Facing the Music

"Great music, no red ink" is the new refrain of the St. Louis Symphony Orchestra

The fate of the live orchestral experience in the dot-com century continues to be debated, but there are positive signs of its preservation, if not its restoration. A fact sheet compiled by the American Symphony Orchestra League shows that at the end of the last decade, 72 percent of orchestras surveyed reported budget surpluses, compared with only 51 percent at the beginning of the 1990s. The survey also reports increases in attendance, ticket sales, income and -- a most crucial statistic for the cash-strapped St. Louis Symphony Orchestra -- increases in both individual and corporate donorship.

During this same period, however, SLSO went in the other direction -- financially, if not artistically. No surplus here -- the symphony could be facing a $10 million debt accumulated over the last two years alone. A $10 million stabilization fund, meant to shore up the institution over a five-year period, was spent in four. Pledges made to the organization did not all come in, resulting in a $900,000 shortfall. Although most of the symphonies that took part in the Orchestra League survey reported an increase in the percentage of earned income, such as ticket sales, to help pay their bills, at SLSO, from 1995-99, earned income went from paying 40 percent of the budget to 34 percent. In dollars and cents, this means that over that five-year period, the SLSO budget grew from $19.7 million to $25.2 million but earned income grew only from $7.95 million to $8.5 million. The financial gains achieved by symphonies elsewhere clearly did not happen here.

So what did happen? Executive director Don Roth is not in the habit of affixing blame. He's not about to charge his predecessors with denial, neglect, malfeasance or incompetence. When he came to the symphony three years ago, he says, he knew the organization had a problem with the endowment (the SLSO's $28 million is minuscule compared with the endowments of comparable American orchestras). He also figured there was a deficit of about $2 million.

David Terrill

What he did not fully realize -- but did fairly quickly -- was that the SLSO accounting system was a mess. Above Roth's desk in his Powell Hall office is a sheet of paper with bold letters that reads "GREAT MUSIC. NO RED INK." That's been his directive for a while, he says, but when he came here he discovered it was no easy task to locate that bottom line. "The accounting software program we had originally was for a construction company," Roth explains. Not long into his new position, Roth unceremoniously gave former chief financial officer Ed Fowler the boot and brought in John Fraser, who oversaw the implementation of a new, accurate, refined accounting system. Before the end of '99, says Roth, Fraser began to report the enormity of the symphony's fiscal woes.

Before the red-ink-averse Roth came on, Bruce Coppock served as executive director. Coppock implemented programs that have brought SLSO national and local acclaim, but they didn't help pay the bills. In the '90s, the St. Louis Symphony Community Music School, with an annual budget of some $3 million, was created. SLSO increased its outreach programs to schools and churches in ways that other institutions regard as a national model. In addition to these good works, the symphony created its own recording label, Arch Media, which made some beautiful CDs and lost close to $500,000.

In the meantime, the symphony did set out to increase its annual fund and its endowment, but, says SLSO board chairman Virginia Weldon -- who came on at just about the time Roth and company began to see how bad things were -- "To expect an organization such as the symphony to be able to double its annual fund and raise $20 million in endowment in a very short period of time was unrealistic."

Realism has set in at the St. Louis Symphony. Last summer, Roth brought in Henry Fogel, president of the Chicago Symphony Orchestra, to take a look at the books and interview members of the organization over a two-day period. His findings are sobering but not without optimism. For all its woes, Fogel concludes, SLSO has the leadership to face them and, he observes, a civic climate in which the institution is regarded too highly to allow either diminution (from a grade-A to a grade-B orchestra) or extinction.

There is also evidence that in the last decade other orchestras have put their financial houses in order. Trying to find a model to follow, though, can prove futile: Every orchestra is different. Every community is different. Yet there is some value in observing that dire situations have been successfully confronted elsewhere. For example, the Atlanta Symphony Orchestra, until recently, was also living with a comparatively small endowment, $40 million. In a little more than two years, however, that has been increased to nearly $80 million.

Charles Wade, ASO's vice president of marketing, says he sees encouraging signs that SLSO is coming to terms with its financial situation. "The Atlanta Symphony has had its share of debt problems as well. What St. Louis is doing is exactly right, which is focus on the endowment." One of the challenges of an endowment campaign, Wade observes, is explaining what those megamillions -- $80 million or $100 million -- do. "The initial perception is "They just got $40 million.' Actually we have that as a base from which we earn interest, the interest for which we use for operations of the institution. The idea is to create the endowment and make it large enough so that you're earning a lot of interest to take some of the pressure off the annual fund and ticket sales. I think St. Louis is going to have an easier time with its campaign because there is an urgency factor that's real critical."

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