Here's a little philosophical query for the experts here. The situation described below is fictional, but based on a true story:

AB&C RR Museum acquires, through donation from a private owner, a passenger car. Said passenger car is absolutely, positively part of the museum's mission and fills a gap, but has been modified for more modern operation--roller bearings, a few internal changes, etc.--and was in the middle of an upgrade to Amtrak standards when donated, so it's not a "time capsule."

Another group, that used to own/operate this passenger car back in the days when main line excursions and club-owned cars weren't a fantasy, inquires about making a donation--not token, but serious--to the AB&C towards completion of this car to operability, if not Amtrak standards. Said car could then be used for museum shuttle/excursion duty, or in an extreme case leased out to produce revenue that would cover the car's eventual complete restoration.

AB&C head says, "Well, we'd prefer a donation to the general restoration fund."
Group: "But we have a history with this car, and this is what we want to see running."
AB&C: "Well, our top priority right now is [the steam locomotive]."
Group: "Do you even have a slot for it in the restoration timetable?"
AB&C: "Well, when funds become available and other priorities are attended to first...."
Group: "Well, call us if you ever fix it."

Now, this kind of bugs me both ways.

On the one hand, I believe a museum, or any such institution, has to stick to some kind of principles and mission statement, and that someone can't figuratively "buy" preferential treatment. On the other hand, this museum has basically turned aside--for now, at least--what could have been a sizable donation towards a car's restoration, and had better hope the sympathy for the car is still there a generation of new administration later.

I see some similar sleight of hand occurring at places here in my town like the National Aquarium in Baltimore and the Maryland Zoo. Both, as I recall, run programs to "adopt an animal" and used to tie donations directly to specific animals and their annual expenses. This gets to be something of a problem when half of the visitors want to "adopt" the lions, elephants, ostriches, or porpoises, leaving nobody adopting the naked mole rat, kookaburra, Stanley cranes, fruit bats, or jellyfish. Nowadays, it's generally acknowledged that the donations are, much like PBS pledge drive donations, put straight into the general fund and that the tie to your chosen animal is strictly symbolic. (Though, according to the zoo/aquarium people to whom I speak, if you seriously want to really sponsor a specific animal's real costs, there are ways to arrange that as well, possibly with corporate sponsorship.)

Thoughts? Looking a gift horse in the mouth, or serious museum administration?

The giver and museum have to negotiate commitments for preservation planning. That's why accepting an artifact is not just an automatic. "Not a time capsule" isn't necessarily a problem; things can be backdated but I for one would not backdate roller bearings :)

If your museum takes money for a restricted fund, you better keep it in the restricted fund. If they allude that it's for tigers, then it damn better well be. I'm not an accountant but I believe that's the law for nonprofits. No hankypanky with restricted funds. I would expect that in a zoo, few of the donations would be restricted... they could do like states do with "lottery money for schools" and if the tiger gets $1000 of donations, then it gets $1000 less general fund support.

Next, what about accepting donations into a restricted fund when that project is bottom of the priority list? I guess you just have to be honest with donors about your priorities. Should large donors be able to change the priorities of a museum? Maybe. That's negotiable :)

The ultimate negotiation, on the donor's part, is to don grubby clothes and show up at the museum with tools in hand. The smart museum won't say no to this. This works really well, for several reasons:

- Free labor. Hey!
- It builds mutual loyalty, volunteer and museum.
- The volunteer is on campus in case an emergency comes up.
- The museum gets to claim the accomplishment.

Sandy,

Good question, but in this case the devil is in the details, so the scenario could easily fall either way based on the unseen or unstated...

A museum can't auction off its planning and priorities process, but there is a political side to museum planning, keeping the greatest number of donors with the greatest number of dollars flowing into your programs...

A couple of thoughts...
1) Not accepting a donation makes a (usually positive) statement about goal setting and commitment
2) In some cases partnerships are possible, but only if both groups can agree on a common agenda and process to move forward.
3) Blindly locking on to a single project, to the determent of all others can and does happen...

This is a terribly difficult problem. Even if the museum agrees that the restoration should be done, there are limits. I volunteer at a museum where the shop has space for four pieces of equipment. Two slots are used for long-term (several years) restorations. One slot is occupied by a short term restoration project and the fourth slot is used for repairs and servicing of operating equipment. All of our work is done by volunteers, most of whom (myself excluded) are very skilled craftsmen. If somebody would come to us with funding to complete yet another project, even a project that is third in line on the Board's priority list, we wouldn't be able to do it, at least not right now. What we need is for members to help us complete the existing projects (and perhaps the high priority project that is scheduled to come after one of the existing projects) so that we would have the space and volunteers to work on the new project. We need to be as honest as possible with potential donors about what we can and cannot do, including what the Board's restoration priorities are. I am glad that my museum respects not only its legal commitment, but its moral commitment to donors of restricted funds.

This situation can be addressed if the Museum has three things:

1. Collections policy
2. Gift policy
3. Strategic plan

The combination of these three tools rovides a strong foundation for evaluating offers such as the one posed in Sandy's case study.

From experience, my employer, a non-profit, has just cleaned up a lengthy list of miscellaneous small reserve funds that were given by well-intentioned donors. We were able to transfer the funds to other projects.

A second experience from our church relates to memorial gifts. The trustees and finance committee maintain a short list of suggested/approved memorial funds. The pastor relies on this list to guide family decisions for designating gifts in lieu of flowers. The few selections are balanced to cover a variety of interests (music, education, sanctuary furnishings, etc.). The process has worked well for us and enabled the church to complete several smaller projects, and refresh the list with new ones.

Wesley

I used to be associated with a museum (one of several in a long career) that took money from a national foundation and did not put the money where it was supposed to go. When the foundation foundation found out ( and they do) the said you do not get one red cent from us for 10 years!

Yes indeed, a museum has to take restricted funds seriously, or there will be Hell to Pay!

Restricted funds can and do make changes in museum programing. A donar gave something like $200, 000 to the Colorado Railroad Museum to restore the RGS #20 for operation. The locomotive has been on static display for many years, but that donation sure did make a difference in their future plans!

Another form of festricted funds is sponsorship of say a street car. Seashore Trolley museum has used this system for years. Town House Shop time is allocated to the cars whose sponsors have either places or found money to put into their individual car funds.

Various museum have done what works for them; mostly you have to tell your donors what you are going to do and stick to it!

Ted Miles

There are two FASB standards that come into play here, 116 and 117 and effect all non profit organizations, not just museums..

In plain English, these standards require that restricted funds only be used for the intended purpose, and if not used carried on the books as a restricted asset, and reported to IRS on the organization's 990.

For example, NRHS accepts and uses restricted donations for several projects including its historic preservation grants program and Teen RailCamp project.

Bob H