By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Feb. 2, 2009
Banks, traditionally the largest sponsors of Spoleto Festival USA, have continued to support the international arts festival despite the difficulties roiling the financial industry.
Wachovia, on the verge of collapse before it was bought by Wells Fargo in late 2008, dropped its funding for the festival’s opening gala but remains the title sponsor for Spoleto’s jazz series.
The Carolina First Dance Series continues in 2009, as does Bank of America Chamber Music. First Citizens Bank and S.C. Bank and Trust also remain festival sponsors.
The ongoing support, at a time when most any cost savings could be justified, underscores the important relationship between Charleston’s arts festival and the banking industry.
 |
| Monkey: Journey to the West was one of the most popular and most expensive productions during last year’s Spoleto Festival USA. (Photo/William Struhs) |
Spoleto relies heavily on banks for funding, and banks rely on the high-profile festival to heighten their image and strengthen a community in which they do business.
Bank benefits
“To be associated with something that represents South Carolina so well, especially for us as a South Carolina-based company, is very important,” said Bill Medich, senior vice president of S.C. Bank and Trust and a member of Spoleto’s board of directors.
The Columbia-based bank is sponsoring a symphony event. SCBT has not reduced its funding for the festival this year, Medich said, even as the bank reported that its annual net income — $15.8 million for 2008 — was down 27% from 2007.
“If you look at the state, even beyond Charleston, and you had to pick one item or one event or one whatever that is truly world-class and shows the state in a positive way both nationally and internationally, Spoleto Festival USA is a world-class event,” Medich said. “To be associated with that is enormously positive.”
The bank uses its sponsor perks for business development by entertaining clients, he said, but the primary benefit is the marketing opportunity.
“We are not being cavalier with shareholders’ money,” Medich said. “Our sponsorship is tied to our support of the festival and the image that we want to have of supporting the festival.”
The support is part of the bank’s business plan, he said.
“I think the same can be said for our other bank supporters.”
Economic catalysts
The national focus on banks, including the federal bailout plan Congress passed in the fall, acknowledges the catalyzing role financial institutions play in the economy through lending, Spoleto director Nigel Redden said.
 |
|
But banks are also catalysts in another way, he said.
“Banks we’ve worked with understand they are catalysts not only by lending money but also by giving money,” he said.
A 2005 study from the University of South Carolina’s Moore School of Business found that Spoleto contributed $55 million to Charleston’s economy that year, bringing an estimated 28,080 visitors.
That activity, in turn, helps banks, Redden said.
“The more economic activity there is, the better the banks do,” he said. “I think the banks have recognized that.”
Wachovia supports Spoleto because of the festival’s role as an economic engine for Charleston and the state, said Carlos Evans, executive vice president for the bank and president of the Spoleto board.
“We believe that suporting the communities where we do business is absolutely critical to our mission,” Evans said. “We don’t think the bank can be strong unless the communities that we do business in are strong.”
Evans said Wachovia chose not to sponsor the festival’s opening weekend gala this year because it is cutting back on customer entertainment, given the economy. But the bank still will support that event, albeit on a smaller level, by purchasing tickets for customers, he said.
Redden declined to detail how much banks have contributed to Spoleto this year.
Secretary of State Mark Hammond’s office does not track donations to nonprofits and said records of donations to charities are not generally open to the public.
Sponsorship information on Spoleto’s Web site lists the highest level of donors, the “founders” category, as those giving $100,000 or more.
Budget concerns remain
Though it is still receiving money from banks, Spoleto’s finances are far from guaranteed for the 2009 fiscal year.
The organization ended the 2008 budget year in August with a deficit of $372,000. Spoleto officials say the deficit, the first in 13 years, was a result of lower-than-expected ticket sales and a state budget cut of about $250,000.
Based on the expectation that the recession will constrain donations, the festival is operating with a 2009 budget that’s reduced from last year’s by about $2 million. This year’s budget is about $6.2 million; last year’s was $8.4 million.
To cut expenses, the festival has decreased the number of performances this year to 120 from 145 last year. Staff salaries have been frozen or reduced, Redden said.
He said it’s too early to tell how contributions from individual, corporate and nonprofit sponsors will add up. Spoleto raises money throughout its fiscal year. Year-end totals, combined with ticket sales from the May and June performances, determine whether the organization will meet its set budget.
The festival has found some new donors recently, but it is also waiting to see whether past donors will be able to contribute this year, Redden said.
“We don’t expect giving to be up,” he said. “We expect it to be down. We hope that it will be down only as much as we budgeted for. At the moment it’s hard to tell.”
Early ticket sales have outpaced prior years, giving festival organizers hope of a strong season. But again, Redden said it’s too early to tell how things will ultimately go.
Officials stress that they aren’t sacrificing quality of this year’s performances.
“We’re trying to do a full program in spite of it all,” Redden said.
This year’s Spoleto festival runs from May 22 to June 7.
Reach Ashley Fletcher Frampton at 843-849-3129.
Yes