Report of the Treasurer and Chair, Budget and Finance Committee
I am pleased to report the Museum continued to move in a positive direction in the fiscal year ending June 30, 2024, and generated a better-than-expected operating deficit of $1.6 million, versus a budgeted deficit of $3.4 million. The Museum started strong in FY24, enjoying the continued success of “Hokusai: Influence and Inspiration” and the midyear rave “Fashioned by Sargent.”
All audience-related activities contributed to the robust positive trends seen in FY23. Overall attendance increased by 13 percent, to 971,000 visitors, surpassing the FY24 goal of 900,000 by eight percent. “Hallyu! The Korean Wave” attracted a younger, energetic crowd with increases of 20 percent in our University Membership Program and Institutional Pass Program members last year. Nevertheless, “Hallyu!” member attendance lagged by 57 percent and the overall attendance pace slowed. Visitor amenities, including retail services, food services, and parking all did well this year relative to FY23, and were in line with the overall increase in attendance.
FY24 ended with $10.5 million in total Museum admissions revenue, or $1.2 million above budget. Paid attendance increased by 12 percent over last year and is currently 37 percent higher than the pre-pandemic historical average. The Museum’s total audience-driven revenue of $33.9 million exceeded budget by $2.5 million. The MFA welcomed 238,000 member visits in FY24, accounting for 25 percent of all visitors, up eight percent from 220,000 visits in FY23. Traveling Exhibitions and Intellectual Property revenues also contributed to growth. A total operating revenue of $91.3 million exceeded our total budgeted goals by $3.98 million, while operating expenses exceeded budget by approximately $2 million.
Capital efforts and investment took a favorable step forward on several fronts in FY24. Strong fundraising and planning is underway for the new off-site collections center; the Museum received a gift of $21.5 million to reopen and reinstall several gallery spaces for 20th-century art; and we recently implemented a new financial system for the first time in many years.
The Museum’s overall assets remain sturdy, led by the endowment. Financial markets had a volatile start in FY24 but recovered with positive momentum through the remainder of the fiscal year. A preliminary endowment of $738 million reflects an increase of $51 million from last year. This preliminary performance return of 9.9 percent is well above our budgeted long-term endowment return target of six percent. The investment committee, which Lila Hunnewell capably leads, continues to manage the endowment with its long-term strategic goal of maintaining a diversified portfolio with a blend of value and growth investments. The annual endowment distribution rate remains level at five percent of the 12-quarter average value, which reflects an appropriate balance of support for current operations and longevity for future Museum support.
In May, upon recommendation of the Budget and Finance Committee, the full Board of Trustees adopted the FY25 budget, with a projected operating deficit of $1.3 million. The Leadership Team continues to focus on improved financial sustainability and responsibility, while balancing the needs of our staff, programs, and visitors in the upcoming year. A key goal of this budget includes a targeted attendance of one million visitors, propelled by strong upcoming exhibitions, as well as modern and contemporary projects, including the “Huntington Avenue Entrance Commission,” which supports the creation of two monumental sculptural works for the plinths outside the Museum’s historic facade. As attendance and visitor programs continue to rebound, the Museum remains mindful of increasing expense pressures and challenges and needs to execute key strategic initiatives and priorities thoughtfully.
I wish to thank the Budget and Finance Committee and the Leadership Team for their continued commitment to work toward financial sustainability and to balance that need with continued Museum growth. In particular I wish to acknowledge and thank Katie Vandenabeele, our chief financial officer, and the Finance department. I am grateful for their constant efforts to move the Museum toward fiscal sustainability and for the courage they showed to install a new and challenging financial system, which will produce the information and data we need to better inform our decisions as we move the Museum into a stronger financial position.
Respectfully submitted,
Susan Weatherbie
Treasurer and Chair of the Budget and Finance Committee