The Smithsonian Institution will cut the pay of some executives and impose salary and hiring freezes for some workers to cover $22 million in estimated losses resulting from the ongoing closure of its museums.
The majority of the institution’s 6,300 employees are federal workers and will not be affected.
The cuts are the first steps toward stabilizing the institution’s finances during an open-ended crisis, Bunch said. The Smithsonian estimates $22 million in lost revenue through May 31.
“The goal is to try to eliminate the possibility of furloughs,” Bunch said in an interview with The Washington Post on Wednesday. “Our hole [if closures extend until fall] could be $20 million to $50 million. This is part of a process that will allow me to control the deficit. We don’t know how long this will go for.”
The Smithsonian’s 19 museums and the National Zoo have been closed since March 14, following social-distancing recommendations by the mayor, and Bunch won’t speculate on when they will reopen.
“I’m not going to say a date. We don’t know,” he said.
Bunch has convened two groups to work on the details of reopening operations and explore how the institution will adapt to a post-coronavirus landscape.
“We will never return to the way it once was,” Bunch said, noting that some surveys of audience behavior have found about half of audiences are unlikely to return until a vaccine is available. “So, rather than adjust on the fly, let’s think about this in a careful way. What does social distancing in a museum mean?
“The most important thing, as a historian, is knowing what the questions are,” he continued. “I’m comfortable we know the questions and now we’re working on the answers.”
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In the meantime, the 10 percent cuts to nonfederal salaries and operations will “get me close” to covering the current shortfall, he said. Other institutions, including the Kennedy Center, have made more drastic moves. President and CEO Deborah Rutter is forgoing her salary, which is $1.2 million a year, until the center reopens, and senior staffers are taking 25 percent cuts. The Smithsonian won’t release Bunch’s compensation, but his predecessor David J. Skorton earned $896,345 in 2018, according to the institution’s most recent tax filing.
“I think it’s fair,” Bunch said of his salary reduction. “I want to make sure I take the heaviest cut. We’re all experiencing pain. I want to experience a little more.”
Two-thirds of the Smithsonian’s $1.5 billion annual budget comes from the federal government, with the remaining $500 million derived from grants and contracts, memberships, interest on its endowment and income from its shops, restaurants, movie theaters and programs, including lectures, art classes and concerts.
The Smithsonian’s free-admission policy and its federal appropriation protect it from the payroll crises faced by other cultural institutions, Bunch noted. Still, it faces serious shortfalls as the closures stretch into the peak summer season. Its popular summer camps have been canceled, museum sleepovers won’t happen for the rest of the year and the ticketed events presented by Smithsonian Associates are on hold indefinitely.
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A hiring freeze for nonfederal positions will be part of the effort to trim 10 percent of expenses from the privately funded operations. Bunch said officials are evaluating the institution's contributions to retirement plans and exploring a targeted buyout offer for nonfederal employees.
“Many things have to be on the table,” he said.
The Smithsonian received $7.5 million from the federal government’s first coronavirus relief bill, which was passed last month, but those funds are for coronavirus-related expenses such as protective equipment and supplies and technical upgrades to enable its employees to telework.
The District’s other federally supported cultural institutions have responded differently to the financial stress of the long-term closures. The National Gallery of Art, for example, continues to pay the full salaries of its 1,100 employees, including those who cannot work off-site, a spokeswoman said.
The Kennedy Center has furloughed or laid off about 1,000 employees and reduced the salaries of the musicians in the National Symphony Orchestra. The center has canceled hundreds of events and has extended its closure through May 22.
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