The Powell House Review

I had an interesting visit at the Powell House which I now must comment on. Somewhere in this document I have to answer the question "Does Philadelphia need another house museum?". The Powell House had less than 3,000 visitors last year and they operate paying a site manager, curator, coordinator, and an administrator or two, most of which I am sure they allocate the duties of the two other museums that the Landmarks Organization owns and runs. At least that would make the most sense.  I feel that I need the proper information before I decide to slice and dice the financial inefficiencies of this organization like the logical conservative capitalist I have sadly become. So, with that being said, I am currently waiting on an email from the director and an administrator of the landmarks organization regarding the 2010 financial statements of the Powell house and hopefully the Landmarks Organization. This will help me draw an educated conclusion to the initial question regarding a  need for another house museum in Philadelphia, and a potential justification or bashing of house museums current business structure.  If I don't hear back from them by friday...I will answer the question based on my observations by this saturday.
thank you,

White Leon


UPDATE 10/31/11

Well, after an administrator from landmarks pointed me in the right direction as to where I could find Landmarks Financial statements, I felt that I was off to a good start and I could turn the engine on; on the wrecking ball. But to my dismay the financial statements were not what I am used to seeing. I was not familiar with "temporarily restricted, and restricted gains" without terms on their restrictions. If I do not know when the cash can be utilized, then I cannot tell the actual short run financial gain. Restricted funds can have donor imposed restrictions that don't let you touch a dollar amount for a long period of time. Luckily in 2010 the temporarily restricted and restricted dollar amounts where minimal and a negative (86k) journal entry of temporary restricted funds was mostly absorbed by a positive 85k entry so dollar amount affecting their revenues was insignificant to the bigger picture.

My biggest issue with their financial statements is the broadness of their expenses. They can hide staff payments or benefits in “Other Programs" (327k) or in their "Road Scholar" (561K) entry in their expense accounts. Now I am not saying that that is what they are doing, but "Programs" require staff and it makes sense to partially pay certain staff members through program expenses rather than Administrative expenses.

They must have done this anyway because not including their site managers, they have 8 employees and based on the broadness of their expenses in the income statement, their "Administrative and general" expenses ($222k) should include salaries and any offices expenses including rent. It is also likely that they have some sort of health benefits and/or employee savings plan.

So now tell me how you are going to employ 8 business professionals (that includes paying workmans comp,FICA tax, etc)..and run an office with all of its expenses, and potentially pay for employee benefits all for $222k a year? Doubt it! So..they must be hiding some type of staff compensation within the $327k in the other program expenses and in the $561k in the Road Scholar expenses.

With that being said, I would like to see all staff compensation of any kind separate from other expenses, as well as offices expenses and rent or loan expenses separate.

Another issue would be the changes to Net Assets and End of Year net assets area. It’s around $2 million while they had negative profits for the year. Surely they are not adding the residential or commercial appraised value of their museum properties to their Net Assets? The reason I think that, is because The Powell house alone would have to be upwards of $800K in value, and the value of all of their historical properties combined surely exceeds $2 million.

Also, I don't see any depreciation or appreciation of assets in these statements, thus their actual properties must not be included in the Net Assets section of their statements. So! The big question is what is this $2 mil in net assets?... and in what form of assets is it? Cash, bonds,property? whats the deal?  I need to know how they acquired those assets in order for me to get to the root of new growth, and also if those assets are invested, how did they only accrue 29k in interest and dividends for the 2010 fiscal year? If half of those net assets where invested cash they would have to receive a very conservative minimum of $40k in interest and dividends.

So they need to be more specific in what their net assets are when reporting their FS.

In conclusion, their financial statements are too broad for me to come to any conclusions without making drastic assumptions and if I had a 501c(3), I would report my FS exactly the same way, so no one knows what the hell is going on but me and my staff.

But I will say this, admission and membership makes up less than 2.9% of the museums revenues while the bulk of their revenues come from rental income and road scholar programs, both of which are scheduled events. $100k in profits come from the road scholar revenues while there are no direct expenses listed for the $130k in rental revenues (I am sure they are burried in "Other Programs" but I am also sure they are very minimal expenses).  I bet it’s safe to say that 50% or more of the profits from those two categories come from rental revenues meaning the rental costs would have to be under $30k while road scholar (although just as lucrative) expenses are a whopping $561k. $661k in road scholar revenues means a lot time and work from some one (or many people) on the administrative level. That time could be allocated to promoting products with minimal capital and time intensive costs and higher margins like rental revenues. Now if you focus on rental revenues (which are scheduled events), the museums no longer has to be open to the public regularly cutting down on your operating expenses. I would now take some of the net assets and use them to convert 2 of the most popular museum locations into historic, high end dining and/or historic gastro pubs depending on the needs of the market. I would slice off 1/4-1/2 of the staff now no longer needed for day to day operations, event coordination, and fundraising, and allocate the slack on to the rest of the staff for a period of time. After hiring high quality chefs, restaurant managers, and new young hip, hot and hungry event coordinators, I would promote the hell out of the two locations to the point of market saturation. If you know about these two restaurant/pubs and you haven’t been there.. Then you’re a fucking loser.

After the cash from these 2 nonprofit historic businesses start rolling in (and with $2mil startup cash you can guarantee that with the right people they will be financially successful).  I would start investing the profits in my non restaurant/pub museum and reopen it to the public with better programs and interactive public features better than ever before.  Once I publicize the shit out of that, I would use any funds I have to start acquiring other failing house museums in the Philadelphia region. At that point, with the political approval I would now have because of the new philly jobs I have created as well as the fine new example  I have created in running my newly reopened, program oriented, soon to be self-sustaining house museum, I should have little problem in getting failing house museums to turn over their keys to me at pennies on the dollar which I will then fix up and eventually make self-sustaining with new interactive programs for the public. How will I make these house museums self-sustaining you might ask? Its pretty simple. Limit them to scheduled tours, programs, rentals, and weekend hours to keep their operations costs minimal while at the same time consolidating all of the administrative duties of all of the museums to one office kind of like Landmarks does but on a larger more efficient scale with more museums and less focus on capital/time intensive products like road scholar and more time on volunteer run products like weekend hours as well as focusing on low capital/time intensive high margin products like rentals.

The more museums I have, the lower the operating costs become per museum if I consolidate the administration.

The goal would be to eventually build a firm of 10-12 house museums where 2-3 of them were historic restaurants and/or gastro pubs. All the profits from the rest./pubs from an accounting standpoint would be “eaten up” in administrative and startup costs for reopening these new interesting and interactive house museums. All the while paying the director (me, the capitalist pig) a hefty but perfectly feasible salary with benefits which would then count as part of operating expenses of a 501 non-profit organization of which all profits(assets) would be tax free. Reason being is that I would still show the upstairs of these restaurants/gastro pubs as museums with exhibits that are free of admission which people would technically be visiting every time they go to the pub or restaurant downstairs.  Like I said, with that setup, everything would be tax free. Museums are doing it now just not to their fullest extent. There is a restaurant in most museums today and I am sure that’s where most of the “business profits” (not handouts) come from. And even if I am missing a small rule here or there in codes or committees etc. etc. I’ve been there before, and with the right ideas and the right salesman codes are made to be modified people do it everyday….So let’s take this shit to the next level baby! Yeaaa! haha



Update: 11/1/11
I never answered the question "Does Philadelphia need another house museum?"...the answer is NO

Penn Museum Review

Our visit to the Penn Museum was pretty boring, but much better than I would have expected for a university museum.  The museum was filled with 3 floors of interesting artifacts from 4,000 years ago up today. Artifacts from all across the world from Greek and Roman to Native American and African artifacts. Sounds great right? I was bored out of my skull!

I liked Independence hall and the Pearle paintings because it was theme focused materials that were directly related to economic history. Lessons of the past that we could use to pave our futures. Whats more important than our present and future?

I also liked the Wagner because it was all biology artifacts that a lot is still present in our world today. The museum was also focused on it's theme and short and sweet. The museum also gave a lesson about the past by the way that it's organization was preserved in time.

According to the text the original organizers of the Penn Museum wanted it to be a museum of art and natural sciences but somewhere along the way it became focused on archeology.

I didn;t like how the Penn Museum blurred its focus on Archeology much more than the other 2 museums with exhibits that didn't really relate well to the focus of the museum like the "fang!" exhibit about demythologizing vampires. Or the "Righteous Dope Fiend" exhibit about living on the street. I understand that both of these exhibit can be construed as contemporary archeology but I just think that they blurred the focus and theme of the museum.


One very important thing that I did learn at this museum was the purpose of this class.

I live my life to follow the money. If you follow the money, you can make money. Everything in politics as a special interest, a facade of doing something but really doing it for another reason altogether; and the reason always dwindles down to dollars and cents.

Prof. Bruggeman during the post museum discussion that museums all have facades and special interests in a way. They promote a theme or focus to the public for one reason but there is usually an underlying special interest, and that special interest is usually money.

Prof. Bruggeman also said that his goal by the end of this class is teach us how to follow the money in museums just by walking through them and observing your surrounds. I believe that special interest part of a museum is more interesting than any of it's contents. So with that being said I am excited to learn more, and I will keep an ear out about learning this skill from Prof. Bruggeman as time goes on.