The cost squeeze — donations

Some years ago, a major figure in the orchestra world told me a story. Foundations, he said, were losing interest in funding orchestras. So he and a colleague went to an annual foundation gathering, to try to stir up some interest. 

At this gathering, he said, anyone could invite foundations to a meeting, to discuss funding projects. Normally, he said, 20 to 30 foundations would show up whenever one of those meetings was called.

So he and his colleagues invited foundations to talk about funding orchestras. Only five or so came — a demonstration, this man told me, of how uninterested they were.

And, before that, the arts funder at a major foundation had told me about losing interest in orchestras. They weren’t solving their problems, this person said, and weren’t doing anything interesting. So this foundation wouldn’t be funding them. 

    Donor fatigue
Those anecdotes illustrate the problem orchestras face with donations. Foundations are losing interest. So, I believe, are corporations. This doesn’t mean there aren’t exceptions, that some foundations and some corporations don’t still fund orchestras. 

But there’s been a loss of interest, overall. Some of it is due to economic conditions, and a feeling that social causes may be more important than arts funding. But some of it, where orchestras are concerned, is due to what Tony Woodcock (president of New England Conservatory and former CEO of the Minnesota Orchestra) called “donor fatigue,” in a blog post I linked to earlier: 

Donors are feeling fatigued by orchestras – the constant demands, the needs, the on-going and unresolved problems.  They are questioning the role of “orchestra monoliths” whose consumption of a community’s  philanthropic wealth is disproportionate to the value they produce. 

    Individual donors

Individual donations, too, are dropping off. Donors, for the most part, have been older people, the same age as the orchestras’ audience. (Which makes sense — donors for the most part are members of the audience.) 

Younger people, even those with money, may not be willing to give. I  heard years ago from people at both the Seattle Symphony and the Seattle Opera — the opera person was speaking publicly — that the new generation of tech zillionaires wouldn’t give to classical. In New York, the new generation of people with power and money doesn’t support classical music (as I blogged here in 2009).

So we have aging donors, not being replaced by younger ones. We have donor fatigue. We have seen, over the past few years, some really large donations, for instance $40 million given to the St. Louis Symphony. Plus large donations to the Pittsburgh Symphony and the Metropolitan Opera, and more. 

But these gifts aren’t a sign of a healthy donor climate. They’re a sign of trouble. Institutions get these donations when loyal (and very wealthy) donors see  that they’re in trouble.

These huge gifts may help the institution get out of financial trouble. For the moment! Because what happens next year, when money is tight, and a deficit looms? The huge gitts, by their very nature, most likely won’t be repeated. So they plug a short-term hole in the dike, but can’t hold back the rising waters.

Previous posts in this series:

The cost squeeze (an introduction to the concept, with some devastating quotes from institutions being squeezed)

The cost squeeze — ticket sales

Someone on Facebook — an arts professional — complimented me on the ticket sales post, and added something I didn’t know about. Performing arts organizations increasingly sell tickets through online discounters, like Groupon. Which gets their attendance up, but (just like lowering ticket prices to attract a younger audience) brings ticket income down, compared to what it would have been if these tickets have sold at full price.

And since the organizations’ customary financial planning calls for the tickets to be sold at full price…

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  1. john says

    I wonder if the massive growth in the sheer number of DGR status ‘arts and culture’ things that donors can choose between, might also be a factor? Over the past twenty years governments have moved to shift as much arts funding as they can onto DGR philanthropy- For examples both the Australia council and ABAF run large programs aimed at directing donations to hundreds of small art projects (very few of which are orchestras), there is an awful lot of activity going on but there is only so much money available, no?

  2. says

    Classical ensembles need to change their marketing. In Britain, every single concert seems to be advertised as “cutting edge”, “innovative”, “confrontational”, “dangerous” and a few other tired old cliches.

    It is quite clear they don’t want people who go to enjoy themselves!

    Why do they have such a reluctance to change their marketing strategy, when the present one is not working?

    Donation fatigue is also true, everybody is asking for money. I am sure every cause is worthy but enough is enough. My wife and I both work hard and have high stress jobs. However when I mentioned to a friend (who was a director of an arts charity) that we were taking a week’s holiday, she shouted “a holiday!, if you’ve got too much money you can give it to my charity!”

    And therein lies the problem. On one of our major news programmes the director of a dance organisation was asked about the arts cuts in Britain. He based his argument around the concept of “artistic entitlement”.

    I can assure you, nothing irritates people more than the concept of “entitlement”.

  3. says

    You have brought up something that I have been wondering about. In the wake of Philly/Detroit, some commentators encourage everyone to shift the focus to orchestras that are succeeding better in their finances. But I have wondered, how much of the difference between, let’s say (and I’m not choosing these institutions terribly carefully) a NY Phil situation and a Philly situation comes down to a handful of super-donors? Because it seems to me relying on a few deep-pocketed angels isn’t a fund-raising strategy, it’s more like Russian roulette.

  4. BobG. says

    I presume these depressing developments will impact on young people who might otherwise be considering a career in classical music. But if they persevere, against such odds, perhaps they will find a way to draw in new audiences.

  5. BPJ says

    However, if those large gifts are to endowments, then it’s not just a one-off deal.

  6. Paul Lindemeyer says

    If donors think orchestras are stale, we know how to make them fresher – your ideas are at least a start. But what to do about orks who are, to some degree, dysfunctional?

    It’s too bad other arts organizers are so often barred from music, or have no interest in it. If music has to be limited to a) its own marketing and administration people or b) the big-money, for-profit sector for ideas on how to survive, it is inevitably going to grow a) more insular or b) more commercial.Neither bode well.