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Post written by Fabiana Basili

Museums walk on a fine line. They are driven by their mission to inspire, educate, and preserve heritage, but staying financially sustainable is a constant challenge. Structural issues in the cultural sector, well known in cultural economics, have become even more pressing after the pandemic and fears of budget cuts in the Netherlands (Cultuurmonitor, n.d.a, b; Museumvereniging, 2024; Education and Sports Ministry outlines major grant cuts, 2024). Granted, this isn't exactly a groundbreaking discovery… But why does it persist so stubbornly? Here’s a closer look at the internal strategic reasoning and external pressures that continue to shape this reality.

This article summarizes the findings of a Master’s thesis in Cultural Economics and Entrepreneurship, exploring how Dutch museums pursue financial health while staying true to their broader organizational goals. Focusing on four case studies—the Wereldmuseum in Rotterdam, Groninger Museum, Catharijneconvent in Utrecht, and Zeeuws Museum in Middelburg—it examines how they manage funding dependency, particularly on government support. The research uses a mixed-methods approach, combining analysis of financial statements (2021–2024) and interviews conducted with museum managers.

We begin with an overview of the case studies, which reflect national trends: between 2021 and 2024, both revenues and expenses rose (Figures 1 and 2) While this was partly due to the low post-pandemic baseline in 2021, broader economic pressures, including an increase in the inflation rate, also played a role. However, in most cases, expenses increased faster than revenues, posing challenges for financial stability. Government funding has increased, but it still struggles to keep pace with these changes. This pattern aligns with national data, though the four case study museums performed slightly better. Generally, medium-to-large institutions showed greater adaptability yet still faced negative results in recent years (Museumvereniging, 2022, 2023, 2024; Verwey, 2025).

Figure 1.

Mean real growth of revenues and net surplus adjusted to inflation

Note. The Zeeuws museum’s charitable revenues (+1,128%) and the Groninger museum’s net surplus (-247%) show exceptionally high values, exceeding the visual limits of the current chart scale.

Figure 2.

Mean real growth of expenses adjusted to inflation

To understand the financial health of museums, it's essential to start by acknowledging their condition of resource dependency. The four Dutch case studies reveal a strong reliance on government funding to sustain infrastructure and core programming. Alongside charitable contributions, these resources are often beyond their direct control. Other revenue streams remain limited and typically support additional activities. Efforts to boost self-generated income are limited by the nature of cultural offerings as public goods: museums struggle to "marketize" these goods without either excluding part of the public or shifting away from their core values (Figure 3).

Figure 3

Mean distribution of the source of revenue by percentage

Financial health can be understood in terms of economic capacity and sustainability. The four Dutch museums generally show strong financial capacity, meaning they can meet both current and future spending needs, largely thanks to stable government support. In two of the four case studies, the situation is slightly more fragile, but still under control and actively managed through strategic planning (Figure 4).

Figure 4

Financial capacity: Liquidity and solvency trends across museums

When government support is not guaranteed, financial capacity is at risk, as developing revenue is challenging as much as cost control. Like many cultural institutions, museums face high fixed costs, with high personnel and core programming expenses (Figure 5).

Figure 5

Mena distribution of the type of expenses by percentage

Under financial pressure, these are often the only flexible areas to adjust, leading to a more precarious job market and a reduction in core activities. This is confirmed by the fact that the museum’s size appears to be related to the amount of government contribution, suggesting that when the government is the main revenue source, smaller investments result in smaller cultural organizations (Figure 6). As museum managers also stated, less public funding means fewer core cultural offerings. That said, the sector faces uncertainty about future solutions development, it often feels stuck, as if no alternatives exist, and this challenge remains largely unaddressed.

Figure 6

Log-normalized development of revenues, expenses, and net surplus among the museums

When it comes to financial sustainability, challenges emerge more strongly. Museums struggle to plan for future growth or cushion potential downturns. In other words, while day-to-day operations are well-covered, building financial resilience for the future remains an open issue (Figure 7). This is found to be linked to limited net surplus and reserve accumulation opportunities.

Figure 7

Financial sustainability: Margin and profitability trends across museums

Note. The Groninger museum shows exceptionally low ROA values (up to -5,808% in 2024, mean - 1,632%), exceeding the visual limits of the current chart scale. Limited net surplus has several causes. First, relying on stable public funding allows museums to prioritize their social and educational mission. Financial choices aim at financial sustainability rather than net surplus generation, with strategic goals shaping decisions in a back-and-forth process between impact and resources (Figure 8). In this context, government dependency enables the production of public cultural goods, but it also reinforces museums' dependent status, limiting financial autonomy.

Figure 8

Relationship between principles of decision-making in the case studies

Second, museums’ resource development remains limited due to several challenges that reinforce their dependency. These include limited funding opportunities, high competition, scarce internal fundraising capacity, and uncertain outcomes from development efforts. Third, some funds are restricted to specific uses: they must be returned if unspent, meaning museums strategically aim to make the best use of what they receive, without the possibility of generating a high net surplus or accumulating reserves. Finally, crowding-out effects from public funders are also relevant, as high surpluses may lead museums to be perceived as no longer in need of future support. Concerning reserve accumulation, it remains challenging due to slim surplus margins, restricted funds, and the risk of reduced support when reserves appear sufficient. These dynamics are represented in the following framework (Figure 9).

Figure 9

Limited net surplus and reserves in relation to resource dependence status

This reveals how museums pursue financial sustainability: they often rely on a combination of cautious reserve-building, ongoing dialogue with public institutions, and targeted efforts to expand income through project-based or special funding. However, these strategies are time- and resource-intensive and often yield uncertain results. As a result, growth is a slow and incremental process.

In this context, dependency on government funding both enables and constrains museums’ financial structure, highlighting a clear trade-off. When public support is stable, museums can prioritize social impact and long-term sustainability over profit. This reinforces their financial dependency, ensuring financial capacity in the short term, but leaving long-term sustainability reliant on future policy decisions. Given structural challenges in developing alternative resources, museums remain vulnerable when it comes to growth and resilience during financial downturns. Conversely, less government intervention pushes museums to adopt a more market-oriented and entrepreneurial approach, with the risk of weakening their public social impact and shifting towards entertainment-driven content. Financial capacity and sustainability are more in the hands of management, only if the policy allows flexibility for it, though. Policy plays a crucial role in shaping this balance. When public funding is stable and guaranteed, stricter conditions may be justified, as the financial vulnerability caused by dependency is covered under the shadow of government support. However, if stability is lacking, excessive restrictions on fund use and crowding-out dynamics can hinder museums’ ability to build financial independence and resilience. Without aligning policy with the actual level of government support, museums may face significant barriers to achieving financial health.

The core issue is that resources are always stretched too thin to cover every need. Government dependency and consequent funding control are beneficial for society and museums, and their management benefits from stability. In a period where policy seems to be shifting toward reducing public intervention, it is essential that this does not simply mean cutting funds. Instead, it should involve rethinking resource distribution criteria and offering museums real opportunities for alternative revenue generation. The analysis highlights that one of the greatest challenges for museums is the difficulty of developing alternative funding sources as their mission and cultural content are often inflexible and not easily “monetized." It appears that both policy and museum management need to work toward developing a funding culture that takes these dynamics into account. This leads to two key questions for the future: How can policy support its goals of reducing direct intervention and simultaneously support the rise of alternative funding opportunities for these institutions? How can museums develop more autonomous financial models while balancing internal priorities with the external pressures of a shifting political and economic environment? True, no one has cracked the code yet, but if turning financial survival into an art form is possible, museums are well equipped to lead the way.

REFERENCES

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https://www.cultuurmonitor.nl/en/domein/beeldende-kunst/.

Education and sports ministry outlines major grant cuts. (2024, October 24) Dutch News.

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cuts/.

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Verwey, J. (2025, April 15). Jaarverslag 2024. [Annual report 2024]. Cultuurmonitor.nl.

Retrieved on June 7, 2025, from https://www.cultuurmonitor.nl/en/domein/erfgoed/.