Thanks for the music / Hernán Piñera

This story is interesting because it exhibits the need to respond to inaccurate or misleading press reports when they provide a warped view of a local nonprofit—in this case, the Minnesota Orchestra.

Some of our readers will remember NPQ’s coverage of the lockout of the Minnesota Orchestra’s musicians in 2013 and 2014. A contract dispute with the musicians lasted a long 16 months and led to the resignation of the orchestra’s president and a number of board members. In the midst of all of this, donors and local elected officials got involved, and at a certain point, the orchestra’s control of its performance hall and its endowment appeared to be in question.

In the final contract, the musicians agreed to a 15 percent pay cut, as contrasted with the proposed 35 percent cut that caused the lockout. Since that time, the orchestra has rebuilt itself under new management, recently making a high-profile trip to play in Cuba as that became possible. Then, in May of this year, the orchestra announced it would not wait until the current contract’s expiration in 21 months to give raises to its musicians and to music director Osmo Vänskä and to raise the number of musicians in the orchestra from 84 to 88. These new agreements were unveiled around the same time as word spread of the $5 million gift from Doug and Louise Leatherdale and a $1.5 million donation from Betty Jayne Dahlberg, with the latter explicitly intended to “help support the Minnesota Orchestra musicians’ agreement.”

The raises are hardly steep, with increases of between two and three percent each year for three years. Tim Zavadil, the chairman of the musicians’ negotiating committee, commented that the move was “a real vote of confidence in the future direction of this orchestra.”

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But last week, nonprofit news outlet MinnPost republished an article printed more than two weeks before by Twin Cities Business that questioned the wisdom of making such “generous” raises, suggesting that to base those raises on a one-time gift endangers the sustainability of the orchestra.

In turn, some commentators are questioning and even damning the integrity of that coverage. Indeed, the article does seem to be more than a bit sloppy—or as one critic charged, “dreck.”

The article quotes Charles “Mel” Gray, a professor of business economics at the University of St. Thomas, who says, “The problem is not solved; the problem is just postponed… A one-time gift can tide us over. But we are buying time and that time is going to expire, and we are right back in the thick of things.”

According to MinnPost and TCB, Gray believes that the orchestra “still has problems on the cost side. Somewhere down the road there will have to be an adjustment.” The musicians, he warns, should not buy expensive houses. (On a 2.5 percent annual increase? Sigh.)

In fact, there is nothing wrong with the principle of not depending on a one-time gift to pay for an ongoing permanent cost increase, but the notion also has its limitations. If you are viewing your use of that one-time gift as capital to build a more permanent revenue mix and you have a plan to go with it, the whole picture changes. We assume Gray knows this.

Other observers have criticized the coverage as being sloppy. In particular, in Emily Hogstad’s blog, Song of the Lark, and Scott Chamberlain’s, Mask of the Flower Prince, we find searing critiques. Both write that Mel Gray never spoke out during or after the lockout, nor had he been cited as an expert analyst previously, although the article suggests he has been tracking the orchestra’s finances since the 1990s. They ask, where has he been during the entire public commentary? Then, both bloggers go about taking the article apart point by point, citing it for problems of context, fact, and analysis.

Those responses are worth reading, but we are particularly interested in some of their commentary in the responses to this article on the issue of sustainability. In fact, in the body of the article, Kevin Smith, the orchestra’s new president and CEO with a long successful track record in the opera, is quoted as saying the new a