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Symphony reports record shortfall of $2.8 million

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The Indiana Symphony Society reported at Monday's annual board of directors meeting a record $2.8 million shortfall for the 2009 fiscal year.

The society, the parent organization of the Indianapolis Symphony Orchestra, ended fiscal 2009 on Aug. 31, with $28.3 million in expenses and $25.5 million in revenue.

Symphony CEO Simon Crookall said he's expecting a smaller but still significant gap of $1.3 million in the 2010 budget year.

"What we know is that it will take us several years to get out of the deficit we've had," Crookall said Monday. "Obviously you can't suddenly increase your income by $3 million. It just isn't possible."

The ISO ended the 2008 fiscal year in the red as well, but the $293,000 deficit, on revenue of $28.2 million, was minor compared with the past year.

All revenue sources shrank in the 2009 fiscal year, the society said. Ticket sales were down, especially in late 2008. Annual giving and major gifts declined. A third, major source of cash, the ISO Foundation, suffered millions in investment losses. The foundation was worth $85 million on Aug. 31, down 22.7 percent from $110 million the prior year.

The foundation, which has a separate board of trustees, is trying to protect its endowment, and so has pared back its grants to the ISO. Last year, the foundation granted $9.78 million to the symphony, down from $10.6 million in 2008.

Even at a reduced dollar amount, the ISO's draw on the endowment represented 8.8 percent of a 36-quarter rolling average. In the current fiscal year, the foundation will give the ISO $8.1 million, or 8 percent, of its average value.

Crookall cut costs throughout the latest fiscal year, saving $1.3 million. Without those cuts, the ISO's deficit would have been even larger. Expenses are forecast to fall further in 2010, mainly thanks to pay concessions by the union-represented musicians and administrative-side salary cuts. The current budget calls for $26 million in expenses and $24.7 million in income.

Ticket sales have rebounded in the first six weeks of the fall classical series, Crookall said. ISO leaders are still projecting lower income in 2010 because they're no longer counting on large, one-time grants, which amounted to $2 million or more in past years.

Crookall said the ISO is beginning a new era of realistic budgeting that doesn't rely on large one-time gifts and extra grants from the endowment.

The board of directors will be calling on donors to help beef up the endowment by $100 million. "We need everyone to realize we can't sell enough tickets to keep this organization going," Crookall said.

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