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It has already started.In Melbourne Australia:

The Federal Government is to stop funding the Australian National Academy of Music (ANAM) in South Melbourne.

Twelve people will lose their jobs if the academy closes.

ANAM currently receives annual federal funding of more than $2.5-million.

A spokesman for the Federal Arts Minister, Peter Garrett, says the academy no longer represents the best way to support Australia's elite performing arts sector.

ANAM Artistic Director, Brett Dean, says it will be hard to attract corporate or philanthropic support in the current economic climate.

"It's going to be tricky, and I don't think we're entering the most opportune moment as far as that's concerned," he said.

"But I do hope there may be sufficient support and recognition in the community of what we've been doing."

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The problem could be far worse that you say as many endowments, particularly those that had a recent significant new-gift campaign will have a substantial portion of their endowment in a restricted form. The draw they typcially take comes from the appreciation of the corpus. If the balance falls below the threshhold of the restricted balance, i.e. the total of original gifts, then even with a substantial endowment they could be forced to leave all of it untouched, so rather than a 30% reduction in draw as your example suggested, one could be in a position to take zero until the copus appreciated beyond the restricted threshhold.

Were that the case in your Chicago example, imagine replacing all of a $12 million annual draw?

(It probably is not the case there as their endowment is old enough to not hit this challenge, but the theory could apply to many others.)

Thanks, Andrew. Glad you could take us past the place where my own knowledge starts to run out. And I hope your orchestra will get through this without too much stress.

It's interesting that you feel the economic downturn will be bad for the entertainment industry. Historically the opposite is true. Initially there is a shortage of funds as the well-to-do tighten their belts and cut out excess (read:ntertainment). However, eventually there is an outpouring into the arts, a way to look on the brighter side of things, to escape from the misery of the economic downturn.

In the early 1930's money was pouring into Hollywood and Broadway, with new musical artists popping up all over the place.

In the mid 1970's the US hit a recession and again there was a blossoming of arts in theater and music. It wasn't as big as the one in the 1930's but the times were no where near as bad.

I suspect, if history repeats, we (the artists) will see a short spell of funding shortages and then a boon - at least for those who are able to weather the initial shortage. Only time will tell.

Hi, Greg -

When I returned to NYC at the end of summer, I took a job with one of those arts fundraising orgs to pick up some cash quickly, and get an close-up view of how it's done here. I stayed only one week. That was enough.

This was before the total economic meltdown, but things were shaky enough. The trainers told us: When times are tough, the arts do well; people want to escape from their problems. We were told to sell the experience: not the objective performance but how good it would make the concert-goer feel. sell the sizzle. "You DESERVE it!" was the message we were to deliver.

And the Met's posters have sold the same message - glamour shot of Fleming with the slogan: "Let yourself go". Allow yourself this luxury. You deserve it.

Of course, though the people we called were previous ticket-buyers, there was a great deal of resistance; already in August, people were tightening their belts. Many polite apologetic refusals. A reluctance to let themselves go. Maybe next year, they said.

Restaurants are hurting. Retail is reeling. Why wouldn't concert or opera ticket sales also suffer?

Unless of course "classical" music is really, primarily, an indulgence of the wealthiest people. And even then - with the Dow down another 400-odd points today - one can only expect private endowments as well as public subsidies to be reduced.

Hi, Suzanne. Thanks for this. Very interesting. Not a surprise, but it's bad to make assumptions, and good to have real data, even anecdotal.