As I look over the comments on my recent posts — and of course over many things that have been done and said over the past few years — I’m struck by something we don’t seem to agree on. “We” being people involved professionally in classical music.
And that’s whether the field is in trouble. And, most pointedly, whether orchestras are in trouble, or whether they’re essentially healthy.
But then I have to ask why we’re having this debate. Why don’t we know? In the newspaper industry, for instance, there’s no debate about how things stand. Everyone knows that print newspapers are losing both circulation and advertising, that this has been going on for quite a long time, and that income from digital enterprise — whatever it may be in the future — hasn’t yet made up for the losses.
No one disputes this! There’s lots of disagreement over what to do about it, but no one disputes what the facts are. You don’t, for instance, find unionized journalists saying that circulation hasn’t dropped, or that, if it has, that’s because newspaper managements haven’t done their job. Or that, overall, the climate is healthy for print newspapers.
Likewise the US auto industry. Nobody disputes that US carmakers were in serious trouble. We’ve seen partisan disputes — Romney vs. Obama — over what should have been done to fix the problem. And the carmakers fumbled badly when their CEOs flew private jets to congressional hearings about how to help them. But nobody says the problem wasn’t there. And nobody, as far as I’m aware, denies that things are now better.
I could take this further. No one disputes that, among mainline Protestant churches, congregations are shrinking. Or that the Catholic church has been closing down some of its parish churches and parochial schools.
So why — in classical music — can’t we agree on how things are going? Think for a moment. Isn’t it amazing, almost beyond belief that we can’t? That we still have violent debates over the most basic facts?
If you ask me, this doesn’t bode well for our industry. We’re not acting the way I’d expect a mature enterprise to act.
Though there are a few other areas, in our world, where we see similarly basic debates. I’ll talk about them in another post. But I’m not sure all of us will find the comparisons quite flattering.
As I said in an earlier post, I think part of the confusion arises from comparing non-profits against for-profits. (newspapers against art museums, car companies verses orchestras) A non profit such as an orchestra typically derives less than half its operating budget from earned income. Charitable contributions are the larger piece. No one donates charitable dollars to Ford or GM.
The demographic that makes up the donor base is the top one percent of one percent. They are generally immune from the tyranny of the business cycle regarding their personal finances. A one million, or even a ten million dollar contribution may not make a dent in their ability to live their lives from year to year. That is why the endowments of the major orchestras are currently 9 digits to the left of the decimal.
A large orchestra runs on a budget north of 40 million. Most of that money comes from donations. The endowment is also built 100% from donated money. It flows in by the tens of millions each year, and balloons in bull movements in the stock market. A CFO of an orchestra can create or eliminate a deficit of millions with a keystroke by moving unrestricted funds from the unearned portion of the operating budget to the endowment and back again at will. It has the potential to be a shell game, all legal, and even desirable or appropriate at times. The only problem is that observers who maybe somewhat gullible can be lured in by these claims of manufactured deficits.
The true picture of the financial health of an orchestra is dominated by charitable donations and accumulated assets. This is the biggest piece. The lesser factor, while still important, is comprised of ticket sales and other forms of earned income. These are the economic realities in the modern american symphony orchestra.
David, everyone knows this! I think you might give your fingers a rest, and stop typing it.
The question is whether donations can continue at the rate we’ve seen in the past. There’s every reason to believe they can’t, due to a variety of factors, including cultural changes — a loss of interest in classical music, which is easy to measure in various ways. Younger wealthy people are far less likely to give to classical music than an older generation was, as classical music institutions in Seattle learned — somewhat to their shock — when a new generation of tech zillionaires appeared on the scene.
And in fact the financial picture of nonprofits is much like the financial picture of for-profit organizations. You make similar calculations of income vs. expenses. It’s just that the income comes from different places. Neither a profit-making corporation or a nonprofit can survive very long if expenses keep growing faster than income. The big difference, actually, is that the profit-making corporations catch on to this much faster. Nonprofits can generate mythologies — that they’re crucial to civilization, that they can’t possibly fail, that they can raise all the income they need simply by trying harder. This may well blind them to the emergence of new realities. Here’s one such reality. In past generations, the richest zipcode in New York City was 10021, the upper east side. The people there served on arts boards and donated to the arts. More recently, the richest zipcode has shifted downtown, to Tribeca. And the people there don’t serve on arts boards, don’t donate to the arts, and — according to information I received privately from a large NYC classical music institution — don’t even buy tickets to classical performances.
Even if you’re right in saying that it’s only the very top of the income pyramid whose donations keep classical music alive — and I think you’re exaggerating that — you’re not accounting for cultural changes in the people who make up that top slice.
Seems to me that if orchestra and other classical music institutions let the cat out of the bag, as to how bleak and perilous the financial outlook, it might jinx donations and subscriptions. There’s a lot of bluffing everywhere, which I perceive as a cunning means for self-preservation. There’s also the positive outlook factor; put on a happy face, the money will appear if you just close your eyes and believe. Recently, a young conductor lectured me on the dangers of reading too much “negative nonsense” from the press. I know of colleagues who are clutching onto the few, remaining orchestral jobs, shaking their heads in denial that, quite possibly, it might be their jobs, or those of their wunderkind, to disappear next.
Hi, Marjorie. As I’m going to say in a post soon, I think the idea that we’ll scare away donors and ticket buyers is an insult to those people. Do we think they’re children, easily frightened away? And do we think they’re that easy to manipulate? In my experience, they aren’t easy to manipulate at all. What they’ll respond to is transparency and planning. If an institution is in financial trouble, let it say so, and — most important — say what the plan is for improving the finances. My guess is that people will rally to its support. As happens, for instance, with universities, which tend (or so I’m reliably told) to be honest about their financial difficulties, without suffering any loss of support. Quite the opposite.
And yesterday the NY Times ran a scorching piece about shoddy scientific research. There’s been a huge rise in the percentage of scientific papers published in major journals that have to be retracted because the data doesn’t stand up. So who blew the whistle on this? Scientists themselves. Science depends far more on grants and donations than classical music does — virtually 100% of its funding (even scientists’ university salaries) comes from grants the scientists have to raise themselves. But even so, there wasn’t any hesitation to blow the whistle on a serious problem. Classical music can learn from that.
It’s a qualitative industry, Greg.
We don’t count.
“We must, indeed, all hang together, or assuredly we shall all hang separately.” attr Benjamin Farnklin
The fact is that those of us in the profession don’t socialize or talk with each other, there is no sense of community. Starting in college, and even before, we split into seperate tribes. Singers don’t hang out with instrumentalists. Fiddlers don’t hang out with brass players, pianists are in their own alternate universe as are composers, and everyone wonders if the theory and musicolgy majors are really musicians. And MuEd majors get no respect at all. In the instrumental world, symphony players are at the top of the foodchain, even though many know that there are freelancing kids who would eat their lunch. I could go on and on, but you get the picture.
The classical music ‘industry’ is not nearly as clear cut as the auto or newspaper industries. The last two have had VERY dramatic changes which dwarf the changes in classical music. Plus, it’s difficult to separate the classical music industry with the greater music industry, all of which have suffered in the wake of the economic down turn (along with the rest of the arts). Then there is the other monkey wrench thrown into the greater music industry- digital music downloads replacing physical media…
So sure, classical audiences have been shrinking somewhat, but it’s not completely a problem unique to classical music. There is a good change there are still just as many true classical fans out there (if not more).
It gets even more confusing when you look at enrollment at music schools and conservatories, more students than ever.
Then look at China or Venezuela. Classical music fans are growing exponentially in some places. In one generation’s time, even if all the symphonies in the western world closed down, there would likely be more classical musicians and fans in China alone than there have ever been world wide. The auto industry is becoming dominant in China too…
I do agree with much of your concern and thinking Greg, but perhaps it shouldn’t be so hard to see why some people don’t share your worries. Economics change and the arts tend to change along side, right?
I’m sorry, Nathan, but what you say in your first sentence isn’t true at all. The difference between the classical music industry and the newspapers industry — in regard to what we’re talking about here — is that you know the data for the newspaper industry in the US, and you don’t know the data for classical music in the US. That’s for many reasons, but two of the most interesting ones are (1) that some of the data (orchestra ticket sales) is gathered, but then kept secret, and (2) a lot of data (ticket sales for chamber music concerts and for concerts presented by arts centers and other presenting institutions) isn’t gathered at all.
Still, here are some stats for the classical music industry. We know enough about orchestra ticket sales to know that they’ve declined over many years. We know from the NEA that the percentage of American adults who go to classical music performances has declined over many years. We know that media coverage of classical music has declined over many years, which indicates a loss of interest in classical music among the general population. We know (from my research) that the classical music audience has aged dramatically during the past two generations. We know that the number of orchestras running deficits has greatly increased in recent years. We know that the number of classical music institutions that say they’re in drastic financial trouble has greatly increased in recent years.
There’s more, but that ought to be enough to sketch out a profile that at least roughly parallels the newspaper industry.
Greg,
I think the fundamental difference is that we are mainly dependent on contributed and not earned income. (I’m talking about the net contribution from both revenue streams, not gross.) And so it’s easy to say “if the board/management just tried harder we’d raise enough money to cover our expenses.” That option isn’t open in the newspaper business, or the auto industry.
I agree, Elaine. And I think it’s a curious myth, the belief that if only everyone tried harder, more money could be raised. For one thing, that’s what a scientist would call a nonfalsifiable proposition — that is, a theory that can’t be disproved. And in science, if something can’t be disproved, everyone agrees that it also can’t be proved. So there’s no reason to believe it.
Robert Flanagan points out in his book on orchestra finances that there’s no logical reason why the amount of money it’s possible to raise should equal the amount of money that’s needed. But we’re blinded from seeing that by the fact that in the past, enough money _could_ be raised. Before the late 1960s, in fact, it could be raised without trying very hard. This history lulls us into thinking we’ll always be able to raise money, though the objective facts don’t show that at all.
The classical music world is conservative with a big C,recognition of decline,bring also the the realisation that things must change,the classical music world veiws change as scary and as a result has but all these issues of decline and change in the too hard basket.the best parallel for this is how human are reponding to the dangers of climate change, ,most of us can deal with minor change but fundamental change is a much more scary thing and many of us would rather stick our heads in the sand.
Greg, you make valid points about all these areas of society and life as we know it. As I see it, we are in a state of flux for classical music, because there are old ways and new ways to attract audiences to classical music, and audiences of old are dying and audiences of new are becoming attached to 21st century tactics of retrieving all of their information. As a musician, I know I cannot get swallowed in the wallow of negativity, for that would attach me to words which would steer people away from what I do. Musicians are a funny breed–we stay in the game because it is our calling. We know we need to make music for the betterment of the human spirit, no matter where and when it takes place. Personally, I busy myself with new projects and recordings, and sprinkle in the traditional repertoire to keep them fresh. Every musician has their own personal purpose. I also believe that, the more we read about how badly things may be, it pushes potential sponsors away. Better to keep the flow of positive journalism, and support of the local arts scene in every publication, online and in print. I posted on Facebook wall something which I truly believe in: since webcasts are now only starting to sprout up here and there with real definition (my concert in Detroit on 4/21 will be webcast live), I foresee one aspect of writing reviews which can be an extra duty for journalists NOT living in the city where the webcast is taking place. I asked journalists if they would consider creating a story about webcasts, the history thereof (which I did in 1997 for the first time in audio+video), and then write the review of the live webcast. That is only one slice of the pie which can contribute to awareness of cultural events online–which, in turn, can be a contributing factor to boosting audience locally. The only people who should be 100% aware of the numbers, the budgets, contributing factors to audience decline, advertising etc, are the administrators and personnel at the presenting organizations who have to deal with these issues on a daily basis, and learn from what is happening to avoid a down spiral. The public must always see positive news, and reasons to believe that the arts are important for their own lives, and the lives of their families. One negative thought, and they can be pushed away forever. But this does not only apply to the arts, as you state in your very informative post.
Jeffrey, for once I disagree with you — when you say sponsors/patrons/donors/fans will be pushed away by negative news. Are they children? And do we really think they’re that easy to fool? I’ve had conversations with fans, donors, and one major foundation executive, all of them outraged by the failure of the classical music industry to change. In one very revealing conversation, a couple I’ve met who are major donors to classical music in their city had seen through all the foolishness of the organizations they donated to, and (to put it mildly) weren’t amused by it.
I think we should treat our supporters as the grownups they are. What they’ll most respond to is constructive honesty. That is, an organization that tells them what the problems are, and then — VERY important — what the plan is to fix the problems. That’ll bring an outpouring of support. It happens already with universities, which are forthright about their financial problems. If classical music’s supporters will be as spooked by bad news as you say they’ll be, then they don’t support classical music strongly enough to allow it to survive.
Perhaps you are correct. You convinced me. Maybe I presented it from my perspective more than the reality check.
Inside the orchestra world of ICSOM we deal with hard facts, spreadsheets and analysis. Everything is reported to the IRS in the 990’s and 5500’s and its all transparent thanks to the freedom of information act. Endowments are growing at measurable rates, as are orchestra budgets, salaries of all kinds, and donor and audience participation. “Why don’t we know?” as applies to current economics makes little sense. The only reason one might not know is because one has not looked.
As to the other area of your question, what might happen to classical music in the future, the reason one might not know is because one is not psychic. For us inside the industry, guesses about future demographics have very little value. Guesses like that have very little probability of accurate prediction.
The only real tangible concern for us is that people with access to an audience through the web, media, or the educational system, will damage our future with the sort of negative rhetoric that seems to be a mainstay of your blog. Consider the impact and consequence of your words carefully.
So a debate about the state of orchestras — if they’re in trouble or not — can’t happen, because anyone who says they _are_ in trouble is flinging “negative rhetoric,” and damaging the field.
Crazy. Are we living in North Korea, or the US?
I’m reminded of Jaws, the movie. There’s a shark in the water, but we’d better not say so, because it’s bad for business.
Crazy.
And if you think published information from orchestras will give you all the data, analysis, and understanding you need, I have a bridge to sell you. A dozen bridges. My good God — sportswriters know better than that. They interpret the stats available about various sports, give you the facts and trends behind the stats. The things stats alone won’t give you. Business writers do that. Economists do that.
The description you gave about the data you get is — forgive me, but this is true — a perfect picture of naiveté. Oh, so donations are increasing? Endowments are getting larger? That doesn’t mean anything at all. What matters is the growth of these things relative to expenses. If expenses are rising faster than income (donated and otherwise) and endowments, then orchestras are in big trouble. Orchestra managements (along with independent observers) have contended that this is true. I’m not saying it is, but where’s your data to refute it? The mere fact that donations might be increasing doesn’t refute the idea that they’re increasing fast enough to keep up with expenses.
If you don’t address this question, you can’t possibly refute the League, orchestra managements, or Bob Flanagan. So address it, please. With some of the numbers you talk about studying.
And please note! I’m not even saying that your conclusion is wrong. I’m saying that you haven’t even begun to show that it’s reasonable, using the kind of data and analysis that (a) professionals in these areas would use, and (b) five minutes’ application of common sense would show are necessary.
Have we forgotten pride? A signal of economic distress by an arts organization might be an acknowledgement of defeat. And who would wish to bear responsibility?
I think one thing that would improve your blog would be if you began to recognize the nuance of the situation. Try to think less in terms of black and white.
Some orchestras are healthy. Some or not. You like to compare orchestras to car companies, so think of the Chicago Symphony, the San Francisco Symphony, or the National Symphony as the Toyota, Honda or Nissan of the 1980s, while Philadelphia, Cleveland and Detroit (aptly), are the GMs and Chryslers. The less affluent orchestras are still viable, but their problems are more tangible.
There is no monolithic reality except for the intellectually insecure.
Finally, all financial aspects of an orchestra are audited by accountants. This includes expenses. I recommend you take an afternoon away from your blog and crack some financial reports. Its all in there.
Your next piece could be entitled “Why DO I know?”
David,
The National Symphony? Sustained by the Kennedy Center? Bailed out from deficits by the Kennedy Center?
If they were a car company, they’d be one that was kept afloat by its country’s government, which would guarantee its financial health whether or not it made money. I’m not sure you could give me an example of a car company for which that’s true. Certainly not Nissan in the ’80s.
To put it simply, you live in a dreamworld. And the kind of thinking dreaming leads to can do tremendous harm to the artform we all love.
To put another thing clearly, in an effort to spread some basic understanding of economics. It’s not a question of taking a monolithic view of orchestras. It’s elementary that some will be doing better than others. What else is new? That’s what a bell curve means. But are you really saying that it’s not possible to get an overview? To see how the entire field is doing? You might do that in two ways. First, you could look at aggregate numbers for all orchestras. If, let’s say, ticket sales for all orchestras had fallen greatly over the past 20 years, wouldn’t that tell us something?
Or you could look at individual orchestras. You could — thinking again of ticket sales — count how many had, in the past 20 years, had ticket sales fall, how many had them remain steady, and how many had an increase. If, let’s say, 50% had an increase in ticket sales, 30% had sales remaining steady, and only the remaining 20% had seen ticket sales fall, then we could smile and say the field — at least in regard to ticket sales — looked healthy.
In this way, David — and, really, this is elementary — we can preserve nuance, and still look at overall trends. You do that yourself, I’m sure, when you look at your household budget. You don’t say, well, my housing costs have gone up 200% but I’m spending less on pies, so I’m in good shape. You look at total income and total expenses, and see where you stand.
If you can do that with individual items in your household budget, surely you can do that with individual orchestras, and see what the total adds up to.
End of economics lesson.
Fine. Why don’t you post some data to support your conclusions? Forgive me but you seem attached to conjecture, hearsay and ambiguity. The title of this piece seems to speak volumes.
I look at data on this every day during negotiations. Much of the work is shoveling through muck In the end, the only thing that matters is facts.
How about a chart? Graph? Data table? Statistics with citations from source?
Really.
David,
I’ve done that repeatedly during the many years I’ve been blogging. Repeatedly. I’ve also cited — recently — NEA data, League studies, and Bob Flanagan’s book. All of which are publicly available.
You say you have data, but I’m not aware that it’s available to anyone except yourself and your colleagues. Others, in comments, have cited a study on the AFM website, and others by an accountant who’s done work for musicians at the San Francisco Symphony and a variety of other orchestras. None of this data, none of these studies are publicly available, and no one answered my request, in response to comments, that the studies be made public.
So here we are. The NEA, the League, and Flanagan have all published quite a bit of data. You and others in the orchestra community say you have data that contradicts what the NEA, the League, and Flanagan have published. But no one but you has ever seen it.
Make it public, with as many tables and graphs as you like. Then we can talk.
Freeerisa.com has 990s and 5500s for all non profits going back two years. That will get you started. Call the AFM and ask permission to use the SSD database. This seems like a minimum of diligence required to attempt to hold court publicly on these issues.
David,
I have a folder on my computer full of orchestra 990s. I’ve been looking at them for years.
You don’t seem to understand my question. I don’t want to look at the data you’re looking at. I want to see your analysis of the data. Nobody but an utter naif would believe that everyone who looks at complex financial data will come to identical conclusions. You talk about conclusions you and your colleagues have come to from published orchestra data, and I want to see the analysis you’ve made. I want to follow your reasoning. I don’t just want to see the raw data (which in many cases I already have), and I don’t just want to hear your conclusions. I want to know how you got there. I want some step by step reasoning, of the kind I’ve supplied in this blog for many years. Something more than “Wow, their endowments are big,” or “wow, they pay their CEOs a lot.” That, to be blunt with you, is kid stuff, not even Economics 101. If you have more to offer, let’s see it.
Good suggestion, to go to the AFM. I’ll do it. But do remember one thing. I heard about the study on the AFM website just last week. I have much more to do than just write this blog, and argue with you. Seemed reasonable, as a first step, to ask the people who told me about the studies if they’d get me copies. Once I’m reasonably certain they’re not going to respond, I can take other steps.
But come to think of it, David — it was you who told me about Ron Bauers and his work for several orchestras. So if he did studies for your orchestra, why don’t you get them to me? You never even responded to my request for them! I’d go directly to him, of course, if you hadn’t told me he’s deceased.
Wow. Dogpile. 2-3 person dogpile, but still.
Jeffrey says something worth taking apart when he says the negative side ought to be kept from the public. While true to some degree – who wants to work with ol’ gloomy Gus? – this sentiment goes further. It kind of harks back to the romantic-era script of the individual artist: suffering and sacrifice has to be embraced, then effaced, all with the end product in mind.
Back in my Westchester, NY days I attended many gigs of their all-pro jazz ensemble, the WJO. There was no dancing around how jazz in general was hurting financially, and how you the concertgoer could help out this band. The stage was set somewhat by a caring marketing head and a public radio host as MC. You couldn’t miss the message that WJO was listener-supported.
Of course jazz is not a selfconscious elite like the symphony, with the unspoken support of the noblesse oblige that that implies. Jazz also is somewhat freer of the romantic era script for art and artists (although it’s alive and well in the discipline of jazz studies and the punishment of the shed). But there is at least some agreement that jazz needs help – and that nobody is going to help but the community who loves the music.
In closing, it just seems to me that too much of the trouble in the orchestra world is due to the *social* assumptions everyone has. Inside, outside, music side, money side, main floor, balcony or stage, it looks different to everyone (hell, even sounds different). Some of it’s honest observation, some interpreted through the scripts of the profession – and it seems to this semi-outsider from jazzland that following the scripts is almost as valued as crunching the numbers.