By Jef With One F
By Rocks Off
By Chris Lane
By Angelica Leicht
By Corey Deiterman
By Angelica Leicht
By Corey Deiterman
Bob Dylan pegged it exactly in 2001's "High Water (For Charley Patton)": It's bad out there — enough to make you want to crawl under the bed (after socking all your money away in your mattress, of course).
Nobody's even brought up the D-word yet, but they might as well.
Inevitably, the worsening financial situation has begun to spread to the arts. The New York Times reported last Tuesday that venerable companies such as New York's Metropolitan Opera and the Chicago Symphony Orchestra have already been forced to cut back in areas like number of rehearsals and even health insurance. Upcoming performances have already been canceled in Detroit and Pasadena, California.
Fine-arts organizations find themselves in an especially sticky set of crosshairs. Besides the obvious fact that leaner times generally make grants and donations harder to come by — from individuals, foundations and corporate patrons alike — the endowments that safeguard these groups' financial security are often tied up in investment portfolios, not exactly the most stable sector of the market lately. The Times reported the Philadelphia Orchestra's endowment, for example, shed $60 million in a few short months.
In Houston, the situation isn't quite as grim — yet. Officials at several local performing-arts groups told Noise they're wary of the current situation and concerned about their long-term fund-raising and donations prospects, but for the moment haven't suffered any immediate damage. And considering many checks won't get written until closer to the end of the year — if they get written at all, that is — the best they can do right now is wait and see.
"I don't know if we have enough information as of yet, but we are watching our ticket sales and our contributions — the trends there — very, very closely," says Houston Symphony Executive Director and CEO Matthew VanBesien. "It'll be interesting to see how it plays out on the corporate side — the corporate-contribution side has been one of our strongest areas."
VanBesien notes that the financial-services sector — probably the hardest-hit of all in the crisis — has been an especially strong growth area, but even before the meltdown on Wall Street, the symphony started its season in a hole. After an opening weekend VanBesien says was "arguably the most financially successful we've ever had," Hurricane Ike hit, forcing the orchestra to cancel two weeks of performances.
As for the orchestra's endowment, VanBesien says he won't have any definite October figures for another couple of weeks but does expect to see some downturn.
"We know just anecdotally from other nonprofits that have an endowment that that's going to be a real issue," he says. "It's less an immediate effect than a longer-term effect because the money we're able to draw from the endowment isn't determined on a year-by-year basis, it's over 12 quarters.
"The good news is because of that, some of that will be smoothed out, but it's still there," he adds. "If this downturn were to persist and the market were not to recover for a number of quarters, then that makes the impact that much greater."
What that means is that groups like the symphony will have to work even harder on the fund-raising front, and so far VanBesien says he hasn't seen any evidence of that drying up. Many corporations have made multiyear commitments, he adds, "which is very helpful for a nonprofit."
Houston Grand Opera is coming off the most successful 15-month fund-raising period in its 54-year history, says Director of Development Greg Robertson. Although HGO's endowment has lost about 20 percent of its value in the past few months, he says the opera hasn't felt any further impact from the financial crisis. Helping shore up HGO's bottom line is an almost never-ending pool of potential donors in single-ticket buyers and subscription holders.
"We have people who have self-identified that they like what we do, because they're coming to see our work," he says. "We just haven't been able to get them to cross that threshold and become a donor, so we still have a lot of people that we need to go out and talk to and form relationships with who like our product."
Should the opera eventually be forced to cut back, though, Robertson says canceling productions — like the Michigan Opera was recently forced to do with Pagliacci — is not a very efficient way to save money at all.
"It's true for us, but also for symphonies and ballet companies — most of the costs we have for any season are already committed before we start the season," he says. "If we're doing a production that might cost $2 million, we might be able to save three to four hundred thousand dollars if we completely cut the run of a production, but it's going to cost us a million five or a million six."