Virtuous Cycle: An Orchestra's Bet on Engagement Helps Bring in Big Funding

photo:  Alenavlad/shutterstock

photo:  Alenavlad/shutterstock

In a performing arts landscape where philanthropy now constitutes a majority of orchestras’ revenue, ensembles uncertain of a way forward can look to Detroit for inspiration.

That sentence may sound a bit counterintuitive given the city's woes, but an infusion of $18.5 million this fall from four funders to the Detroit Symphony Orchestra underscores how labor stability, community outreach, and technological innovation can set an organization on a path to sustainability. Even in Detroit.

I’ll dig into the funders and their gifts momentarily. But first, let's frame the gift within the respective performing arts landscape.

When Philanthropy Meets Labor Unrest

These are tough times for ensembles, which are being squeezed by two powerful forces. The first, the precipitous decline in box office revenue. A 2013 League of American Orchestras study showed that for the first time, ensembles no longer earned a majority of their ticket revenue from subscription packages. Ensembles now rely on philanthropy to keep the lights on.

Ensembles, of course, aren’t alone in this regard. Sectors like dance and theater have become increasingly reliant on philanthropy, especially as public and corporate donors dial back giving. But the looming specter of labor unrest further complicates matters in the ensemble space.

The past few years have seen a spate of highly disruptive strikes at the Green Bay Symphony Orchestra, Philadelphia Orchestra, Pittsburgh Symphony Orchestra and Fort Worth Symphony Orchestra. To say labor unrest is bad for fundraising would be an understatement. Donors naturally feel more secure in making big gifts knowing that the labor situation is simpatico

As a result, ensembles locked in labor disputes find themselves in a vicious cycle. They need donor support to survive, yet donors, craving stability, are reluctant to give until management and musicians can hammer out an agreement.

The Detroit Symphony Orchestra's success tells us that when involved parties finally see eye-to-eye, good things happen.

"The Most Accessible Orchestra on the Planet"

Things were looking bleak for the DSO in 2010. It had been bleeding money for several years, posting $20 million in accumulated deficits, and using up much of its unrestricted endowment money to make up the shortfalls. Management proposed (among other things) salary cuts and layoffs to right the ship.

Musicians pushed back, and on October 4, 2010, the DSO went on strike.

As the Times reported, a major sticking point for the musicians had been management’s proposal to require them to "take part in activities other than rehearsals and concerts, as part of their job description."

This may have rubbed musicians the wrong way, but it was a prescient demand by management. As repeatedly noted here on IP, funders want orchestras to engage the larger community, and that often means redefining the role of a musician to include teaching, coaching and other forms of outreach.

Six months later, the DSO went back to work after agreeing to a significant 23 percent pay cut and reduced seats in exchange for not having their jobs redefined. The agreement nonetheless included a carrot: Each player could earn up to $6,900 more a year if they choose to take part in community outreach activities.

Management then turned its attention to other engagement efforts. For example, the agreement gave the orchestra the ability to stream its concerts. The new program, Live at Orchestra Hall, quickly received support from other donors, and soon became, according to the Times, "the most ambitious free web-streaming program of any major American orchestra."

The orchestra also lowered ticket prices, scheduled concerts around the city ("The Neighborhood Series"), and branded itself as the "most accessible orchestra on the planet."

While the agreement was clearly a positive step, management nonetheless urged cautioned. According to its calculations, the orchestra would still run deficits of about $3 million a year.

Fast-forward to 2017.

Upon announcing $18.5 million in new funding, DSO President and Chief Executive Anne Parsons said that thanks to the engagement efforts embedded in the 2011 labor agreement, the orchestra raised more in donations, sold more tickets and, in 2013, balanced its budget for the first time since 2007. Mark Davidoff, chairman of the DSO Board of Directors and Michigan managing partner of Deloitte, chimed in, noting that the orchestra has reported five consecutive balanced budgets.

The orchestra’s post-labor detente success created a virtuous cycle: In January 2014, the DSO announced that the board, musicians and management agreed to a new three-year contract eight months before the current one expired. And in January, it ratified another extension, also ahead of schedule.

A Longtime Supporter Steps Up

Which brings me to the DSO’s $18.5 million windfall, announced at the end of October. 

A majority of the total funding—$15 million—came from the William Davidson Foundation, whose gift of $15 million represents a large portion of the collective funding. A longtime supporter of the DSO, the foundation awards grants to organizations carrying out work in Southeast Michigan, the U.S. and Israel.

The foundation’s gift, which adds to its $3.75 million gift in 2014, includes continued sponsorship of the neighborhood concert series. It's easy to see why the Davidson Foundation is so bullish on the initiative: According to the DSO, the Neighborhood Series attracted new subscribers and increased total subscription growth of nearly 25 percent from 2011 to 2014.

The Davidson gift also includes a $5 million challenge grant to the DSO’s permanent endowment to inspire additional support. Early results are encouraging, to say the least—the challenge is already halfway met, thanks to new support from the Andrew W. Mellon Foundation, the Fred A. and Barbara M. Erb Family Foundation, and the Dresner Foundation.

Followers of Mellon won’t be surprised by its support for the DSO. The foundation, which contributed a total $2.75 million including its recently announced annual fund gift, is famously keen on making “highbrow” arts experiences accessible to underserved demographics. 

To that end, Mellon’s gift includes boosting enrollment for underserved youth in the DSO’s Civic Youth Ensembles program, funding private lessons, and expanding the orchestra’s African-American Fellowship program to include two fellows in the orchestra simultaneously. 

The Royal Oak, Michigan-based Fred A. and Barbara M. Erb Foundation, meanwhile, gave $1 million to the challenge, adding to its ongoing support for initiatives including the DSO’s Civic Jazz Ensemble. The foundation's key focus areas include the environment, Alzheimer's research and the arts in metropolitan Detroit.

Lastly, the West Bloomfield, Michigan-based Dresner Foundation is chipping in $500,000 to the challenge, in addition to a previous pledge of $600,000 to provide comprehensive music education for underserved youth and the establishment of a new entry-level program in the DSO’s Civic Youth Ensembles.

In related news, check out our take on a recent $2.9 million gift from the estate of Dr. Clyde and Helen Wu to support DSO music education programs through the Wu Family Academy for Learning & Engagement.

Editor's Note: An earlier version of this article stated incorrectly that the Grand Rapids Symphony was among those that experienced strikes. No such strike occurred.