We are about to receive a low six figure bequest of stock. Again, as with Thomas windfalls, the line is forming for those intent on advancing their causes with the money. (Luckily, our organization reasons rather than rants over these opportunities.) In this instance your feedback may be helpful. What would you do with the money given that: most of the diesel and steam maintenance and repair occurs outside, a significant part of our collection is not housed, we need a crown sheet replaced, we have a $300,000 land loan, insurance next year will approach $100,000, we need better visitor amenities (restrooms/snackbar) among other things?

wyld@sbcglobal.net

Not enough data. (You foolishly assume I remember which museum/operation you work for.)

Is there income from the gate or train rides? What are your expenses? How long-term is the land loan?

If I have only this much to go on, I would recommend investing the money in the best way to reduce overall operating expenditures long term. As an example, pay part of the land loan down, then commit money to whatever will keep bringing people back (does traffic drop if you don't use steam? can you use better visitor facilities? maybe a paint job on the frontline displays?)

lner4472@bcpl.net

> Not enough data. (You foolishly assume I
> remember which museum/operation you work
> for.)

> I concur. What is the interest rate on the land loan? Of course, even without knowing the rate..

Since you are a non-profit, you don't get a deduction for interest, and given what depository products are paying now, its almost a guarantee that you will get better bang for your buck by paying off (a portion) of the loan. Not to mention that its one less bill to pay if things get tight

Superheater@rrmail.com

> Is the bequest restricted by the donor? If not,consult a CPA or tax attorney about issues of selling the stock. There's a lot of crazy rules involving taxes and corporations holding stock. I don't work with it, but I know its worth talking to a pro.

Superheater@rrmail.com

In general terms, my first inclination would be to invest in those things which will provide the best return, whether that be expanding the market to increase income or reducing expense items which syphon off the existing income from a fully exploited market.

Only your insights can provide the answers. If steam doesn't run will it cost more in lost revenues than the cost of the new crown sheet and other repairs? Will more visitor amenities result in more visitors or in more income from each visitor? Is your market fully developed now or are there segments of potential visitation you are not exploiting? Is there a particular program you could offer that will dramatically increase income from either visitation or ancillary sources?

I agree with Superheater that return from investment is about the least useful purpose right now since the rates are low and the cost of money isn't high either. It could cost less to refinance the land loan at today's rate than to use these funds to pay it off.

Most of us would like to have this problem to solve.

Dave

>(You foolishly assume I remember which >museum/operation you work for.)

I really didn't assume anything and intentionally provided sketchy details so people could espouse an assumed scenario and then list the pros & cons of any recommendations. I hope that's ok.

wyld@sbcglobal.net

I would hope your group has a general plan. If not, I would suggest you write one, Now, before you spend the money

The plan should explain what the group is about, where you are, and where you want to be, and what you need to do to get there, and what the project priorities are.

From the plan will come decent, if not always the best answers.

Randy Hees


http://spcrr.org
hees@ix.netcom.com

Randy,
You make a great point. We are a mature museum with a mission, collections policy, site plan and the like. Our dilemma is that all competing ideas have merit. It is given that we would never use a bequest for anything but a capital expenditure. We will find other ways to fund operations. I didn't want to start with this info as I wanted unhindered feedback even on the merits of spending on operations and maintenance

wyld@sbcglobal.net

You may want to talk to the people at the Bay Area Electric Railway Museum at Rio Vista They have been very successful at fund raising, and as a result have good experience at spending money.

Over the last 10 years they have built a visitor center with an archive, a book store, wonderful restrooms, and a café, have funded car restoration, have extended their railroad, and are working towards a third carhouse which will house most of the rolling stock, still outside. They seem to be pretty good at balancing the efforts over many projects, making progress on all.

Randy Hees
> Randy,
> You make a great point. We are a mature
> museum with a mission, collections policy,
> site plan and the like. Our dilemma is that
> all competing ideas have merit. It is given
> that we would never use a bequest for
> anything but a capital expenditure. We will
> find other ways to fund operations. I didn't
> want to start with this info as I wanted
> unhindered feedback even on the merits of
> spending on operations and maintenance


http://spcrr.org
hees@ix.netcom.com

Assuming you have a mature museum operation that takes proper advantage of business plans and professional financial managers ...

Does your Museum have an endowment?

A well-managed endowment will give your museum a reliable revenue stream and help you attract other in-kind donations - thus increasing your endowment and your annual revenue stream. It will also help you supplement tickets, food sales and gift revenue.

An endowment is the gift that keeps on giving.

Just a thought.

Best Regards,
Glenn


christensenge@yahoo.com

> Assuming you have a mature museum operation
> that takes proper advantage of business
> plans and professional financial managers
> ...

> Does your Museum have an endowment?

> A well-managed endowment will give your
> museum a reliable revenue stream and help
> you attract other in-kind donations - thus
> increasing your endowment and your annual
> revenue stream. It will also help you
> supplement tickets, food sales and gift
> revenue.

> An endowment is the gift that keeps on
> giving.

> Just a thought.

> Best Regards,
> Glenn

Get the equipment (and your volunteer workers) under cover. It preserves what you have, preserves future restorations, and encourages more work if the volunteers don't have to deal with sun, rain, mud, etc. It doesn't have to be fancy (we like pole barns at IRM, about $6.50/sq.ft.).


Kevinmccabe@avenew.com

> Get the equipment (and your volunteer
> workers) under cover. It preserves what you
> have, preserves future restorations, and
> encourages more work if the volunteers don't
> have to deal with sun, rain, mud, etc. It
> doesn't have to be fancy (we like pole barns
> at IRM, about $6.50/sq.ft.).

I wholeheartedly concur. There is NO substitute for indoor storage; it reduces deterioration to almost nothing. If you have anything you eventually plan to restore sitting outside, the sooner it gets inside the better. Especially with interest rates as low as they are, there's no better investment.

> I wholeheartedly concur. There is NO
> substitute for indoor storage; it reduces
> deterioration to almost nothing. If you have
> anything you eventually plan to restore
> sitting outside, the sooner it gets inside
> the better. Especially with interest rates
> as low as they are, there's no better
> investment.

AMEN to that

As a general principle spend your money where it makes you the most money ... endowments at a coupla %, questionable ... increase ridership, great unknown ... pay off some of the land debt, nothing like a free and clear title ... indoor storage ... worth its weight in gold as a great money saver both on restored and stored equipment !!!

lamontdc@adelphia.net

> Does your Museum have an endowment?

> A well-managed endowment will give your
> museum a reliable revenue stream and help
> you attract other in-kind donations - thus
> increasing your endowment and your annual
> revenue stream. It will also help you
> supplement tickets, food sales and gift
> revenue.

> An endowment is the gift that keeps on
> giving.

> Just a thought.

> Best Regards,
> Glenn

Amen. Of course I'm biased, as part of the reason I have a job is because someone had the foresight at our facility to fund an endowment. If you don't have that, or its not very high, I would suggest the endowment route first.

Next, I would look at getting your collection (if possible) under cover. Very few grants allow you to spend on "bricks and mortar", and so this would be an excellent opportunity to do so. To me, this is a "pay me now or pay me later" principle; if you only have to pay to paint or restore a piece once, it will save you in the long run.
Now, having said this, exactly half of our collection is under cover (we have two pieces); the other is constantly looked over for maintenance, with a strict schedule: Paint every two years, check for caulking and sealing every 4 months, etc. So my third suggestion? Fund a continuing maintenance program with VERY detailed descriptions of what has to be done, timed (at the very least) every quarter.

My two cents!

TJG


Port Huron Museum

tjgaffney@phmuseum.org

A lot of what I will say has been said above, so I will only enumerate.

1. BEFORE YOU DO ANYTHING, HAVE A PLAN. There is no easier way to p--- way money than to have a huge pot of it sitting there and everyone clammering to spend it all. Do not do that. Think deeply about your hopes and dreams, your problems and potentials, write them down, talk them over with everyone from the president, the board, the rank and rile, the janitor and the cat, your peers, your friends, your enemies and then think about them some more and write down a plan for what you will do with this.

2. Think about an endowment. There is nothing like a steady stream of income, especially in poor times. Right now there are only a handful of railway museums with an endowment. Be one of them. These are the guys who will be around a long time after the bunch who just sold a 10-6 sleeper for $25k and went out and bought that backhoe they "just had to have."

3. (this is part of No 1) Think about what will be the greatest bang for the buck for your visitors, volunteers and staff (in that order).

4. A roof over your head is a great idea.

5. Make sure you're following your mission statement.

6. Plan and act long term. That is really all there is. Short term thinking yields short term results.

http://nctrans.org
Wrinnbo@aol.com