Local Arts

Culture at the crossroads: Charlotte arts groups on edge ahead of sales tax referendum

To hear some arts leaders tell it, cultural groups in Charlotte face a financial crisis — and they’re hoping voters will deliver much-needed aid next month by approving a new sales tax hike.

The referendum on a quarter-cent sales tax increase would provide an annual $50 million boost to arts groups, as well as for education, parks and greenways.

For arts and cultural groups, the cash infusion would amount to $22.5 million a year, funneled through the Arts & Science Council with oversight from elected officials and citizens from the city, county and outlying towns. The council is a funding pass-through agency for local arts organizations.

But the potential tax hike faces pushback in a year when many voters saw their property taxes rise after a revaluation, and the county continues to grapple with issues like affordable housing and a national last-place ranking in upward mobility.

ASC leaders insist the need is real.

The arts sector is at a “crisis point,” ASC board chair Valecia McDowell told the Observer in February, with budgets for even the biggest groups stretched thin and not enough money to go around for emerging organizations.

Jeep Bryant, who took over this summer as ASC president, says he believes boosting arts and culture is a vital social need that deserves help from taxpayers. “This is part and parcel of addressing those critical community challenges,” Bryant said.

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Opera Carolina performs “Carmen” in January 2019. The opera is one of many Charlotte arts groups that stand to benefit if voters pass a sales-tax referendum in November. Mitchell Kearney Photography

One of the city’s most prominent arts leaders, Blumenthal Performing Arts Center CEO Tom Gabbard, is helping drive public support for the referendum. But in an email to a county official even he was critical of how the ASC was selling the referendum, calling the notion of an imminent collapse of the cultural sector “total BS.”

Now, as voters deliberate paying an extra 5 cents for every $20 purchase they make, many are asking: How badly does the art and culture sector need this money?

Once a model

Charlotte’s arts scene was once flush with cash, so much so it gained national prominence.

In 2001, a New York Times story focused on Charlotte’s prosperous arts giving campaign, with the headline: “Spreading the Wealth: As a Booster of the Arts, One City Proves a Model.”

“Charlotte was the envy of a lot of art leaders in this country,” said Randy Cohen, vice president of research and policy at Americans for the Arts, a national arts research and advocacy group in Washington, D.C.

At the time, the city was drawing big national names to lead its cultural organizations because of its reputation as a place where people were willing to dig into their wallets to fund art and culture.

In fact, Charlotte Ballet CEO Doug Singleton said he came here 23 years ago from the Alvin Ailey American Dance Theater in New York largely because of how generous local residents were in funding the ASC. “It said to me, ‘This is a community that invests in the arts,’ ” Singleton said.

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Charlotte Ballet’s 2017 performance of Johan Inger’s “Walking Mad.” Observer file photo

If you worked at a big or medium-sized company in Charlotte in the early 2000s, chances are you’d fill out a ubiquitous ASC pledge card during an annual giving campaign — often while an African drum circle or python handler made the rounds in your office.

“It turned into a very good way to raise money, because we had... (banks) competing with each other on how much money they could raise,” says Hugh McColl. The former CEO of Bank of America is a longtime leader in arts philanthropy in Charlotte who supports the referendum.

You can’t fund everything

But in the last 10 years, that model tanked.

As businesses gradually recovered from the recession, corporate culture changed. Companies no longer wanted to pressure employees to pony up a portion of their salaries to charity.

Many began to give directly to arts and culture groups, where for a big enough check, they could get their name emblazoned on an auditorium or on a placard outside a gallery opening — a benefit they wouldn’t get by donating to an umbrella organization like the ASC.

PNC Bank, for instance, has made the arts one of its primary avenues for charitable giving since arriving in Charlotte in 2012. The bank has been the lead sponsor for Mint Museum exhibits and the Blumenthal Broadway Lights series.

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An enormous collection of Oscar de la Renta fashions went on display at the Mint Museum-Randolph in April 2018. Observer file photo

Meanwhile, the ASC was dealing with waning funds. The agency decided to refocus its mission, focusing more on bringing smaller, more grassroots art and culture groups into the fold and doling out less cash to the bigger arts institutions.

“The problem with that, of course,” said McColl, “is that there wasn’t enough money to fund everything.”

Trending in the red

Which brings us to where we are now.

Of the city’s 10 biggest art and culture institutions, seven have spent the majority of the past five years with their expenses exceeding revenues, according to an Observer analysis of IRS 990 tax documents that nonprofits are required to publicly disclose. (The exceptions were the Blumenthal, the Charlotte Ballet and the Harvey B. Gantt Center for Afro-American Culture.)

Analysts with Charity Navigator, a national non-profit evaluator, say it’s normal for arts groups to be in the red for several years in a row, because many have endowments that provide cushion for leaner years.

And they often have capital campaigns to raise large sums for new facilities or big fundraisers to launch programs, and then draw down those funds over time.

From 2007 to 2017, direct giving to Charlotte arts groups grew from $28 million to $37.5 million, according to an ASC study cited by Michael Marsicano, president and CEO of Foundation for the Carolinas.

Although that growth looks significant, Marsicano said, when you combine it with the sagging donations to the ASC, total arts funding hasn’t kept pace with inflation and the mounting need for more programming in a growing city like Charlotte.

Goodbye field trips

What hasn’t grown is donations to the ASC.

From 2005 to 2008, the ASC received $16 million or more annually. But in 2009, in the midst of the recession, total revenue fell to $12 million.

Since then, revenue continued to fall or remain stagnant, hovering around $10 million. As a result, ASC grants to local arts groups have dropped significantly, from $13.2 million in 2008 to $6.8 million last year.

The impact, ASC leaders say, is profound.

Field trips to cultural institutions like the opera or the symphony were once a part of every student’s curriculum in Charlotte-Mecklenburg Schools — first paid for by CMS, later by grants through the ASC. But they are now available only to schools with PTAs wealthy enough to pay for them.

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Students look up at the Blumenthal Performing Arts Center as they arrive to see a show during a school field trip in March 2016. That year, more than 12,000 Charlotte-Mecklenburg Schools fifth-grade students experienced “Endless Possibilities,” a performance tailored for 10- and 11-year-olds and featuring Opera Carolina, Charlotte Ballet and Charlotte Symphony. Observer file photo

And even the biggest arts groups, which have staff and resources to hold charity galas and development campaigns, are finding it hard to raise enough money to build their programs as the city grows.

At Charlotte Ballet, for instance, the amount of basic operating support from the ASC dropped by more than $366,000 between 2009 and last year. That’s money it uses to keep the lights on and pay staff, which is the hardest money to raise, says the ballet’s Singleton.

“It’s hard to operate a business — any business — with significant unknowns,” Singleton says.

For smaller groups with little or no dedicated fundraising staff, a big drop in ASC money would be difficult to survive.

ASC funding enables the for-profit Number Drummer music-and-math integration program to appear in more Charlotte-area schools, instead of having to spend most of its time in far-flung cities, director Troy Kryzalka said. Schools receive ASC grant funding to bring in programs like Kryzalka’s. Number Drummer received $27,760 from the ASC last year.

If ASC funding were cut dramatically, “it would be very difficult for me to do this full-time,” Kryzalka said.

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Troy Kryzalka runs a for-profit organization called Number Drummers, that integrates music and math during assemblies and workshops in area schools. Schools can apply for grants through the ASC to bring Kryzalka to their school. Courtesy of Troy Kryzalka

Feeling financial pain

When one organization suffers funding cuts from ASC, the pain has a ripple effect.

Both the Charlotte Ballet and Opera Carolina have drastically reduced their use of the Charlotte Symphony during performances this year. The ballet is contracting with the symphony only for the Nutcracker this season, when in other years it hired the symphony to provide music for the Nutcracker and at least one other program.

Ballet and opera leaders say they cut back their use of the symphony for artistic reasons, and plan to return to a more robust partnership with the orchestra in coming years. Still, those moves cost the symphony about $100,000, former symphony president and CEO Mary Deissler told the Observer.

The symphony spent the bulk of the past decade in the red, with expenses exceeding revenues. But it was able to reverse that trend during two of the last three years.

When Deissler arrived to lead the symphony in 2016, she launched an annual gala that raised $550,000 last year and revamped programming to include popular music like Queen and appearances by musicians in non-traditional spots like breweries. (Deissler stepped down in August, and her successor has yet to be named.)

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Former Charlotte Symphony president and CEO Mary Deissler, in a 2016 file photo with Charlotte Symphony Orchestra conductor Christopher Warren-Green. Deissler left the post this summer, but during her time with the symphony she led the organization back onto firm financial footing. Observer file photo

Even when performing arts groups sell out concert halls, the money generated by patrons isn’t nearly enough to keep an organization afloat on that alone.

In the case of the opera, for instance, ticket sales generate about 38 cents for every dollar spent on production, Beth Hansen, executive director of Opera Carolina said.

In recent years, the opera has brought performers into schools and community groups, and hosted discussions about social issues brought out in the performances. Next April, for instance, the opera will perform “I Dream,” an opera about Martin Luther King Jr. and is scheduling a series of community conversations around the opera’s theme.

“We’re making such great headway (in the community),” Hansen said. “I’d hate to see it retract.”

Up to voters

The high-profile fight over the referendum has played out in county commissioners meetings and in public events.

In February, the Blumenthal’s Gabbard waded into the fray when he emailed Mecklenburg County Manager Dena Diorio, telling her that to “describe this as the imminent collapse of the cultural sector is total BS.

“The crisis and collapse of the cultural sector that ASC describes is not what most of us see,” Gabbard wrote in the email, which the Observer obtained through a public records request.

In a recent interview, however, Gabbard said the arts sector has benefited from the lively discussion over how the county should fund the arts.

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Blumenthal Performing Arts Center CEO Tom Gabbard is helping drive public support for the sales tax increase referendum to benefit arts and other groups. Observer file photo

Gabbard doesn’t feel the financial pinch in his own organization as much as most. The Blumenthal reported $40.6 million in revenue last year. But he worries about the city’s smaller arts groups.

“Nearly all of these groups are severely under-capitalized,” he said. “So when something goes wrong, or even if a new idea doesn’t work out the way they’ve hoped for, they don’t have the financial resources to fall back on to cushion the blow.”

That provides even more urgency for the upcoming referendum, arts leaders say, knowing that how voters respond will be a barometer for Charlotte’s commitment to the arts.

Which brings us back to the ballet’s Singleton, who came here mainly because of the city’s rep for generous donors. If he was job hunting today, would he still decide on Charlotte?

“I’d wait till December,” he says.

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