The museum's revenues (both earned and contributed) were negatively impacted by the recession, but prior management was slow to react. The resulting cash drain was compounded by the museum's major capital campaign, which distracted management and the Board's attention away from operations. Although the current management team reduced programming and cut expenses, it was not sufficient to generate positive cash flow.
As a result of the ongoing losses and consumption of reserves, the Board of Directors decided to seek assistance from a management consulting firm.
Fort Dearborn Partners was retained to develop a plan to return the museum to positive cash flow, monitor plan implementation, and assist with preparation of a 13-week cash forecast. Working closely with management and the Board, FDP prepared or facilitated:
•Detailed Program profitability analyses
•A comprehensive review of the museum's organizational structure; FDP challenged management to justify each position, which ultimately led to a reorganization of the top tiers of management and over $600,000 of annual staff cuts
•Presentations and numerous discussions with the Board that were instrumental in convincing them to embark on an aggressive campaign to secure large contributions from key donors resulting in over $600,000 of incremental cash
•Convinced the Board to defer the major capital campaign