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November 6, 2020

Where Does $100 to the Metropolitan Museum of Art Go?

by Anne Paddock

The Metropolitan Museum of Art (MMA) is the largest art museum in the US with two sites in New York City (the Met Fifith Avenue and the Met Cloisters).  Established in 1870, MMA is a tax-exempt, non-profit 501 (c) (3) based in New York City with 46 trustees (44 of whom are independent), although 48 are listed on the Form 990 (2018 for the year ending June 30, 2019) due to timing differences.  34 of the 48 (71%) listed are male while 14 (29%) are female.

For the year ending June 30, 2019, MMA reported the following information:

Total revenue was $515 million (compared to $573 million the year before) with most revenue coming from eight sources:

  • $210 million:  Contributions, Gifts, and Grants
  • $103 million:  Net Gain on Investments
  • $ 91 million:  Non-Cash Contributions primarily publicly traded securities)
  • $ 31 million:  Restaurant
  • $ 29 million:  Membership Dues
  • $ 21 million:  Investment Income
  • $ 17 million:  Other Revenue (including parking and corporate events)
  • $ 13 million:  Government Grants/Contributions

Expenses totaled $443 million (not including $48 million in depreciation) categorized as follows:

  • $198 million (38% of revenue):  Compensation
  • $ 89 million (17% of revenue):  Art Purchases
  • $ 56 million (11% of revenue):  Office-Related Expenses
  • $ 33 million (6% of revenue):  Fees for Services (primarily investment and other fees)
  • $ 31 million (6% of revenue):  Restaurant Supplies, Services, and Catering
  • $ 13 million (3% of revenue):  Interest
  • $  8 million (2% of revenue):  Advertising and Promotion
  • $  6 million (1% of revenue):  Repair and Maintenance
  • $  4 million (1% of revenue):  Travel and Conferences
  • $  3 million (1% of revenue):  Grants
  • $  2 million (less than 1% of revenue):  Other Expenses

As illustrated above, compensation for the 2,564 employees is the largest expense at $198 million which equates to an average compensation of $77,000.  $89 million was spent for art purchases, and $56 million for office-related expenses. Fees for services – primarily investment management and other fees not detailed – were $33 million.  $31 million was spent on restaurant supplies, services, and catering.

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 38:  Compensation

-$ 11:  Office-Related Expenses

-$  6:  Fees for Services

-$  6:  Restaurant Supplies, Service, and Catering

-$  3:  Interest

-$  2:  Advertising and Promotion

-$  1:  Repair and Maintenance

-$  1:  Travel and Conferences

-$ 68: Subtotal:  Compensation, Office, Fees, Restaurant/Catering, Interest, Advertising, Repair, and Travel  

 $  32:  Remaining Revenue

-$ 17:  Art Purchases

-$  1:  Grants

-$ 18:  Subtotal:  Art Purchases and Grants

 $ 14: Remaining Revenue:  To General Fund

As illustrated above, MMA spent $68 out of every $100 on expenses directly related to operating the museum (i.e. staff, office, fees, restaurant supplies and catering, interest, advertising, repair and travel costs) leaving $32.  $17 out of every $100 was spent on art purchases and $1 out of every $100 was spent on grants for a total of $18 out of every $100 for “discretionary” expenses (meaning they could easily be curtailed if need be). Consequently, MMA spent $86 out of every $100, leaving $14 of every $100 to be placed in the general fund.

It is very interesting to note the MMA had $3.7 billion in net assets at year end (which is comprised primarily of publicly traded securities and other securities. However, it is very important to note the value of the museum’s collections has been excluded from the statement of financial conditions. Purchases of art objects by the museum are recorded as decreases in net assets in the statement of activities while sales of art and related insurance settlements are recorded as temporarily restricted net assets for the acquisition of art.

To read the IRS Form 990 (2108) for the year ending June 30, 2019, click here.

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