Practicing Strategic Financial Sustainability in Small Cultural Non‐Profits: Evidence From London Museums

ABSTRACT Small cultural museums play an important role in sustaining local heritage, community identity and inclusive cultural participation, yet they face persistent financial and organisational constraints. This study examines how financial sustainability is achieved and maintained in three small cultural museums through a qualitative‐led mixed‐methods design. The quantitative component draws on audited financial data from three museums over a 6‐year period, while the qualitative component is based on semistructured interviews with trustees and senior managers. The descriptive quantitative analysis indicates that donations, return on assets (ROA) and grants are associated with short‐term financial viability, while financial outcomes remain volatile across time and organisations, highlighting fragile rather than stable financial conditions. The qualitative findings show that financial sustainability is enacted through continuous adaptation, legitimacy‐seeking practices and responses to chronic capacity constraints, rather than through balanced budgets alone. Drawing on institutional theory and resource dependence theory, the study develops a triadic framework linking short‐term financial viability, organisational resilience and long‐term sustainability. The findings demonstrate that accounting and governance practices function both as technical tools and symbolic performances, enabling resource access while masking underlying fragility. Sustainability is therefore conceptualised as a negotiated and processual outcome, not a fixed financial metric. The study highlights implications for funders and regulators, particularly the need for flexible funding and capacity‐sensitive accountability frameworks, within the context of small, resource‐constrained cultural non‐profits. By foregrounding the organisational work through which sustainability is enacted, this research contributes to non‐profit accounting and sustainability scholarship and offers a more context‐sensitive understanding of financial sustainability in small cultural museums.