The Performing Arts Center Death Spiral

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Queen of the death spiral?

A group of community leaders get together one day and decide to develop a performing arts center. Perhaps they believe that such a thing is needed to validate their coming of age as a community. Or they see their local arts organizations struggling in high school gyms and churches and declare that those groups and their audiences deserve better. Or they hear that a neighboring city is building one and they turn green with envy.

Whatever the motivation, this group gets organized, raises some money, does a study or two, and then approaches key funders to see if the money is there. Their case is generally some combination of supporting the cultural development of the community, attracting great artists for local audiences, enhancing quality of life and other good things.

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If the funding is there, a project is pursued and some years later there is a grand opening that features world-class performing artists who extol the building’s virtues and the community from the stage. After the dust settles, the management gets to work operating the building. They try to accommodate local arts groups with limited financial resources. They sell tickets to touring cultural programs and generally keep the building busy. They keep — try to keep — the budget balanced.

Bye-bye, Paul Taylor Dance Company. Y'all come back now, y'hear?
Bye-bye, Paul Taylor Dance Company. Y’all come back now, y’hear?

All of which goes well for a few years until a recession hits and the building runs into budget challenges due to lower rental income from local groups, reduced corporate sponsorships and lower ticket sales from touring performing arts groups. Then the executive director comes under pressure from the board to fill the budget gap, so a decision is made to redirect the annual presenting program. Bye-bye, Paul Taylor Dance Company and the Tokyo String Quartet, hello Kathy Griffin and The Oak Ridge Boys. The immediate payoff is positive: comics and country sell more tickets. Then there are rumblings from the funding community, particularly those donors who were initially sold on the center as a home for symphony, opera, ballet and theater. The annual campaign for the following year falls by 20 percent, causing another budget shortfall.

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The pressure on the executive director grows once again. The ED advises the local ballet company that their traditional December dates for The Nutcracker won’t be available this coming year so the building can book the touring Radio City Christmas Spectacular. This programming decision solves the budget crisis briefly, but even bigger problems emerge as the ballet is forced to cancel its next season without The Nutcracker cash cow. Then the funding community shows its displeasure with another 20 percent dip to the annual campaign.

Now our poor ED is really under the gun. All those business leaders on the board call for more responsible “business decisions” that will surely put things right. Additional cultural tours are replaced with acts that are more commercially oriented; education programs are cancelled to reduce the daytime activity in the building, saving staff and maintenance costs. Three guesses how this goes over with the funding community as the dream of a performing arts center becomes, in reality, a center focused on touring popular entertainment and on aging rock ‘n’ rollers staggering around the stage trying to remember the name of the city to shout out.

rockettes
Just for kicks: The Radio City Rockettes

You see where this is going. Too often, the promises made to fund a performing arts center are unrealistic in terms of the economic challenges of maintaining the buildings. Then the situation is made that much worse as staff and boards abandon whatever mission they may have had in order to balance the budget.

We’ve seen situations in which those early promises to funders doomed the operation of the building before it even opened. It seems implausible, but think of the capital campaign chair and the fundraising consultants trying to write a case statement for key local funders. They know that a pitch based on creating a new venue for The Oak Ridge Boys won’t get them very far, certainly as opposed to one focused on bringing world-class artists and great art to their town. This sort of pitch also aligns well with the interests of a certain set of architects, acousticians and other specialists who seek acclaim (and higher fees) by designing and constructing a world-class building to support all of that world-class programming.

Thankfully, there are excellent facility managers who succeed in programming, operating and sustaining performing arts centers. They generally pursue some combination of educational programming, meeting and event business, and more commercial programming to drive earned income. They recognize that the changing demographics of their community require a much broader approach to what and whose “culture” should appear on their stage.

Ka-ching!
Ka-ching!

As it relates to the ongoing fundraising needed to sustain facilities, the best managers work very hard to craft a strong value proposition appropriate to their community. If they see the opportunity to position the building as a key tool in recruiting new businesses to locate there, they go down that road. If the building can have a catalytic role in revitalizing the downtown, they follow that path. If the city needs a new tornado shelter, get those signs up!

Fundamentally it’s about balance, starting with the right mix of sophisticated cultural events and popular entertainment representing not just the Western European but other cultural traditions. There are cultural events to support the building’s mission (driving donations) and still others that generate the earned income necessary to fund operations. There’s the right mix, therefore, of earned and contributed income, of public and private sector support, and of local and touring work. And finally, there is the balance between a strong internal focus on operations and customer services and an equal, external focus to make sure that the building is deeply integrated into the life of the community. It’s a long walk on a tight rope, but unless there are donors prepared to fully endow operations, it’s the only way to avoid the death spiral.

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Duncan Webb
Duncan M. Webb, President of Webb Management Services, Inc., has been a management consultant for the development and operation of performing arts facilities for 25 years. Mr. Webb entered the theatre profession as a lovesick maiden in Gilbert and Sullivan’s Patience in 1969. Since then, he has completed degrees in economics and business; worked in international banking; produced commercial, industrial and experimental theatre; and has been teaching for New York University’s graduate program in performing arts administration since 1990. He worked for Theatre Projects Consultants from 1989 to 1995 and founded Webb Management Services in 1997. That practice has completed over 300 feasibility studies, business plans and strategic plans for facilities, organizations and districts. Mr. Webb is also the author of Running Theaters: Best Practices for Managers and Leaders, published by Allworth Press in 2005. He lives in New York City with his wife and two children.