The record speaks for itself. Having spent its first 19 years in the black, ProMusica Chamber Orchestra of Columbus may be one of the best examples in town of good money management.
Thats not to say ProMusica has always had smooth sailing. In the early 1990s, says Executive Director Jennifer Keefer, the organization had to cut concerts and rehearsals to meet financial goals. However, the fact that ProMusica identified the need to make adjustments before large losses were incurred and actually did so epitomizes the organizations dedication to watching the bottom line.
Smart money management, cautious risk taking and strong control over growth have contributed to the organizations sound financial history. So have product development, marketing, customer service and diversification.
Its not rocket science, Keefer says. Its business, and it all takes the same things. You need to raise the money, produce a product, search for excellence. All of these things its all universal.
ProMusica goes to great lengths to measure its success, keeping close track of every detail, from each source of income to the attendance and capacity of all performances. This gives it a way to see signs of trouble that need immediate attention.
In 1991 and 1992, for example, ProMusica noticed audiences were not filling seats at the twice-a-weekend concerts, so one performance each weekend was eliminated and rehearsals cut back.
Its all based on the financial situation, Keefer says. We were not bringing in enough revenue to manage the scale we were doing.
Now, however, ProMusica is seeing a period of growth in the past two years, revenue increased $150,000, pushing the annual budget to $530,000 and the board is considering a return to the double concert weekends.
To stay prepared for the hard times, the organization keeps a cash reserve equal to 10 percent of its budget. Established in 1995 through a matching grant from the Greater Columbus Arts Council, ProMusica now sustains the fund.
Although the money could be used to maintain cash flow throughout the year, ProMusica has never needed to access it. In fact, in her past three seasons as executive director, Keefer says, it also has not had to draw on a $35,000 line of credit set up through The Huntington National Bank for the same purpose.
In keeping with its forward-thinking nature, the organization has taken a look ahead at another potential income source: its endowment fund.
Established in 1992 for general support of the orchestra, the fund grew to $19,000 through contributions and reinvestment of its average annual 10 percent interest, but the fund was never tapped because it was so small. Rather than let the money sit idle, the board recently set out to increase it. In honor of ProMusicas 20th anniversary this year, members did a six-week blitz soliciting pledges that should add nearly $500,000 to the fund.
In addition, subscribers this season were asked to contribute $1 or more toward the endowment, a move made more to increase awareness of the endowment, and thus garner more contributions down the road, than to provide a significant or immediate increase.
That will be our nest egg, Keefer says, adding that an advisory committee will review the income and recommend ways to use it. We can build on it and help sustain our growth in the future.
Keefer says the ProMusica board knows that to keep the organization growing, it will have to take the occasional step out onto a limb.
A prime example: the move this season from Weigel Hall at The Ohio State University to the newly remodeled Southern Theatre. That costs the organization nearly $20,000 more per year in production costs, but is tempered by a $7,500 grant from the Ohio Arts Council and the prospect of increased ticket sales due to the mystique of the historic, newly restored theater.
It was a calculated risk that has paid off, Keefer says, because four of seven concerts so far this year have been sold out, and the others had at least 85 percent capacity. Because Weigel seated 700, compared to the Southerns 900, ProMusica still comes out ahead.
ProMusica will have to assess the risk again in the coming year, when the grant expires. Even though it has only signed a one-year contract to perform at the Southern, the organization is making plans to stay.
This year, we have identified a lot of new donors for our annual fund, Keefer says, noting that the move to the Southern, and its ensuing cost increase, was incorporated into solicitation materials for corporations and donors. In addition, ProMusica will continue to modify pricing in order to bring in the necessary income to remain at the downtown theater.
Patrons, she says, were willing to pay the increased ticket prices about 20 percent more during the 1997-1998 season. In fact, income from subscriptions grew 43 percent that season due to the price increase and a larger subscriber base. During the 1998-1999 season, patrons supported tiered pricing because of the Southerns varied seating options and were willing to pay more again.
Another risk ProMusica takes may not appear to deal directly with income, but can dramatically affect the groups finances all the same. That risk is balancing the need to provide a consistent product with the need to continually innovate. That means scheduling concerts that include traditional and new works.
Its an approach Keefer and her board are passionate about, but one that could turn off patrons if not handled correctly.
If we stop commissioning, premiering, promoting contemporary music, there wont be any new music, Keefer says. So we ask the audience to support that development.
Were committed to taking [musical] risks, but because weve done it so long, we know how to present it with something we know is going to be successful, she explains. For example, the May concert includes a piece written by Messiaen in the 1950s and a symphony Beethoven wrote in the 19th century.
Ray Hanley, president of the Greater Columbus Arts Council, says ProMusicas sound day-to-day business operations make it easier for it to take such risks.
They are very stable in their basic operations, and when they get an idea to take a risk, its for several years away, Hanley says. Because they plan well, because the board is very knowledgeable and involved in the organization, they are able to do projects very risky for an organization their size.
ProMusica recognizes that new customers those who have never before experienced its chamber music are taking risks, too. To continually attract new patrons and bring in more revenue, ProMusica must meet them half way.
To do that, the musicians perform in different venues, such as at corporate events or weddings, or hold concerts at the Pontifical College Josephinum.
This expands our reach into the community, Keefer says. Im going to take the mountain to Mahomet. Well be in your setting so you can experience ProMusica at your own comfort level.
The organization makes an effort to cater to various customers.
For example, it presents concerts, curriculum materials, recordings and special ticket offers for children. The orchestra reaches out to senior citizens with open rehearsals for an up-close-and-personal look at how it transforms from the rehearsal state to the performance state.
Aggressive recruitment of new donors and ticket holders comes from board members, who add a personal touch, and the Trustees Circle, a group of established Columbus leaders, including Bernie Yenkin of Yenkin-Majestic Paint Centers and Artie Isaac of Young Isaac Inc., who serve as a mbassadors, or social advocates, of the organization.
Like any business, once ProMusica gets its customers, it has to keep them.
Music Director Timothy Russell sends pre-concert letters to subscribers and offers a personal talk 30 minutes prior to each performance. He also speaks with the audience during concerts to introduce and explain various pieces of the program.
While forward thinking and big-picture management guide ProMusica, its board and staff have not forgotten primary business strategies, including diversification, to increase revenues.
Keefer acknowledges that ProMusicas income is limited to approximately $20,000 for each concert that fills a house. One way it has conquered that obstacle is to arrange small ensemble performances, such as a quartet at a corporate event, to draw additional income.
In the 1997-1998 season, ensembles brought in $8,630, a 40 percent increase from the previous year.
Looking ahead, ProMusica has invested in another potential revenue source: compact discs of contemporary, childrens and multicultural music performed by ProMusica. Although it will not gain royalties until sales top approximately 20,000 CDs, ProMusica has arranged with record companies to receive about 500 discs to sell at its concerts and events a move that has netted a couple thousand dollars each year. Other revenues are very far off; in the first five years, the CDs are nearing 5,000 sold.
The same premise ProMusica uses to find additional patrons holding more concerts in various locations results in increased revenues. Those smaller concerts cost less to produce at $5,000 for a three-concert series at the Ohio Historical Societys Ohio Village, for example, versus more than $35,000 for a full subscription concert. And they bring in about $3,500 after expenses, which are typically paid by a sponsor.
On a larger scale, ProMusica looks for a financial boost during the 1999-2000 season with its production of PASSION, a chamber musical by Stephen Sondheim. Although its another risk since it requires a $200,000 budget, the effort is already paying off with a Huntington Bancshares Inc. promise of $100,000 ProMusicas largest gift ever.
It is because they are conservative that they can take risks like PASSION, Hanley says of ProMusica, pointing out that PASSION will require more than one-third of the organizations normal operating budget. They had the money banked to do it before they announced it. Its not that they get an idea they want to do and then get the money for it.
The Huntington gift, plus a grant from the Greater Columbus Arts Council and an anonymous donation of $25,000, have covered 75 percent of the musicals costs, and ProMusica hopes to earn more than $20,000 for each of the two scheduled performances.
Moreover, PASSION is an investment in exposing more people to ProMusica in the hopes of attracting them as patrons later, Keefer says.
Staying in the black, she says, has been possible for ProMusica with such conservative and calculated business operations.
When we talk about growth, Keefer says, it isnt, How do we get to be an $8 million organization? Its, How do we become a stronger organization? Joan Slattery Wall (email@example.com) is a reporter for SBN.