[M]useums are ... facing increasing financial pressures as costs rise but revenues ... stabilize or decline. They must also deal with more complex legal, ethical, and operating environments...[T]hey are under increasing pressure to focus more on increasing public involvement at the expense of ... collecting, preserving, and interpreting art objects. Although these pressures are felt by most museums, their ability to resolve them has become increasingly unequal.

This description, immediately recognizable to anyone involved in running a museum, is from A Portrait of the Visual Arts: Meeting the Challenges of a New Era, a 150-page report about museums, artists and the art market in America published this August by the RAND Corporation.* The report presents a perspective that has moved, over a four or five year period, from being regarded as unwarrantedly gloomy to more or less received wisdom within the museum sector both in the United States and Europe.

The report points out that although museum attendance has increased significantly over the past twenty years, the increase is largely attributable to growth in the segment of the population with the highest propensity to attend art museums (educated, better off) rather than to a deeper penetration by art museums of that segment or, better, penetration of a broader social demographic. Moreover, the frequency with which people attend art museums in America has actually dropped during the same period, notwithstanding the growth in the number and size of museums, in marketing budgets, and in the willingness of art museums to programme block-busters aimed at broader audiences.

Further growth, it notes, is going to be difficult, given wider demographic changes and the assaults on the audience base from longer work hours, changing leisure patterns and the home-technology-based entertainment industry (i.e. Tivos, DVDs, movies-on-demand and other accessories of the couch potato).

The report also illustrates vividly the difference in the circumstances of the top 1% of museums – effectively the eight largest museums in America – and the circumstances of the other 99%. The 1% receive, astonishingly, over 40% of all of the sector's contributed income and own 48% of its endowments and assets. RAND has, in earlier reports, been among the first to emphasize the different circumstances of the small elite of cultural organisations that grab the headlines, visitors and resources nationally, and the rest, and to show how dangerous it is to extrapolate from the fortunes of the few to those of the sector as a whole. The strategies that these more privileged institutions can use to secure earned and contributed income – blockbusters, media campaigns etc. – are simply unavailable to most museums.

Over the past five years RAND has built up an empirically well-grounded picture of cultural life in America that has caused people to inhale deeply, to ask themselves uncomfortable questions. Their ‘reality-based' approach is in stark contrast to much ‘faith-based' writing on the sector. The reports have focused on the downside of the apparently inexorable growth of the cultural sector; the stresses placed on arts organisations by growth that is clearly not ‘demand (i.e. audience)-driven' but fuelled by the sectors' own rapacious ambitions; and the mixed success of arts organisations in engaging meaningfully with the communities in which they are located and whose tax-base supports them.

Diagnosis should lead to prescription and although prescription clearly needs to be tailored to individual circumstances of individual museums, the RAND work provides a good perspective from which museums can consider their options in the current environment. For their part, RAND sees museums as needing to face three basic strategic challenges.

The first is to bite the bullet and refine the focus of their missions, which have sprawled unmanageably and implausibly over the past two decades to the point where all museums aspire too often to be all things to all people. This is undoubtedly correct and the report will help those trying to persuade their attention-deficit beset funders of their need to be able to prioritize honestly. Different museums can and should have different priorities with respect to education, collecting, stewardship etc.

The second is to improve their ability to measure progress toward the things that matter to them. This sounds a little like UK public sector reform circa 1980 and it is depressing that museums are not spontaneously more disciplined that they are. Pragmatic, practical performance measurement tools now abound but museums tends to debate them endlessly rather than using them.

The third strategic challenge RAND identifies is the need for museums to improve their ‘institutional competitiveness' by working out more honestly what public needs and purposes they are really serving, and whether they in fact have the skills and the funding to address those meaningfully. This will require the sector to strip away some of the inflated rhetoric with which it feels it has to describe itself to the world and to take a more forensic and less advocacy-oriented perspective.

It would be easy to cavil with the precise list but these are all areas where many museums would benefit from honest, well-informed internal discussion. This in turn requires a quality of museum leadership and of maturity that does not always appear to be rewarded by board members and funders. However, the emerging diagnostic consensus will, inevitably, force the adoption of a prescriptive approach by museums and funders that is more measured and more in tune with the challenging environment in which museums find themselves than has the simplistic ‘grow-or-die,' ‘all things to all people' prescriptions of recent years. This will be an immensely positive step for the museum sector not only in America but internationally.

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* Details of A Portrait of the Visual Arts: Meeting the Challenges of a New Era by Elizabeth H. Ondaatje, et al. can be found at www.rand.org/pubs/monographs/2005/RAND_MG290.pdf