Budgets and Financial planning

Careful budgeting and financial planning are key to the success of a temporary or touring exhibition, particularly because expenditure and income are likely to straddle a number of financial years. It may be necessary (depending on the financial model used) to commit expenditure in advance of receiving income, on which you are dependent to cover costs, and there will be some budget lines where estimated figures have to be used when planning. This chapter looks at the range of financial models that can be used for developing temporary and touring exhibitions, and how to develop and manage your budget.

It can be difficult to derive profit from a touring exhibition, particularly in the initial stages of its development. Reflecting this, benefits other than financial gain are often at the root of an organisation?s motivations for touring, as outlined in the Touring an Exhibition resource. The financial models for touring, outlined below, are examples of the ways in which an organisation or consortium of organisations may wish to structure the funding and derive income from a touring exhibition. The funding model selected will affect cash flow, the planning and development process, and how and when income comes in:

• Individual organisation hiring to venues for a fee: Traditionally this this been the most common funding model used to develop and tour an exhibition. The originating organisation develops and funds the production of the exhibition, and then hires it to other organisations for a fee. In some cases the exhibition will preview at the organiser’s venue first.
• Consortium of equal organisations dividing costs equally: With the advent of smaller budgets for temporary exhibitions and an emphasis on the many benefits of partnership working, there has been a growth in the use of this funding model for touring. It sees a group of organisations dividing costs equally, and working to develop an exhibition that can be shown at each of their venues.
• Lead organisation with a consortium of partners, costs divided by agreement: Touring projects structured in this way have become more common as larger organisations, such as the national museums, have had to ensure wider public access to their collections. This model sees a single organisation taking the lead in developing an exhibition, with the input of partners, who will then present the exhibition or an element of it in their venue. The division of costs will be negotiated and particular to the specific project. The venues may receive the exhibition for free, or only need to cover transport and local costs, if it is deemed an outreach and access project by the lead organisations.

Any of these examples may be tweaked according to the particular circumstances in which a project is being developed.

Each of these funding models may be supported by external funds, raised to part or wholly subsidise the project, by one or more of the project partners. For further information see the Funding resource.

The structure of your budget and timings of your outgoings and income will be dependent on the funding model used, and the proportion of fundraised income to core funds. To ensure the economic viability of your exhibition and to assist with fundraising (if/as necessary) it is essential to develop your budget in advance of starting to develop the exhibition. Income and expenditure should be recorded for the project’s duration, in line with systems in place within your organisation. As some figures are likely to be estimates in your initial budget, for example costs such as onward transport may be unknown until your tour venues are confirmed, it is especially important to include contingency in your budget.

The example touring exhibition expenditure and income plan provides a checklist of headings for planning a budget. The headings in the first column correspond to main activities, whilst the second column contains sub-headings. Some costs may be managed by other departments within your organisation. They are included here because they form part of the total spend on a project, but may be omitted if necessary. The expenditure and income plan can be adapted to the individual requirements of each project. Headings and sub-headings can be deleted or left unused, as applicable. The intention is to ensure that any omissions are deliberate and that nothing is inadvertently forgotten or overlooked.

Many services provided by in-house staff are not generally included in exhibition budgets, and costs may only apply to materials and equipment. Similarly, indirect expenses (staff salaries, overheads, stationery, telephone, postage, etc.) associated with the development and delivery of a temporary or touring exhibition are not normally included in exhibition budgets. However, when applying for funding, you may need to quantify these expenses as match or in-kind funding.

All budgetary planning should be undertaken in accordance with your organisation’s tendering and procurement procedures.

When setting the hiring fee, the exhibition maker has to consider the income target as a proportion of the project’s total cost (including those specifically relating to touring), the number of venues, the market rate based on comparable exhibitions and the appeal of the particular exhibition. Fees usually have a degree of negotiation built into them, but it is in the interest of the exhibition maker that fees appear consistent and provide value to hiring venues, especially when touring is an important feature of the organisation’s programme of work. When initiating a new programme or exhibition, research is recommended to take account of the amount that venues of the scale and type you are targeting can afford, and the level of fees for comparable exhibitions, developed by others. Setting the hire fee is not an exact science, and has many dependencies. Touring may not be a viable financial option for your organisation, if the fee that it is necessary to charge to balance your budget, is significantly higher than your potential venues can afford.

A distinction can be drawn between an exhibition that tours to a number of venues in return for a hire fee, and a partnership between two or more organisations. In this arrangement, the organisational efforts, as well as defined costs are divided in an established manner, and all parties share the credit and any income as agreed. It requires a well-drawn-up contract and a good working relationship, but a significant advantage is that it encourages the development of skills and experience. When a partner is a potential lender of key works, it will also help secure them for the benefit of the project.

Fees can be paid over more than one financial year, for example by requiring a hiring venue to make a deposit on signing the hire agreement, to even out cash flow for the venue and to provide useful early income for the exhibition makers during the stages when expenditure is at its greatest. The organiser may charge VAT on the fee.

You can filter exhibitions by Hire Fee on our website.  This 2016 report by the British Council on Fees and Economic Models for International Touring Exhibitions produced by UK Museums and Galleries can also provide a useful reference.

Transport is a key element of any temporary or touring exhibition budget, and can be the hardest to quantify at the planning stage, because an exhibition maker may not have finalised the object list, or confirmed tour venues, at the time of seeking initial quotes for transport.

For touring exhibitions, a number of models are used for dividing/paying touring transport costs, and the approach selected will affect the budget, cash flow and potentially the hire fee:

• Exhibition maker’s own transport team is used: Direct costs are charged to the project, possibly excluding staff salaries but including any overtime, and can be recouped through the hire fee.
• Venues pay onward transport: The exhibition maker usually covers the cost of delivering the exhibition to the first tour venue, and each subsequent venue pays for onward transport. The return of the exhibition to the exhibition maker and/or lenders is often shared between the exhibition maker and all of the tour venues. The onward transport fee is paid in addition to the hire fee. As an approach, this reduces the financial risk to the originator, by passing it to the hiring venue, who may have to cover the cost of the exhibition travelling a great distance. A hirer may ask for information/reassurances about the location of the next venue before signing the hire agreement, to ensure they can afford this cost. It is to the benefit of the originator to devise a tour that makes a logical progression around the country, region or world to minimise costs for the venues, to encourage bookings.
• The cost of transport is divided equally between venues: This can be the fairest approach, but it may mean that the exhibition maker has to pay this cost up front, and invoice the tour venues towards the end of the project, if the venues are not confirmed immediately. It is likely to be most effective if all venues are known in advance, or if a group of organisations are working in partnership to develop and tour the exhibition amongst themselves.

Classic financial management tends to disapprove of contingencies because they are unallocated sums. They also present tempting targets for imposed budget reductions.

However, it is generally recognised that estimates are only forecasts, or snapshots representing the best information at that time, so in practice it is useful to have a financial safety net to cover necessary unforeseen expenditure, particularly in the early stages of planning the project budget.

The amount allowed depends on the scale and nature of risks, but around 5-10% of total expenditure is acceptable, reducing steadily as forecasting improves. With experience, the budget holder will develop the essential intuitive understanding of estimating. Note that all estimates must be regularly monitored to avoid either an overspend or an underspend developing at the year-end; it is very important that contingencies do not become ‘dormant’.

Download Example Touring Exhibition Expenditure & Income Plan

Written by Charlotte Dew (2015) and updated by Dana Andrew (2025)