When you think of venture philanthropy foundation funders, chances are you don’t imagine art museums as their grantees. Yet, art museums are ideal candidates for venture philanthropy-style grants. They are starved for unrestricted revenue, trying to expand their abilities to earn income, and desperately in need of capacity-building assistance. The effort to understand if and how venture philanthropists might work with art museums was the driving force behind my museum studies master’s thesis—this article, as well as its sister, written for an art museum audience, are the products of my research. One of the major findings of the project was that museums in general, and art museums specifically, are not being considered for venture philanthropy funding. Although foundation representatives interviewed indicated interest in the idea of funding the arts, they had not yet established venture philanthropy-style grant relationships with arts institutions. Rinconada Ventures Foundation (RVF) of San Francisco has considered three proposals from performing arts organizations and individual artists, Executive Director Mark Breimhorst indicated the projects were not sustainable and, therefore, not funded. Social Venture Partners, Seattle (SVP Seattle) chose to focus initially on kindergarten through twelfth grade education and childhood development and have not funded arts organizations. The Peninsula Community Foundation (PCF) in San Jose has granted funds to arts education and individual artists in the past, as well as capital funding for a science museum, and a historical society.

Venture philanthropists have been working mostly in the areas of elementary education and health and human services, which are closer to the activities and aspirations of art museums than they might at first appear. The founders of the first art museums in the United States felt society would benefit from public art museums, which would make American cities "more civilized, sanitary, moral, and peaceful." In other words, if art museums have served the purpose intended by their founders, they have, through educational and curatorial programming, been providing Social Return On Investment (SROI) since their inception. Despite the fact that museums are educational institutions providing respite and inspiration for the human spirit, arts organizations are considered "removed" from the front line of physical health issues venture philanthropists have been working with. However, with the exception of the Arizona Social Venture Partners, whose commitment to these issues is narrowly defined, the foundation staff interviewed for this project recognized that the arts play a significant role in societal and personal health and might therefore be considered for venture philanthropy grants. SVP Seattle has gone as far as taking preliminary steps to add the arts and arts education as a focus area of giving. SVP Seattle’s initiative is significant because it is the model for similar organizations, such as Arizona Social Venture Partners, Austin Social Venture Partners, and other partner groups beginning to form across the nation.

Measuring return, financial or social, should not pose an insurmountable obstacle in establishing a venture philanthropy/art museum relationship. A number of foundation officers interviewed pointed out that it is easier to measure some actions than others, and indicated that they try to make "good grants" whether or not their success or failure will be easy to measure. For example, PCF has a program that helps low-income families to develop savings for the future. Some aspects of the program are easy to quantify, such as the number of families served and the amount of money they save each year. Others are more complex and intangible, such as hope for the future, that the foundation has not yet found a way to measure. Yet PCF’s Executive Director, Sterling Speirn, did not imply that the foundation is uncomfortable with the grant because there are intangibles involved. Museums have also wrestled—and continue to work with—defining, measuring, qualifying and quantifying personal and societal benefits from their services and programs in the arts. An effort to qualify, quantify, and enrich museum experiences has lead to the recent focus on implementing and improving visitor studies and program evaluation. Therefore, it seems that the intangible social benefits of the arts should not dissuade venture philanthropists from funding art museums—rather, the potential partnership will broaden the range of experience and ideas brought to bear on working to discern and understand benefits that art museum experiences bring to individuals and society.

What Venture Philanthropists Need to Know to Foster Good Relationships With Art Museums

As mentioned earlier, although no art museums and venture philanthropy foundations relationships were found so far, foundation officers are open to the idea. Museum development directors expressed in interviews and surveys that they are also interested in establishing working relationships. Hopefully, this project has laid the groundwork for that process to begin. However, as with any potential collaboration, institutional integrity issues must be addressed before launching mutual efforts.

Venture philanthropists, especially those who prefer working at the board level must be aware that museums are deeply concerned about "outside" attempts to influence the public service and trust they hold dear. The recent scandal surrounding the Sensation exhibition at the Brooklyn Museum of Art has brought fear of for-profit or governmental pressure and manipulation to a pinnacle in the museum field. Since this is a particularly sensitive area, the best approach foundation officials can take is to be excruciatingly clear with museums at the outset about how high-engagement philanthropy works so that the museum trustee or staff member understands exactly how the process is designed to function. Developing a work plan, in concert, as practiced by SVP Seattle and its grantees, or using a similar tool to plan with museum staff, will likely make a much more comfortable collaboration. Planning together allows museum staff to participate in designing mutual goals and methods by which to achieve them. Therefore, they will be assured that the project will support their institution, not detract or distract work toward their mission. Knowing which foundation and museum staff members will work together, and developing a work plan/process together will go a long way toward establishing comfortable terms of engagement. Thorough and mutual planning will be imperative to the success of a grant. Venture philanthropy foundation officers should also make sure their museum partners know where there is flexibility and room for re-defining the relationship.

Despite sensitivity to the subject, when asked if venture philanthropy foundation involvement in administrative projects would constitute a threat to ethical museum governance, development staff interviewed indicated it would effectively add another stakeholder to the mix, and as such would not be inappropriate. Foundation officers at SVP Seattle and PCF indicated a preference for working staff to staff rather than at the board level. Furthermore, given the evidence that, so far, the grantees are the ones deciding which organizational capacity-building projects they need help with, nonprofit work with venture philanthropists so far seem ethical and productive. However, foundation staff should make clear to their museum counterparts at the outset of the relationship whether or not their institution feels it is necessary to work at the board level.

On a practical level, seventy-five percent of the museum staff interviewed worried about venture philanthropy taking extra time and effort. Since they have affirmed that venture philanthropy is highly-engaged, foundation officers working with potential museum partners should discuss frankly what will be expected of museum staff so that they can make informed decisions when considering their resources.
Tom Reis, Director of Venture Philanthropy at the W. K. Kellogg Foundation, says the foundation practices a spectrum of philanthropy, ranging from straight charity to venture philanthropy, with room for blending modes in between the two extremes. According to Venture Philanthropy: Landscape and Expectations, which classifies forms of venture philanthropy, the W. K. Kellogg Foundation is a hybrid. The James Irvine Foundation has recently announced the launch of their Innovation Fund, a venture philanthropy effort. They, too, have worked with art museums in more traditional grant arrangements; the Innovation Fund will extend to the foundation’s art focus. Hybrid foundations likely pose the best opportunity for mutually beneficial art museum forays into venture philanthropy, since the two institutions would share common experience with "traditional" styles of philanthropy, and a common interest in learning and experimenting with a new mode.

Social venture funds or organizations expecting a pre-determined mix of both SROI and financial return on investment (FROI) may prove a more difficult liaison. Art museums might be able to provide FROI from earned revenue, however, it is unlikely they would seek such a situation. As with growing for-profit corporations, earned income is traditionally re-invested in a museum. It is important, however, to note that a combination SROI/FROI grant might be desirable to museums in the future. Some art museums are developing for-profit ventures as separate entities joined to the nonprofit. For example, The Museum of Modern Art and The Tate Gallery are creating a website that will sell commissioned design products and educational programs. Revenue from the for-profit internet venture will fund operating expenses for the art museum. It is likely that a venture philanthropy FROI grant could be obtained since it is a capacity-building project that will generate income. Venture philanthropy foundations might be willing to make a grant for planning and starting up the for-profit facet, given a pre-determined amount of return on the loan grant. Mark Breimhorst of RVF indicated that desirable FROI rates fluctuate from project to project and amongst foundations. In some cases, as little as twenty percent of the initial grant could be the expected financial return for the foundation, which might make such a project possible for museums.

Breimhorst also postulated that museums and venture philanthropists might explore capital grant projects, such as a foundation buying or leasing a space for museum occupancy. Considering the large scope of this possible project, to address concerns raised by common business sense, as well as survey respondents, a carefully negotiated contractual agreement is in order.

Based on this project’s survey responses, there are a number of museums that could benefit from professional, experienced help with administrative, capacity-building projects such as strategic planning. Thirty-nine percent of the respondents had two years of experience or less in their current museum development positions, and nineteen percent had museum development careers of two years or less. Of the museums surveyed with approved strategic plans, forty-three percent of the plans were between four and twenty years old, suggesting that these new (or new to their museum) senior development directors could benefit from help with crucial administrative projects. Strategic and financial planning are among the many projects venture philanthropists interviewed indicated that they often help nonprofits perform.

Summary
Museums, and art museums in particular, are excellent potential partners for venture philanthropists. Museum professionals care deeply about the audiences they serve and work hard to provide environments that stimulate, inspire, and educate the public. However, the dual nature of their missions—to objects and to audience—results in few, if any, resources for supportive administration. They are, therefore, deeply in need of the capacity-building administrative help venture philanthropists have to offer. I urge venture philanthropists to consider museums, and art museums in particular, as potential future partners. It is both difficult and wonderful to imagine what might be accomplished if museum leaders had the time and capacity to nurture and support their creative staffs.