Our Business Model is Badly Broken

Graham Beal gave a speech at the volunteer program today, for which I was pleased to be present. I had been hearing a lot of things, second hand, and was interested in his thoughts.

He spoke primarily (and apologetically—this is supposed to be a celebratory occasion, after all) about the DIA’s financial situation and stated that “our business model is badly broken”.

For many years, 16 million of our 22 million dollar budget came from the State of Michigan. Last year, $10,000 of our now 32 million dollar budget came from the State of Michigan.

Mr. Beal expressed that what the DIA would really like is stability and believes this can be achieved by setting up an unrestricted endowment. The endowment the DIA is currently working with has something in the ballpark of $70 million. At around 3% interest, that would generate about 2.1 million per year (remember-- the budget is 32 million).

To establish this endowment, what the DIA intends to do is launch a millage campaign, proposing a 10 year property tax, which would then be used to build the endowment—ensuring the DIA some long term financial stability.

A poll was conducted in the community and the response was overwhelmingly positive. A similar campaign for the Detroit Zoo was launched a few years ago, and was accompanied by billboards that tugged at the heartstrings in all the right ways. The Zoo millage passed with incredibly high numbers.

Who Doesn’t Love Giraffes?

It was a concern that the DIA millage would not be as successful because art museums and zoos are perceived so differently by the public.  Zoos have very family-friendly amenities like sno-cones and stroller parking. Art museums are not always perceived as being a place for families to spend a Saturday afternoon. Thus, there was concern that the DIA would not receive the same support from its surrounding communities. However, the polling company was stunned by the data they collected, which showed great support.

Interestingly, the original millage proposal had multiple cultural institutions on the ticket. However, the polls showed that people did NOT show the same support for the shared millage. Thus, the DIA dropped the other institutions, in favor of going it alone because it could so drastically increase their odds of winning.

And nobody minds.

Graham Beal expected the other institutions to be a little miffed when he announced that the DIA would be the only institution on the ticket (and thus the only one benefiting from this property tax). Yet, he claimed that his colleagues handled this news graciously. I found this incredibly hard to believe until he explained why.

Mr. Beal reported his colleague at the Detroit Symphony Orchestra as saying, “A strong DIA helps every cultural institution in the city”.

Wow. That is gracious.

But the gentleman at the symphony has a good point and another colleague is reported as noting that if the millage passes, “that will be a major institution that is no longer asking for money, and that helps everyone”.

These are both excellent points. If the DIA can be self-sufficient, then it will be sucking significantly less money from donors around the city, who will then be able to donate to The Detroit Symphony Orchestra, The Detroit Historical Museum, The Science Center, and every other cultural institution in Detroit.  Sounds good to me.

"Artie" The Donkey

Also, I think I should be featured on a billboard, feeding something to Artie and giggling. Millage accomplished.