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Gold Rush: How the Oakland Museum of California Transformed Itself Through Public-Private Philanthropy

October 27, 2010

When James W. Marshall discovered gold in Coloma, California, in January of 1848, he sparked arguably the most transformative era in the state’s history. The “49ers” jump-started the state’s population, built towns, cities, railroads and schools all over the west, and created a vivid story that has since been showcased in countless films, books and museums.

While the Wild West has had its fair share of economic struggles recently, there has still emerged one golden nugget—and it’s in philanthropy, of all places.

Dedicated to the art, natural science and history of California, the Oakland Museum of California has been a pillar in its community for over 40 years. The institution’s strong connection with its surroundings has helped to build its reputation for high quality education and community-based programs, as well as an ongoing partnership with patrons that has helped to shape planning, audience development and governance. The Museum is a model institution that shows the strength in public-private philanthropy, and in a time when many doors have been closed for good, it has just reopened its doors to the public after a substantial remodeling.

Not only did the institution’s $62.2 million campaign draw from both private and public sources, but the institution itself operates under a structure of public-private funding.

“The Museum itself is a public-private partnership between the City of Oakland and the Oakland Museum of California Foundation,” explains Lori Fogarty, Executive Director at OMCA. “The Foundation was initially established in the early 1990s as a kind of ‘friends’ group to raise funds for exhibitions and programs. Over the years and with declining City financial support, the Foundation took on greater and greater responsibility for actual operation of the Museum and today funds approximately 60% of the Museum’s budget.”

While the Museum has clearly made strides to maximize its finances through public and private sources throughout the years, the size and ambition of the recent campaign made it necessary to expand and enhance their long-term plans to sustain the public-private model. OMCA needed to build an unprecedented base of philanthropic funding to complement their private support.

“The City and the Foundation did not have a formal operating agreement until 2006. With the launch of our major capital campaign, it became very clear that this agreement was essential and that clarity of responsibilities—and the allocation of income and expenses—needed to be clearly articulated and easily communicated to the donor community.”

With waning public funding, private giving was necessary to allow the Museum to undertake its ambitious transformation and continue to serve the community. However, communicating the need for stronger philanthropic funding for an institution that is publicly funded is a daunting challenge, especially when you consider that private donors have recently faced the same economic issues that have plagued the public sector.

“Marts & Lundy was very instrumental in helping us recognize the importance of clarifying the role with the City early on in the campaign process,” says Fogarty. “Through a feasibility study, a number of donors expressed in interviews their apprehension and lack of clear understanding of the City relationship. Lynne [LaMarca Heinrich, Marts & Lundy Senior Consultant and Co-leader of the Arts & Culture Practice Group] helped urge the board forward with the negotiation of an operating agreement and also helped us frame the Museum’s unique role as a civic institution—with a strong public mission—as a very positive aspect of our history and our case to the donor community.”

The new operating agreement with the City helped to mitigate public budget reductions to OMCA’s budget, plus the new understanding of donor views and apprehensions allowed the Museum to move forward with a more focused, effective strategy for private fundraising.

“With the Oakland Museum of California, Marts & Lundy had the opportunity to work with incredibly strong and talented leadership. They had a vision for the Museum’s transformation, deep insight into the values and priorities of their core constituencies and a commitment to getting the project completed,” says Heinrich. “The challenges they faced were common to those seen by many public-private partnerships. These included a board that was new to fundraising with a mix of affiliations and orientations, a need to educate donors on how their private support is necessary to continue the mission of an institution that receives public funding, and a small base of private major gift donors that needed to be greatly expanded for campaign success. But while some of the challenges they faced were common, their excellence in addressing those challenges is to be applauded.”

The campaign was such a great success that its initial goal increased twice. Two of the three galleries were re-opened last spring to great acclaim and a grateful public. Not only did OMCA reach their goal with a strong board, volunteer base and deep connection with the community, but 70% of the funds raised were unrestricted in their allocation—proof of how OMCA’s constituencies’ understood the need for funding and trusted the organization unconditionally to allocate their donations effectively.

“In this partnership, OMCA didn’t just raise some money and build some new things—they allowed for a transformation of the institution,” says Heinrich. “The Museum now has a strong, experienced board and a cadre of major donors, all stewards who will ensure that this unique setup is sustainable and the impressive new renovations to the Museum are best utilized. It is a model Museum, both physically and institutionally.”

Now with a state-of-the-art facility that can better showcase California’s treasures, OMCA’s new space is a true testament to their continued success in the public-private arena.

“I am most proud of the fact that we were able to completely reinvent the institution while still remaining true to our unique mission, identity and role in the community. The Oakland Museum of California has a tradition dating back 100 years as an institution with a deep commitment to its own local region, to engaging the diverse community and to serving as the primary cultural resource of the East Bay,” says Fogarty.

“We were able to really reinforce and highlight this mission and advance it in many innovative and dynamic ways in the new spaces, while at the same time mounting the first-ever major capital campaign in the Museum’s history. The Museum’s success has also become a source of great civic pride for Oakland at a very difficult time for the city in many ways. I am most proud when I hear a resident of Oakland say to me: ‘Thank you. I am so proud of Oakland for making this happen.’”