It wasn’t such a bad year to be in an audience in Atlanta in 2011.
The High Museum had solid success with its “Memory as Medicine” exhibit of work by Atlanta artist Radcliffe Bailey. The Alliance Theatre had crowds rocking to the world premiere of “Bring it On: The Musical.” And the Atlanta Opera produced Gershwin’s “Porgy and Bess” to sold-out houses.
Behind the scenes, however, 2011 was a year of continued financial strife for the metro’s myriad arts organizations. Especially the ones in the middle, those houses that are sandwiched between well-endowed juggernauts like the Alliance and the High, and tiny professional and community groups used to operating on a shoe string.
Even though the financial picture was cloudy, there were bright spots. The Atlanta Opera, which has limped along in recent years, had its trajectory completely altered by a $9 million bequest in February from its late board member, Barbara D. Stewart. The Atlanta Symphony Orchestra got a $1.85 million endowment from the Mabel Dorn Reeder Foundation announced in January. And the Woodruff Arts Center reached its $8.8 million goal for its annual Corporate Campaign.
But for every announcement of goals reached, there seemed to be a plea, particularly from theater companies, for emergency cash to stay afloat. Theatre in the Square in Marietta, Actor’s Express, Georgia Shakespeare, were among the more prominent houses seeking rescue funds. It made some in the industry wonder if this last-ditch fundraising model had become the new normal.
But if the metro area’s arts groups have learned anything this year, it’s that they’ll have to make fundamental changes in the coming years if they’re going to continue entertaining and challenging audiences.
“Someone said to me the other day, ‘It’s the now normal, not the new normal,” said Lisa Cremin, director of the Community Foundation for Greater Atlanta, which oversees the Metropolitan Atlanta Arts Fund.
‘Shrinking middle’
Nonprofit arts groups nationwide have been coping with this steady slide in donor support over the past several years. But for the past couple of years, and especially this year in metro Atlanta, the situation has become more acute, particularly for medium-sized organizations. All the talk about the “shrinking middle” in the overall national economy could also be said for the local theater community.
Earlier this year the NonProfit Finance Fund, a national community development financial institution, studied the business models of 40 small to medium-sized arts groups in metro Atlanta, from county symphonies to theaters.
Of the 40 groups, 78 percent had less than three months’ worth of operating liquidity in fiscal 2010, said Cremin. That’s the money needed to pay bills and produce work. Generally a nonprofit should have at least six months of operating cash on hand as well as a reserve fund. It was during this same period, and into fiscal 2011, that established theaters such as Georgia Shakespeare and Theatre in the Square in Marietta put out dire pleas for donations.
None of the major mid-size companies has had to permanently shut its doors, but like a household where one of the breadwinners has been laid off, they are having to drastically revamp their budgets and look for ways to pare expenses.
“We’ve cut back on the length of our runs from six weeks to five,” said Palmer Wells, producing director of Theatre in the Square in Marietta, which faced major money challenges this year. “Top salaries, including mine, were cut 20 percent and the remainder of the staff got a 10 percent cut. That’s in addition to cutting four staff positions in the last three years. And we’ve cut back from paying full medical benefits to only half. Those are significant and painful changes for us.”
The group has also outsourced its bookkeeping and some marketing duties. Yet it is still three months behind on its rent.
“It’s hard for our board to understand,” Wells said. “They say, ‘Why don’t you raise ticket prices or do more popular shows? Operate it as a conventional business.’”
New business models
Ultimately, the larger issue many Atlanta arts groups have wrestled with in 2011 has been business plans not robust enough to deal with the “now normal.”
This month the Metropolitan Atlanta Arts Fund brought in representatives from the NonProfit Finance Fund and those local arts organizations, as well as donors, for a two-day workshop on developing stronger business models.
“The trend in the nonprofit artistic community nationwide is finally realizing that 501(c)3 is a tax status not a business model and that it’s OK to look at this as a business,” said Lauren Morris, Georgia Shakespeare’s new managing director, who attended part of the two-day session. “It’s time for us in the nonprofit sector to stand up and say a balanced budget is something to be proud of, as is great creative work.”
Morris, who has an MBA in theater management, came to the company after working as a financial turnaround artist for a theater in Long Beach, Calif. She signed on with Georgia Shakespeare not long after the company came close to shutting down earlier this year. An emergency fundraising campaign brought them back from the brink, but as of the middle of last week the group was about $25,000 short of its do-or-die goal of $500,000.
And yet, while the company was roiled by financial strife, it mounted one of its best received productions in years, “The Glass Menagerie,” which earned superlative reviews. The challenge in the coming year will be developing a financial structure that supports the artistic mission.
“You can’t save your way to a healthy organization, but you can decide what projects you can afford to do and which you can’t,” Morris said. “We’re looking for efficiencies rather than austerity.”
To that end, the company has instituted a green-lighting process that will impose tight fiscal controls on everything from the sort of coffee maker used in the break room to the sort of plays it chooses to do. Where the company might have done a show with 16 actors, maybe it does a few with half that number.
Those are the same challenges in Marietta at Theatre in the Square. The 30-year-old theater appealed to donors this fall to save it from having to close the house for good. The goal is to raise $350,000 by New Year’s Eve to help retire its debt and finish the current season. It has $110,000 left to go, said Palmer Wells, producing director. As has been the case with most of the theaters making financial appeals, the request has been fulfilled largely by individual donors so far, Wells said. As a part of the “Save a Seat” campaign, the group is also selling seats in the theater, where a person gets a plaque with their name applied to a seat for $1,000.
In a letter to patrons sent two weeks ago, the theater asked them to dig even deeper into their pockets to help them raise an additional $400,000 before June 2012 to help pay for the 2012-2013 lineup. Roughly 65 percent of the theater’s budget comes from ticket sales. The rest is from grants, corporate and individual gifts. But these days every entity is giving less than it did during the boom years.
“The theater curtain speech plea is pretty common in the metro area these days,” said Wells. “But I’m also saying we’ll take anything, $3, $30, $300. We’re literally passing the hat.”
Little legislative aid
Arts and cultural institutions can’t expect much government support in 2012. Georgia ranks dead last among all states in legislative appropriations to the arts, according to the National Assembly of State Arts Agencies.
Flora Maria Garcia, the CEO of the Metro Atlanta Arts and Culture Coalition, has been a supporter of a legislative sales tax that would direct a fraction of the tax to cultural arts groups. The measure has the potential to bring in hundreds of thousands of public dollars that could shore up arts infrastructure around the state, she said. The bill has been thwarted twice, including in 2011. But with a major transportation sales tax vote up for consideration next year, the arts proposal probably won’t see light again until at least 2013.
“The cavalry isn’t going to come for two years,” Garcia said in an earlier interview, “and other cultural centers are going to overtake us. We just can’t remain competitive and we’re going to lose a lot of our cultural infrastructure over the next two years.”
In lieu of a strong public/private partnership, arts organizations will have to continue tweaking their operational models and lean on big donors such as the Loridans Foundation. This year Loridans gave $450,000 to artistic institutions and will give roughly the same in 2012, said Bob Edge, Loridans’ chair.
Even so, how the benefactor evaluates grants is beginning to change.
“Do we help people stay alive or do you support the ones who have the best chance of surviving,” Edge said. “This is what’s going on in the minds of the trustees.”
Going forward, the fund will target those groups that seem to have the best chance for longevity. Edge said there is no set criteria for choosing which organization to give to, but there will be some hard judgment calls to be made in 2012 and beyond.
“I’m afraid there’s a Darwinian factor involved,” said Edge. “The issue is not just can you survive, but if you can survive, can you flourish?”
Howard Pousner contributed to this article.
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