PILOT Programs and Museums

By Dan Yaeger, Executive Director, New England Museum Association

So much of our civic conversation today is black and white. You’re either a winner or a loser. Pro or con. A maker or a taker. 

It wasn’t that surprising, then, to see a column in the Boston Globe recently that characterizes Boston’s museums as selfish tightwads because some resist participating in the city’s payment in lieu of taxes (PILOT) program (“Cultural institutions need to pay up,” Boston Globe, 1/12/13). Columnist Lawrence Harmon speaks for a school of thought within municipal government around the U.S. that puts nonprofit institutions such as museums firmly in the “taker” camp.

Museums, these folks observe, may serve noble civic roles, but they provide little or no direct revenues to the city’s coffers. This is especially galling to them because museums are tax exempt, with some situated on prime real estate. Were the real estate owned by an individual or company, its taxability would be much more productive to the city’s bottom line. This is the fundamental premise behind PILOT, in which a growing number of cities around the country seek to recoup a portion of those lost tax revenues by asking nonprofits, including museums, to pay up voluntarily. 

Money by Tax credits on Flickr

Nationally there are 117 municipalities with PILOTs in 18 states. New England’s PILOT communities include Boston, New Haven, Cambridge, Providence, 82 total municipalities in Massachusetts, and every New England state except Maine and Vermont. 

But the role of museums and cultural institutions in the lives of citizens is not a simple economic calculus. Certainly, economic impact is part of the equation. Museums contribute significantly to local economies through employment and spending, not to mention attracting thousands of out-of-town visitors.

Museums also play an essential educational function that complements primary and secondary schools, important especially in an era of restricted budgets that curtail anything more than core curriculum in public schools. Each month, museum education departments serve thousands of children from all points of the socio-economic spectrum with experiences that will help shape them into accomplished grownups. 

More important than all of these pragmatic benefits, though, is the fact that museums are transformative institutions. They are places where lives are changed through interactions with art, history, science, technology, and ideas that help define our humanity. In museums children are inspired to aspire. Adults learn anew. And communities benefit with an enviable quality of life. 

Museums provide these civic benefits without the benefit of funding streams that other nonprofits enjoy. Compared with colleges and hospitals often targeted by PILOT programs, museums do not charge tuition to confer degrees, nor do they collect payment for services rendered in making bodies whole. Rather, they charge admission, which typically underwrites only a small portion of museum expenses. If they’re lucky, they attract private donations to keep them solvent. Even the largest institutions do not take this for granted.

The problem for museums is not with PILOT programs per se, but the way Mr. Harmon and others seem to use PILOT as a litmus test for whether a museum is contributing sufficiently to the life of the community. PILOT is designed as a voluntary program, with municipalities asking museums to contribute to the cost of fire and police protection, snow removal, and so on. Some museums have contributed while some have not. 

Shaming museums that do not participate in PILOT and suggesting, as Mr. Harmon does in his column, that they may be seen as “parasites,” does great injury to those institutions and, frankly, to the civic conversation. It’s the bully’s approach, and one which fails to recognize the covenant a community has with its cultural institutions. 

Museums emerged in virtually every American city because leading 19th-and 20th-century citizens recognized that they were critical components to a well-rounded citizenry. In recognition of their important role, museums were bestowed with tax-exempt status. Many communities felt so strongly about their museums (and continue to do so) that they built and operated museums using public revenues. In all communities, the covenant was this: museums enhance the community’s quality of life, the community helps sustain the museum.

Now that municipal budgets are strained to the breaking point, it is understandable that some are eying museums and other nonprofits as potential revenue streams. And some museums are in a position to answer the call by volunteering to contribute what they can. 

But those museums not in a position to contribute to PILOT should not be castigated as deadbeats. They still contribute mightily to the community’s bottom line and to its quality of life. They are still major facets of what makes places special. If we construe the relationship between museums and their communities as merely a dollars and cents proposition, we are all impoverished.