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RE: Freedom Center could close
Quote: The Cincinnati Museum Center will merge with the National Underground Railroad Freedom Center, a move that leaders say will improve the finances of both and create opportunity to reach new donors and develop new exhibits.
They will reduce payroll expense by sharing administrative work and eliminating redundancy in areas like human resources and finance. The savings will eliminate the Freedom Center’s $1.5 million annual budget shortfall and allow the Museum Center money to more quickly pay down its $8 million debt.
The Freedom Center will become the fourth wholly owned subsidiary of the Museum Center. Museum Center chief executive officer officer Douglass McDonald will be in charge of the entire operation. Freedom Center President and CEO Kim Robinson will report to McDonald.
No taxpayer dollars from the county operating levy for Union Terminal will flow to the Freedom Center, McDonald promised. Levy money is used only for maintenance, repair and operations of the Union Terminal building, which the Museum Center leases.
The organizations will remain separate with separate missions. The Museum Center – home of the Cincinnati History Museum, Duke Energy Children’s Museum and Museum of Natural History & Science – will remain in Union Terminal in Queensgate. The Freedom Center will stay on The Banks.
“I think this if going to bring stability to both organizations,” he said. “That will an enormous help, not just closing a budget, but in raising money.”
The leaders outlined benefits to both organizations:
• Cincinnati Museum Center will spread operating costs over two organizations allowing for savings it can apply to debt reduction. It also gets the cachet of the Freedom Center’s national brand when creating traveling exhibits, a moneymaker for the Museum Center, McDonald said.
• The National Underground Railroad Freedom Center gains financial stability. Donors have been hesitant to help the struggling institution but can now be assured of sustainability, Pepper said. It will also see enough cost savings to close a $1.5 million budget shortfall. It can benefit from the Museum Center’s expertise in producing traveling exhibits, generating new revenue for the Freedom Center.
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P&G president McDonald put merger plan in motionOn Oct. 10, Procter & Gamble Co.’s president and chief executive, Bob McDonald, called together in his office the Museum Center’s McDonald, who is no relation to him, and the Freedom Center Robinson.
Bob McDonald articulated what the museum heads already knew: Some donors wanted a merger. Could one work?
“The key is mind set,” said John Pepper, co-chair of the Freedom Center board and former P&G chairman CEO. “The key question is, ‘Do the financials hold?’ ”
McDonald lent a team of analysts from Procter & Gamble to review each organization’s records and potential terms of the merger. “They found that enough savings can be distributed across both organizations,” McDonald said.
In December the Freedom Center opened its books to The Enquirer, revealing a $1.5 million budget gap. Its leaders said the institution, hailed as a beacon to freedom worldwide, might have to close by the end of 2012. Asked about possible mergers, Freedom Center leaders said bringing in a tenant to its building on The Banks was a possibility.
Community leaders, politicians and philanthropists locally and nationally went on record in the Enquirer urging donors to come forward.
At the time, though, this deal was already being examined as a possible solution.
The negotiations and analysis remained secret for months as details were worked out. Even last week when asked by The Enquirer, both organizations denied working together.
Many details need to be sorted out, but the savings would come from “elimination of redundancies,” said A. Larry Fisk, chief financial officer of the Museum Center.
The Freedom Center had cut its number of full-time employees to 34, from 120. The Museum Center has 300 employees, full- and part-time. The merger will eliminate 4 percent to 4.5 percent of employees – about 15 positions. Other savings come from bulk purchasing.
Debt also played into making the decision.
The Freedom Center owns its building. Pepper and his family played a major role in retiring $27 million in debt in 2010. The Museum Center, however, is carrying $8 million in debt, and the savings on its end of the new arrangement should help it pay off additional pieces of the debt while interest rates are at all-time lows.
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Then came the votes.
The Freedom Center board approved a resolution Jan. 30 expressing intent to join Cincinnati Museum Center’s corporate structure. Ten days later the Cincinnati Museum Center board approved a resolution acknowledging that vote, promising to strengthen the delivery of the Freedom Center’s mission and authorizing its management to present the plan to the public.
Freedom Center will not receive taxpayer supportFrom its origins in the early 1990s, long before it broke ground on its building in 2002 and opened in 2004, Freedom Center leaders said they would not be taxpayer supported. That pledged changed, and the center received $20 million in federal, state, county and city money since its opening, a funnel that has closed to about $275,000 in 2012.
Hamilton County has provided just $15,350 since the Freedom Center opened.The new arrangement with the Museum Center will not open that faucet. Douglass McDonald said no county levy dollars will be used to support the Freedom Center.
The Cincinnati Museum Center has an operating levy which brings in about $3 million dollars a year. It costs the owner of a $100,000 home $5 a year. The Museum Center is also asking Hamilton County Commissioners to put a $150 million building repair levy on the November ballot. .
McDonald said the repair levy request is “separate” from the Freedom Center agreement and that there would be “no diversion of funds” to the Freedom Center.
“In no way will the tax levy be used for anything other than the Museum Center,” McDonald said.
The Freedom Center has worked in the past year to form partnerships or develop programs with colleges or other academic institutions. Among them is Historians Against Slavery, which is attempting to raise awareness of contemporary slavery and link it to historical slavery of African Americans.
“The merger provides an incredible amount of credibility locally,” said James Stewart, founder of Historians Against Slavery and history professor and Minnesota’s Macalester College. “The idea that the Freedom Center is now linked to an organization with deep roots in Cincinnati can help put the Freedom Center on solid ground in its hometown.”
A long-held criticism of the Freedom Center was that it was aloof and disconnected to the local black community.
Cincinnati NAACP President Christopher Smitherman, also a member of city council, praised the museum agreement.
“I think there will be shared services that will make the freedom center more financially viable,” Smitherman said. “I see this as a win for everybody. Everyone has assured there is no financial bleeding over from one institution to another.”
More Here: http://news.cincinnati.com/article/20120...r-to-merge