Allocation of Museum Capital
Every privately owned company’s goal is to minimize their costs as much as possible. Museums, which are operated similar to private companies, have the same goal. In order to decide where to allocate their capital a museum must asses some essential questions such as what attracts visitors to their museum, what is the opportunity cost to allocating capital to one resource over another and how the museum can maximize the use of the funds spent. These questions depend on many external, constantly changing, variable factors such as the state of the nation’s economy, other events in the same city and even the weather. These factors can help, hurt or have no effect on the museum and must be monitored constantly by the members of the board of directors in order to manage the museum as efficiently as possible. Different museums exist for many different reasons. There are various types of museums located around the country including: art museums, military and war museums, science museums, history museums, natural history museums and zoological museums. Some are interested in building and flaunting their collection, while others simply aim to educate the public. Depending on its goals, each museum has set up a budget that will maximize their profits. Annual reports from museums located in the United States from each of the six categories will investigate the hypothesis that different types of museums cater to different audiences with different needs. Those distinctive needs will be shown in the annual reports by the ways in which the museum allocates it’s capital. In order to account for the different size museums used in this study, the amount spent in the various areas is broken down into a percent of the total amount spent for the fiscal year. The goal of art museums, such as The Museum of Modern Art (MoMA) in New York City, is to collect as many pieces of art as possible. Specifically, MoMA states in their mission statement, “…The Museum of Modern Art manifests