http://www.gwinnettforum.com/

Scroll down to read the press release. This is a landmark event in the history of both the Atlanta Chapter, NRHS, and that of the Southeastern Railway Museum.

Andrew Durden
Operations Manager
Southeastern Railway Museum

"There's a place in the Atlanta area, too, for schizophrenics?" Interesting strategy.....but oddly appropriate.

Seriously, scrolled down and found it.

What can NRHS as contract manager bring to the museum that the museum couldn't find for itself? Not criticizing, just interested in the story behind the story. Most NRHS chapters seem to be in the decline rather than poised for innovation these days as we old guys die off.

dave

Dave,

Read the article again. The NRHS is the owner, not the contractor. The new museum Board of Trustees is made up of professionals from outside the chapter.

Andrew

The concept for a board of trustees was first presented to the chapter circa 99-00 by Lisa Campbell and Malcolm Campbell. They were the management team which brought the museum to the new site, acquired TEA grants which paid for the initial work necessary for move on building #1 (main exhibit hall).

When proposed, the idea of an advisory board/board of trustees was met with great opposition as most did not want to "give up control" even though it meant giving up a relationship with the Woodruff foundation (now the Robert W. Woodruff). The foundation could not provide funding towards the museum with a board such as it existed and Mrs. Campbell tried to establish an appropriate board but with no success.....loosing out on several million dollars.

It is great to see that her idea, her vision was not forgotten. It just took some 11-12 years to come to fruition, I applaud all those who kept it alive and carried it through to completion. In fact, has it perhaps been expanded upon and improved? What are the benefits of setting up the operation in a manner such as you have? Negating on going politics as are associated with many if not most not for profits?

Greatly interested and do hope you can provide education to us all!

Cheers, Jason

Actually, what this museum is doing is not an outlier.

At one time the NRHS National bylaws required chapters establishing museums to incorporate the museum separately from the chapter.

Sadly, there are some people who do not understand the fact this is a standard business procedure and is often used in the for profit world -- for example a retail store might be incorporated separately from the company that owned then building it used, even though both were owned by the same group of people.

Bob H

It's true, people don't get it, but business structures kinda have a bad name from how they are sometimes misused. Generally, corporations and LLCs encourage projects by allowing investors to limit their risk to only what they consent to. In short: The purpose of a corporation is asset protection.

So that you risk only what you choose to risk. Whether you're an investor or a lender.

In your case, the store is separate so that if the store goes bankrupt, you won't also lose the building. Thinking about these "if's" is what most people generally do not do, hence, the value of these structures is lost on most (until the day they really need it, then it's either "oh snap" or "wow, it's magic".)

I've been setting up these types of structures at SMRS, and they have a lot of people scratching their heads. Some even foist conspiracy theories. It's not that.

Take two or more such corporate structures and the power really amplifies due to the ability to write contracts between them, which can deter takeover artists and creditors. A takeover artist wants to take the railroad to scrap it - oh wait - they have a 20 year renewable agreement with the Museum to run trains on it, and the railroad can't back out without a painful exit clause. Suddenly it's not much use to the scrap guy :)

This story raises some interesting questions, and I'd love to hear more.

I have long been of the opinion that our museums need to pay much more attention to the practices of successful nonprofits. I see organizations in other fields winning grants and growing the ranks of their supporters while a lot of our institutions worry about aging volunteers and earning enough money from ticket sales to "keep the lights on." In response, I have said that we probably need to adopt professional management to survive and thrive in a future where there is no one remembers steam or private passenger trains.

Most of our museums have been built entirely by volunteers over the course of decades, and they typically have a somewhat democratic (and often messy) system of governance. These people are the passionate and tireless supporters that have been central to the successes of our movement. A very large number of these people have been motivated by their personal sense of nostalgia to work on things they remember from their youth. Needless to say, these people are our museum's stakeholders, but while they have done amazing work in saving, restoring, and maintaining rail equipment, very few of them have taken classes in nonprofit management, museum studies, education, or any of the other fields of study that folks in the "professionally managed" museums have degrees in. This latter group has literally studied how to attract visitors and grants and we are competing against them.

So, if as I feel, professionalization is necessary to attract a new generation of donors and volunteers, how can we transition to this model while maintaining the support and enthusiasm of our current volunteers and leaders? How many of our museums have successfully brought in a professional Executive Director? How about a Curator or an Educator? How about a Board of "outsider" Directors or a Board of Trustees?

There seem to be a number of horror stories about hiring professionals of various forms that have driven off volunteers or instituted detrimental changes. I am certain a lot of the active members of the groups I belong to would feel VERY threatened by bringing in any "outsiders" to "run" things, yet I think most of our groups could benefit from this if it was done well.

I'd love to see a study of exactly this topic. Which case studies would you pick? If only there was some sort of national organization concerned about our future...

Step 1. Build museum with mission - become successful at mission.
Step 2. Volunteers find some "crazy money" grant.
Step 3. Grant requires hiring certain paid staff.
Step 4. Staff treats volunteers like subordinates, considers them unreliable, then elbows them out of essential functions.
Step 5. Crazy money runs out. Cannot afford paid staff and also continue museum's mission.
Step 6. Paid staff are "essential" now, Board are scared to fire them. Mission is thrown under the bus.

Usually this happens so slowly that insiders don't notice. Like the frog in the cookpot. The situation develops in phases, so the full arc is not seen. Certainly the board does not intentionally plot a course to step 6. Unfortunately once things are fairly far along, it would take unbelievable courage and vision to reverse the process, and that is beyond the character of most Boards. Firing people is hard, and by the time it comes down to "mission vs staff", the staff is considered "family". Too bad the mission is not.

Before you, or anyone start thinking of restructuring your corporate organization of your non-profit, I'd suggest you contact competent legal and tax counsel. Simply setting up different corporate entities isn't the "magic bullet" Mr. MacDowell says they are. Subsidiary corporations have to be adequately capitalized, have enough "separation" from the parents, etc. in order to be considered separate and distinct corporate entities by courts. Otherwise, you risk a court finding that the subsidiary corporation was an "alter ego" of the parent, and you will not be able to partake in the alleged "magic" such protection allegedly offers. In other words, if you do not adequately capitalize the gift shop, the museum may end up being liable, and all of that alleged "magic" simply goes away.

Making sure your organization's corporate structure is set up correctly is important, as it is also important if you wish to maintain your tax exempt status with the federal and your state government. However, know what you are doing beforehand, and the pros and cons.

Of course, you should never take legal advice from the internet, either from me or someone else. See someone who does this for a living and knows that they are doing.

Thanks Andrew - i got called out on a radio call in the middle and missed a big chunk of the article in my first read. Makes a lot more sense now.

Pros are one thing; and hiring the right ones critical, and also perhaps not as permanent employees but for a set time or to accomplish set goals. Not all relationships between memberships and hired staff are disfunctional, or at least no more so than between different factions of volunteers. That isn't really relevant to Andrew's post.

There's also a critical difference between forming official relationships between "movers and shakers" who can make rain in your sphere of influence and hired daily management staff. If you are governed by popular volunteers who have no connections in the business and political power structures to exploit, you are limited in terms of your ability to gain meaningful support for larger projects. Those guys want to see good business management practices in place.........if for no other reason than to prevent them from embarrassment. So, you either have dedicated volunteers of that calibre in those positions, or you hire what you lack.

Don't be scared of sophisticated structures that are proven to work in large and successful nonprofits just because they weren't invented at your place or you don't understand them. Learn how they work and make them work for you.

dave

My concern is the the "tried and true" approach to museum management developed over the years by the traditional professionally managed museums doesn't work anymore. I think all museums (except maybe the top art museums) are seeing their attendance, as well as ther support from both public and private donors erode year after year. Times have changed permanently. The old business models have failed for all museums, not just volunteer railroad museums, and they are all busy trying to find a model that allows them to survive.

History has shown that in such times, the innovative ideas and approaches often do not come from those trained in the business, but from "out of the box" thinking by outsiders. This might be a good time to be outside the establishment.