The Pittsburgh Cultural Trust and Kevin McMahon stay nimble to stretch resources

As one of the larger arts organizations in the country, the Cultural Trust knows other organizations, particularly arts organizations, count on its support.
“We don’t have the option of ‘Oops, let’s just shut down three of our theaters for a year because we don’t have enough money to run them,’” he says. “That would be devastating to many of our arts organizations. They might actually have to close their doors permanently, if we would do that.
“So, we have to be very careful, very mindful of those kinds of issues.”

Budgeting for cyclical business

As part of a cyclical business, the Cultural Trust and McMahon are understandably careful with budgeting.
One year, a large Broadway show could come to town and inflate the revenue, but not the next.
“You have to be very mindful of when you have a big activity that’s generating lots of revenue streams, and then the second (year) or the year after, you may not have a ‘Lion King,’”
McMahon says. “And so you have to live within your means. You have to be very nimble. You have to be extremely careful not to become complacent and create a budget of ever-increasing requirements.
“Our budget goes up, our budget goes down, depending upon our revenue sources,” he says.
Budgeting and forecasting is something the Cultural Trust reviews constantly. McMahon says literally weekly, and sometimes daily, his team is checking ticket sales, fundraising revenues and sponsorships to make sure everything is in line.
“And even with that, sometimes there are shows for which you forecast a certain revenue number, and you don’t hit those numbers,” he says. “So, we’re not perfect. Sometimes we don’t get it right, but more often than not, we do.”
The Cultural Trust doesn’t want to be overconservative in its predictions, but at the same time, McMahon says it needs to make sure it’s still around tomorrow.

Evaluating all operations

The Cultural Trust isn’t a single building or a collection of a couple of buildings next to each other. By focusing on 14 city blocks, the organization owns a lot of property outside of its arts portfolio as part of the revitalization process.