Industry Financial Data

Financial Analysis

Arts organizations are often struggling businesses and rely heavily on fundraising and government funding to generate enough revenue to balance their expenses. Looking at Figure 1, we see about a $230 million difference between the minimum and maximum net incomes within the dataset of 507 art museum organizations. This is an extremely large gap showing the wide array of financial positions for art museums. This is also shown with a median of $1,566. This median is lower than expected but shows over half of the art museums have a surplus because the median is a positive number. The net income can be analyzed more when looking at total revenue and expenses. The data presents the average total revenue is greater than average expenses, once again proving over half of the art museums within this data set have a surplus. The median total revenue and median expenses are very similar, with about a $25,000 gap between the two. Upon further investigation of all companies with a positive net income, over half of the company’s revenues within the data set are greater than their expenses, showing art museums being generally profitable.

Figure 1

The data presents many art museums are successful nonprofit organizations. There are some outliers within the data, which can affect the averages I looked at, however, based on the net income, revenue, and expenses data, most art museums show a surplus.

Museum Revenue

Art museums generate revenue in a few different ways, with government funding being the main source. Although the public sector is a large part of art museum funding, “the 150 largest art museums have a combined annual operating budget of less than $1 billion, not even one percent of national spending on higher education,” showing that art museums must be strategic with their income and spending (Feldstein, 1992). Another fundraising strategy is private beneficiaries such as membership fees, publications and media, catering, selling tour packages, and educational activities. (Cornell University, 2013).

Revenue of art museums can be broken down into three categories: space revenue, time revenue, and price revenue (Cornell University, 2013). Space revenue is sold implicitly and explicitly through exhibition spaces being rented for events/performances or bookstores, restaurants, and cafes taking space in the museum and generating revenue. Time revenue is also sold implicitly or explicitly by controlling how long each visitor spends in the museum. The more time visitors spend within the museum, the less revenue generated because the visitor is taking up a spot of the capacity for a longer period of time. Space and time revenue can also overlap. Lastly, price revenue fluctuates because different visitors can pay different prices for entry depending on if they are the general public, members, employees, students, teachers, adults, or seniors (Cornell University, 2013). Entrance fees are not popular among the public, but many art museums rely on these sales due to philanthropy pattern changes (Cornell University, 2013). Art museums use the revenue and funds generated for operating and personnel costs, art acquisition depending on gifts of works of art, and construction of new facilities and expansions (Feldstein, 1992).

Financial Status at the Woodmere Art Museum in Philadelphia, PA

On November 17th, 2020 I was able to meet with Ms. Cehelsky to discuss the financial position of the Woodmere Art Museum. Ms. Cehelsky began her career as a CPA for a national firm, before moving into the nonprofit sector to work in direct services, social advocacy, and eventually become the CFO of Woodmere, a small museum in Philadelphia with a budget of around $3 million. Her position takes on a lot of different paths. On the financial side of the organization, she handles the budgets, audits, tax returns, endowments, and traditional accounting work, while working with managers of different funds and investment managers. Ms. Cehelsky also works alongside a bookkeeper who does the daily transactions for the museum. Along with being the CFO, Ms. Cehelsky takes on the role of Human Resources Manager, Chief Operating Officer, and Head of Guest Services, which is not a traditional structure for an art museum but works well for the size of Woodmere.

The most important question I asked Ms. Cehelsky was what are her top priorities for the Woodmere Art Museum as the CFO? Her immediate answer was “safeguarding the museum’s financial assets.” She ensures the endowment is in the best possible hands and is managed best for the museum. She also makes sure the museum is ensured. Many art museums rent buildings, however at Woodmere, the building is owned by the museum, so there are special criteria for ensuring the building. Lastly, she makes sure she understands the financial statements of the museum. She always studies the audits to make the best decisions for the art museum financially. By talking with Ms. Cehelsky, it seems Woodmere is in a very good financial position, however by looking at the museum’s audit on their website, they are in a slight deficit. Their assets match their liabilities, however, their expenses are slightly higher than their revenue. I am curious to see the financial position for 2020, with the pandemic affecting many arts organizations globally.


Feldstein, Martin S. The Economics of Art Museums. University of Chicago Press, 1992.

Kreischer Miller. Woodmere Art Museum, Inc. Financial Statements December 31, 2019 and 2018. 2019, . “Revenue Management Applications In Untraditional Industries.” Cornell Blogs, 27 Mar. 2013,