Posted by Rick Denney on May 14, 2003 at 17:50:35:
In Reply to: Re: Re: From Today's NYTimes posted by AW on May 14, 2003 at 16:18:24:
Allen mentioned the magic word that I haven't seen yet:
Endowment
Too many orchestras, it seems to me, have used the largesse of good times in support of expanding their activities and payroll (i.e. numbers of employees) instead of building their endowment. An endowment is a rainy-day fund. You pay the bills out of what it earns. When earnings are low, you draw down on it, and when earnings are high, you put back into it. Your fund-raising efforts are used to expand the endowment, not to pay the bills.
Living off donations is like living hand-to-mouth or paycheck to paycheck. People can do long periods with that strategy, but they can be ruined by one disaster.
It seems to me that too many orchestras (and other arts and culture groups) built the programs as fast as their donations increased, but not that donations are declining, have to eliminate those programs. I wonder if the ASOL-type orchestras might be doing better had they not expanded so rapidly over the last couple of decades?
The orchestras that are weathering this storm have been diligently and effectively tending to their endowment over the years.
Rick "who thinks companies call this 'plowing profits back into the business'" Denney