Transcript – Episode 44


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Todd Smith: But the reality is no margin, no mission. So if you’re not able to stay sustainable you can’t assure that you’re delivering whatever your services, whatever the cultural resources you’re providing to the public. So assuring that you’re sustainable five years, 10 years, next decade, next century.

Anita Walker: Hi, I’m Anita Walker at the Massachusetts Cultural Council and welcome to “Creative Minds Out Loud.” Our guest today is Todd Smith. He is the Interim Executive Director at the American Textile History Museum. Hello, welcome to the program.

Todd Smith: Thank you.

Anita Walker: For those who have not had the experience of the museum, what is it?

Todd Smith: So the American Textile History Museum and its different iterations really centers around the history of the textile industry primarily from the actual the owners, the manufacturing companies themselves. And so it was established back in 1960 and it focuses on the manuscripts and documentation around those organizations, but also the machinery, the wooden tools, the history of the textile industry from the beginning in Lowell in 1820s up to today and the changes that it’s gone through throughout. So we’re– we kind of cover the full gamut of the history of textiles.

Anita Walker: So now that we’re all excited about it. <laughs>

Todd Smith: Yeah.

Anita Walker: You’re here to tell me that unfortunately, it’s kind of going the way of the textile industry in Massachusetts.

Todd Smith: Unfortunately, we’re mod– we’re modeling that a little bit closer than we meant to, yes.

Anita Walker: So you came in, you’re a business person, right?

Todd Smith: Right.

Anita Walker: You came in from the land of business executives–

Todd Smith: Corporate exec, yeah.

Anita Walker: — to try to take a look at this institution, which was really struggling financially and help determine whether there was a path forward for the museum or whether it needed to be gently, carefully, and kindly come to the end of its life.

Todd Smith: Exactly.

Anita Walker: So how did you approach that question?

Todd Smith: Well, I think the- the way that the issue was approached was with the support of one of the major funders for the organization for the museum. And they really urged the board and the museum leadership to take advantage of some outside financial consulting to do some forensic analysis essentially on the finances and evaluate what the status of the museum was. And did it have a path, like you were saying, a transformative path that it could explore or was this a time where they need to think about responsible close, because with museums, unlike many other organizations, closing is not something that happens slowly. And we can talk more about that too.

Anita Walker: So what did you find? What were some of the indicators that told you that it was time to come to an end at this museum?

Todd Smith: I think specifically for this museum one of the biggest indicators that actually triggered this event with the funder was a couple years of major losses. You know, so from a sustainability standpoint, you know, the museum was not able to continue to cover the expenses that it was sustaining. And so those losses got to a point where it raised the– both the attention of the board itself and what they wanted to focus on but then the funders wanting to get involved too.

Anita Walker: What were the options that you considered in terms of saving it?

Todd Smith: So that’s definitely with the– with the work of the consultants and definitely the integration of the board and the engagement of the board we looked at several different paths over a nine month period, basically of transforming the museum both and, you know, the size of it. The collection is a massive collection, as many people have heard us talk about. So how to possibly reduce that and then get more integrated within either the community or different partnerships. So looking at partners locally, looking at partners regionally, looking at alternative ways of us to engage with the community. And then also looking at ways to potentially no longer be a museum with an exhibit focus, but research focus and so to kind of turn inward more. And so we looked at all those different options surrounding that.

Anita Walker: And?

Todd Smith: And funding and sustainability was the utmost of importance to be able to do that. And the– many of those options came close. The long-term financial perspectives in all of them really didn’t play out in a way that meant that the museum could sustain itself long term. So that was the overarching goal for the board and for the organization was if we were going to transform, transform successfully so that it was sustainable five, 10 years down the road. And the math just, it didn’t work. We essentially the runway that we had, if you want to think of it that way from a financial standpoint, wasn’t enough. There wasn’t enough time to be able to kind of put the things in place that needed to happen, so.

Anita Walker: So I can imagine that you came into this position hoping to find a magic solution. <laughs>

Todd Smith: Right. <laughs>

Anita Walker: I mean this must’ve been tough to really sort of face up to the facts, you know, magical thinking, we talk about that all the time that, if only we could do this. But what was that like?

Todd Smith: That was actually very difficult, I will say. I mean and this is true again for the– for board leadership and some of the consultants as well, that we all came into– and I was talking to another organizational leader who was talking to the same problems, you don’t come in with the intentionality of closing. That’s not it at all. It’s exactly what you said. You come in saying, “We can do this. We can save this.” And it’s very addictive from that standpoint, I will be honest. You know, and early actually when you and I met in January, I really at that point we were really investigating these paths and it’s like we’re going to make something work. We’re going to make it happen. And one of the key things that I realized specifically is as a voice kind of from the outside of the organization as well, you have to balance that with bringing in the but we still have to be sustainable when we’re done. And so some of those tough decisions are, it’s close, but does it really play out? Like, let’s take it three years out, let’s take it five years out and really look at the finances. And so it’s tough.

Anita Walker: So now there’s a whole new work assignment in front of you.

Todd Smith: Yeah.

Anita Walker: And closing an institution isn’t just a matter of shutting the door and locking it and walking away. I mean what’s involved in bringing an institution like this to closure?

Todd Smith: It is not a simple process. Yeah. So what’s involved in closing, specifically for museums and any nonprofit organization that has some level of assets collect– collection or otherwise, it’s responsibly distributing those materials. So for us our collection is, as I said, rather significant and large. And it covers both paper materials, so books and manuscripts and archives, and then 3-D materials, machinery. So large, huge pieces to small patent models, and textiles, costumes, dresses, all these different pieces, we have to find homes for all of that. And so the struggle for a museum is that those homes are not necessarily hard to find, and it’s the sense that we have lots of people interested in wanting to help us by taking those things on. But the timing of that, just the engagement and time that it takes for their boards to approve things and our boards to work through that, it’s a long process.

Anita Walker: And what about even Providence? I mean donated, contributed items that the– have been entrusted to your care–

Todd Smith: Right.

Anita Walker: — and the donor expects you to do so.

Todd Smith: Exactly. And that I will say, and I give full credit to the board for how forward-looking we’ve been in being, you know, we are an organization for the public good, as all the nonprofits are. But taking that into account when we’re looking at the collection, those things were donated to the museum by different people for different reasons, whatever they may have been, financial or otherwise, but keeping that in place when we’re looking at the new homes for that and really keeping that as the forward most important piece that is this the right home for the public good for that item. So when someone donates yeah, actually that’s one some of the toughest conversations is from some of those smaller donors, the family donors who have said, “Well, we’d like that piece back.” And we’re like, “I’d love to be able to do that, but the reality now is it’s part of the public good and actually, it’s part of this longer collection that this organization now would like to see. But the need all of those pieces and so your family piece goes with that.” And so those are sometimes the toughest conversations.

Anita Walker: Oh, I can imagine that would be very, very difficult.

Todd Smith: Yeah.

Anita Walker: I’m actually curious about the reaction of the community, because this is a museum that is of and about Lowell. I mean Lowell’s whole identity, the National Park and so forth is really about its history and the textile industry. And certainly, this is a iconic symbol of that. What does it mean to the community to have it go away?

Todd Smith: I think the message that I’ve gotten I mean in engaging with the community and certainly the feedback that we’ve got, you know, once we had to announce the closure publicly, it’s very, you know, huge disappointment. But also I will say kind of the follow-up comment to that from a lot of people is recognizing the reality specifically because of what Lowell and the Merrimack Valley has been through in different cycles of these things happen, so we hate to see this happen but how can we now, you know, move on beyond that and have it go to again, back to the public good and service everybody better?

Anita Walker: It’s a lifecycle.

Todd Smith: Exactly.

Anita Walker: And not everything was forever. <laughs>

Todd Smith: Right. Exactly.

Anita Walker: How long is your timeline from the moment you decided okay, this is the path we have to go down, to when you will lock the door and walk away?

Todd Smith: That was one of the tough conversations, I mean specifically with the board, you know, when the rea– it’s one thing to have been discussing for months about the transformation versus close that, you know, not the intentionality of closing, but the fact that it might be happening to the real okay, we have to make that decision. And the reason for that and we had set that kind of milestone of we could talk about this forever for the transformation, but at some point money is really the timekeeper for us in this case. And so the board had set a very clear milestone of if at this point we’re making a decision. And so that decision was made because we needed a certain amount of runway to do the essentially the deaccessioning process, which is a– the big word that’s very difficult to deal with <laughs> within the museum space. But for us the timeline is one where at least based on our financial estimates we’re looking at something around 10 to 12 months at this point. Which I will be clear to anyone listening who’s used to museums, that is an amazingly aggressive timescale. Most museums–

Anita Walker: Especially with a huge collection like that–

Todd Smith: Exactly.

Anita Walker: — and finding homes for things and making decisions.

Todd Smith: I mean I know other museums that have struggled with this and either done large deaccessioning efforts or had to close completely, three years was an aggressive schedule for that and we’re doing, you know, something far more aggressive. And so my– the staff that’s been engaged with this and dedicated this museum and collection for so long, they are saddened by what’s going on, but they are so dedicated trying to find new homes for this that I really I– everything that we can do to support them is the things that we– is the front– the frontline thing we’re always making sure is the case.

Anita Walker: So one thing that seems almost like a contradiction is that the institution is in trouble because it’s out of money and it’s in deficit situation. But it costs money to close the door. <laughs>

Todd Smith: Exactly. Right. And yeah, and in fact, someone was just recently talking to me about that, that some organizations, when they realize they have to close, they actually– and that was the thing, we knew it was going to be the case too. You actually have to go on a fund-raising campaign to close. And those campaigns are not very successful in many cases.


Anita Walker: Yeah. We’ve talked about raising money for debt, raising money for reserves. Raising money to close?

Todd Smith: Yeah. And, in fact, when sort of just to step back for a second, when we were doing the forensic analysis– and I’m using that term. Suzanne Moss [ph?] kind of gave me that term a few days ago. So, I like that term. When we were doing that back almost a year ago, it was really talking to the board and everyone engaged saying well, it’s going to cost this much to close and that’s just about the same as it is to do the transformation analysis, so it’s worth investing in it at the same time. But the reality is keeping those costs in mind because as difficult as fund-raising can be anyway, fund-raising for close is almost impossible. So the board really took the status of well, then we’re going to try to make sure we’re closing with control by dealing with the finances that we do still have. And so we- we were blessed with a level of endowment, it’s not big enough to be able to help us stay sustained, but it is something that we’re using to be able to help us close. So we’re working with the attorney general’s office to handle that and restricted access.

Anita Walker: So to dig into that a little bit deeper, most endowment funds are restricted for a purpose, education, exhibitions.

Todd Smith: Exactly.

Anita Walker: Most people don’t put money in endowment to pay for closing. <laughs>

Todd Smith: They don’t. No.

Anita Walker: So what is the process to free that up?

Todd Smith: It is long.


Todd Smith: But that’s the way it should be. I mean in other words, for all of this, as I will say to donors and others that are interested, you know, if it was easy to close, then that’s not the point of this. So having to go through the steps is why we want to make sure we’re doing it responsibly. So we engage with the AG very early on. They appreciated that from a proactive standpoint. So as we were investigating not closing at that point, but just the transformation of the organization saying, “Hey, this is a possibility,” they were helpful in pointing us in a couple of directions, specifically around the deaccessioning issue, but also in potentially getting restricted access to the restricted funds within the endowment itself. And so that’s the process. Yeah, you’re right, the restricted endowment is restricted for a reason and what we are doing is then having to go through the AG’s office to the courts to say we now need to get access to that for a different reason, but it’s to support essentially what the donor’s purpose was, which was to support the collection and the public good. We’re trying to do that by finding the new homes and using the funds to do that.

Anita Walker: So you use the word forensic and it’s almost like in a away you’re doing a little bit of an autopsy on an organization. So I have to ask you, you probably know about as much <laughs> about the fiscal, the finances and the fiscal liability of organizations by studying this organization. What are your top two or three takeaways? What have you learned as a businessman coming into a nonprofit and having to decide whether it would live or not and now taking it apart? What have you learned?

Todd Smith: Fair enough. So- so I’ll say– I’ll say– I’ll kind of do two things there. So we definitely– there are something that I definitely have learned and I know, ’cause we’re not done yet, there are things I’m going to learn. And so there are lessons that are coming up, I’m just waiting for them.

Anita Walker: <laughs>

Todd Smith: But I think the two biggest things are and the other nonprofits that I work with too, the struggle that non– many nonprofits have in not wanting to think of themselves as a business, because that has a different connotation to everybody. But the reality is, no margin, no mission. So if you’re not able to stay sustainable, you can’t assure that you’re delivering whatever your services, whatever the cultural resources you’re providing to the public. So assuring that you’re sustainable five years, 10 years, next decade, next century, is really something that we’d want to have and really keeping. And I think it’s easy to lose that site. You get lost in the weeds your firefighting, whatever it is, and you’re not– you’re– you end up allowing expenses to outgrow your donations, your revenue. So that’s kind of one big thing that I got, ’cause coming from a not necessarily from a corporate perspective, but just from a kind of business strategy perspective. And the other one, because of the feedback, like you asked about the public outcry from the community, it’s for the public to realize don’t wait until your organization closes, right? So many people think like for an organization like ours where you pay a membership for a ticket price that covers the cost. Not even close. So, you know, earned income, operational income doesn’t for most organizations come close to it. And people don’t realize that the tip of the iceberg aspect of this. Making that clear in some kind of way to your public is really important for them to realize. If you really believe in the organization, you know, it’s not think of it as its closing and to support it. It’s more thinking how can you support it beyond that ticket price for that membership price? It’s you should be making a donation ’cause finances are what keep them viable. And–

Anita Walker: And if you love that organization you need to preserve it for the next generation so that you benefit as well.

Todd Smith: Exactly. And I think that’s the biggest thing is that people sometimes not lose that vision, but they don’t think about the fact that I can make a difference in the organizations that I care about, ’cause well, they’re so big they don’t need me. But the reality is, you know, every dollar does count no matter how small the contribution is, because it does add up. And, you know, a mass appeal type thing is definitely something that can have weight.

Anita Walker: So, well, a job very few people would envy. But I think it’s been an incredibly informative experience to hear from you, Todd Smith–

Todd Smith: Cool.

Anita Walker: — Interim Executive Director at the American Textile History Museum in Lowell, another Creative Mind Out Loud.

Todd Smith: Thank you very much.


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