American Orchestras: Make No Little Plans

“Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty. Think big.” – Daniel Burnham, Chicago architect. (1846-1912)

This is a post for everyone who is watching the state of American Orchestras decline. There are a couple of important factors for all of us to consider as we hear news of yet another orchestra’s financial troubles coming to light: The Atlanta Symphony Orchestra is facing a potential $20 million deficit, the Indianapolis Symphony is facing a proposed 40% pay cut, Minnesota is seeking to cut salaries by more than $40,000/year, Philadelphia Orchestra just emerged out of bankruptcy, and Santa Monica Symphony and Delaware Symphony shut down it’s 2012-13 season. What about orchestras in Louisville, Kentucky; Syracuse, New York; Albuquerque, New Mexico; and Honolulu, Hawaii? This is heartbreaking and sadly, only the beginning of more bad news to come. Orchestras, are struggling and I hope these ideas help us to understand the causes and paint a vivid picture of what we could become.

Here are the facts…

We saw an explosion of growth in American orchestras in the late 80s and throughout the 90s. The quality of the art was rising, many smaller cities around the US were proving that their orchestra could give any of the top 10 a run for their money on their best nights, and the funding for the orchestras increased during this period. By 2000, concert attendance was up for all orchestra concerts, education concerts, special events, and was up 11% from the late 80s. Concert income and endowment income each increased, but the drop in spending at gift shops, program ads, hall rentals, and special presentations declined 12% and OVERALL earned revenue declined 1.4% as a result. Public and private support increased a whopping 82% and a 9% increase came from the local and federal governments, but the state funding was down 6%. Private donations were up over 100% during this time. Despite these increases, orchestras were posting some of their first operating deficits in a decade as total income increased 1% and expenses increased 2.5%.

What was happening? The growth in the 90s: quality, visibility, and the talented staff to run these orchestras came at a price that continued to grow year after year. That was OK to do in the 90s, but the September 11th attacks in 2001 helped to fuel the recession we had mostly in 2002 and 2003. Economist knew that recession was coming, but it wasn’t nearly as bad as we thought. Most orchestras were able to work through it OK, but some didn’t in San Jose, CA and Tampa Bay, FL. Instead of making big plans to avoid a bigger economic jolt, most orchestras continued on their path to attract the best musicians and staff, some cut their expenses, and a few made big plans. By 2005, the average orchestra received 45% of its income from donations, 13% from investments, and 5% from governments. We underestimated the recession that hit us in 2008 and those effects are sending ripples throughout the American Orchestra landscape. Now that many of those contracts are coming to an end and it’s time to renegotiate, orchestras have found that the debt has pilled up and that there are few indicators that revenues will go up and that investments will bear the fruit needed to sustain what was built during the 90s and 2000s.

This is what I make out of the facts…

Who could have predicted the full effects of the economy and how that would change some of these orchestras overnight? It’s hard to say that most of the problems were created by unwise decisions… some orchestras did make unwise decisions, but there are not enough of those cases to say outright that orchestra management, board of trustees, or musicians are to blame. This is not an argument about the musicians being greedy – the boards being lazy – and the management being careless.The storm of the recent recession lasted for over 18 months and many orchestras will never be able to repair the damage that the storm left unless given a bailout OR some major sacrificing is done all around the table.

I must address the function of the Board of Trustees: They have to preserve the public trust by taking the financial responsibility for the orchestra – they are all held personally liable, and their personal assets, for legal action if bills can’t get paid or they get sued. So when an orchestra has a $42 million budget and the numbers project a big deficit in the future, and the economy is dictating that revenue, donations, investment income, and government assistance is not looking so hot, then the board has the fiduciary responsibility to dictate the terms of the relationship between the staff/artists and those of us that are in love with… even if it is not a favorable solution.

Today, there is a question about survival. 

I believe that there are people out there that would be willing to invest in orchestras taking a more aggressive stance on proving their impact. Tomorrow’s healthiest orchestras, literally tomorrow’s, will rest on the foundation of building sustainable societies. How many more stories of another struggling orchestra do we need to hear until we shift our focus from “we play so good” to “we demand that our art (all those good notes) be dignified with the mission of creating better human beings, stronger communities, and sustainable societies”? With that mission, could we find those to invest in our survival?

We have 110 kids in Play On Philly. Social scientists here estimate that we will spend at least $23 million on them before they’re dead. Or we can invest $2.2 million in them over a ten-year period and drastically increase their chances of graduating from high school… which would generate $99 million of taxable income before they’re dead. What about the 70,000 living at/below the poverty line or the 110,000 of them that will drop out of high school? Another group of social scientist from the University of Pennsylvania think our 110 kids could cost up to $39 million before they’re all dead taking into consideration the economical challenges they now face. So what if you gave them a violin and taught them everyday for 3 hours? Want to guess how many of them, based on rigorous research, have a high chance of avoiding the “trap”? 71%. What impact could professional orchestras have by providing this opportunity to those children and communities? What if we helped 500 kids? 1,000? 5,000? I think when you save cities hundreds of millions and produce billions in taxable income, people might write the tens of millions we need every year to stay vibrant, flexible, and relevant.

What is holding us back?