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May/June 2001:
Building a Base of Support
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Smooth Passages: Ten Tips for Surviving the Transition from Capital to Operating
By Leonard J. Aube
The California Science Center in Los Angeles (formerly the California Museum of Science and Industry) is an institution undergoing major reinvention and expansion. Our board-adopted master plan calls for the addition, replacement, or renovation of all existing facilities—a total of some 700,000 square feet—in three phases over approximately 20 years. The opening of our new building in 1998 marked the culmination of Phase I and represented more than 10 years of planning, construction, and public/private fund-raising.
Like many institutions involved in lengthy and intense capital campaigns, we focused in Phase I on achieving our capital goal ($130 million), but gave the operating fund considerably less attention. Consequently, the transition from planning to opening and running a new institution exposed both professional staff and volunteer leadership to unforeseen challenges.
Fortunately, we now have the opportunity to capture what we learned from Phase I and apply it to phases II and III. Consultation with colleagues across the country confirms that our experiences have not been unique. Making the transition from "capital" to "operating" has a dramatic impact on large and small institutions alike. For some, the process may lead to a fight for survival itself.
Anecdotes about transitions could easily fill this publication. The purpose of the present article is to provide a few tips on fund-raising, board development, and marketing. Museums and science centers are multifaceted, complex organisms, and these suggestions are not "one size fits all." Consider them food for thought from one participant who hopes to find smoother sailing in the next transition from capital to operating.
1. Include all or a major portion of first-year operating
expenses in your capital campaign goal.
This advice is particularly important for start-ups. Raising
enough money to cover operating expenses as well as capital
costs is difficult, yes, but not impossible. For most museums,
the relative scale of the operating budget pales in comparison
to the goal of a major capital fund drive. Having substantial
dollars in the bank gives staff and volunteer leadership the
chance to catch their breath while adapting to a significantly
changed environment. Be sure to "fire-wall" those dollars for
their intended timing and purpose.
2. Set aside an amount equal to half your initial marketing
budget for marketing in months 15 to 24.
Many science centers and museums come out of the gate strong,
only to find themselves looking for visitors in year two and
beyond. Diminishing earned revenue places a high demand on every
dollar just when the institution could benefit from being visible
in the marketplace again.
3. Solicit three-year "charter memberships" at start-up.
Virtually every museum experiences a spike in community participation
at all levels just prior to, and through, the first year of
operation. Then the bottom seems to fall out. By seeking a longer
membership commitment when enthusiasm is highest, even if it
means offering a modest discount for the second and third years,
you begin the process of turning benefits-driven supporters
into mission-driven donors.
4. Establish higher expectations for board members' annual
giving.
Capital campaigns provide an incentive for board members to
give to their maximum capacity—or at least to reexamine
the firmness of their financial commitment. An increase in their
annual giving forms a basis for seeking higher levels of support
throughout the community. After a successful capital campaign,
some museums raise expectations for board members' annual giving
by 100 percent or more.
5. Within the first year, solicit every capital campaign
donor for an annual fund gift.
Campaign donors have a major stake in the success of the institution.
Some science centers frame their second request in the form
of meeting increased "needs." A better approach is to emphasize
carrying forward the "strengths" or "vision" of the campaign.
6. Develop and sustain a budget for market and visitor
research.
Research that quantifies and proves the impacts, challenges,
and strengths of your institution is invaluable in developing
a compelling case for operating support.
7. Identify and enlist new board members in the year
before a new facility opens.
The visibility of an institution's capital campaign can enhance
its prospects of enlisting new community and financial resources.
Ask your board nominating committee to approach potential new
members during the 12 months leading up to the opening. The
influx of vigor and leadership could be critical to a successful
transition from capital to operating.
8. Develop budget and staffing models that allow for
a reduction in attendance and earned income in year two.
Euphoric over seemingly endless numbers of visitors passing
through the turnstiles, newly launched science centers may develop
a case of administrative atrophy and be slow to reduce spending
when the inevitable downturn occurs. Prudent budgeting can help
an institution ride out what may be a 40 to 50 percent drop
in attendance and earned income in year two.
Equally important is a strategy for retaining staff beyond the
first year. Employees who guide major aspects of successful
campaigns are prime targets for recruiters. When experienced
personnel leave, they take institutional memory with them, and
stakeholder relationships suffer setbacks—all at a time
when the institution is attempting to find a solid, operating
foundation.
9. Hold a special event for major donors 12 to 15 months
after opening.
A gala luncheon or similar event at the museum at the start
of the second year provides an opportunity to update contributors
on the results of their investment. Celebrate your successes
and share what you've learned about your impact on the community.
Adding a thoughtful presentation on short- and long-term goals
can lay the foundation for securing annual support (and major
gifts) for five years or more.
Encourage senior staff to participate in other community
organizations.
For any institution, success often depends on significant investment
by a large segment of the community. This is not a one-way street.
By making it possible for senior executives and top-level managers
to join and work actively in local organizations, your science
center can position itself as an indispensable part of community
life.
Leonard Aube is senior vice president for development and marketing at the California Science Center, Los Angeles.
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Smooth Passages: Ten Tips for Surviving the Transition from Capital to Operating
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