Every arts organization has a deficit, NOT!

Michael Kaiser, in a blog about the Oregon Symphony, brings up an important point:

I am afraid NOT every arts organization has a deficit. That is simply not true. And it is dangerous logic.

This is a good counterpoint to the fact that not every popular entertainment institution is profitable or sustainable.  Until we can get past specific stereotypical qualities we attribute to arts organizations and popular music institutions, we’ll never be able to start seriously figuring out why some things work and why others don’t.

Since some of my colleagues in what used to be the Louisville Orchestra have been posting the Kaiser piece, I’ve been following pretty closely both sides of the musicians and management/board issue.  One thing I’ve noticed about management side of issues in orchestras, and this is related to my recent 10,000 hours or talent? blog post, is that there is often so much focus on the external reasons for deficits.  In this kind of thinking, the external environment is either impossible to change or very resistant to it.  There’s just no way to get more of an audience or more donors hence the organization needs to make cuts to be sustainable.  This is one other consequence of the Fundamental Attribution Error as I’ve discussed here.

As Michael Kaiser describes the Oregon Symphony situation, we have a different viewpoint:

I am always amused (disturbed?) when someone attached to a not-for-profit arts organization (usually a board or staff member) rationalizes an annual deficit with: “Every opera company/symphony/ballet company has a deficit.”

Tell that to the Oregon Symphony, which has been in the black two years in a row. As reported in an illuminating article by Anne Adams in the Portland Monthly, the Symphony earned a surplus of over $190,000 on an annual budget of $13.9 million during the 2010/11 season.

Most interesting to me was the statement by Symphony President Elaine Calder, “For the second year in a row revenues have exceeded expenses, despite the additional cost of taking the orchestra to New York’s Spring for Music festival and making a recording of the Carnegie program.”

The Carnegie program did not feature 19th century European chestnuts. It included Ives’ The Unanswered Question, Adams’ The Wound Dresser, Britten’s Sinfonia da Requiem and Vaughan Williams’ Symphony No. 4. (It was recorded on the PentaTone label.)

So how can a symphony orchestra earn a surplus performing less than standard works, touring to New York, and making recordings? I would like to hear an explanation from all of the board members of symphony orchestras (and opera companies and ballet companies…) who are convinced that the only way to attain fiscal health is to cut salaries, eliminate touring, scotch special projects like recordings and reduce the size of the orchestra.

And the Oregon Symphony isn’t the only organization doing well financially.  The Met Opera hit a record-breaking fundraising year and for the first time in seven years has a balanced budget.  Despite the modest deficit, which can be attributed partially to Muti’s illness, the Chicago Symphony Orchestra has been in the black recently.  The LA Phil is holding its own as well.  Plenty of mid-sized and smaller organizations are also doing relatively well.

The point is, I think, that making cuts to downsize to a shrinking level of revenue is exactly the opposite of what groups that are successfully weathering the depressed economy are doing.  It can be argued that just maybe, all those that are doing well happen to be in areas where there is much more support for the arts, but it can just as easily be argued that the collective vision and investment in expansion has brought more revenue to the organizations that are working!

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