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Keith Cerny

Fundraising and Innovation

General Director and CEO Keith Cerny explores the implications of major donors increasingly directing major gifts toward new programs rather than towards general operating support.



published Sunday, October 2, 2016

 

 

Dallas — One of the highlights for me at any OPERA America conference is the “General Director’s Roundtable,” at which General Directors from opera companies with similar budgets meet to discuss important issues of mutual interest. At the spring 2016 conference in Montreal, the discussion turned—as it often does—to the challenge of fundraising. As many readers will know, the balance between fundraising and ticket sales has shifted dramatically over the last 30 years; many Board members and Development directors, not to mention General Directors, yearn for the “good old days” when ticket sales covered as much as 65 percent of the total budget (unusually in life, perhaps, this is one of the few times when the past really was better). Today, subscription and single ticket sales can represent as little as 20-25 percent of an opera company’s total budget, which intensifies the demand on annual giving, and increases the pressure on Board and management to grow the Endowment.

None of this is news, sadly. What was notable, however, about this year’s roundtable with my colleagues was how far this trend had progressed. I had long hoped, perhaps naively, that there would be some “back-stop” on the percentage of budget provided by ticket sales, but such was not the case. For many opera companies, the gap between earned income and expenses continues to grow each year, driven by flat ticket sales (adjusted for relative popularity of specific operas) and inevitable expense growth due to inflation, even at the same level of activity. The issue is compounded because donations are not indexed for inflation; a donor who has consistently contributed $10,000 a year does not increase his or her gift by $200 a year to offset the impact of inflation, even though expenses will have risen simultaneously. During the discussion at OPERA America, I was stunned to learn from colleagues that some are actively planning for a world in which ticket sales account for a mere 10 percent of the budget!

If this level of ticket sales revenue actually comes to pass, it will be a truly historic, if challenging, moment for the field. It will create a “mirror image” of the traditional, continental European revenue distribution model of 80+ percent government funding, 15 percent ticket sales, and the remainder private philanthropy (Many European governments, by the way, are working to encourage non-government philanthropic support as a way to reduce the heavy reliance on state funding). For American opera companies, dependency on such a high level of individual, corporate, and foundation support is an additional source of pressure on already overstretched fundraising efforts.

Photo: Karen Almond/The Dallas Opera
Keith Cerny

Over the last five years, The Dallas Opera has been fortunate to secure a number of major gifts to support the company, thereby enabling us to achieve four consecutive balanced operating budgets—the first time in 15 years the company has achieved this result. Since this welcome generosity from our donors is essential to our future, I have been reflecting on the areas that have attracted the greatest level of support over this period.

Linking these disparate gifts is one common theme: donors providing support where they feel the company is advancing the art form, community outreach, education, or the field as a whole. Without being in a position to recognize every Dallas Opera donor, I find it instructive to review some of the areas that have attracted the most support in recent years:

  • Education and Family Programming: Many donors, whether individual, corporate, or Foundation, are passionately interested in supporting Education and Family programming. In TDO’s case, this giving accelerated when we transitioned from a very traditional education program in which we bussed children to abridged performances in the Winspear Opera House, to more tailored and interactive programs produced in the students’ own neighborhoods. Although we continue to provide some popular “inbound” performances in the Winspear, we produce nearly 90 programs out in the community, as well as after school programs and summer camps. The launch of our family series, featuring performances of composer-focused concerts and two different one-hour operas, all for $5 a ticket, has also been warmly received by donors. 
  • Simulcasts: As I have written before, TDO’s 13 free public simulcasts to date have been central for our community outreach and branding strategy, and have entertained 68,000 patrons to date. They have also proven attractive to donors, allowing us to secure three major gifts, each in the $250,000-$500,000 range, as well as other significant gifts. While many of the gifts come from donors here in North Texas, we have also secured support from donors with strong ties to Silicon Valley in California. TDO’s simulcast reach has included cities in the Greater Dallas metro area; major arts markets such as London, New York, Boston, Philadelphia, San Francisco, and Los Angeles; and regional markets such as Galveston and Wichita Falls (where we will present our first simulcast to this market on November 4). Having access to this range of geographical markets opens up many new fundraising opportunities for us, and we are exploring options to expand the program to another regional location in Texas in the fall of 2017.
  • Diversity Initiatives: While many opera companies are working to attract more diverse and representative Boards, audiences, and staffs, as a field we still have a long way to go. As readers of this column will know, I have focused particularly on increasing opportunities for women conductors, and TDO will welcome the second group of women conductors for a two-week residency with the Linda and Mitch Hart Institute for Women Conductors in late November of this year. This program has secured international media recognition, and has been generously supported by individuals and Foundations, including The Andrew W. Mellon Foundation. 
  • Naming Initiatives: Naming opportunities have become increasingly popular with major donors, especially when tied to new and innovative programs. TDO has been extremely lucky to receive support to name the Institute for Women Conductors (by Linda and Mitch Hart), the Principal Guest Conductor position (by Martha R. and Preston A. Peak), and even my position, in honor of Dr. Kern Wildenthal. Generally, donor interest has been high in naming new projects—in this case, the women’s conducting program and underwriting Nicole Paiement as the company’s first-ever Principal Guest Conductor.  Our Music Director, Emmanuel Villaume, has been named the Mrs. Eugene McDermott Music Director. Other important named programs include the “Betty and Steve Suellentrop Educational Outreach Fund” and the “Perot Foundation Education and Community Outreach Programs.” 
  • Commissions and Special Programming: TDO received special donor support for each of our three world premieres in calendar 2015, which was directed at either commissioning or production costs, or both. For many supporters, the chance to underwrite the creation of a new opera, and to be able to observe the creative process in action is an especially attractive area to focus their giving. For the OPERA America conference in 2017, which TDO has been selected to host, we have secured project-specific support for all three concerts: Doug Cuomo’s Arjuna’s Dilemma, Joby Talbot’s Everest, and BreakThru Film’s The Magic Piano, with live piano performance by Lang Lang’s protégé Derek Wang.

With all of this good news, readers may wonder about a downside, but there is a subtle one. Over the same period, donors have generally been less interested in underwriting productions of classic operas, or even prominent singers. While we have had a few welcome supporters for these areas, there has been a notable shift away from “bread and butter” major gifts such as general production underwriting of classics, and towards these new, and different projects. Many of the smaller gifts, and Board giving, still provide the general operating support that is so essential for day-to-day operations, but the larger “break-through” giving at the highest levels tends to seek out splashy new initiatives such as programs for women conductors, simulcasts, special education programs, premieres and commissions, new productions, special production funds, and other naming rights. While any leader in the opera field should be intently focused on the continuing shift of support from ticket sales to annual giving, donor interest in new initiatives, such as the above, will continue to be critical to every company’s success.

All donor support is very welcome, yet management must be careful that the pursuit of new programs and projects does not add excessively to the company’s cost structure. As with many aspects of running an opera company, this is just one more important balancing act, analogous to balancing the programming of more popular operas (which have higher ticket sales and lower donor support in this new environment) with lesser-known works and commissions (which have lower ticket sales but create new opportunities to inspire giving).

To quote from The King and I, today’s fundraising environment for the arts “Is a puzzlement!” But one we are deciphering more and more each day.

 

◊ Keith Cerny is the General Director and CEO of The Dallas Opera. His column OFF THE CUFF appears the first Sunday of each month in TheaterJones.com.

 

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Fundraising and Innovation
General Director and CEO Keith Cerny explores the implications of major donors increasingly directing major gifts toward new programs rather than towards general operating support.
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