Detroit art museum wins taxpayer support

The Detroit Institute of Arts avoided a fiscal cliff when voters in three counties approved an tax increase that directly funds the 125-year-old museum.

The stagnant economy has crippled countless nonprofit museums and arts organizations over the last few years. Big donors and foundations can't commit as much cash, and local governments can't justify supporting culture when roads, schools and pensions are on the line.

The Detroit Institute of Arts is joining a small group of museums experimenting with a new way to fundraise. They've asked local taxpayers to chip in. Voters in three Michigan counties passed a tax increase -- known as a millage.

Annmarie Erickson is the executive vice president and chief operating officer of the Detroit Institute of Arts. Erickson says the millage is a very small property tax increase. "A home that has a market value of about $150,000, those individuals will pay about $15 a year for this tax." But that adds up quickly for the museum. She says the millage plan allows the Detroit Institute of Arts to take in $23 million a year for 10 years, and that money will be spent on the museum's operating budget. In return, residents of the participating counties get free admission into the institute.

Reaction to the fundraising campaign overall, Erickson says, was supportive. "We got on the phones, we did literature drops, we posted signs in people's lawns when they said OK. I would say that most people were very supportive of the museum, and even people who didn't really support the idea of an additional tax were supportive of the museum," she says. "And we would obviously try to convert those who were not supporting the tax, but when we couldn't do it, we thanked them, we encouraged them to vote, to express their opinion even though it wasn't an opinion we were in agreement with. But we did want people to vote and to exercise that right."

Tess Vigeland: The stagnant economy has crippled countless nonprofit museums and arts organizations over the last several years. Big donors and foundations can't commit as much cash, and local governments can't justify supporting culture when roads, schools and pensions are on the line.

But the Detroit Institute of Arts is one of a few arts groups experimenting with a different way of fundraising. They've asked local taxpayers to chip in. Voters in three Michigan counties passed a tax increase -- known as a millage -- dedicated to supporting the DIA.

Annmarie Erickson is chief operating officer at the museum and joins us. Thank you for being here.

Annmarie Erickson: Thank you.

Vigeland: So this idea of millage -- explain that for us.

Erickson: It's a very small property tax for homeowners. Here in our area, a home that has a market value of about $150,000, those individuals will pay about $15 a year for this tax. Ultimately though, with all three counties in the mix, it will reap $23 million annually for the Detroit Institute of Arts.

Vigeland: So how did you convince people -- particularly in this day and age -- and folks scattered around metro Detroit, to vote yes on a new tax?

Erickson: We were relentless. We just never let up. And this was an example of people really pulling together from various communities to say this museum is important and we're going to support it.

Vigeland: When you say you were relentless, I read reports that you all just basically got on the phones and started calling up homeowners, voters. What was the reaction like when you did?

Erickson: We got on the phones, we did literature drops, we posted signs in people's lawns when they said OK. I would say that most people were very supportive of the museum, and even people who didn't really support the idea of an additional tax were supportive of the museum. So that was a good place to begin from. And we would obviously try to convert those who were not supporting the tax, but when we couldn't do it, we thanked them, we encouraged them to vote, to express their opinion even though it wasn't an opinion we were in agreement with. But we did want people to vote and to exercise that right.

Vigeland: How will this money be spent by the museum? Is this dedicated for a specific program? Is it part of the operating budget?

Erickson: It's part of the operating budget, and the whole idea is that we will no longer have to fundraise three-quarters of our operating budget, so now our fundraisers can work in endowment. And in return for this investment from the citizens of Wayne, Oakland and MaComb counties, we are offering them free museum admission. That has proven to be incredible popular since the election on Aug. 7. What you'll find with most museums is that admission revenue is a very small percentage of our budget. We are not one of the New York museums that can charge $20 for admission; our admission for an adult is $8. So it's a relatively small part of our operating budget, and the tax will more than make up for that loss. And quite honestly, just having more people in the building is very energizing, and it helps our restaurant revenues and our shop revenues.

Vigeland: How unusual is it to use an additional tax like this, a millage, to fund a community arts organization?

Erickson: It is not completely unusual; there are other museums in the country that use this model. I believe St. Louis uses it and I believe Minneapolis uses it as well. It is not unheard of here in the Detroit area, our zoo is funded in much the same way.

Vigeland: Annmarie Erickson is the executive vice president and COO of the Detroit Institute of Arts. Thank you so much for joining us.

Erickson: Thank you Tess.

About the author

Tess Vigeland is the host of Marketplace Money, where she takes a deep dive into why we do what we do with our money.

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