When art world veteran Daniel H. Weiss took over the Philadelphia Museum of Art in December, he quickly recruited a new team, including a chief financial officer and chief fundraiser. That team has begun to assess the museum’s financial condition and what can be done about it.
The picture that is emerging is not a pretty one.
Preliminary figures seen by The Inquirer show that the museum ran a deficit of about $10 million on a budget of $76.5 million for the fiscal year that ended June 30.
That is on top of a deficit of $5.4 million for the year before, and leaders say the outlook does not promise to improve soon. For the fiscal year that has just begun, the museum anticipates the deficit will be comparable to last year’s $10 million, but in planning the budget the museum has outlined the possibility that it could be as high as $15.9 million.
The shortfalls are the museum’s largest in recent history, leaders say.
Weiss said the museum’s financial situation is “substantial, but solvable.”
“I have no doubt that we will have a balanced budget in about three years,” he said, “but we have real work to do to get there.”
Financial pressures are not threatening the museum’s ability to remain open, but the run of red ink cannot continue. The museum is covering the deficits by drawing on a pool of money that includes cash and reserves — sometimes referred to as quasi-endowment — whose use was not restricted by donors for any specific purpose.
“The way I would describe it is, we have a savings account for rainy days. We’re spending it,” Weiss said. “We need to stop doing that.”
The museum’s struggle to right its finances comes as it faces some urgent needs and considers the fate of key projects. Among the unsettled questions is how to pay for deferred maintenance to both the main building and the Perelman building, the annex to the north that was closed to the public during the pandemic and never reopened.
The combined cost of work on the two buildings has a preliminary price tag of around $300 million.
As for a much sexier project, the museum’s much-trumpeted expansion envisioned by architect Frank Gehry: That will have to wait. Given the current challenges, the ambitious idea of carving out new spaces beneath the east terrace continues to be on hold; the timeline is uncertain.
“It is not, at this time, appropriate for us to be evaluating the feasibility of a very substantial new capital project which would be required to implement the Gehry plan,” Weiss said. “We need to determine the priorities and sequencing of capital work that needs to be done. And over the long term, we need to figure out what this institution can afford in a sustainable way.”
The famed architect died late last year.
The priority now is ringing the alarm that all is not well at one of the city’s two largest arts groups (the other being the Philadelphia Orchestra and Ensemble Arts) and rallying support around a rescue plan.
Weiss said:
“We want to be transparent and we want to be accessible to people, and they have a right to know — it’s their institution. But we don’t want to do it in a way that turns people away. It’s just an institution that needs repair. So how to tell that story is part of what we have to work on.”
Ambitions despite deficit
The pool of money is finite, and the museum would like to stop tapping its reserves as quickly as possible. Instead of funding the deficit, it could be helping grow the nest egg.
Referring to what is being spent this year alone to cover the deficit, Weiss said:
“That’s $10 million of assets earning at least 5% a year till the end of time we’re foregoing. We’ll never get that back.”
And yet the museum does not expect to balance its budget this year or next.
“We anticipate getting within shouting distance of a balanced budget within three years. We don’t have the luxury of taking longer,” Weiss said.
Even as it struggles, the museum has not shelved ambitious projects. The idea of creating a new learning and engagement center on the north side of the museum is still very much in play, Weiss said. Design development for the facility could begin within a year.
Blockbuster exhibitions like the 1982 show of Nigerian art seen by 197,000 visitors or the Cézanne retrospective in 1996 that drew 548,741 are hard to come by, but the museum is working on a number of shows that it believes would draw 100,000-plus visitors each.
“We will have exhibitions that will be of very significant public interest that will draw large numbers that will be exciting and powerful,” said Weiss, who declined to give specifics on the exhibits.
About the future of the nearby Perelman building, Weiss said the museum is searching for ideas.
On the one hand, the highly decorated art deco structure contains the library, art conservation studios, and administrative offices for which there is no space in the main building. On the other, the costs of operating and maintaining it are high. It is more building than is needed, and the location across two busy streets limits the number of visitors who will make the trip to reach it.
A revenue stream that’s been flat
The museum’s new leadership has analyzed finances from the last 10 to 12 years — a period that includes the pandemic, plus the periods before and after — and determined that the deficit is the result of a revenue stream that has not grown much, while expenses have.
“Functional revenue — contributions, admissions, membership, and earned revenue — has grown by only 0.3%, effectively flat,” said Mitchell Wein, the museum’s executive vice president and chief financial and operating officer.
The museum has not fully yet developed a plan for reversing the trend, but is “modeling lots of scenarios and coming up with the best approach on how to do that,” Wein said.
“Part of this process is evaluating everything. Everything is on the table,” Weiss said.
Reducing expenses in some areas will be considered, but that cannot be the only answer.
“We also know we need to focus on revenue generation and supporting the museum for the long term,” Wein said.
But revenue from where?
Six keys to securing solvency
Ticket sales is one obvious place to look, but a big boost from admission is probably not in the cards. The museum once aspired to attract a million visitors a year, but that goal was floated before the pandemic, and the museum has not yet recovered its pre-COVID numbers.
This past fiscal year, the forecast called for 731,000 visitors; 672,753 showed up.
So the goal for next year has been adjusted down to 705,000, which the museum feels is more realistic. Attendance was 773,511 in the last full year before the pandemic.
The museum’s difficulty in coming back from the pandemic is not unusual. Over half (55%) of U.S. museums of all kinds were reporting lower attendance in 2025 than in 2019, according to a report from the American Alliance of Museums.
Weiss says the museum needs to focus on six key areas to achieve solvency:
- Optimizing endowment income.
- Boosting earned revenue, including income from retail, restaurants, special events and membership, and admissions. “Each of those needs to be examined to determine what’s possible,” he said.
- Evaluating how much can be brought in through philanthropy.
- Working toward more city and state government support. “We want to try to make the case to them that a larger investment in these facilities is in everybody’s best interests, and that’s a work in progress.”
- Reviewing the operating budget. “The operating budget can be improved, but there’s not a ton of opportunity for us, for example, to lay people off. Our staffing levels are already down. We don’t think that’s the answer. But there are certain things we can cut and manage better or maybe outsource or streamline to improve the operating budget.”
- Assessing programs, such as making better and more economical use of the Perelman building.
“If you add all of those things up and we do all of those things — even if we don’t also find a private equity guy who falls in love with us who’s going to give us $100 million — we’re going to balance our budget,” Weiss said.
Hundred million-dollar gifts may or may not be in the future, but the suggestion raises a salient question being pondered by leaders: What is the fundraising capacity of the museum?
“How much can that be, how much can we raise? I don’t know,” Weiss said. “What is this city set up to do? Most of the people who give money to an institution like this are local. So what is the philanthropic opportunity for one of the leading cultural institutions in this city?”
What Weiss is sure of is that fundraising depends on resetting the profile of an institution known more recently for organizational turmoil than for success.
“People who invest in an organization at lower levels as members, at higher levels as donors or major philanthropists, they always invest in winning organizations, and they rarely invest money to remediate problems. And one legacy I would like to leave is that we become an organization that’s known for being really good at what we do.
“The positive is a world-class institution with a great collection. If we can’t figure this out, then we’re the wrong people. It’s just not that hard.”
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