Little Brown Notebook Blog Post #5: “How budgets work: revenue”
part of a series on “The Impact of the Coronavirus on the Arts”
Before delving further into the impact, I thought I’d share a few posts about the financial side of running an arts organization that produces and presents shows. For the purposes of these posts, we’ll talk about the typical performing arts season which has productions, concerts, and events from September through May.
Revenue is just fancy word for income or resources coming in to the organization. When laying out a budget we break these revenue streams into a few major categories: Earned Income, Contributed Income, and In Kind. …and, of course, there are several subcategories within each of those. If we were to make a pie chart of the typical “revenue mix” for a nonprofit arts organization in the United States it would break down to roughly 60% earned income, 20% grants, and 20% donations. [Graphic from a 2017 study by American for the Arts]
In performing arts, the largest percentage of earned income comes from ticket revenue from subscriptions and single ticket sales. A key aspect of this revenue is that it is unrestricted – once the show is over you can spend it wherever you need it to sustain the organization.
Subscriptions are a key part of keeping many organizations afloat as they’re built trust and loyalty. Organizations offer ticket packages at a discounted rate in the spring and patrons buy them in April/May for shows they won’t be able to see until the next season, which is often months away. The much-needed infusion of cash from subscriptions helps the arts organization sustain itself during the summer months when there are no productions (so no single ticket sales) and donations may be down. It also provides capital needed to cover the upfront expenses that need to be paid during the months leading up to a production. More on that in our next blog post about expenses.
Single ticket sales are a huge stressor as a producer as they tend to be last-minute, the week of the show. You watch the daily ticket reports looking for a bump. Did the article in The Isthmus inspire anyone to purchase? Is there an uptick after a social media campaign or your latest newsletter. Every morning is a check against the money that has already been invested in the show vs the earned income from ticket sales. Why is this such a big deal? Go back to the imaginary pie chart with 60% of the revenue needed coming directly from patrons via ticket purchases.
Beyond tickets, many performing arts organizations offer classes and outreach programs. The registration fees for classes work much like a subscription – You pay tuition up front, for the promise of the delivery of a specific number of lessons/classes. For outreach programs, you’ve got a flat fee to bring a performance or workshop to a specific audience and are usually paid for that work after the event.
Other segments of earned income include concession sales (wine sippy cups!), merchandise, and
I’ll start this section by ranting a bit about the terminology “contributed” as it sounds like you didn’t have to EARN it. Contributed is usually defined as “gift in support of mission.” Anyone who has ever written a grant or spent hours building a donor campaign can attest to the fact that it is earned. Rant over.
The main categories of contributed income are grants, sponsorships, and donations.
Grants from the government (like the Madison Arts Commission, Dane Arts, and Wisconsin Arts Board) and foundations (Madison Community Foundation, Peterson Family Foundation, etc) are usually awarded in support of a specific project – they’re funds that are restricted. When you write the grant application, you are making the case for support for a particular show or project and, if you are funded, the money must be spent on that show or project. Further complicating this process is the requirement by some granting agencies that no portion of the funds underwrite “administrative overhead” aka the daily operations of the arts business which will make the project possible (institutional marketing, company staff, fundraising expenses, etc).
Sponsorships are usually a promotional exchange. A company pays cash or donates a substantial amount of goods or services in exchange for benefits like being named as the lead sponsor for a particular project, logo on website/poster/program, verbal recognition in a preshow announcement, and program ad space. Some sponsorships also include a specific number of tickets to a performance and/or a corporate performance for the business and its employees and families.
Individual Donations are when someone gives you money to support the work you do as an organization or arts business. The relationship building that inspires someone to send money, no strings attached, takes time and attention. Think about the times you’ve donated – What moved you to send $$? Were you thanked for your contribution? Will you consider supporting the organization in the future? Why or Why not?
IN KIND GOODS & SERVICES
In Kind Good and Services is just business jargon way of talking about donated goods and services. When budgeting for a show, I usually lay out revenue, expenses, and in kind as three separate sections as in kind are both a revenue (donated) and an expenses (you have to account for what it would have cost so your budget balances out).
Examples include someone volunteering their professional services like an accountant giving you a discount on monthly bookkeeping, a church allowing you to rehearse in their space for no charge, and a printing company donating the printing of your programs. For In Kind gifts you ALWAYS track what has been donated and the cash value of that item as you need to know what it actually costs in case you need to pay for it for a future project or event.
Hopefully this whirlwind exploration of the revenue side of arts organizations has provided some insight into how companies work. We’ll tackle expenses in the next blog post and then discuss how the coronavirus is disrupting the business model.
Americans for the Arts regularly conducts nationwide surveys of artists and arts organizations. See “Source of Revenue for Nonprofit Arts Organizations” from 2017.
“Grantmakers in the Arts Study Points to Positive and Negative Revenue Trends,” by Eileen Cuniffe for the Nonprofit Quarterly on February 26, 2018
“Arts Management: Uniting Arts and Audiences in the 21stCentury,” Ellen Rosewall, Oxford University Press, is the best arts management text available. We use it as the foundational book for all the courses in the Arts Management program that I teach at University of Wisconsin-Whitewater. It should be required reading for all nonprofit staff members and nonprofit board members.
“Beyond Sustainability: Identifying the Right Resource Mix for Growth,” by Woods Bowman for Nonprofit Quarterly for July 12, 2017
Today’s “The Impact of COVID on the Arts” post (#4) is an essay by freelance soprano Sarah Brailey who also serves as the Artistic Director for the Handel Aria Competition and co-founder of the Just Bach concert series. An incredible musician, Brailey is pursuing a DMA in Vocal Performance from University of Wisconsin-Madison and has an impressive career as a professional singer – ranging from appearances with Kanye West and Roomful of Teeth at the Hollywood Bowl to Purcell’s The Fairy Queen, Handel’s Silete venti, and Bach’s Mass in B Minor with the Handel and Haydn Society.
Learn more about Brailey and hear excerpts of her singing at her website.
Read Sarah Brailey’s full essay on The Well-Tempered Ear.
Blog Post #3:
UPDATE: This effort has already past and as of March 24 had raised over $30,000 for the artists who contributed to the live stream festival. Take a look at the website and project as a potential business model for in-person music festivals and concert series that have been postponed or cancelled due to the coronavirus outbreak.
Check out the Stay at Home Festival, livestreamed music concerts by international artists, Friday 3/20 11 am CST through Sunday 3/22
Today’s “The Impact of COVID-19 on the Arts” post (#3) is sharing the innovative Stay at Home Festival which will livestream concerts via their website and @StayAtHomeFestival on Instagram. The lineup includes traditional and folks artists (Alasdair Fraser, Ruben Bada, Ana Rossi, and many more) from across the globe and was organized by Galen Fraser, Diego San Miguel, and María San Miguel, three artists currently residing in a state of quarantine in Valladolid, Spain. (They’re so on top of things the schedule even includes PST, EST, UK time, and Madrid time.). All proceeds benefit the artists who are performing.
From the website:
What is #stayathomefestival?
During all this chaos we bring you live broadcast music from your favorite international musicians straight to the comfort of your living room. Performances will be live streamed from the individual Instagram accounts of the artists as well as on this website. Follow us on Instagram @StayAtHomeFestival for updated artist roster and performance schedule!
Support live music
As the lives of touring musicians all over the globe become immensely complicated and stressful due to the Corona Virus, we have decided to take matters in to our own hands to raise moral and support live music by starting an online festival where groups or solo musicians can stream direct to peoples’ homes in an effort both to encourage people to stay in their houses to prevent further virus spread AND to give musicians an opportunity to make up for countless canceled events and lost incomes.
Little Brown Notebook Blog Post #2: A Timeline Review & How to Help Artists & Arts Organizations
part of a series on “The Impact of the Coronavirus on the Arts”
Today’s post will be a launching pad for several others. We’ll start with a review of the timeline of what has unfolded in the past few days in Madison, WI and then talk about immediate effects on artists and arts organizations. I’ll also include a list of suggestions of how you can help – I’ll revisit this topic often so if you have additional ideas, please post them in the comment section.
TIMELINE in Madison, WI
While it seems like we’ve been embroiled in the tumult of COVID-19 for weeks, it’s only been five days since University of Wisconsin-Madison announced on Wednesday, March 11 that they were moving all instruction online for March 14 through at least April 10, that official travel to many locales was suspended and personal travel was discouraged, and that students were encouraged to move home during spring break, all as a proactive measure to flatten the curve and prevent the spread of the coronavirus.
Here’s a timeline of the days that followed:
WHAT HAPPENED IN THE ARTS?
On Wednesday, March 11 the Chazen Museum of Art cancelled all public events and announced reduced hours starting March 23.
On Thursday, March 12, The Isthmus ran a story by Mike Muckianof current postponements and cancellations (most related to UW-Madison venues like the Wisconsin Union Theater and Hamel Music Center) with cautious words of from leadership at local arts organizations.
Friday, March 13 (Friday the 13th) became a Black Friday of another sort in the arts community in Madison. One announcement after another of cancellations. UW-Madison Varsity Band Spring Concert. Madison Opera’s production of “Orpheus in the Underworld.” Wisconsin Youth Symphony’s remaining performances. Wisconsin Film Festival. Wisconsin Chamber Orchestra. CTM’s production of “Peter Pan.” Madison Symphony Orchestra. Madison Ballet. Forward Theater’s “The Amateurs.” Madison Children’s Museum. The list goes on and on.
On Friday, March 13 Overture Center for the Arts announced that it was closing until at least April 13 which means no activity by any of ten resident companies, no access to art galleries, and no touring productions and concerts. Frank Productions and Live Nation announced that they were postponing all events at The Sylvee, The Orpheum, The Majestic, and The High Noon through March 31.
WHAT DOES THIS MEAN FOR THE ARTS IN MADISON?
Venues like Overture Center, Kohl Center, and The Sylee sustained massive financial hits as they are dependent on ticket sales and concessions for earned income needed to pay rent, pay their employees, and keep the doors open.
Many Arts Venues and Arts Organizations learned that their “event cancellation” or “business discontinuation” insurance did NOT cover epidemics so they would receive no help regarding the sunk costs already invested in now cancelled events and in recovering any of the lost ticket revenue. Couple this with what is happening in the stock market and the decimation of endowment funds across the country and the impact is more than doubled. More on this in a future post.
In a matter of hours, the livelihood of many local performers, stagehands, and technicians evaporated. In a gig economy, there are no vacations days or sick days. When a gig is cancelled, you are not paid. Read back over the partial list of organizations that cancelled events and start to do the math on how many musicians, actors, dancers, designers, stagehands, performers, and arts administrators and employees have been affected.
Most artists have a clause called force majeure in their contracts. This means, even when they’ve already spent hours learning a role or music, they can lose all income for the gig.
From a New Yorker article:
“Perilous times for working musicians lie ahead. ‘Force majeure’ clauses in artist contracts—releasing companies from liability in the event of disruptions—mean that many opera singers and freelance instrumentalists, not to mention actors, dancers, and backstage technicians, will go unpaid for the duration of the pandemic.”
For those who are members of a union, the cancellation may also affect their ability to maintain health insurance as full membership, and benefits, are dependent on the number of weeks worked each year. For Equity actors and stage managers, 11 weeks of union employment qualifies you for six months of coverage and you’ll need 19 weeks more for 12-month of coverage. In IATSE (International Alliance of Theatrical Stage Employees), depending on which chapter you belong to, coverage can be dependent on the number of days worked in a particular period (for NYC 60 days in a 6 month period), the amount of money paid in (% of salary goes into a fund), or any of number of contractual agreements, all dependent on actually working gigs.
WHAT CAN YOU DO TO HELP?
Reach out to your friends who work in the arts and check in. In this time of social distancing, every virtual visit by phone or Skype/Facetime will be appreciated. Sure we can chat on social media but hearing the smile and laughter of another human makes a difference.
All of these suggestions come from the position of someone who has regular income and is not 100% dependent on the gig economy so take them with that privilege in mind:
In the short term, when an event that you had tickets for cancels, please consider donating the tickets rather than asking for a refund. Arts organizations need your support now more than ever and that donation can help them stay financially solvent. Already several area nonprofits are asking employees to go on a furlough with reduced compensation as the organizations are concerned that they will not be able to make payroll in the coming months if they keep everyone on full-time during the weeks that they are closed down or on greatly-reduced operations.
If you watch a livestream or video of an arts event or performance, please donate to the organization or individual artist as they are dependent on tickets sales for income. In this case your donation is your “ticket” to the experience.
If you or your child takes music, art, dance, or photography lessons, consider doing so via Skype or Facetime. Teachers are dependent on that income so try to find a way to continue that relationship in an alternative setting.
Buy art, music, and literature online from the creators themselves and/or local businesses. Looking for a book to read? Order from a local bookstore so the $$ stay in the local economy. Rather than listening to music for free on Spotify, order a CD or purchase mp3s from the artist. Buy merchandise from your favorite musicians and shows. Visit the websites of visual artists and purchase their work. Commission a new piece of music, visual art, theatre, or dance.
Consider contributing to online fundraisers for arts organizations, artists, and technicians.
One group that is being hit particularly hard is IATSE (International Association of Theatrical Stage Employees). As the stagehands and workers who support the entertainment industry, they are completely dependent on the venues and events that hire union workers to make events, performances, and shows happen. Losing calls for the UW Varsity Band Spring Concert, CTM, Madison Opera, and slew of others events that cancelled has wiped out income for hundreds of stagehands for at least the next six weeks, and this is happening during one of the busiest times of the year.
IATSE Local 251 Business Agent Justina Vickerman has started a GoFundMe to help those in the greatest need in the coming weeks.
Last, but not least, here’s an article on how community members in Seattle are working together to help each other: https://www.seattletimes.com/seattle-news/coronavirus-sparks-an-epidemic-of-people-helping-people-in-seattle/
“From coughing fits to closings, cultural world girds for cononavirus: Museums, theaters, and concert halls in the United States are steeling themselves for fearful patrons, lighter crowds, and possible government shutdowns” by Julia Jacobs for The New York Times on March 6, 2020
“Performing Arts and Cultural Organizations Close Their Doors Due to Coronavirus,” heard on “All Things Considered” on NPR
“’Every musician I know is now facing bankruptcy’ – the impact of coronavirus on the arts,” by Kyle Macdonald for Classic FM on March 13, 2020
“How COVID-19 is affecting the arts” by Mark Lowry for Theatre Jones, North Texas Performing Arts News, on March 13, 2020
“Coronavirus Concerts: The Music World Contends with the Pandemic” by Alex Ross for The New Yorker on March 14, 2020
UW-Madison press releases and info regarding COVID-19 are available at: https://covid19.wisc.edu
The Madison Metropolitan School District COVID-19 page incudes updates and a list of resources (WiFi and Chromebooks, Mental Health resources, Neighborhood Food Sites and more): https://www.madison.k12.wi.us/mmsd-covid-19-updates
“CDC recommends against gatherings of 50 or more, as states close bars and restaurants” by Emma Bowman for WPR on March 15, 2020
Announcement from Frank Productions and Live Nation: https://www.thesylvee.com/covid-19-info/
Announcement from Overture Center for the Arts: https://www.overture.org/health
In Actor’s Equity (the union for actors and stage managers): https://www.actorsequity.org/join/WhyJoin/health-insurance/
In order to qualify for plan eligibility, you must have at least 11 weeks of covered employment in any 12 calendar months “accumulation period” to qualify for 6 months of coverage. If you attain 19, or more, weeks of covered employment in an accumulation period, you may qualify for 12 months of coverage.
The IATSE (International Alliance of Theatrical Stage Employees) contract for stagehands and entertainment members who work in New York City. I learned today that, unlike Actors’ Equity, there is not a standard across the country and that each chapter negotiates their own benefits. https://www.iatse.net/us-organizing/your-health
Employees qualify once they have worked 60 days under a contract in a period of six consecutive months. Coverage then starts on the first day of the second month after you complete the 60-day requirement, and continues for six months. Coverage continues uninterrupted beyond your initial eligibility period as long as you have 60 days in covered employment in each successive six-consecutive-month period.
Image taken from a Colonial Players blog about the history of the ghost light: https://thecolonialplayers.org/index.php/the-season/off-book-the-blog/670-offbook-a-ghost-light-in-the-round#!/ccomment
Little Brown Notebook Blog Post #1: Livestreaming Arts Events
I’m working on a series of posts where I’ll talk about how the wave of closures and cancellations is affecting arts organizations and artists, technicians, administrators, and staff. Eventually I’ll come up with a catchier title for the series and spend days writing and rewriting every paragraph but there’s no use in agonizing over such things when we’re in a moment when the arts world as we know it has imploded in just a few days due to the global pandemic that is the coronavirus.
Blog topics will include: “Why you should donate your tickets rather than asking for a refund,” “Livestreaming: Making art, and money, during a shutdown,” “The Freelance Life,” and “What does the shutdown mean for arts organizations in Madison?”
Consider this article a primer (and catalyst) for upcoming conversations. I don’t agree with everything in this particular essay but there’s a lot of food for thought to kick off the conversation.
Ou tu vas quand tu dors en marchant? is a spectacle/multidisciplinary artistic installation produced as part of the Carrefour International Theatre Festival held each year in Quebec City. For 2015 there are five “exhibits” – four at Artillery Park and one just down the hill at Les Palais.
The photos included below are from a walk-through theatrical experience created by Le Théâtre Rude Ingénierie, a “multidisciplinary creation company that focuses on the interrelation of sound, image, object, engineering and life, exploiting the potential of unexpected encounters,” in partnership with L’Orchestre d’hommes-orchestres, a collective of artists who mix visual arts, music and theater.
Created at Ilot des Palais it was the most elaborate of the five pieces showcased in this year’s Festival. The piece included 14 musician environments, each its own set with detailed dressing, and the musicians in attire fitting to that particular place. The orchestra wore headsets so they could stay in sync with each other as they were spread far apart on a parking lot and facing all directions. In addition, all were also under the microscopic focus of a video camera feed that was projected on the walls of nearby buildings like a Wes Anderson version of The Brady Bunch.
Was it a successful project? The production values (scenic elements, costumes, and lighting) were well conceived and executed. The musician actors all played their parts well – staying in character in the face of thousands of voyeur audience members invading their respective “homes.” Connecting the environment with the instrument each played was also a fun exercise – from a banjo player in a buffalo check flannel on the back of old rusted red truck to a dolled up bassoonist in a hairdresser’s shop. We’re used to seeing musicians on a stage, separate, away. This created a sense of place, of belonging, and each audience member became part of that “home.”
Listening to the sound check with each musician warming up with whatever they felt like, I had high hopes for the musical aspects of the performance. I chose not to incorporate video in this post as I’d rather you imagine your own soundtrack than listen to the unison dirge that was composed as part of the project and failed to capitalize on the musical talent of the orchestra members.
I started the morning with a walk to Marché du Vieux-Port, the farmer’s market in Quebec City. It’s reminiscent of the Essex Market in NYC – compact but with plenty of interesting vendors. As it’s located at a port, there were several seafood stands, including two tanks full of lobsters. My favorite was an Italian food stand that was selling balls of homemade pasta wrapped like skeins of delicious yarn. If you visit, I’d recommend visiting the market on your first day and stocking up on groceries to sustain you during your visit. With all of the FAA rules, the chances of getting to bring anything home are slim to none.
A stop at Boutique Gourmand in Place Royale in La Petit Champlain proved to be a nice window perch for people watching. One last chocolate chaud and a few macarons to accompany the entertainment. I witnessed a previously unknown phenomenon of tourists sitting at empty cafe tables just to take a photo pretending like they are actually “at” the establishment …and then leaving. Maybe it’s just the Midwesterner in me but this seemed a bit strange.
From the exterior Notre Dame des Victoires (1688) looks like most other churches in the city, walking through the doors revealed a refreshing simplicity. Open and airy the sanctuary glowed from sunlight and the warm wood of pews, carved in shapes that echoed carriages and sleighs of a bygone era. White walls hung with white oval frames of the stations of the cross. The altar flanked with fluted Corinthian columns, is accented with golden Grecian molding. Suspended from the ceiling are six simple chandeliers, that once held candles and now channel electricity, and a large model of the Brézé, a wooden ship that arrived in Québec City in 1664 transporting the Carignan Regiment and the Marquis de Tracy. Two local musicians provided vocals with pipe organ accompaniment, ending the mass with their own jazz rendition of Leonard Cohen’s “Hallelujah.”
From there I headed back “up the hill” to the Museum of French America (Musee de l’Amerique Francaise). It’s a bit of an oddity as you enter off of St. Anne’s Street and then walk through a small chapel which is used for music and theatre performances in addition to services. I shared a few discoveries in my photo album – let’s just say a good rule of thumb when visiting any Catholic church is “You really don’t want a closer look.” From the Chapel it’s through an underground tunnel to the main entrance to the actual museum. Following a recent renovation the museum is incredibly interactive, luckily they have headsets with English translations for practically everything. The collection placed emphasis on early settlement and also on exploring the role of missionaries in the history of Quebec and the disbursement of French-speaking people across North America.
One final stroll down Terrasse Dufferin in front of Chateau Frontenac, overlooking the St. Lawrence River ..a mixture of historic and contemporary buildings and ships in the harbor, with the old paper mill and the Laurentian Mountains in the distance. A little bear of a man was busking, singing “Sitting on the Dock of the Bay” with a jagged Quebecois English accent. Coupled with small picnic of rillette, cheese, and wine, it was a fitting send-off before my journey back to Madison.
Until this trip I hadn’t spent much time looking into my French ancestry. It turns out Raymond Legris (my maternal grandfather) was the 10th generation descended from Guillame Legris of Brittany. Three of his sons, including our ancestor Adrien, emigrated to New France (Quebec) in 1680. Quebec City was founded by Samuel de Champlaign in 1608 and reached a population of 500 by 1663. When the Legris brothers arrived it had grown to 1300, partially due to the promise of wealth from the fur trade …and partially due to the fact that the government, in an effort to increase population, awarded a sum equal to the value of six cows for every child in a family. (That subsidy only lasted ten years as French Catholic families exceeded government estimates and it could no longer fulfill the contracts).
I spent three hours at the Musée de la civilisation on Saturday. Half of the first floor is taken up by an exhibit on the history of animation in film in Canada. Following the history of projections from the early 1800s through computer animation was fascinating – highly recommend a visit. “The Peoples of Quebec City” exhibit was a study in curation and museum design, what could have been boring and dry actually kept an entire tour of middle school students engaged.
While visiting the “Magic in Ancient Egypt” exhibit at Musee de la civilisation I was struck by how many parallels there are between Christianity and the traditions of ancient Egypt. Rather than a god for a particular concern, Catholic traditions have saints. Mummification and death rituals are echoed in our own Western funeral traditions. Temples have been replaced by cathedrals but the aspect of community ritual remains.
From there it was on to Musee de la Place Royal. It’s in the heart of Quartier Petit Champlain and is a strange little museum focused on the history of that neighborhood. Artifacts are from the homes, warehouses, and businesses that once stood in the surrounding blocks.
My evening field trip included a visit to Ecole de Cirque, the Quebec City school of circus arts, to see their spring youth performance. Housed in a decommissioned church, the school transformed the main floor into a highly flexible practice/performance space. Many of the pieces featured performers of mixed ages, body types, and abilities. Both boys and girls were trained in every aspect from juggling to the silks. Young girls served as bases while boys “flew” and vice versa. The crew who set up and rigged the equipment and also provided comic relief between each piece was comprised of both students and coaches. The emphasis was on community, artistry, and athleticism. Stars were given showcase pieces but they also performed with younger athletes and those who may not have had their level of skill. It was the embodiment of what most youth organizations tout as their mission …and a far cry from what most of them actually do.