By Roger McBain, Evansville Courier & Press
EVANSVILLE - Economists may quibble over exactly when the nation's financial decline fell into a "recession," but Glenn Roberts can tell you when it crystallized for him.
For Roberts, the Evansville Philharmonic Orchestra's executive director, it came in a phone call in November.
A major contributor called to withdraw financial support completely for next season, says Roberts, "because the economy was having a devastating effect on their business."
"It was the same week we didn't have a single sale for a ticket subscription," recalls Roberts.
Representatives for arts organizations throughout the Tri-State report similar "aha," or perhaps, more appropriately, "uh-oh" moments over the past year.
As they prepare for their next seasons, all are dealing with the impact of reduced revenues, grants and contributions at a time everybody feels the pinch.
They're responding in some of the ways corporate America has - leaving job vacancies empty, freezing pay and raising health insurance premiums and deductibles.
And in methods more tailored to the arts world, some are eliminating and reducing the sizes of live productions, recycling costumes and scenic elements and going to patrons for additional funding.
One-two punch
A punch combination rang the recession's bell for Lynn Kinkade, managing artistic director for Evansville Civic Theatre.
The first blows came from longtime supporters who said they couldn't renew program ads for the coming year. "Businesses were not just cutting from a full page to a half or a half to a quarter, they were cutting from a full page to zero," says Kinkade.
And after the stock market's plunge in September, "our ticket sales for shows in November and December were both very much lower than we would have expected," he said.
For Keith Martin, artistic director for Evansville Dance Theatre for the past four seasons, "all the red lights lit up" with his board's decision to cancel a Mardi Gras fundraising event, he says. "There was not enough support due to the economic woes we are facing."
This, after Dance Theatre already had canceled a spring performance to cut expenses.
It's across the map
The challenges come at a time when arts organizations across the nation are taking even more drastic measures, wondering if they'll be able to weather reductions in local and state funding, drops in endowment income and corporate giving and declining private donations, ticket sales and other revenues.
Americans for the Arts, a national nonprofit advocacy organization based in Washington, D.C., estimates 10,000 arts organizations, about one-tenth of all those across the nation, may be at risk of shutting down if the economy continues to decline.
Why should we care?
At a time when major industries are cutting production, laying off workers or even going out of business, why should we care about the financial health of the arts?
Arts advocates offer a variety of reasons, from the role music, art and literature play in helping us express and understand our world, especially in times of crisis, to providing, in concerts, theater, books and movies, a diversion, an escape from the grim reports of a nation and a world in recession.
Beyond that, artists and arts organizations pay rent, purchase property, hire employees, buy services and pay taxes. They play a significant role in the financial health of our communities and our government.
According to a 2007 report by Americans for the Arts, some 10,000 nonprofit arts and culture organizations in the United States spend $63 billion per year, employ nearly 6 million people and contribute $167 billion to the national economy.
In addition to $104 billion in household income, according to the survey, the nonprofit arts and culture industry generates $7.9 billion in local government taxes, $9.1 billion in state taxes and $12.6 billion in federal income tax revenue.
Closer to home, the Americans for the Arts survey of "creative industries," which includes artists, arts organizations, museums, art schools, architects, photographers and design firms, reported 7,919 Indiana companies employing more than 49,000 Hoosiers.
That list showed 248 creative industry businesses in Vanderburgh County, with 1,654 employees.
Orchestra sees red
The Evansville Philharmonic, the region's largest performing arts institution, is used to cinching up its cummerbund to continue putting on orchestral music at The Victory on tighter budgets. In recent years the organization has eliminated a Classics concert, dropped its full-time assistant conductor, and left open the position when the assistant box office manager left.
Even those efforts weren't enough to balance the Philharmonic's 2009-2010 season budget, however.
Nothing was, which recently led Roberts to do something he'd never before imagined doing. Roberts recommended the Philharmonic's board of directors approve a $2,079,613 budget with an anticipated $42,273 deficit for the 2009-2010 season.
"It's the first time in my career I've ever presented a deficit budget," he said.
The board approved the budget for the orchestra's 75th anniversary season, planning to cover the losses with money from a cash reserve fund of just less than a half-million dollars.
"It is our rainy day fund," Roberts told his board, "and it is raining right now."
These are the toughest economic times he's seen in his 20-year career, says Roberts, and he expects them to get tougher. "We are anticipating that the economy will have its strongest impact on our organization over the next 12 months."
The orchestra's staff, which includes 10 full-time and two part-time employees, as well as 87 musicians, most of whom are part-time contract players, all will take a pay freeze next season.
And insured employees will pay bigger premiums and steeper deductibles on health care.
On stage, the Philharmonic will scale back production costs by selecting fewer high-priced stars, programming music that requires fewer players, and shifting its fundraising focus more toward individuals, with a new emphasis on planned giving. They'll also try to identify and solicit support from businesses less adversely affected by recession than others.
The orchestra has won new grants next year to help offset reductions in state funding, anticipated in whatever budget Indiana legislators pass. Recently, however, Roberts learned the Philharmonic likely won't receive the annual operating grant it has counted on for years from the Indiana Arts Commission. Last year, the IAC gave the orchestra $64,000 in direct funding.
The rainy day fund will help get through next year, but Roberts knows the orchestra can't continue banking on reserves to blot up red ink.
In looking to the future, Roberts said he'll be looking for additional funding sources, including some of the arts stimulus money to be given out by the National Endowment for the Arts in direct grants and through state agencies such as the Indiana Arts Commission.
More cuts could come, as well.
"Staff restructuring will be necessary if current economic conditions persist indefinitely," says Roberts.
Beyond that, the orchestra also has created a strategic planning task force of staff members, volunteers, board members and musicians to evaluate all programs for their cost effectiveness and start planning for the 2010-2011 season and later.
They'll examine the numbers and types of concerts offered, how best to offer them and take a fresh look at everything about the operation "to see what the Evansville Philharmonic will look like in two to three years," he said.
Every other arts organization in Evansville faces its own funding challenges.
Double whammy
Like the Philharmonic, the Evansville Museum anticipates reduced state, corporate and foundation funding and a $100,000 loss in its endowment income, the result of the economic downturn.
This comes as the museum attempts to complete a $15 million campaign to build a 21/2-story building addition to house a new entry pavilion, history and science center, and a new planetarium and sunken, domed movie theater.
Plans still call for bids to go out this month and construction to begin in July.
Total income from some other areas, including membership, fundraisers and other sources increased in 2008, but John Streetman, the museum's director, doesn't expect that to continue in 2009. The museum's budget has dropped to $1.38 million in 2009 from $1.41 million the previous year.
The drop has come through salary freezes for 18 full-time and 18 part-time staff members, reductions in professional development funding, association dues, staff mileage and in cutting the number of museum publications.
In order to weather future financial challenges, the museum will mount more shows drawing from of its own voluminous collections, and the organization will work to cooperate more closely with other local arts organizations to consolidate some programs and expenses and share facilities, Streetman says.
Civic's challenge
Even with weak sales on fall shows in 2008, Civic Theatre, with an annual cash budget of $196,000, not including $46,000 in in-kind services, has finished this season with strong ticket sales, reduced expenses and a budget surplus.
Kinkade anticipates as much as a 25 percent drop in corporate support next season, however, and continued declines in program ad revenue.
With only three full-time employees, Civic hasn't cut staff, pay or benefits, but Kinkade has asked the board of directors to step up fundraising and advocacy for Evansville's oldest and only remaining community theater troupe.
Dancing on margin
Evansville Dance Theatre operated on a budget of about $275,000 this season, according to Keith Martin, who earlier this month left the organization after four years as artistic director for the school and student troupe.
Reduced contributions from government grants, corporate, business and individual donors have led Dance Theatre to increase ticket prices for its annual "Nutcracker" ballet performances, to consider adding a performance of the traditional winter holiday ballet, and perhaps present the show in another community.
The board is negotiating employment contracts, working to develop an auxiliary guild and expects to stage a new fundraising event in the fall.
Recycling threads
The Children's Center for Dance Education, which offers classes and performances throughout the Tri-State, plans to toe the line on their annual budget of about $180,000.
The 10-year-old organization anticipates reduced funding for its next season, but they hope to reduce expenses through recycling old costumes in new productions, using painted backdrops rather than more three-dimensional scenic designs, and conserving on utilities, transportation costs and other expenses.
Cost of visibility
It's been a period of losses and gains for the Arts Council of Southwestern Indiana, says Mary Jane Schenk, the regional arts agency's director.
With three full-time employees, the arts council operates on an annual budget of about $300,000, serving artists and arts organizations in Vanderburgh and six surrounding counties and acting as regional partner to the Indiana Arts Commission, doling out about $130,000 in state funds in the last year.
The arts council also organizes art exhibitions in its own and in other spaces, and presents concerts, lectures and arts workshops and sells member art through its gallery.
The arts council has seen state funding for its own operations, as well as its constituent arts organizations drop in recent years. Those cuts have come in the same period its rent and expenses have doubled with the move to a new, street-level office, gallery and store at 318 Main St.
The dramatically improved visibility of the new space has allowed the arts council to establish a higher profile in the community, however, and to increase sales in its shop and gallery, which feature the work of member artists and artisans.
Even with the other funding cuts, "the Council seems well-positioned ... because of our greater visibility and opportunities on Main Street."
Opportunities
Even in the face of the budget cuts, "I'm not hearing a lot of whining going on over this," says Schenk. "Everyone seems to be working hard to find other sources of revenue and find new ways to cut costs."
In fact, the arts organizations and individuals see opportunities in the economic challenges.
Roberts sees it as the chance to take a fresh look at what the Evansville Philharmonic has to offer 21st century audiences and, perhaps, redefine the orchestra and the concert experience.
"There's a saying," says Roberts. "Never waste a good recession."
Amy Musia, an Evansville artist coming off several strong years of corporate commissions, agrees.
Musia created "Bend in the River," a sandblasted, curved, stainless-steel panel with cutouts of Evansville founders Hugh McGary and Col. Robert Evans which sits next to the Pagoda overlooking the Ohio River.
In recent years she's made a comfortable living, she says, creating three-dimensional column art priced at up to $40,000 for clients including Old National Bank, Vectren, Evansville's Central Library, a hospital and a hospice.
Musia hasn't landed a new commission since January, but she's been working on several proposals designed to reflect the new sensibilities of individuals, companies, colleges and corporations dealing with pinched budgets.
In order to cut costs, she's looking to develop new collaborations with architects and other artists.
"We're stretching our creative muscles to be more cost-effective," she said.
"I'm hoping it's going to pay off."
More than money
Money isn't the main thing many people go into the arts for, however.
That's how Jenny Smith feels about her J.E. Smith Gallery, which recently moved from Haynie's Corner to a new space at 413 Main St..
Smith needs to cover her expenses, and she would like to turn a profit in the gallery, which features local art and will host music, poetry, classes and an open studio.
The way she describes her motives, however, presenting art sounds like a kind of mission, a reaction to her two decades as a relief worker in some of the poorest areas of Central America.
"I've spent so much of my life seeing the ugly in the world," she said.
"I just want to devote the rest of my life to bringing beauty to the world. I think art is beautiful, I think it's healing and I just think there should be more of it."