By Todd Cohen
Bonnie Hancock, president of the Exploris museum in Raleigh, resigned effective Sept. 1 to head the Enterprise Risk Management Initiative at the College of Management at N.C. State University.
Hancock, named interim director in April 2005 to assess whether Exploris could reverse its financial troubles and continue operating, says the nonprofit museum has revamped its business model and is poised for growth and a planned merger with Raleigh’s Playspace children’s museum, but still must address its $5 million debt.
Under Hancock, Exploris has cut its staff and expenses, stabilized revenue, generated new corporate sponsorships, secured an offer by its bank lenders to forgive part of the debt in return for a partial cash repayment, and instituted plans for the merger.
“I think it’s in great shape,” Hancock says. “I think we’re going to find a solution to the bank debt. And the upcoming merger with Playspace is going to create a wonderful family destination.”
Overall, she says, Exploris now has “more of a can-do culture” and a business structure and processes that are more disciplined and designed to promote innovative ideas and initiatives.
Former president of Progress Fuels, a subsidiary of Raleigh-based Progress Energy, Hancock was hired by the Exploris board in the face of continuing financial troubles that prompted the resignations of its founding chair, Gordon Smith III, and its founding president, Anne Bryan.
Despite raising more than $50 million in public and private support, the museum had faced lagging attendance and revenues, and had been unable to repay $5 million it had borrowed from a group of four local banks headed by Wachovia.
Hancock has reduced the staff for the Exploris museum and IMAX theater to 32 full-time employees from 45, and cut annual expeneses to $3.37 million from $4 million.
And while state funding fell to $100,000 in the fiscal year that ended June 30 from $500,000 a year earlier, and county funding fell to $1 million from $1.5 million two years earlier, the county is again providing $1 million in the current fiscal year.
“Wake had been on a steady path of cutting us,” Hancock says. “I feel really good about the fact that we stabilized county funding at $1 million.”
Hancock made significant cuts in expenses, including $400,000 that Exploris had been spending on traveling exhibits.
The museum, for example, was paying for off-site storage despite having storage space in the museum, and was paying a private firm to assemble the exhibits even though, with training, its staff now is handing that work.
Hancock says the museum also stabilized revenue overall in the most recent fiscal year, even without a big traveling exhibit, and expects revenue to grow this year because of “The Enemy Within,” a traveling exhibit on domestic terrorism that opened Aug. 26, and because more Hollywood films are being made for the IMAX format.
IMAX revenues in the fiscal year just ended fell $40,000, to $1.23 million, and revenue from admissions fell $60,000, mainly because rising gas prices resulted in fewer field trips by school groups and families, Hancock says.
But offsetting those declines, and keeping overall revenue at $2.23 million, the same level as the previous year, were revenue increases from event sales, summer camps, after-school programs, and concessions at the museum and IMAX theater.
And to help generate more admissions, Exploris reduced the single-ticket admission price to $5, down from $7.95 for adults and $6.95 for children.
While Exploris has not been able to reduce its $5 million debt, Hancock says, it hopes to recruit donors or business executives, or both, to provide funding to partly repay its bank lenders in return for forgiving the remainder of the debt.
“We have a possibility of completely extinguishing the debt with that group of banks,” she says. “We have been given a forgiveness offer from the group of banks, but we have to bring some cash to them before they will do the forgiving.”
Private contributions to Exploris totaled $195,000 in the just-ended fiscal year and should grow to $345,000 in the current fiscal year, Hancock says.
“The organization has reestablished some credibility, and donors are seeing a brighter future for Exploris,” she says.
But she says the “funding cycles are very long,” sometimes involving a year or more between a visit to a donor and receipt of a gift.
She also says Exploris had hamstrung its fundraising.
Donors had been concerned about the nonprofits’ debt and possible reductions in public funding, she says.
An extended vacancy in museum’s top fundraising job, now filled by a veteran museum fundraiser Hancock hired last year, may have resulted in a loss of connection with donors, she says.
And in the two fiscal years before she arrived, during the height of its financial troubles, Exploris asked some donors to “dig even deeper to help us through that on a special basis,” she says. “You couldn’t expect that funding to continue.”
But with the planned Playspace merger, which would involve redesigning the museum’s exhibits, Exploris should be able to raise more money, Hancock says.
“Fundraising also revolves around what you have to sell,” she says.
The two museums have agreed on the merger in principle, contingent on completion of a feasibility study by Witzleben Associates in Chapel Hill.
Plans call for the museum to continue its international focus, and to expand that to younger children now served by Playspace.
“It is going to be a place where children and families will come,” Hancock says.
Exploris also received a $25,000 sponsorship from GlaxoSmithKline for “What the World Eats,” a traveling exhibit last year, and has secured sponsorships for “The Enemy Within” from Progress Energy, WakeMed and The News & Observer, with additional media support from WRAL-TV.
Overall, Hancock says, the future looks promising for Exploris.
She says her initial assignment was to determine whether Exploris could continue operating and, if so, what changes were needed.
“I concluded it could be viable with a number of changes,” she says. “It needed dramatic changes to its operating model, including cost reductions and improvements in the visitor experience. We’ve certainly put it on a new business model and are making progress in improving the visitor experience.”