An Overview of how Art Galleries Operate
By Joshua Chek
Art galleries are a fundamental connection between artists and the public, and facilitate the sharing of culture, knowledge and ideas. However, not all galleries are made equal. Galleries can come in many different shapes and sizes, from the Art Gallery of NSW (AGNSW) to much smaller initiatives. This article will introduce and explain the four broad categories and how they operate from a financial perspective.
Institutions are galleries that receive some form of external funding. That could be from the Government, as well as private. Government funded Institutions in Sydney include the Art Gallery of New South Wales (AGNSW), and the Museum of Contemporary Art (MCA). An example of a private institution is the White Rabbit Gallery, funded solely by Judith Neilson.
Institutions tend to be not-for-profit charitable organisations, and do not rely on artwork sales and commission as income. To generate revenue, publicly funded institutions are unable to survive on funding alone. The AGNSW frequently receives around fifty percent of its revenue through funding, while the MCA receives around twenty percent. While these numbers are significant, they alone are unable to cover the gallery expenses. The remainder is made through ‘donations, corporate sponsorship, venue hire, ticketed exhibitions and events’ (MCA, n.d.).
For institutions, a large portion of expenses include personnel costs which can include a large amount of staff, from waiters at the café to head curators. This is a point of difference to other types of galleries, which may be run by very small teams. Other expenses include depreciation, costs of goods sold and many others. For government institutions, it is possible to access their financial reports. For example, the financials for the AGNSW are accessible on their website here, while the MCA’s reports are available here.
Commercial galleries are not externally funded, and instead make their money through art sales and commission. They tend to be smaller in scale compared to other art institutions. In Sydney, public commercial galleries include Roslyn Oxley9 and Sullivan and Strumpf Fine Art. There are also many private commercial galleries, to which only those with special access can peruse, in order to purchase work for their collections. Commercial galleries will curate exhibitions from artists which can then be sold either to individuals, private collections or institutions. Typical commercial gallery sales commissions range from 20-50 percent, but can be higher or lower depending on the costs. Some commercial galleries also charge their artists exhibition fees, much like rental galleries. As a result they may take less commission. The income earned from commission and exhibition fees is used to pay the expenses of running a gallery. The largest of these expenses for commercial galleries is rent, but also encompasses wages, and other costs associated with running a business.
Also known as co-ops, Artist-Run-Initiatives (ARIs) often operate in a similar way to commercial galleries, making revenue through artwork sales. However, instead of being run by a separate organisation, artist-run-initiatives are operated by artists that together share the expenses of the gallery space, including rent, bills, maintenance, cleaning, customer service and more. ARIs are not-for-profit, and have very different values compared to commercial galleries. The advantage for many artists of an ARI is not having to pay rental fees or the commission charge of a commercial gallery to have an exhibition available to the public, making exposure accessible and available to up and coming artists. Examples of ARIs in Sydney include Firstdraft gallery, Kudos gallery, AirSpace Projects, the Boomalli Aboriginal Artists Co-op and many more.
Not all exhibitions are funded by the gallery. In the cases of some galleries, their walls are offered to artists to display their work, in exchange for monetary compensation. Instead of generating commision through the sale of artworks, galleries generate revenue through the rent and space that artists pay for. Despite the spaces being available for rent, artists must satisfy other criteria in order to guarantee a space in order to display their work. Most rental spaces will require a serious proposal consideration before allowing artists to hang in their walls, in order to uphold gallery reputation. Expenses for rental galleries are similar to those of commercial galleries. An example of rental space galleries include Gaffa Gallery, Incinerator Gallery, and M2 Gallery. For many artists Rental spaces are a real way to showcase their work in a public space.
While not the main focus of a creative precinct, the financial work required to maintain a gallery is no small effort. Just like any business, there are real logistical issues that need to be considered for all types of art galleries, whether tiny in size or massive in scope. Each form of gallery ultimately requires a business mind to navigate and fulfil the unique and varying goals and missions of each one.
Museum of Contemporary Art Australia. 2021. Frequently asked questions. [online] Available at: <https://www.mca.com.au/about-us/faqs/>