RICHMOND, Va. — This is what the Museum of the Confederacy, the onetime “Shrine of the South,” has come down to:

Attendance has dropped by nearly half over the past decade. The museum has been losing about $400,000 each year for a decade. Employees have been laid off, hours curtailed. A recent report by a panel of outside experts in museum management concluded that the 117-year-old institution was at a “tipping point” that was going to affect “its very existence.”

And this is in Richmond, the capital of the Confederacy. The museum will likely have to sell its $7 million site to raise cash. It needed a $400,000 emergency grant from the state Legislature earlier this month to allow it more time to look for a new home.

It may even have to change its name. That same doleful report said the Museum of the Confederacy, though it has made efforts to distance itself from being an unabashed shrine, still “conjures up in the public mind images of slavery, racism, and intolerance. ... (It) carries enormous, intransigent and negative intellectual and emotional baggage.”

The museum and the adjacent White House of the Confederacy, home of Confederate President Jefferson Davis during the Civil War (and a National Historic Landmark), have been swallowed by a surrounding medical complex, shoehorned onto eight-tenths of an acre at the end of a dead-end downtown street — just beyond the emergency-room entrance.

“Most museums don’t make, but record history,” said Executive Director Waite Rawls, a former banker hired in 2004 in an attempt to restore solvency. “But the museum was where Confederate veterans came to give their items to make a statement. Richmond was the epicenter of the Civil War. ... So yes, there’s a symbolic message to our moving.”

The tangible remnants of the belief were preserved here: Robert E. Lee’s uniform, the plumed hat of J.E.B. Stuart, hundreds of battle flags, thousands of soldiers’ letters from mud-filled trenches that soon would become their graves.

“I went there in the 1960s when I was about 14, and it was a shrine, no question — the sacred relics, locks of hair, all that,” says Gary Gallagher, professor of Civil War history at the University of Virginia and author of more than a dozen books about the era.

While the Museum of the Confederacy goes begging, the $13 million American Civil War Center — which looks at the war from three perspectives (Southern, Northern and black) — gleams on an eight-acre campus a few blocks away. Just six months old, it’s already packed with school kids coming to learn about the Confederacy as a flawed participant in the Civil War, not as the Great Defender of (white) Southern Heritage.

“A lot of people in Richmond are just sort of embarrassed by (the Confederacy museum), particularly when we have this beautiful new American Civil War Center that people are not embarrassed by,” says Harry Kollatz, a senior writer at Richmond magazine who writes regularly about city history.

The real issue, rarely articulated in direct terms, says Gallagher, is race: “our great national bugaboo.”

Opened in 1896 in the Confederate White House, the museum remained even as Richmond became predominantly black and the civil rights era rendered its unabashed cheerleading for the cause obsolete. A new attitude came with the adjacent new building in 1976, built with private donations. Tourism peaked at 91,000 visitors annually in the early 1990s.

But the museum did not conduct a capital campaign for years, and when gate receipts dropped off precipitously (it now averages about 50,000 visitors per year), income plummeted.

Rawls spoke recently at a public meeting in Lexington, a picturesque town of 6,000 about 135 miles away, to which the museum may relocate. He mentioned, as proof of its racial bona fides, that the museum had featured Theodore DeLaney, a history professor (who is black) at Washington and Lee University, on a panel there in Lexington.

Sitting in the audience, not amused, was DeLaney.

“It was a miserable experience,” he says. On the panel, which addressed Confederate monuments in city parks, DeLaney posited that black people are Southerners, too, and might not want such monuments.

People “lined up to chastise me for my views after the discussion,” DeLaney recalls. “They didn’t line up to talk to the other three speakers. I got tongue-lashed by everyone.”

DeLaney thinks the museum presents a divisive image and does not want it in Lexington, his home town. Others in town do want it as a tourist attraction. After all, supporters say, Lee and Confederate hero Stonewall Jackson are buried there, and Jackson’s home is already a museum.

This is Rawls’ predicament: To make the Confederacy museum palatable to the wider world (most of whom are never going to visit), he needs to make visible changes to the museum, either its name or its public image. This would, however, alienate the museum’s grass-roots supporters, who don’t have the financial wherewithal to sustain the museum on their own.

“Mr. Rawls has lost a lot of support from the heritage community because he has, at least to us, endangered the integrity of the museum itself,” says Darryl Starnes, chief of heritage defense for the national chapter of the Sons of Confederate Veterans. “He’s talking about removing the name ‘Confederate’ or stopping flying the flag out front, in order to appease people who don’t approve. But the museum is unique.”