The Portland symphony is in trouble. The unresolved dominant-seventh chord — a $2 million loss over the past eight years, and a possible shortfall of $220,000 this year alone — would be a setback for any company. But for the symphony, this is more than that. It means the end for some of the PSO's signature events, the disappearance of community-outreach programs, and layoffs and pay cuts for staff.
"This process of sharing challenges with the community is just the first step," says PSO executive director Ari Solotoff. "We want to share the story with anyone who will listen."
The endowment, the symphony's invested assets, has lost more than a third of its value in the past five months, and is down to $2.1 million from a 2007 high of $2.9 million. Most of that money is untouchable, except for the interest it earns; last year, endowment interest provided only seven percent of the symphony's operating cash. But if the interest earned isn't enough to offset the value lost, then the symphony can't use any of the interest at all because it has to use the earnings to try to make up the lost value.
"With the fall of the market, those losses have to be applied against the (interest earned). This leaves us with no safety net," explains Solotoff. Many arts organizations around the country are in similar — and similarly dire — straits. Layoffs and cutbacks have hit major arts organizations nationwide, including the Baltimore Opera, which filed for bankruptcy in December.
Americans for the Arts, a New York City and Washington, DC-based non-profit advocating for the arts says 10,000 arts organizations are at risk of closing just this year — 10 percent of the country's total, according to spokeswoman Liz Bartolomeo. Another 20,000 are going to make spending cutbacks of as much as 20 percent, she says. Smaller arts groups, ones that already operate day-to-day financially and have just one or two staffers, may not suffer as much because their size makes them flexible, she says. The biggest ones will survive, too, with sizeable endowments and support bases, though they will also need to rein in spending. Bartolomeo says most of the blow will fall on mid-sized arts groups, who get a significant portion of revenue from ticket sales, and smaller-but-still-significant amount from government programs, and the rest from donations. All three of those funding streams are shrinking, Bartolomeo says.
In response, arts groups across the country are quietly building support for what some are calling a "cultural stimulus" to go along with the federal economic stimulus package proposed to address other needs. And the John F. Kennedy Center for the Performing Arts in Washington, DC, just last week announced what might be called a "mini-bailout" for American performing-arts groups, offering free Kennedy Center staff assistance and money to pay some expenses "to provide emergency planning for fundraising, budgeting, marketing or other strategies as box office revenues decline and donations and endowments run dry," according to an Associated Press story on the program.
The Portland symphony will attempt to re-weave its own net beginning on February 17 at 7:30 pm, when the PSO will welcome opera superstar Renee Fleming to Merrill Auditorium.
"She is the finest voice of our generation," says PSO music director Robert Moody. "She is to the voice what Yo-Yo Ma is to the cello, what Perlman is to the violin."
Tickets to this concert start at $65 and can range up to $150, which is approximately twice the price of a typical PSO concert. The hike in ticket prices is not simply because Fleming is a superstar — private donors paid her hefty fee — but because this concert is an endowment benefit, at which proceeds will go to shore up the long-term finances of the orchestra.
"The ticket prices at our Tuesday Classical concerts don't even come close to covering the cost of the concert to us," says Solotoff. "We've been operating and providing services at a level that exceeds our endowment level."
In the 2007-2008 fiscal year, ticket sales covered 51 percent of the symphony's $3.2 million budget. Of the rest, 41 percent was government and private donations, and the remainder was that income from the endowment.
Solotoff hopes that the symphony will be able to keep ticket prices for the regular performances low, but explains that patrons should know that ticket sales alone are not enough to sustain the budget, even lowered as it has been, to $2.8 million for the coming year.
The list of what has been cut from the symphony's budget reveals the challenges ahead for arts organizations across America.
The PSO has already cut the beloved Independence Pops concert series from its summer program. The traveling concert, complete with fireworks during the 1812 Overture, has become a mainstay for Fourth of July celebrations around southern Maine. But it loses $65,000 a year. As corporate funding dries up, community enrichment concerts like this will be the first to go.