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Pittsburgh Symphony weakest at individual donor level

Bankruptcy alarm highlights orchestra's fund-raising woes

Wednesday, September 18, 2002

By Caroline Abels , Post-Gazette Cultural Arts Writer

Compared to orchestras of similar size and prestige, the Pittsburgh Symphony has not had great success in raising money from individual donors. Now, with this year's shortfall raising alarms of bankruptcy, that chronic weakness has come back with a boom.

 
 
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PSO finances relative to similar orchestras

Other local arts groups are suffering financial reversals

   
 

"This problem has been with us for a long time," said Gideon Toeplitz, the orchestra's managing director. "But it came to light this year because of the economy."

Toeplitz said he believes that if donations from individuals had been stronger, the gap between revenues and expenses last season might have been filled.

Other orchestras have also been hurt by the economy, but they are not talking about bankruptcy protection.

The Philadelphia Orchestra, which is facing a $1.2 million deficit, raised $9.6 million in the 2000-01 season. Although the Pittsburgh Symphony Orchestra, with an annual budget of $32 million, is of similar size, it raised only $5.3 million. The Dallas Symphony Orchestra, now weighted down with an $850,000 deficit, raised $7.5 million.

In Dallas, 54 percent of the revenue came from individuals. In Philadelphia, 63 percent came from individuals. But in Pittsburgh, the figure was 43 percent, considerably lower.

Conversely, Pittsburgh raised a large amount from foundations that year -- 22 percent of the total -- while Dallas raised only 8.9 percent from foundations and Philadelphia raised 7.5 percent.

The Pittsburgh arts community has long enjoyed strong support from foundations such as the Heinz Endowments and Bayer Foundation. Toeplitz said that support remained steady throughout the 2001-02 season, at 23 percent.

But support from local corporations has dwindled in the last decade or two, as stalwart companies left Pittsburgh. It dipped particularly sharply in the 2001-02 season, when the PSO, which raised a total of $4.8 million that year, obtained 29 percent of the total from corporations, as opposed to 34 percent the year before. Many arts groups noticed a steep drop in corporate support last season.

At a Sept. 10 grant hearing before the Allegheny Regional Asset District, at which he mentioned a possible Chapter 11 filing, Toeplitz said Pittsburgh will have to decide if it's willing to support a world-class orchestra. But some PSO officials and donors say the organization may have to look at the effectiveness of its own fund-raising strategy.

Even though the Cleveland Orchestra boosted its individual giving recently, it still ended last season with a $1.3 million deficit, mainly because of poor corporate support and declines in the stock market.

Managing Director Gideon Toeplitz, center, with orchestra members last year. (Martha Rial, Post-Gazette)

The Cleveland Orchestra's executive director, Thomas Morris, said yesterday that individual contributions are a major source of revenue for his orchestra. When the organization began seeing that local companies were moving out of town, a move was made to increase individual donations, he said.

As a result, in the 2000-01 season the Cleveland Orchestra raised $8 million -- 57 percent from individuals, 26 percent from corporations and 17 percent from foundations. The orchestra will go after individuals even more this season as it seeks to alleviate its deficit by tightening expenses and canceling a planned concert in New York's Carnegie Hall.

"Certainly one of the great secrets of Cleveland is the value the community finds in the orchestra, which has led to great support, particularly by the individuals," Morris said. "I believe they give to the orchestra because they value it, not because they think it will prevent a crisis."

In addition to facing fund-raising challenges, the PSO is seeing the draw on its endowment -- now set at 6.5 percent a year -- decrease yearly at the insistence of local foundations.

The Pittsburgh Symphony is finding itself immersed in these financial challenges at a time when it is seeking a replacement for its highly paid music director, Mariss Jansons, who will leave in 2004. In addition, the orchestra will soon begin performing at a new summer home in the Poconos, and is a year away from negotiating a new contract with its musicians, whose average salary was $97,700 last season.

Filing for Chapter 11 bankruptcy protection, which the PSO board had not discussed at the time Toeplitz spoke to the asset district board, has not been mentioned as an option among the orchestras surveyed by the Pittsburgh Post-Gazette.

But the San Jose Symphony, located in the heart of California's Silicon Valley, filed for Chapter 11 protection last month. A new symphony will be formed from the few assets of the San Jose, which is $3.4 million in debt because of attendance declines and weak donations.

For the most part, orchestras in financial trouble are trying to reduce expenses and stepping up public pleas for money.

The St. Louis Symphony Orchestra, which sank into a deficit situation a few years ago and is still struggling to get out of it, predicted possible bankruptcy in an August 2001 letter to supporters. But it has since raised $31 million in emergency funding from individuals and St. Louis foundations.

Carter Dunkin, communications director at the St. Louis, said the orchestra now believes it did not do enough to shore up its financial condition as deficits began to appear in the mid-1990s.

"Even though [in Pittsburgh] you are hearing alarmist talk coming from people who don't normally talk like that, they're absolutely right to do something before it gets out of hand," Dunkin said.

Post-Gazette staff writers Andrew Druckenbrod, Patti Sabatini and Steve Twedt contributed to this report.


Caroline Abels can be reached at cabels@post-gazette.com or 412-263-2614.

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