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Breaking up may be hard, but museum thrives anyway: Conner Prairie turning red ink to black as it embraces independence after years-long governance dispute

December 11, 2006

Nearly a year after its split from longtime trustee Earlham College, Conner Prairie is on the rebound.

The Hamilton County living-history museum is poised to close out 2006 with more revenue than expenses-the first time in years it's been in the black.

"We feel very good about it," said Berkley Duck, board chairman for both the museum and its affiliated foundation. "We're coming in pretty well against what we estimated."

That's impressive, considering the 32-member board didn't have much time to plan for its first year in charge. Earlham ceded control Dec. 30, 2005, 2-1/2 years after college leaders fired museum CEO John Herbst and dismissed the independent directors, including Duck.

Indiana Attorney General Steve Carter negotiated a resolution, creating two separate boards: one to oversee the museum and one to manage its resources. The newly appointed-and in many cases reappointed-boards took over an independent Conner Prairie and investments worth $105 million.

Hopes ran high, but they had their work cut out for them. Museum attendance had dropped 16 percent from a high of 194,000 in 2001, fund raising contributed a paltry $158,000, and the annual operating deficit approached seven figures.

Now all that has changed.

Attendance already has surpassed last year's 162,000 total by 8 percent, fundraising is on track to meet an ambitious $564,000 goal, and the balance sheet is looking rosy.

Duck declined to release year-to-date totals for the $9.1 million budget, saying year-end results will be revealed at the museum's annual meeting in January. But he's confident Conner Prairie will end up "solidly" in the black for the first time since 2000.

If that holds true, this year's accomplishments could breed more of the same, said local fund-raising consultant Mike Laudick.

"Operating in the black is very important," said Laudick, principal of Laudick/Brown & Associates. "It shows good management, good stewardship of donors' precious resources."

Indeed, winning over donors is key to Conner Prairie's continued success. Fund raising tanked during the governance dispute-dropping to a low of $92,365 in 2004-and museum leaders know it will take time to rebuild.

In 2002, the year before the management overhaul, gifts, sponsorships and grants amounted to 10 percent of revenue; last year, they totaled 2 percent. Such revenue is expected to add up to 6 percent this year.

Duck said one challenge has been dispelling the notion that Conner Prairie doesn't need money because of its healthy endowment. In fact, the museum planned to get 57 percent of its $9.1 million budget from the endowment this year. But board members want to replace some of that revenue with fund-raising and earned income-all the better to make sure the endowment stays healthy.

That's a smart strategy, said Jeff Patchen, CEO of the Children's Museum of Indianapolis, which has a quarter-billion-dollar endowment that provides nearly half of its $23 million budget.

"There's a public perception that is, you have an endowment, you don't need to fund raise;" he said, "that when you need to fund new programs or capital improvements, you can go to the endowment like a piggy bank."

But nothing could be further from the truth, he said. The Children's Museum raises money for operations and special projects alike, with fund-raising efforts contributing as much as 20 percent of annual operating costs. Earned income-revenue from admissions and membership fees, for example-provides the rest.

Conner Prairie is making progress in that area, as attendance and memberships continue to exceed expectations.

Attendance got a boost in 2006 from an "astounding" 32-percent increase in general-admission guests, CEO Ellen Rosenthal said, bringing the number of non-member visitors to 75,000. Memberships likewise were on the rise, reaching a record 2,500 with a month remaining in the year.

"We spent a whole lot of time in a staff meeting trying to figure it out," Rosenthal joked. "Our product is better than ever, we've had great [media] coverage, and there's been curiosity about how we're doing."

But don't think anyone at Conner Prairie is content with the status quo, even if it is a pleasant one. Strategizing for the next phase of the museum's history is well under way. National reaccreditation is in the works. New-and old-fundraising events are on the drawing board.

And board members are ironing out an even more ambitious spending plan for next year. Details are scarce, but one thing is clear: They want the red ink gone for good.

"We are bound and determined to produce a balanced budget for 2007," Rosenthal said. "We're moving forward."
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