Slow to recover from COVID-19, Minnesota's cultural institutions seek boost in state funding

From the Science Museum to the Minnesota Historical Society, the state's largest cultural institutions are seeking boosts in state funding as they slowly rebuild from revenue losses suffered during the COVID-19 pandemic.

As restaurants, movie theaters and some arts organizations try to rebound, recovery for cultural organizations here and nationwide is lagging behind due to rising costs, slumping donations and sluggish admissions.

"It's still a big challenge," Science Museum CEO Alison Rempel Brown said. "It's just not sustainable for an organization."

Unlike most nonprofits, many of the struggling cultural institutions receive significant state funding because they operate programs or draw visitors from across Minnesota.

The Minnesota Historical Society, which relies on state funding for about two-thirds of its revenue, will receive $23 million from the state this year. For next year, it has asked the Legislature for an additional $1.5 million and $2.5 million more for every year after that, arguing that state funding — which has risen annually by less than 1% in recent years — hasn't kept pace with inflation.

"Just to keep up, we need this funding," said David Kelliher, director of public policy and government relations at the Historical Society. "It's important that the state funds the work that we do and other history organizations ... so that all Minnesotans can learn about our past."

The Science Museum typically gets about $1 million a year from the state, amounting to about 5% of its revenue. But it hasn't seen an increase in its state appropriation in 10 years. This year, the museum has requested $3 million in Legacy Amendment and general funds.

Science Museum officials also hope to persuade legislators to tap the state's historic surplus for a one-time payment of $12.3 million to pay off the debt for its sprawling 1999 facility on the Mississippi River bluffs in downtown St. Paul. As with the proposal to pay off the publicly financed part of U.S. Bank Stadium's debt, Brown said, the state should step in to help the Science Museum and free up about $1.5 million a year for operations and other expenses.

"It gets the debt off our balance sheet," she said. "That's a significant annual cost that we've been funding through our operations."

Gov. Tim Walz included the Historical Society's requested increase in his proposed budget, as well as $12 million for projects preserving and restoring some of its 150 buildings across the state. His budget recommends raising the Science Museum's general appropriation to $1.2 million in 2024, about $1 million less than what it has asked for.

Walz's budget also includes additional funding for the Minnesota Zoo: $2.8 million more next year and $3.9 million more each year thereafter, along with a one-time appropriation of $850,000 for security system upgrades. The Apple Valley zoo, which gets a third of its operating revenue from the state, also seeks $18 million in bonding for projects.

Director John Frawley told legislators in February that the zoo is still rebuilding memberships and staffing after losing a third of its employees during the pandemic.

"It has taken us a lot longer to recover than anticipated," he said. "There are pockets around the zoo that are still lagging, and we're still working to build back to pre-COVID type levels."

The Minnesota Children's Museum in St. Paul is seeking an annual increase of $380,000 in state funding to help develop new exhibits and activities, boost outreach and partly cover the cost of providing free and discounted admission to lower-income families.

Across the nonprofit sector, COVID hit museums particularly hard. More than 90% of museums worldwide closed their doors for weeks, and according to the American Alliance of Museums, will take years to fully recover.

Closures at the beginning of the pandemic cost the Historical Society $3 million, leading to furloughs of roughly half its workforce and layoffs of more than 200 employees. The Science Museum lost about $15 million and laid off nearly 40% of its workers.

Federal pandemic aid helped stave off even worse outcomes: The Science Museum received $14 million from the American Rescue Plan Act and Paycheck Protection Program. The Historical Society received $800,000 last year, and officials said it expects to get $3.5 million this fiscal year under the Employee Retention Credit program.

That federal relief has largely ended, but the number of Science Museum visitors is still down by 32% from 2019 and total revenue has slipped by $10 million. Donations have dropped by a third.

Last summer, the museum took the unprecedented step of drawing $3 million from its $50 million endowment to balance its budget. It also raised the pay of some employees by an average of 4.5% to help vie for workers in the current competitive job market.

"We know we'll have to do more," Brown said, adding that the organization has completed a compensation and benefits study.

In the wake of the COVID-related furloughs and layoffs, employees at the Science Museum and Historical Society unionized for the first time in pursuit of pay raises and a voice in workplace decisions — moves that reflected the broader national trend of unions forming at museums and nonprofits.

At the Science Museum, Brown said more staffing reductions are possible as officials struggle to balance the budget. She said the pandemic will lead to a permanently smaller workforce at the museum.

The museum stands about 30% below pre-pandemic staffing levels. The Historical Society has slowly rebuilt its staffing and is about 12% below 2019 staffing levels, while the Children's Museum has lost nearly a third of its staff.

Museums aren't just making pitches to policymakers for financial help: They also hope to increase public support. A coalition of more than 100 museums, theaters and other cultural organizations is slated to launch a marketing campaign soon to encourage Minnesotans to support cultural nonprofits.

Brown said she hopes to draw visitors back to the Science Museum by offering new programs, including year-round outdoor experiences at its riverfront site. People often associate the museum with children's activities despite its efforts to attract more adults, she said. During the pandemic, Brown said, people of all ages flocked to parks and outdoor attractions instead of indoor museums.

"The pandemic trained people to stay home," she said. "We need to remind people what a great time they have going out to cultural organizations, including the Science Museum. The million-dollar question is: Have we permanently trained people to stay at home?"