Facing down a financial crisis

Historical society's new chief had to make difficult decisions in a hurry


W. Eric Emerson had been director of the Maryland Historical Society less than a month when he found himself facing a looming disaster.

Emerson, who arrived on the job July 1, had been taking a hard look at the $1.2 million budget deficit reported in the society's most recent financial statement, from May, and realized that he was facing a sea of red ink.

"I had never seen anything like it," says Emerson, who came to Baltimore after four years as head of the South Carolina Historical Society. "Every year I was director there, we ended up in the black."

To Emerson, the solution to the deficit problem seemed clear but painful: slash jobs, consolidate departments and scale back plans for big future exhibitions until financing could be found.

It was the only way, he concluded, to save an institution that had experienced a decade of dizzying growth - including a $30 million renovation of its West Monument Street campus; a takeover of the old City Life Museum collections, as well as two satellite museums on Civil War and maritime history; and ambitious exhibition and education programs - while revenues had remained essentially flat.

But having accepted the need for drastic change, Emerson said, he still worried about the impact on the institution and its employees. He was particularly concerned about cuts that would result in the termination or transfer of 12 of the 60 employees - a fifth of the society's work force.

"It was the greatest challenge of my professional career," he says. "I never had to lay off anyone before."

The result was devastating to the staff. One employee learned about the cuts only when she saw a colleague walking to her car, plants in tow.

Today, Emerson stands behind the tough decisions he made in his first few weeks on the job. The 39-year-old North Carolina native, Civil War scholar and author says he believes the society, over the next three years, will eliminate its deficit and still fulfill its mission of collecting, preserving and interpreting Maryland's history.

"All nonprofits are facing difficult times, and I think we're facing ours pretty well," Emerson says. "My goal is to make this one of the premier cultural institutions in the state, but to do that you have to be [financially] responsible, and that starts right here."

Beyond that, Emerson says, he wants to broaden the society's audience through shows with wide-ranging appeal - for example, he wants to do exhibits on Marylanders in World War II and in the Civil War - and by offering programs that reflect the diversity of the state's population.

"I'd like to see exhibits that represent every region in the state and that touch everyone in the state," he says.

Emerson's changes reflect a national trend among historical societies, which are struggling to reposition themselves to attract broader audiences.

"What they're doing [at the Maryland Historical Society] is pretty typical of what's happening across the country with historical societies," says Greg Britton, director of the Minnesota Historical Society Press.

"Years ago, many of them were scholarly institutions dedicated to regional and local historical research, but in the last 15 years they've begun changing into popular museums, places where people go to do family history or local history about their neighborhoods and towns," Britton says. "Ultimately, what [the Maryland Historical Society] is doing could make them much more successful in reaching the people of Maryland and making them excited about their dynamic past."

Yet such transformations have not been easy in an era of spiraling costs and flat or declining attendance.

"There are probably more museums running deficits or struggling to run without them today than I have seen in 20 years," says Edward H. Able, outgoing president and CEO of the American Association of Museums. "It's a crisis, in my mind."

And the nation's estimated 4,500 historical societies, archives and historical sites have been particularly hard hit, according to Karla Nicholson, director of programs at the American Association for State and Local History in Nashville, Tenn.

"Most historical organizations have been facing decreased attendance and revenues, especially after Sept. 11, when travel went down," Nicholson says.

Meanwhile, nonprofits are facing higher costs, especially for energy, supplies and salaries.

"Many organizations simply don't have the increased revenues to make up the difference," Nicholson says. "The public wants more and more services, which requires more staff."

While some groups delay increasing services and staff, Nicholson says, "others go ahead and offer the services, hoping the funding will come in either through admission fees or whatever additional sources they have."

The deficit at the Maryland Historical Society, which has an annual budget of about $4 million and an endowment of $18 million, seems to stem from problems related to its recent rapid expansion and problems endemic to the industry.

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