A big boost in donations and hefty cutbacks pushed the Indianapolis Symphony Orchestra’s annual budget into the black for the first time since 2007.
The ISO finished its 2012-2013 fiscal year with a $236,000 surplus on $23.2 million in revenue, the organization reported Monday afternoon.
“After a groundswell of support from the Indianapolis community and major sacrifices from our musicians, the ISO had a milestone fundraising year and demonstrated it can operate within its means,” ISO Board Chairwoman Martha Lamkin said in a prepared statement.
Fundraising was up $4 million, but total revenue was down $3 million from last year.
Ticket sales dropped $500,000, to $6.4 million. But most of the revenue drop happened because the ISO drew significantly less from its endowment.
Endowment spending the last few years became a major concern for the group, which consistently spent more than the investment fund earned.
The ISO reined in the withdrawls, which amounted to $5.1 million, or 6 percent this year. The previous year, the ISO drew $11.4 million, or about 12 percent.
The ISO’s endowment was worth $86.5 million as of Aug. 31, up from $81.9 million a year earlier.
Management cut the ISO's budget to $23 million from $27 million the previous year to compensate for the more conservative approach to the endowment.
Musicians shouldered the brunt of the cuts. Orchestra operations, primarily made up of musicians, took a $3 million cut.
Contract negotiations with the musicians’ union boiled over last year and led to a five-week lockout that canceled the first several shows of the season.
The lockout ended after the performers agreed to steep pay cuts that mainly were derived by reducing the number of shows they were scheduled to perform. The base salary for a musician dropped to $53,000 from $78,000. Base pay rises to $70,000 in the final year of the five-year contract, a 10-percent pay cut from the previous contract.
The pay cuts were difficult for some of the musicians, but it’s good to see the ISO operating under budget again, said Rick Graef, who headed negotiations for the union.
A few orchestra members retired soon after the concessions, he added.
“I don’t think it hurt us artistically, but it’s something we have to be cognizant of,” he said about the potential for turnover.
Part of the contracts also required the ISO to launch an aggressive $5 million fundraiser that jump-started a strategy more reliant on donations to avoid drawing too much from the endowment.
The campaign, which aimed to raise almost a year’s worth of donations in four months, hit its target after last-minute gifts rolled in before the February deadline.
Total contributed income for the fiscal year reached $10.7 million, up from $6.9 million the previous year.
“Obviously, the [$5 million] campaign was a big part of it and in a very concentrated period of time allowed us to get our message out,” ISO CEO Gary Ginstling told IBJ. “Now, the question is, can we sort of absorb that into our regular fundraising?”
The ISO had about 7,500 donors in its 2013 fiscal year. About 2,000 resulted from the contract-mandated fundraiser.
The new labor contract stipulates the ISO must pull in $12.6 million annually from donors by 2017, which is almost double what annual contributions have been.
“We’re encouraged by the fact that 2,000 new donors stepped forward of all ranges and sizes of gifts, so that we can really build the base,” Ginstling asid. “It’s both a base of smaller gifts and obviously some key larger gifts as you work up the chain.”
Part of the strategy will mean being more transparent about finances, even when the news is negative, he said.
“If we see challenges lurking ahead, we’ll get in front of it as quickly as we can,” he said. “We’ll cut expenses wherever we can, and we’ll communicate it, so people will know every step of the way how we’re doing.”
One of the biggest projects outside of fundraising has been restaffing a largely vacant management team.
Ginstling, who took over at the ISO in March, has made four major hires since he arrived: Danny Beckley, vice president and general manager; Holly Johnson, vice president of development; Steve Hamilton, vice president of finance; and Larry Baysinger, director of human resources.