Changing Its Tune

Mozart’s “Jupiter” symphony was on the program of the Charleston Symphony Orchestra’s November 15 performance, but the intricate piece was not what most concertgoers were talking about afterward.

That’s because, during intermission, the president of the symphony’s board stood up and made a startling announcement: If the orchestra didn’t raise $250,000 by the end of December, Ted Legasey said, the stage would go dark.

While the orchestra met that goal, raising more than $358,000 by the end of 2008, it still faces a daunting task: bringing in more than $800,000 by the end of June, the close of its fiscal year.

In the wake of the sharp economic downturn in the fall, ticket sales and contributions dropped fast, causing a major cash-flow problem for the orchestra.

But the group’s leaders say that the way the organization was managed while times were good left it vulnerable to a decelerating economy: The orchestra had operating losses in five of the last six years, signed a five-year contract with musicians that locked in high fixed costs, conducted periodic “save the orchestra” campaigns that alienated donors, and spent meager sums on marketing and fund raising while undertaking an ambitious artistic program.

“We’ve been on the Titanic for a decade and discussing the choice of china,” says Jan Newcomb, who has served as the orchestra’s chief executive since October 2007.

Dialing for Dollars

Efforts to raise much-needed cash started just days after the orchestra revealed its bleak financial prospects.

The following week, board members, musicians, and members of the gospel choir spent two evenings making fund-raising phone calls to former donors and season-ticket holders who were not donors. More than 800 calls netted nearly $30,000.

“People really enjoyed having the musicians call them. It was like, ‘Oh, are you the blonde violist?’” says Ms. Newcomb. The musicians “got excited when they got a gift, but they also got a lot of no’s.”

Musicians also organized a fund-raising concert, held at a downtown church, which brought in more than $13,000.

News coverage in Charleston and surrounding towns generated small checks that came with notes like, “Hope this helps” and “Wouldn’t want the symphony to go away.” And in early December, several anonymous donors promised to give up to $75,000 to match donations of $1,000 or more made by January 31. By the end of December, the organization had raised $50,000 toward the matching offer.

The orchestra expects to receive grants of $120,000 from the city of Charleston and $50,000 from nearby Kiawah this month. The government money gave the organization a little breathing room. By mid-December the symphony’s leaders felt confident the orchestra would be able to make payroll in January, and their concern had shifted to February and March.

While the orchestra’s leaders had been nervous about its financial prospects as 2008 began, the precariousness of the organization’s finances didn’t become clear until the fall.

The year started off pretty well. In the spring, sales of subscriptions for the forthcoming 2008-9 season were strong. Season-ticket sales for the orchestra’s Masterworks series of eight classical concerts totaled $263,592, down from $281,466 for the 2007-8 season. But without the downturn in the economy, Ms. Newcomb thinks the organization would have exceeded its goal of $275,000 for this season.

Canceling Performances

The organization would largely live off the proceeds of those spring sales until the start of the performance season in late September. By the summer, leaders began to realize that cash flow could become a problem in the fall, so they trimmed the budget by almost $200,000.

The symphony canceled its Out of the Box series, which featured unconventional performances designed to draw new patrons, and three other concerts. It also changed the lineup it planned for several other performances to eliminate works that would have required additional musicians. The orchestra chose as replacements compositions for which it already had the sheet music, eliminating the need to rent new scores. At the same time, Ms. Newcomb and the orchestra’s music director both took voluntary pay cuts of 15 percent.

The meltdown on Wall Street intensified in September, just as the orchestra was about to start its most important fund-raising period. Corporate sponsorships and contributions from individuals account for roughly 50 percent of the orchestra’s $2.9-million budget, and it raises more than two-thirds of that money from September to March.

But with almost daily news of teetering financial institutions and other economic bad news, everyone froze, says Ms. Newcomb.

The orchestra sent a fund-raising appeal to 4,000 donors in September that elicited only 54 gifts.

And fewer people were coming out to concerts.

Single ticket sales for the season’s opening performance in late September had dropped 37 percent from the previous year. The next month the orchestra fell nearly $4,000 short of its $14,000 goal for single-ticket sales for a concert featuring the acclaimed pianist Jean-Yves Thibaudet.

But when the orchestra took its plight to local residents, not everyone was sympathetic.

“There were a lot of people in the community going, ‘Here they go again,’” says Ms. Newcomb.

For the last decade, she says, the symphony got into financial trouble every two or three years, and had to undertake an emergency fund-raising push to right its course. The approach has cost the orchestra donors.

Ms. Newcomb started working for the symphony in October 2007, and she says she kept meeting frustrated former donors who said they wouldn’t give another dollar until the orchestra improved its operations.

In a way, says Ms. Newcomb, those conversations gave her hope. “When a corporate guy spends an hour and a half with you to tell you why he’s not going to give anything, that tells me there’s something there, that if we make some changes, he’ll be supportive,” she says. “It’s not like he was indifferent.”

Laying Off Workers

The symphony is not the only local arts group struggling to make ends meet.

In December, Charleston Stage laid off two staff members, and cut the salaries of all remaining employees by 6 percent. The theater had already reduced the number of productions this season to eight.

Charleston Ballet Theatre has let one of its full-time dancers go, and needs $270,000 to make it through the end of its fiscal year, which closes in June.

In the fall, the Coastal Community Foundation, in Charleston, brought the three groups together to talk about the financial challenges they face.

“For the longest time, each of the organizations thought they were alone in having financial difficulties,” says George C. Stevens, the foundation’s chief executive. “When they began to realize that, no, their partner down the street is also having the same challenges, then they started saying, ‘Well, how can we work together?’”

The organizations’ first step: a $30,000 joint marketing campaign to promote their holiday performances. The city of Charleston covered the cost of the campaign.

The community foundation created a Web site to complement the advertising, and media organizations threw in donated ad time and space on top of what was purchased.

The effort seems to have paid off. The symphony sold more than 90,000 single tickets to its holiday performances, exceeding the goal it had set of 76,000.

Now the groups — along with other arts organizations in the area — are exploring other ways that they might be able to share costs, such as joint ticketing.

Offering Advice

The foundation is also acting as a sounding board for the symphony in its efforts to win back disaffected supporters.

To reengage those donors, the symphony’s leaders will have to explain in detail the changes the group plans to make, says Mr. Stevens.

He likens the process to going back to an ex-girlfriend or ex-boyfriend and saying that things will be different this time — “and really meaning it.”

“It’s not pleasant,” he says, “but in a small community you’re going to run out of donors pretty quickly if you don’t have the ability to do that.”

Renegotiating the orchestra’s contract with musicians will be key to both weathering the short-term financial crisis the group faces and in restructuring the organization for long-term sustainability, says Mr. Legasey, chair of the orchestra’s board of directors.

In November, the board wrote to the union that represents its musician to ask it to renegotiate the five-year contract that went into effect in 2007.

The union agreed to discuss the organization’s financial problems, talks that began the second week of December and continue this month. But so far, the union has not agreed to reopen negotiations on the contract.

Mr. Legasey thinks that it’s unlikely the orchestra will be able to make payroll through the end of June without wage concessions.

At the same time, he says, for the orchestra to be sustainable over the long term, it needs to reduce its annual budget, now $2.9-million, by about $500,000.

“If you look at the revenues over the last six or seven years — what’s the amount of revenue that you can really count on — it looks like $2.4-million to $2.5-million,” says Mr. Legasey.

Wages and benefits for musicians account for 51 percent of the current budget. When other staff members are added, that figure rises to roughly 75 percent.

“The only way you really move things is by looking at the personnel side,” says Mr. Legasey. “It’s just the way it is, because we’re not going to fix this problem monkeying with the other 25 percent.”

Because the number of people potentially affected by layoffs or salary reductions is relatively small — 44 musicians and nine staff members — cuts will be particularly hard to make, says Mr. Legasey.

Not only does everyone know everyone else, he says, but in many cases they also know one another’s spouses and children.

School Events

As the symphony struggles with its financial problems, it is doing what it can, given its tight budget, to bolster its education programs and improve the concert experience for patrons.

In August, the orchestra put together a curriculum guide to accompany its Young People’s Concerts. The guide outlines activities related to Peter and the Wolf, the featured piece for the fall concerts, that teachers could use in the classroom. The activities were designed to adhere to South Carolina’s state curriculum standards, and detail which activities apply to which standards.

Anticipating that local school districts may not have the money to transport students to the concerts next year, the symphony is reorganizing the program and sending the orchestra to the schools instead.

The orchestra has also reconsidered where its other performances will be held.

The symphony moved its January classical concert from Galliard Municipal Auditorium, which seats more than 2,700, to Memminger Auditorium, which seats 883.

Even though the orchestra will have to present two performances at the new venue, the change will save an estimated $4,000.

Ms. Newcomb hopes that the cost-cutting move to the smaller hall will also provide a more intimate experience for concertgoers. She notes that Galliard’s capacity is roughly the size of Avery Fisher Hall at Lincoln Center, in New York, and that neither the symphony’s classical nor its pops performances there have ever filled more than 78 percent of the seats.

She believes that finding creative and inexpensive ways to make attending a symphony performance enjoyable is even more important in today’s grim economic climate.

Says Ms. Newcomb: “We’re going to be competing for the few dollars that people have.”