Charlotte Symphony launches drive to raise $40 million
The orchestra hopes to raise $40 million over 10 years to solve financial troubles it's been having since 2003.
11/04/2011 12:00 AM
11/04/2011 6:52 AM
In its most ambitious attempt to straighten out its finances, the Charlotte Symphony on Thursday announced $2.5 million in donations that launch a fund drive aimed at raising $40 million over the next decade.
The orchestra, which has seen a series of turnaround plans run afoul of the recession, thinks a bigger financial foundation is the key to ending the money troubles that began in 2003.
As the campaign's first stage, the orchestra hopes to bring in $10 million to close its budget gaps for the next five years. Later, it will seek $30 million for its endowment - the investment fund whose earnings add to the orchestra's income.
The donations announced Thursday are headed by $500,000 each from the Leon Levine Foundation; Duke Energy chief Jim Rogers and his wife, Mary Anne; and an anonymous donor. Ten other donors pledged the remaining $1 million.
The orchestra's first goal is "to secure the next five years," said former Gov. Jim Martin, the orchestra's board chair.
The orchestra, whose expenses this season will be about $8.6 million, faces a budget shortage of about $2 million a year, its leaders say. They attribute most of that to two factors that arose in 2009: a drop in corporate support because of the recession; and a $1 million cut from the Arts & Science Council.
After the ASC announced that, the orchestra launched an emergency fund drive that brought in more than $5 million while it worked to increase ticket sales and find donors.
The money bought the orchestra time, said Jonathan Martin, executive director. Ticket sales have increased. But the orchestra's fundraising has continued to suffer from the recession.
"All of us assumed that in (autumn) 2011, we'd be in a different world from what we are now," Jonathan Martin said.
The orchestra's financial troubles began in the 2002-03 season, when the post-9/11 downturn hit cultural groups nationwide. The orchestra's efforts to get back in the black, such as a 2007 plan that included a pay cut for the players and bigger donations from the board, have been undercut by the recession.
Losing "three major sponsors at $200,000 a year - that's a major drop," said Kim Cook, a consultant with Nonprofit Finance Fund, which the ASC hired to analyze the orchestra.
Cutting costs isn't the solution, Cook said. The orchestra already did that. After staff reductions, it "didn't have enough of a team" to create programs to bring in revenue.
The answer, she said, is revenue.
The orchestra's box office revenue increased more than 20 percent from 2006 to 2011, Jonathan Martin said. "It gives us reason for optimism," he said, but ticket sales can't make up the shortage.
The Charlotte Symphony wants an endowment that can generate about $2 million a year, he said. Based on a benchmark of 5 percent a year in income, that means an endowment of about $40 million.
The total now is $5 million. About $5 million more will come from the orchestra's share of the ASC $83 million cultural facilities campaign.
The orchestra's scant financial foundation helps explain why its path to security is proving so arduous.
"In Charlotte," Jonathan Martin said, "it's a much longer journey than it is for the average orchestra."
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