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Worried note: PSO putting donors to the test

Friday, September 27, 2002

By Caroline Abels, Post-Gazette Cultural Arts Writer

The Pittsburgh Symphony Orchestra will aggressively go after individual contributions this fall to stave off a potential $1.5 million deficit and test the region's support for its world-class orchestra.

PSO officials, in a meeting yesterday with the Pittsburgh Post-Gazette's editorial board, said the orchestra hopes to raise $500,000 by the end of the year from individual gifts. If it fails to do so, the orchestra may take cost-cutting measures that could diminish its artistic quality and reduce its educational programs, they said.

The orchestra, which has refrained from providing details about its finances until this week, has paid its bills for last season, in part by dipping into its operating reserve, a kind of rainy day fund. Last season, corporate fund-raising revenues dropped significantly and the faltering stock market decreased the value of the PSO's endowment.

With very little money left in its operating reserve, and corporate fund-raising and investment projections much gloomier than when the PSO put its 2002-03 budget together in April, officials said the orchestra has no choice but to seek help from individuals, who have not been targeted much in the past.

"I don't think we can look at foundations to pick up the slack," said Gideon Toeplitz, the orchestra's managing director. Because foundations have provided such strong support over the years, "we haven't pressured the public to do their part," he said.

The orchestra plans to send a letter to subscribers and potential new supporters next week. Compared with American orchestras of similar size and quality, the Pittsburgh Symphony obtains a low percentage of its donations from individuals.

The Dallas Symphony Orchestra received 54 percent of its revenue in the 2000-01 season from individuals, and the Philadelphia Orchestra received 63 percent. But individual contributions made up only 43 percent of the Pittsburgh Symphony's revenue.

As it seeks additional funds this fall, the orchestra will try to reduce expenses by $250,000. Mariss Jansons, the music director, has agreed to help by not taking Shostakovich's 7th Symphony on the orchestra's two upcoming European tours. The piece requires 10 extra players. Not performing it overseas will save the orchestra $110,000.

Toeplitz said numerous cost reductions, totaling $500,000, have already been made. Ten management positions were cut last season, and upper level managers -- including Toeplitz -- have taken a 10 percent wage cut. On the artistic side, two full-time musicians who left the orchestra have been replaced by part-timers, and the orchestra has been able to negotiate some reduced fees with guest artists.

At the start of the 2001-02 season, $2 million was in the orchestra's operating reserve. Today, there is only $110,000. Having thought in April that it could use $911,000 from the reserve this season, it is now facing a deficit of at least $801,000.

That deficit could climb to between $1 and $1.5 million, officials said, if government grants are smaller than expected and there is a shortfall in the annual fund campaign. Last season's campaign fell short by $660,000, in part because many people failed to pay their pledges from the previous year.

Although Toeplitz mentioned Chapter 11 bankruptcy protection as a future option at a recent public meeting, PSO board chairman Richard P. Simmons said yesterday the organization has not discussed that possibility.

In January, the orchestra will decide how to proceed based on whether it has achieved its fund-raising and cost-cutting goals. If fund raising and stock values continue to look bleak, Toeplitz said, officials might consider such measures as reducing the number of tours, raising ticket prices and cutting back on educational programming.

But Simmons, who said the orchestra is at "a defining point in its history," expressed hope that the stellar reputation of the orchestra outside of Pittsburgh, which he believes helps the region's image and economy, will continue to be maintained.

"What happens to us will have an impact on what Pittsburgh is and what it will be," Toeplitz said.

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

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