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CSO inches back into the black
By Kathleen Dayton
Staff Writer
Last year, they were playing on a string and a prayer. One year later, the Charleston Symphony Orchestra is financially in the black and its operations are sound, thanks to a strategic plan that included an appeal for support directed to the local business community as well as to private donors.
That doesn’t mean the orchestra is parked on Easy Street. As with all nonprofit organizations, the orchestra begins each fiscal year anew with ticket sales, fundraising efforts and marketing strategies. This year is different, however, because the orchestra has started off with cash in its coffers, the first time in several years the orchestra could make that claim.
“We finished our fiscal year June 30 with a $300,000 operating surplus, so there was a real turnaround,” said Ted Legasey, the orchestra’s vice president of finance.
Not only did the orchestra finish the year in the black, it restored its musicians’ salaries to the level where they had been before pay cuts were implemented three years ago, adding $200,000 to the orchestra’s expenses.
The past fiscal year was a milestone year for the orchestra. The organization hired a new executive director in October and negotiated a five-year contract with its musicians, providing a far more stable picture for the ensemble.
“In the past, they were going year-to-year with no raises,” Legasey said. “Now they have some clarity in their financial future.”
The musicians got a 2.8% raise this year and will get a minimum raise of 3% each year through 2012, under the contract negotiated with the American Federation of Musicians Local 520.
The orchestra also has built a new business model after hiring AMS Consulting, an arts consulting firm that helped the orchestra develop a five-year strategic plan.
Keep the music going
During the past fiscal year, the orchestra managed to increase revenue from ticket sales while also increasing contributions from private donors as well as from the business community and through fundraising efforts of the Charleston Symphony Orchestra League.
“The symphony had ’fessed up that we had financial difficulties and we were trying to straighten out the operations of the organization and the finances of the organization and we were making a direct appeal to the business community to support the orchestra in a way we hadn’t made before and in a way they hadn’t supported before,” Legasey said. “Through this period, there was never any question about the quality of the music being played.”
On becoming aware of the orchestra’s plight, businesses large and small rallied to keep the music going. Sponsorships came from businesses like McCrady’s restaurant and The Ginn Co. The King & Queen Co. donated office space to the orchestra for the next four years.
The town of Kiawah Island donated $50,000 to the orchestra during the past fiscal year and has pledged the same this year. McCrady’s will once again sponsor the Pops series and The
Ginn Co. plans to continue its sponsorship of the Masterworks series for the 2008-2009 series.
While the orchestra can’t relax in its efforts to grow its audience and patrons, the past fiscal year was a far cry from the previous one, when it was borrowing money from the upcoming season to pay its current expenses.
“In the springtime, we sell season tickets for the following season,” Legasey said. “That cash comes in and is commonly used for the current season — borrowing from next year to pay for this year is a charming little practice. It’s like people charging one credit card to pay another one. It’s not an uncommon practice in symphony orchestras that don’t have a large endowment to draw upon.”
Jan Newcomb, who in October 2007 took the reins as the orchestra’s executive director, said she will be concentrating on raising the orchestra’s earned income from ticket sales and increasing the number of donors, as well as encouraging people to include the orchestra in their estate planning.
“We don’t have a big enough endowment to help us yearly, so that’s another long-term goal,” Newcomb said. “From a true business aspect, we don’t have any products that make money. We are paying 46 full-time musicians and the cost of our product is all personnel.
Seventy percent of our budget is payroll. This is typical in the world of orchestras. You have to rely on unearned income. It’s kind of a misnomer, because you work very hard for that. It’s the grants, the donations and the planned giving memorials.”
Charleston Symphony Orchestra leaders want local businesses to be aware of the orchestra’s contributions to the community and its importance in attracting visitors and new residents to the area.
Making time for schools
While most people think of the orchestra in terms of public concerts, many don’t realize the ensemble reaches 25,000 school children annually through education programs.
In addition to performing more than 100 concerts in more than 30 locations annually in the tri-county area, CSO musicians spend 40% of their time in local schools through In-School Ensembles and Adopt-A-School programs. Those programs, as well as Kinder Konzerts, Young Peoples’ Concerts and the CSO Youth Orchestra introduce students of all economic backgrounds to instrumental music.
In addition to its scheduled concerts, the CSO performs a number of free concerts throughout the community each year, including a concert with fireworks in May as part of the Piccolo Spoleto Festival and a Martin Luther King Day concert in January. The orchestra last summer also performed free at the public memorial service for nine Charleston firefighters who were killed in the line of duty.
To supplement their income, many CSO musicians give private lessons and some are on the faculties of area colleges and universities. Even with their reinstated salaries and the recent 2.8% pay increase, orchestra members make an average of $24,400 annually. That is tolerable but not sufficient, said Leo Fishman, president of the orchestra’s board of directors.
Fishman said the orchestra each year will have to jump the same hurdles, and he feels more members of the business community could step forward to support the orchestra.
”I think there is still room for excavation in that community,” Fishman said. “I don’t think we’ve really gone below the surface on it. There is a scarcity of large corporations in this area and you really have to go after these people one at a time and convince them that the symphony is at the core of Charleston’s cultural existence and that we are an attraction that encourages people to move here.”
While the orchestra has made a great deal of progress in the past year, a nonprofit’s job is never done, Legasey said.
“The first of the year, you have to go out and get every penny of revenue,” Legasey said. “We have to convince people to come to the performances and we have to convince donors that they need to sustain their support of the symphony. Just because it happens one year doesn’t mean it’s going to happen the next. People like to check things off and say ‘This is fixed.’
“The symphony is operating on a much sounder platform, but we have to go out every day and convince people that this community asset is worth their support. This is really a campaign that must be sustained.”
Kathleen Dayton is a staff writer at the Business Journal. E-mail her directly at kdayton@setcommedia.com.
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