Donors ease orchestra's deficit pain
By JOHN FLEMING, Times Performing Arts Critic
Published October 1, 2003
TAMPA - The Florida Orchestra will close the books on its 2002-03 fiscal year with a deficit of about $500,000. That's in the middle of the range the orchestra projected in the spring when it announced a special end-of-season fundraising campaign to bring the budget into what David Fischer, chairman of the board of directors, called a "manageable deficit."
"It could have been a lot worse," said Fischer, the former mayor of St. Petersburg who will be elected to his third one-year term as chairman at the annual meeting tonight at Tampa's Centre Club. "Back in February and March, we had $1.4-, $1.5-million staring us in the face."
Because of the feeble economy, individual donations and state government grants were off, and a number of corporate sponsorships the orchestra was counting on didn't materialize.
With executive director Leonard Stone making pitches from the stage before every concert, the 10-week fundraising campaign brought in $1.7-million, including a $500,000 challenge grant from several anonymous donors.
"The most successful part of it was the increase in donors," Fischer said. "Where we had a reduction in the average amount of gifts, we had a lot more givers, so that bodes well for the future."
Ed Davis, director of development, said the number of individual donors was up 21 percent over the previous season, to 4,160, many of whom gave multiple gifts. "The numbers were dramatic," Davis said. "The average gift was somewhat less. Plain and simple, that was the economy."
The orchestra has cut its budget by $1-million, to $7,446,000, for the 2003-04 season, which began last weekend with concerts led by the new music director, Stefan Sanderling. Three-fourths of the cuts were realized in a renegotiated one-year labor contract with the 78 musicians, who took a 16 percent pay cut.
As part of its agreement with the musicians, the board is obligated to launch an endowment campaign.
An endowment is intended to provide interest income to make up revenue shortfalls. The orchestra, lacking an adequate endowment, has been able to balance the budget only with large one-time individual gifts, unrestricted bequests or government appropriations.
"If you had a $20-million endowment, at 6 percent, you'd have $1.2-million in additional income," Fischer said. "That's the way other orchestras do it."
Raymond Murray, past chairman of he board, will head the endowment campaign. A goal has not been announced, but the industry rule of thumb is that an orchestra's endowment should be about three times annual expenses.
"That would put us at $22-, $23-million," Fischer said. "We already have about $7-million in the endowment. It would be great if we could create another $15-, $20-million."
Jerold Panas, Linzy & Partners, a Chicago philanthropy consultant, has been hired by the board to help with the campaign. Stone wouldn't disclose the consultant's fee but said the campaign is likely to cost $250,000 to administer.
In a feasibility study conducted last winter, the consultant warned that the fundraising climate was far from ideal but that the orchestra had little choice. "The study said these are not the best of times to go out, but it's your time to go out," Fischer said. "The times have improved since they did the study."
Balancing the endowment campaign with the annual fundraising campaign will be a challenge. "What you hope is that your endowment campaign becomes separate and not at the sacrifice of your annual campaign," Fischer said. "That will be tricky."
Fischer said the musicians may get a bonus if the orchestra has a good season financially.
"Twice a year we'll sit down and review how we're doing," he said. "If some things come through, then we can talk about revenue sharing with members of the orchestra. If we have a surplus, we can reduce our debt but also share with the musicians."
Fischer cautioned that even with the deep cuts, this year's budget is not guaranteed to be balanced. "It's not a no-fail budget. If you want a no-fail budget, you'd probably be around $7-million. We're going to have to be innovative. I think we'll make it all right, but I wouldn't say it's a no-brainer by any means."
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