Marshals Museum fundraising still important after groundbreaking

The U.S. Marshals Museum will break ground Wednesday (Sept. 24), the 200th anniversary of the Marshals Service's founding. But even with dirt moving at the planned museum's site along the Arkansas River near downtown Fort Smith, fundraising continues.

The 20,000-square-foot museum's final estimated cost is expected to be $53 million and is tentatively scheduled to open sometime in 2017. Arkansas tourism officials and Gov. Mike Beebe have said the national museum would create a “triangle” of tourism that would include the William Jefferson Clinton Presidential Library in Little Rock and Crystal Bridges Museum of American Art in Bentonville. Beebe is scheduled to be at the Wednesday groundbreaking ceremony.

As of the June 30 quarterly museum board meeting, Marshals Museum President and CEO Jim Dunn reported that the museum had $5.5 million cash on hand, with an additional $3.2 million in pledges. The combined $8.7 million reported as of the June 30 report was a decline from March, when Dunn said the museum had between $9 million and $9.5 million "in cash or pledges receivable."

Of the cash on hand and pledges as of the end of the June 30 reporting period, there is "no specific breakdown" of whether the money is to be used for construction, operations, or both according to museum spokesman Denver Peacock, whose company The Peacock Group has been hired to handle public relations for the museum.

Since the June 30 report was released, Peacock said the museum has upped the number of pledged gifts to $19.5 million, including a $5 million pledge announced last week that is payable by the end of 2015.

Dunn told The City Wire in March that the museum would cost more than $50 million to build and would be broken up into three construction segments based on funding. Dunn had previously said the first phase of construction to be kicked off with Wednesday's groundbreaking would be self-funded. The first phase largely focuses on site work allowing for the other two phases of construction to begin at later dates.

"We will self-fund the 2014 phase (of construction)," Dunn said in March. "In 2015, we will aggressively fundraise. Plans are in 2015, when we've reached necessary fundraising thresholds, then we can hopefully apply (for the tax credits). … Ideally, we'd like to have $25 million in cash or pledges next year sometime.”

An expected $10 million in new market tax credits is uncertain, with the museum looking at the possibility of spreading the tax credits out over multiple years. And even though the museum will apply for the credits, which are meant to drive economic development in economically challenged areas, there is no guarantee that the tax credits will be awarded, presenting a possible future funding challenge.

The Marshals Museum is also counting on possibly up to a $5 million windfall from the sale of commemorative U.S. Marshals coins. Dunn has previously said an additional $4 million to $5 million in museum funding could come from sales of the commemorative coin.

U.S. Mint profits from the sale of the coin that go to the museum are restricted to fund “the preservation, maintenance, and display of artifacts and documents” at the Marshals Museum. Revenue from coin sales will also go to the Federal Law Enforcement Officers Association, the National Law Enforcement Museum, and the National Center for Missing and Exploited Children.

But hopes for potentially millions of dollars in proceeds from coin sales could prove to be difficult, website Coin Week reported in January. According to the publication, a commemorative coin for the Girl Scouts of America failed to produce any proceeds for the organization after lackluster sales.

"The reason is that sales of the coins, which only reached about a third of the congressionally-authorized maximum mintage, or 123,814 out of 350,000 (as of January 5 unaudited data), were insufficient to cover program costs. By the law organizations cannot receive funds from the sales of commemoratives unless all costs associated with the coin program are first covered. In this case, that meant forfeiting $1.23 million dollars as each proof and uncirculated coin comes with a $10 surcharge. This was the first time that has happened.”

The article's author, Louis Golino, noted that the Girl Scouts employed marketing efforts to ensure sales of its coins much as other groups — including the Marshals Museum — have done.

"As Anna Maria Chavez, the CEO of the GSUSA explained in her interview with me, her organization worked to promote the coin through its web site and other venues such as local Girl Scout council partners, who sold the coins in Girl Scout shops. And yet that was not enough.”

Whenever the museum has funding available, Peacock said phase two of construction would begin. The phase includes construction of the museum building and is expected to cost around $25 million, though costs could increase depending on how long it takes to raise funds and inflationary impacts during that time.

The final phase before the museum opens its doors to the public includes establishing an endowment to fund the museum for years to come, as well as building the exhibits inside the museum. The total cost for the third phase, Peacock said, could run between $10 million and $15 million.

While the museum is focused on fundraising to take the museum from a dream to a reality, it also faces real costs each year the Marshals Museum is not open due to operational costs associated with fundraising, salaries of museum administration, storage and other expenses. For fiscal year 2015, the museum's operating budget was set at $766,416, Peacock noted. The figure includes so-called soft items such as staff expenses of $467,255, up 18.89% over 2014, and a marketing budget of $138,500, ahead of the $23,000 budgeted in 2014.

The 500% increase in the museum's public relations budget comes as the museum staff has hosted several events tied to raising money and awareness of the museum during the fiscal year, which froms from July 2014 to June 2015.