http://www.dailybreeze.com/news/ci_19151125

Rail museums must strengthen their endowments whenever possible.

Sloan

A few observations from a visit about 7 years ago:

http://www.lomita-rr.org/History.htm

It's a nice little museum, more like a private collection (which it once was) than anything else. To their credit, they have a S.P. 2-6-0, a U.P. wooden cupola caboose, a 1923 Union Oil tank car, and a 1913 boxcar displayed outdoors, in good condition - far better condition than most steam-era equipment displayed outdoors. There are a lot of steam-era artifacts displayed inside.

The museum not near a railroad, not next to any other visitor attraction, not in a high-foot-traffic or high-drive-by-traffic area, and with no obvious large support base. It is next to local soccer & baseball fields.

The museum's "Lomita depot" is a replica of the Boston & Maine Wakefield, Massachusetts depot, so it doesn't have much of a local history connection.

Lomita is a suburb of Los Angeles, surrounded by other suburban cities, so there are an awful lot of attractions nearby competing for the family trade.

- Doug Debs

Agreed.

In this case, if the bequest was an endowment, I wonder why its corpus was apparently depleted. Typically one can use the income from an endowment, but the corpus should not be touched.

Of course, the terms of this one might be different.

In this case, if the bequest was an endowment, I wonder why its corpus was apparently depleted. Typically one can use the income from an endowment, but the corpus should not be touched.

The situation would depend on the terms of the gift from the donor. If the bequest was unrestricted then the board can do as it wishes. If the board designated the bequest as an endowment, then the board can change the designation or eliminate it all together.

Wesley

But a railroad museum has several large capital needs that also have a significant cost impact on the organization. An endowment isn't necessarily the best place to put your capital.

Consider. A healthy endowment, well invested, will yield about 4% a year in perpetuity (that is: not being depleted, and keeping up with inflation. Basically you invest it the way a 19 year old invests his 401K.

Now consider a hypothetical railroad museum. It could have a car-barn and land to build it on -- but it does not. Instead it has a $200,000 endowment, netting $8000/year. But for lack of a car-barn, it suffers $10,000 a year of weather damage. This occupies most of volunteer time, leaving little time for other work... so the place gets shoddy... turning off volunteers, visitors and the community... which increases cash losses, "soft money" losses, and missed opportunities. Most folks here are familiar with this snowball. This is a case where the best endowment a railroad museum can have is a car-barn.

So it's not a surprise to me that very few railroad museums have substantial endowments, and those that do (I'm thinking particularly of WRM), already have everything indoors.

That's true. The wording of the original article suggested that the donor had donated the money as an endowment, which would be very difficult for a board to change.