Report of the Treasurer and Chair, Budget and Finance Committee

We have endured several challenging years due to COVID, but the Museum has emerged on a strong footing with improved results in FY23. Growth in all audience-related activities indicated a renewed interest in visiting the Museum, fostered by an expansion of public programming, events, and lectures, which helped bring attendance to a four-year high. Overall attendance increased 34 percent from 632,000 in FY22 to 849,000, and membership households increased by 27 percent to 51,000. Visitor amenities experienced growth as well, with increased revenue of 25 percent in parking, 14 percent in food service and 12 percent in retail relative to FY22.

Although Museum attendance of 849,000 trailed our original FY23 budget of 900,000, the MFA completed the fiscal year on a strong note with the exhibition “Hokusai: Influence and Inspiration.” Paid attendance increased over prior years and total audience-driven revenue exceeded budget by $2.6 million. We had 220,025 member visits in FY23, up 36 percent from 162,126 in FY22, accounting for 26 percent of all visitors. Traveling Exhibitions and Intellectual Property revenues also contributed to growth. Total operating revenue exceeded our total budgeted goals by $2 million, while expenses were below budget by approximately $3 million, primarily due to reduced ability to fill open positions in a challenging hiring market. The combination of increased revenue and fewer expenses than expected generated an overall deficit of $1.3 million at the end of the year, $5.5 million below the budgeted deficit of $6.8 million. This better-than-expected deficit was reduced to breakeven by using Bridge, Landing, and Road funds, which have been utilized over the past several fiscal years to eliminate pandemic-related deficits.

Financial markets continued a modest recovery in FY23. A preliminary endowment value of $687 million reflects an increase of $34 million since last year, with a preliminary performance return of 7.4 percent. The rising interest rate environment has resulted in a continued reduction in the liability to unwind the Museum’s $100 million interest rate swap debt. This will continue to be monitored.

During FY23, our Board of Trustees’ restricted endowment increased by approximately $7 million due to receipt of the Earned Retention Credit. However, this has been earmarked to defray the expense of repairing and improving the skylights over much of our collection galleries. This is an important step toward our deferred maintenance projects.

After several years of searching and inspecting many locations to reposition and store our collection, the Museum purchased a new off-site collection center in January 2023. Planning and preparation are underway to maximize the possibilities of this new space. Most importantly, it will to open up some 40,000 square feet of space here at 465 Huntington Avenue for new galleries—a major enhancement for the Museum.

In May, the budget for FY24 was adopted by the full Board of Trustees. The Leadership Team focused on key areas to balance a continued focus on financial sustainability and responsibility with the need to support our staff, programs, and the Museum’s mission in the upcoming year. Key goals of the budget include targeted attendance of 900,000 visitors, increased membership to 61,000 households and a focus on adequate staffing levels to achieve these goals. An important investment in the FY24 budget is to improve our financial technology to enable us to monitor and mine data more quickly and efficiently to adopt more flexible and nimble maneuvers to take important steps to address expense reduction and increased revenue opportunities. The FY24 budget has a planned deficit of $3.4 million.

One year ago, we welcomed Katie Vandenabeele as our new chief financial officer. She arrived facing a very steep learning curve for this organization, which she has mastered. I wish to thank the Budget and Finance Committee as well as the Leadership Team for their ongoing efforts to balance fiscal responsibility with continued growth of the Museum. But in particular I wish to acknowledge and thank Katie and her Finance team for their constant vigilance and focus on moving the Museum forward to fiscal sustainability. Thank you for jobs well done.

Respectfully submitted,

Susan Weatherbie
Treasurer and Chair of the Budget and Finance Committee