? The present study might be the first attempt to find answers to a practical managerial issue – how to measure the performance of museum activities, from the funder`s perspective. To assist answering the above, the research also unfolds motivations to engage in art support and maps the selection process - synthesizing all decisive funding decisions into one research. The exploratory qualitative research is based on ten semi-structured, in-depth interviews with eight Netherlands-based organizations that fund museums. Half represent private sector companies, while the other half stand for organizations that are partially state-owned or which finance museums through a foundation. The theoretical framework that guides the research is the Balanced Scorecard, developed by Kaplan and Norton, with some additional variables that are relevant for museum performance. The central tenet of the study is that the entire process of art funding rests on client or stakeholder satisfaction and involvement. This orientation shapes funding decisions, strategies and evaluation methods. Private sector funders assess performance based on the financial, brand, customer and staff satisfaction and community perspectives. They review reports assembled by museums, conduct their own research which primarily centers on surveys sent to their clients who attended museum activities. Heuristics are also used to make judgements. The artistic merit of the program does not get appraised, but inferred from professional and customer values, perceptions. The internal process and learning and growth dimensions do not get measured but changes or underperformance with reference to them are noticed. Non-private organizations implement performance measurement methods to varying degrees. They assess the financial and stakeholder perspectives through a combination of data provided by museums, interviews, surveys and research carried out by external consultants. Staff satisfaction, environment and community dimensions are appraised based on heuristics while the artistic quality is inferred from professional and societal values, perceptions. In general, akin to private firms, the learning and growth and internal process perspectives are not measured, but observations are made. The research confirms that quantitative tools are not enough in measuring performance related to museum activities, but qualitative, anecdotal appraisals are sought after as well. Those non-private organizations who consider performance assessment seem to use more qualitative methods than private firms.