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Improvements at museum should attract more paying customers

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Though the pursuit of artistic excellence is their overall calling, operators of nonprofit museums like the High Museum of Art must be as astute at business operations as they are at eyeing a Degas or Wyeth.

And like corporate America, High executives know that making money and growing means spending money.

The cost of the art museum's $124 million, 177,000-square-foot addition will outlast construction.

Spending on everything from heating and cooling to marketing will jump once the enlarged museum opens Nov. 12.

Yet the enhancements are expected to be revenue-generators, too, as new members are lured by a bigger, better High. The museum hopes to increase revenue by 24 percent this fiscal year.

In fact, metro Atlanta's flagship gallery expects to draw so many members that contributions from the Woodruff Arts Center --- the largest single contributor to the museum --- will make up just 14 percent of the High's $22.6 million budget for fiscal 2006, the 12 months that started Aug. 1.

That makes the museum less dependent on the Woodruff than it has been in at least five years. As the city's premier arts foundation, the Woodruff also contributes to the Atlanta Symphony Orchestra, the Alliance Theater, the Atlanta College of Art and Young Audiences, which trains artists for in-school productions.

About a fifth of the High's current budget --- 19 percent --- comes from annual membership fees. The High has 35,000 members and hopes to increase that to more than 50,000 by December 2006.

"They are our bread and butter," said Rhonda Matheison, the High's director of finance and operations. "That's a big part of our [financial] pie."

The High also makes a considerable amount from ticket sales --- an estimated $3.1 million in 2006 --- and sales at its museum shop, Matheison said. Those proceeds plus membership fees will make up 43 percent of the museum's revenue this year, according to budget estimates.

It's essential to add to that revenue as the museum's costs go up, Matheison said.

"The major growth will be in facilities (operating) expenses, especially in utilities, which will more than double," she said, adding that the High also will increase staff, including for security and housekeeping. It even will have to hire more workers to hang its artwork.

For the past five years, the High has brought in more money than it spent, Matheison said. Revenue in 2004 --- the most recent year for which audited numbers are available --- was $15.9 million against expenses of $13.6 million.

The extra funds are put in a fund balance --- a rainy day fund of sorts worth $1.5 million in September --- and an enhancement fund, which is used mostly for acquisitions and stood at $1.9 million in September, Matheison said.

How much the High will be able to sock away next year will depend on whether its revenues increase along with its costs, as museum leaders hope.

The High plans to reach potential customers through advertising, direct mail and telemarketing, the latter aimed at visitors who express an interest in returning to the museum.

"We expect to grow [revenue] 24 percent this year," Matheison said. "For that to happen, we have to communicate efficiently with our members and those who are considering joining the museum."

Copyright 2005 The Atlanta Journal-Constitution

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