The Minnesota Orchestra recently took a moment to share some good news: it balanced its budget.
Rather than hold off until December when it typically shares figures from the past financial year, the orchestra surfaced the unaudited results to assure any skeptical music fans that it has bounced back following the 16-month lockout. It’s very different news from last December when the orchestra actually celebrated going just $650,000 in the red rather than the $1 million deficit it was anticipating.
“If that was a rebuilding year, this is a building year,” said CEO and President Kevin Smith. “We’re passed that recovery period. We’re on solid ground.”
Smith took on the challenge of leading the post-lockout orchestra last year, and has since taken the orchestra on a historic trip to Cuba and rolled out a new season, which they recently launched.
The orchestra’s budget was $30.6 million in the fiscal year ending Aug. 31, according to preliminary unaudited results. The orchestra, the state’s largest performing arts organization, had just $20.8 million in revenue the past financial year.
Smith chalked up the balanced budget to revenue increases and cost savings.
Rather than pile another expense on the budget, the orchestra’s trip to Cuba last May actually did more to boost both morale and revenue, Smith said. The diplomatic trip, which marked the first major U.S. orchestra to play in the country since President Barack Obama announced he wanted to normalize relations, was funded through a donation from Marilyn Carlson Nelson and her husband, Glen Nelson. Smith began working on the trip right after Obama made the announcement, beating several other major orchestras in a race to the Caribbean island.
All in all, Smith said expenses were $800,000 lower than anticipated.
The orchestra fundraised $14.8 million, including annual operating fund drive, major gifts for operations and artistic initiatives like the Cuba trip.
With concerts at 83 percent capacity, the orchestra had $8.1 million in earned revenue, up from just $5.8 million from last year’s short season. It also withdrew $7.7 million for operations from its investments based on a 5 percent endowment draw policy.
Individual donations were up nearly 30 percent with gifts from 7,105 people. Corporate gifts also returned with 47 this past financial year, up 10 from the previous year. Revenue from the newly renovated Orchestra Hall, which is available for events, and concessions significantly increased. The orchestra also paid off $9.5 million in old debt.
Despite the solid financial year, the organization is still facing challenges with fewer subscribers and a lot of new staff. About one-third of the orchestra’s staff were new after the lockout, and the orchestra lost one-third of its 10,000 subscribers following those 16 months, recouping only about 13 percent this past financial year.
“We lost a lot support over the lockout because we weren’t doing anything. Part of this year was about reestablishing relations with donors,” Smith said.
One symbolic event this season points to greater stability, he said. Music Director Osmo Vänskä and the musicians will come to Carnegie Hall next March. Vänskä resigned in the fall of 2013 after two highly coveted shows at the New York venue were cancelled.
Smith still plans to release the audited financial report results at the orchestra’s Dec. 2 annual meeting.
“The musicians are absolutely thrilled with the news of this year’s balanced operating result,” Clarinetist Tim Zavadil said in a statement. “We now look forward to a strong musical future, continuing our work with Osmo Vänskä, and serving our community.”