December 3, 2015; Minneapolis Star Tribune
A surplus of $15,000 on an annual operating budget of just over $31 million might not seem like cause for celebration. But at the Minnesota Orchestra, which last week reported its 2015 fiscal year results, that slim margin is a vast improvement over the previous year’s $650,000 deficit. On the same day those results were made public, the orchestra’s musicians announced a $250,000 donation to the Orchestral Association for a new fund to support community and education programming; that gift represents what was left in the coffers from Minnesota Orchestra Musicians, a nonprofit formed during the 16-month lockout in 2013–14, which has now been dissolved. Perhaps more importantly, though, the gift underscores the tremendous strides the organization’s artists and management have made in moving beyond the rancor of recent years.
As board chairman Warren Mack noted, “The 2014–15 season was a year of coming together for the Minnesota Orchestra and this is exemplified by the musicians’ announcement today. Their gift…reflects the valuable leadership role musicians now play.”
Speaking for the musicians, Kate Nettleman, the acting associate principal bass who was president of the now-defunct musicians’ group, said the $250,000 gift is “a powerful symbol of how, together with the wonderful orchestra staff and board of directors, we are working in a truly collaborative organization.”
NPQ readers may recall the dozens of newswires, including these, we published as the relationship between management and the musicians deteriorated in Minnesota, leading to board defections, the resignation (and subsequent return) of music director Osmo Vänskä, that long lockout, the resignation of president and CEO Michael Henson and the fallout in terms of organizational and individual reputations. All of which were exacerbated by the $50 million renovation of Orchestra Hall, which unfortunately bumped up against the challenging economic environment of the first half of this decade.
The Minnesota Orchestra was hardly the only major arts institution to struggle with its finances or to experience tension between artistic and administrative leadership during and after the Great Recession, but the 16-month lockout—which erased a season-and-a-half—was among the most-publicized meltdowns within the sector. The lessons learned through that long ordeal may have helped other arts organizations to avoid similar train wrecks, but it left the Minnesota Orchestra in deep distress.
When last we reported on the orchestra back in August, things were looking up: Vänskä and the musicians had received modest raises and contract extensions ahead of schedule, some significant private donations had been announced, and the orchestra—along with staff members, board members and donors—had traveled to Cuba in May for performances now described as “the historic and artistic highlight” of the rebuilding season of 2014–15.
And indeed, the financial results announced last week suggest that the Minnesota Orchestra continues to move in the right direction, at least by some measures: total contributions for FY2015 were $18.1 million, compared with $10.5 million the previous year; and income from rentals and concessions in the renovated space outpaced expectations by nearly $200,000.
It may, however, be too soon to declare a full victory in Minnesota. To achieve its balanced budget, the orchestra drew $4.5 million from its investments and made a decision to retire long-term debt of $9.3 million. Total investments fell from $164 million to $141 million, in part because of the drawdown and in part because of poor market performance in the first half of 2015. And while the orchestra had a blockbuster year in terms of donations, only $8.5 million of its revenue was from earned income, which puts a lot of pressure on the organization’s fundraising operation.
A recent analysis of the financial state of the Philadelphia Orchestra highlights both the challenges and the opportunities for top-tier orchestras in the 21st century. Like the leaders of virtually every other major orchestra, the folks at the helm in Minnesota will have to keep wrestling with questions about earned and contributed income, subscription rates, labor contracts, endowments, venue costs and changing audience demographics and community expectations. They will, of course, be more likely to land on successful strategies for the future if the musicians, the staff and the board continue to work in harmony.—Eileen Cunniffe