Invitation to Tender – Operations Models Research – AIM

Research into successful operating models for independent museums and success factors for trusts

Deadline to apply: 12noon Monday 16 December

Introduction 

The Association of Independent Museums (AIM), Arts Council England, and Department for Culture, Media and Sport are seeking a researcher to explore and identify any common themes in the operating models of thriving independent museums – the relationship between their success and for example their sources of income and funding, how they spend their money, and how they approach public investment and commercial activity, and whether there is an optimum approach that could be shared more widely across the sector’s business models. As a subset we are particularly interested in looking at trusts operating former local authority museums (i.e. caring for and using publicly-owned buildings and collections) and the critical success factors for this type of organisation, including governance, legal, and financial factors.

The Association of Independent Museums is a thriving UK museum membership organisation with over 1000 museum members, helping heritage organisations to operate as effective charitable businesses. We represent a wide range from some of the largest attractions in the country to small, grassroots heritage organisations across a huge range of subject areas and localities.

Arts Council England is the national development agency for creativity and culture. We have set out our strategic vision in Let’s Create that by 2030 we want England to be a country in which the creativity of each of us is valued and given the chance to flourish and where everyone of us has access to a remarkable range of high-quality cultural experiences. We invest public money from Government and The National Lottery to help support the sector and to deliver this vision. Click here for the Arts Council website>>

The Department for Culture, Media and Sport (DCMS) supports culture, arts, media, sport, tourism and civil society across every part of England — recognising the UK’s world-leading position in these areas and the importance of these sectors in contributing so much to our economy, way of life and our reputation around the world. The department champions sport for all at every level, supports our world-leading cultural and creative industries, and enhances the cohesiveness of our communities. DCMS is a ministerial department, supported by 42 agencies and public bodies.

Background

The museums sector is in a challenging position as we come towards the end of 2024. Museums – with buildings and collections to care for and make accessible to the public – have always had high fixed costs relative to some other parts of the arts and culture sectors, with limitations on opportunities for income. Added to this, currently many museums are struggling with rising costs and falling incomes in an environment of a cost of living crisis for staff and visitors and yet increasing expectations from a range of stakeholders. For some museums the effects of the Covid-19 pandemic are lingering, with what now appears to be a permanent change in the habits of audiences, particularly tourists, and volunteers stalling recovery.

However, other museums are thriving, with robust audience numbers, decent income, and the ability to do both core museum work around collections and visitor experience and also to invest in buildings, galleries, and programmes. While some of AIM’s data gathering in recent years has suggested slightly more difficulty for medium sized museums (those with high costs but less flexibility to reduce expenditure or increase income), there seems to be no real pattern to which museums manage or do well and which are struggling. Sometimes the museums themselves do not have a clear view on their own circumstances, which adds to the complexity.

Independent trusts running former local authority museums are currently facing particular difficulties. This model includes some of the biggest civic museum trusts and most significant collections in the UK, many of which have been operating for some time after a wave of spin-outs in the 2000s and 2010s. Many trusts have utilised flexibilities from their trust status but remain reliant on grant funding from their original councils, which have been under extraordinary pressure in the last few years.

AIM provides a range of support including written resources, training and development opportunities, and consultancy to members and the wider museums and heritage sectors designed to support museums to develop effective charitable businesses with robust operating models that use the museum’s assets to sustain themselves. This is built on the experiences of people in the sector over decades of running independent museums and is crystallised in our Hallmarks of Prospering Museums, a framework for understanding what makes a good independent museum in the whole. However, we do not have a thorough understanding, especially post-Covid, of what makes for a good independent museum operating model.

Purpose of the research 

The aim of this piece of research is to gain a better understanding of the operating models of independent museums of different sizes and identify what – if anything – sustainable ones have in common, including where there might be specific or different success factors for trusts spun out of local authorities.

This will mean looking at the income and expenditure breakdowns of independent museums and analysing the proportions raised from/spent on different things and identifying the museums that are doing well or commercially viable.

From this we hope the research will be able to draw some conclusions as to how the thriving museums are doing it, and the role of public funding in museums that are doing well and the potential priorities for investment in those that are struggling. The goal is to for museums to be able to examine their own operating models in light of what works for others and for funders and other decision-makers to understand where organisations might have opportunities to become more sustainable. We are also keen to explore the methodologies and information sources that generate useful conclusions in this area, and which could be extended into different parts of the museums or wider culture sectors.

Scope

We want to look at independent museum operating models and understand the range of income sources and expenditure categories and anything the museums doing well have in common, including how governance or legal factors affect success.

For example we are interested in answering questions like:

• What is the relationship between financial viability, strategy and business planning, and leadership e.g. in maintaining relevance and delivering for placemaking?
• What is the relationship between governance and sustainability?
• What are the common income sources for independent museums, by size? What are the common costs?
• Is there a necessary level of core funding (by size or other categorisations) to maintain minimum viable services?
• What is the range of the proportions of the common income sources and costs for museums that are financially sustainable (i.e. regularly breaking even or making a surplus)?
• What is the role of public funding in the operating models of independent museums, including core funding, project funding (restricted and unrestricted), and other support e.g. peppercorn rents of publicly-owned buildings? Are there any impacts of public funding or public ownership (e.g. of collections or buildings) on operations?
• What is the impact of reserves? What is the impact of endowments?
• How do levels of pay and/or volunteering affect the operating models? What is a sustainable level of pay costs? Does training affect success?
• What percentage of their costs do sustainable museums (by size) typically spend on staff, collections, overheads? What do they spend on permanent displays/exhibitions and temporary ones?
• What are the costs and benchmarks of estates management? What is spent on contracts?
• What level of commercial income is needed to run museums of different sizes and what does a ‘normal’ level of income look like for different commercial streams? What is the relationship between visitor numbers and income and between innovation and income?
• Are there legal agreements or other relationships between organisations that affect how independent museums operate (in particular what are the legal arrangements with building/collections owners that affect trusts)?
• Are there types of collections or other distinctions (e.g. urban or rural) that affect operating models?
• What level of activity (e.g. opening hours, programming, capital projects) can be sustained by museums on a typical earned income?
• Is there anything in common of trusts spun out of local authorities that are doing well?
• How can independent museums and trusts futureproof their business models, both through choices at establishment and ongoing operations?

These questions are intended to be indicative rather than final – they are draft questions from non-financial experts and we are keen to appoint a researcher or researchers who can bring the knowledge and understanding to agree the final scope with us.

We would like to see proposed methodologies, including sampling, from researchers as to how these questions would be answered but have considered that it may involve for example looking at accounts filed with the Charities Commission/Companies House (our current expectation is that this would utilise a significant proportion of research days); a survey to AIM members and other independent museums; in-depth interviews or other direct contact with a select number of museums; desk review of legal papers such as leases and contracts. We are keen for a final report that includes both conclusions drawn from across the sector and detailed/specific case studies.

Potential contractors should note that the trusts element is of particular interest and a complete proposal should ensure coverage of the related questions around governance, legal agreements, finance, and operations. We would like to see at least five interviews with trusts.

In developing this project we have been inspired by the work of MyCake https://mycake.org which provides financial benchmarking to charities enabling them to interrogate and improve their operating models based on what is working for other organisations. Researchers may also wish to draw on the findings of research published December 2023 by AIM and partners on admissions policies.

The project will have a small steering group comprising AIM, ACE, DCMS and sector partners, with the potential for emerging findings to be presented to a larger group of stakeholders to help shape the final report. AIM will be the lead contact for day-to-day project management.

Work of the contractor

We are seeking contractors to undertake this research. We anticipate the consultant will have a sound understanding of research methodology and operating models in the culture sector.

The research should result in the following outputs:

• A full research report with executive summary
• A practical guide or toolkit for museums on how to review and improve their operating models
• A summary article for AIM Bulletin
• An online presentation of findings
• An online Hallmarks at Home online – these are typically an hour to an hour and half with up to 15 participants. The workshop should be a combination of presentation of information and an opportunity for discussion and participation.

There may be other opportunities to present e.g. at AIM annual conference which would be discussed and priced separately.

Budget

The budget available for this work is £38,000 inclusive of VAT. We expect to appoint researchers in December and hold a kick-off meeting shortly after, with the work taking up to 4 months and reporting in spring 2025.

Tendering for the research 

Proposals should include:

• Brief credentials and evidence of relevant experience of your company and the names and experience of the people who will work on this project.
• Your proposed methodology
• Indicative timeline
• A breakdown of your costings
• Two references

Proposals will be scored on:

• Understanding of the issues 20%
• The extent to which the methodology will reach the objectives of the project and in particular the requirement for a practical output 50%
• Experience of researchers 20%
• Cost 10%

Proposals should be no longer than 12 pages and be sent to [email protected] by 12pm (noon) on Monday 16 December.

It is possible the project team may seek a short meeting with applicants ahead of making a decision. The full scope, methodology, and research questions will not be finalised until the kick-off meeting.