Both the quantitative and qualitative phases of the Múzeumok Ma 2020 research had a special focus on the maintenance, operation and financing of museums in Hungary. In this context, special attention has been paid to the issues of museum strategy and the generation of residues.
Changes related to maintaining authorities
As of 1 January 2013, the maintaining authorities of most Hungarian museum institutions outside of the capital have been changed. With the reorganisation of the county museum network, the role of local governments as institution boards has increased, while former county museums have had to redefine themselves primarily as methodological centres, and their activities are now mainly concentrated in the county town. For several of the national museums, the management of smaller museums that have been added as member institutions has meant new or partly changed responsibilities. This has brought many challenges (professional, organisational and economic) for museum managers and professionals alike.
The process took place simultaneously with the opening up of opportunities for EU and national developments, the intensification of the museums’ social responsibilities and the growing demand for a service-oriented approach. However, in most places, the diversification of resources has not been accompanied by an increase in resources for long-term maintenance and their more flexible use. This paper summarises the results of 44 in-depth interviews focusing on the management characteristics of institutions with particular regard to the impact of the generation of residues and identifying areas for improvement based on the opinions of the heads of institutions.
The obligation to generate budgetary residues and its impacts
The in-depth interviews contained questions about the budgetary residues and their utilisation. As regards attitudes to this question, it is important to note that the sample included a significant proportion of senior managers of national museums and county-level city museums, because the possibility of generating budgetary residues may only be relevant for these institutions.
The majority of respondents said that a negative impact is associated with the fact that the generated budgetary residues are taken away from the institution at the end of the year: for the 16 institutions giving a negative answer, this obligation is clearly a problem.
The figures clearly show that the larger institutions are the ones affected by the withdrawal of residues, which is no coincidence: they derive a significant proportion of their revenue from a wider range of services, which may help accumulate residues, and they also generate significant resources from archaeological excavations. A clear impact, as indicated by respondents, is that to avoid the withdrawal of residues, there is a significant outflow of funds in the last months of the year to ensure that the funds are not lost to the museum. However, this situation leads to many compromises, makes planning difficult or impossible, and hinders the efficient and cost-effective implementation of multi-year projects, as well as their preparations involving prior costs. The following quotes from the interviews support this:
"It's a challenge... in this sector with its tasks, it poses many risks, and I think it doesn't contribute to the efficient spending of public money, ... because what does it lead to? At times an incomprehensible, ill-considered, wasteful outflow of money from the institution at the end of the year.”
"Whatever would be left in a budget for unrestricted use is usually taken away by the maintaining authority, because that's the way we work, and I think that it makes museums disinterested in economic processes and it makes it very difficult for them to achieve certain goals... if a museum wants to make a small investment, and it could set aside some money for that purpose in a given year, but could only add a third of the money the following year, it has no way and no possibility to do so at the moment, because the Board will take this money away. The institution cannot borrow either, this is also against the law.”
"Technically, there's a positive and a negative side to it, obviously, if you cannot keep residues and you have to spend them, then you’ll spend on things you wouldn’t necessarily need to spend on otherwise. This is not necessarily good. There may also be changes during the year, either in terms of priorities or other situations may arise that could necessitate budgetary modifications or could affect the revenues. I prefer to be flexible in these situations."
Options for museums to use their own revenue and to incorporate it into their budget
The overall picture is made more complex by the fact that six of the respondents, mainly the heads of non-autonomous municipalities or the heads of institutions run by foundations indicated that the maintaining authority either does not take away the extra revenue (thought of as “residues”) or it returns it in the next year's budget. A few respondents, who run small museums, indicated that their institutions accumulate virtually no residues. The head of a county-level city museum also reported that it is problematic to make sense of residues, because all the revenue generated is immediately and directly transferred to the budget of the city that acts as the maintaining authority.
Only two of the respondents indicated that the withdrawal of residues had a negative as well as a positive effect. One of them highlighted the fact that they can operate on a fixed budget every year, with all their revenue going to the maintaining authority. The other respondent indicated that despite the negative effects, it is positive that purchases that were necessary but not a priority can now be made to prevent the accumulated residues being withdrawn, and confirms, similarly to the previous respondent, that the extra revenue would allow for more flexibility during the year, which would be lost if the residues were withdrawn.
As regards the possibilities and difficulties of using archaeological revenues, one national museum, four county-level city museums and one regional museum indicated that the withdrawal of the residues at the end of the year poses difficulties in terms of the efficient, unhurried and rational use of the revenues generated from archaeological excavations.
The responses can be seen primarily as suggestions, ideas, and positive steps in a process towards more efficient and rational work. Indicating the need for a change, one respondent suggested that it would be important to be economical in terms of management, however, now this seems irrational in light of the withdrawal of the residues.
Several respondents indicated that a significant increase in the financial interest of museum staff should be among the factors that need to change. The financial motivation of museum directors based on revenue generation (i.e. the idea of a “sliding wage”), also brings a new aspect to revenue-oriented management in a system without the obligatory withdrawal of residues. In addition to this, a change would allow for more efficient working, and thus several further goals could also be reached.
The proposals for change include more freedom in wage management, the need for more sensible planning of resource-intensive exhibitions and building renovations, the possibility of prior consultation about these with the maintaining authority, and the more rational and scheduled use of resources. There could also be more opportunities to set targets in consultation with the maintaining authority, and to make the necessary decisions about changes in response to external factors. One respondent, when asked about the need for change, indicated that during the respondent’s term as a manager, the institution's revenues more than doubled, which the respondent considers a significant achievement and therefore does not intend to change it.
"We would do certain things more intensively, it's close to us... and I'm sure there would be more involvement there. This way, if we take on jobs elsewhere, I can pay the colleagues who perform them, and I can generate money for the museum, which I can spend on what I think is important. Or I can spend this budget on bringing over exhibitions.
“It could be handled more rationally, we could set ourselves an objective or a path together with the maintaining authority. And if it were to change due to internal or external factors, we could react with much more flexibility and freedom."
“ [...] Much better, because then we would be able to work much more actively right from January. In our case, January and February are basically lost because we don’t have money... you can't pay for a catalogue in advance, and you can't buy the whole installation in advance... we'll put off a single exhibition until the end of January, we won't do any in February and we'll open a new one in March because by then we'll have collected some income from the permanent exhibition, but it's very inconvenient. It is mainly the exhibition programme that is affected, but nothing else really.
Another important factor is the possibility of efficient use of savings and resources for the maintenance and conservation of museum buildings, which would also have a motivating effect on the institutions. The respondent also raises the potential associated with a non-profit operating model:
"... institutions should be motivated to save or be economical if they can... if they could keep at least part of what they save, I think they would become interested in efficient resource management, and the logic of residues would begin to work in a very different way... I think that a non-profit operating model could bring to the surface a lot of problems that we are sweeping under the carpet today, and might even help to solve them."
Are managers motivated by the possibility of generating residues? Areas for development
This question received the least number of direct responses, a total of nine. Four of the respondents indicated a clear yes, primarily focusing on providing financial motivation for staff, such as the possibility to plan personal costs in projects. One respondent approached the issue from the perspective of managerial responsibility, referring to planned work as an incentive and motivation rather than an unwelcome obligation. One respondent reported that there are too many managerial posts in their institution – a structure that should be simplified and that makes it difficult to motivate middle managers financially, because this way (financial) incentives may only work for a limited circle of managers.
"Obviously, the museum director has an incentive to produce residues, and that’s exactly how we manage our operations: our goal is to accumulate as much budgetary residue as possible, so that we can use it to make investments that we otherwise couldn’t afford, such as warehouse improvements and infrastructure investments."
In the case of a museum, the possibility and the need to generate its own revenue can be created by institutional development, provided that it is based on good programmes (also) supported by the maintaining authority. In addition to supporting the core activities of the institution, the developments are also closely linked to the extension of the service-oriented museum approach. At the same time, despite the current rigid legal framework, decisions taken by the maintaining authority can also contribute to the rational and rapid use of end-of-year residues for further developments, especially in the case of medium-sized museums.
Bererczki, Ibolya: Múzeumok és kihívások – Gazdasági kérdések, maradvány, fejlesztendő területek (Museums and challenges – Financial issues, residues, areas for improvement)
[date accessed: 25/09/2022]