ESO moving forward despite tough economic times

It's no secret that arts organizations nationwide are being hit hard by the economy. The Elgin Symphony Orchestra is no exception, but a disappointing fourth quarter from the fiscal year ending June 30 has been balanced by two areas of encouragement.

First, the ESO apparently has not been hit as hard as other orchestras its size (those with annual budgets in the $2 million to $12 million range).

Second, the orchestra's educational endowment has received a pledge of $1 million ($200,000 annually over the next five years) from Elgin businessman Bob Durchslag of Singles Roofing, Inc.

So, planning for future seasons continues to move ahead with little knowledge of how deep and how long the recession will be.

"When the books are audited, we think we'll post a deficit of around 10 percent of our $3.2 million budget, or $320,000," said chief operating officer Julie Griffin. "Any deficit over a zero balance is not good, but then, we know our colleagues around the country are being hit much higher, around 20 or 30 percent."

For example, the Brooklyn Philharmonic, an orchestra in the ESO's budget category, has suspended its concerts for the foreseeable future.

The Elgin Symphony is not on that kind of critical list, but the slow fourth quarter certainly has sent up danger signals.

"Individual and corporate gifts is where we really took the hit," Griffin said. "Minor gifts (under $1,000) mostly from individuals plus some small corporate sponsorships were definitely down. But our overall corporate goal was surpassed by a few thousand dollars, which was very good."

Chief executive officer Dale J. Lonis knows there's plenty of work in the months ahead as the budget for 2010-11 is in its final approval process.

"Of course, you always have to take into account what you end up the year with," Lonis said. "For instance, since we're down a bit in development, we can't all of a sudden think that we're going to reach the targets that we have made prior to that knowledge. So, if we thought we were bringing in $1.2 million in development, we've built next year's budget based on that. Now, if we're bringing in 10 percent less than that, then we have to make adjustments.

"We're rethinking on the fly, making sure we don't build a budget on hope, that we really build it on realistic goals and know what we think we can do," Lonis said. "We're not happy, but our financial director reports that orchestras our size across the country are a lot worse off than we are. We're not yet having to make the gigantic cuts that a lot of other organizations have had to make."

With that in mind, Lonis and his staff have been rethinking the budget for the 2010-11 season, which was originally submitted to the board of trustees in December and subsequently approved. As with most arts organizations, planning is done more than one season in advance, so the already-budgeted 2009-10 season (the orchestra's 60th) is set to open the weekend of Oct. 3-4.

"We went back a few weeks ago and told the board that we really had to sharpen our pencils again based on this fourth quarter," Lonis said. "There really was no deadline, but I believe that we really want to have a 2010-11 budget pretty much finalized by mid-July. So, we'll have an executive meeting and I will be proposing yet another final budget at that point. That's the one I'm going to stick to, with contingencies in case sales don't even meet the targets that we've reduced them to, or if we see some signs of development flagging even more."

The $1 million endowment gift from Durchslag will affect more than the ESO's youth educational programs.

"This gift really helps us in many ways," Lonis said. "The money that we were previously putting into education can now be redistributed throughout the organization. We'll use every single dollar Bob gives us toward education for sure, and we're developing new programs because now we have the means to do so."

A key change is the ability to fund the education director as a fulltime position; previously it was a half-time position. When Lonis approached Durchslag about this possibility, the gift was raised from its original $750,000 to $1 million.

"I cannot say enough about Bob's generosity, in particular considering the times we are living in," Lonis said.

In addition to individual and corporate support, the main way an orchestra raises money is through ticket sales. The ESO tracks its season subscription and individual ticket sales very closely.

"Our unofficial results from 2008-09 season show that luckily our ticket sales were not as far down as those for a lot of other institutions," Griffin said. "I think we ended up 5 percent down in ticket sales projections over what we were hoping to bring. People were still coming to concerts, but we also offered more discounted ticket deals during the fourth quarter that hurt our bottom line. But we definitely had more people in the house."

The ESO slightly exceeded its subscription goal but single tickets were down. "That's where we suffered the 5 percent decrease for the season," Griffin said. "The gala concert helped, because it sold out and actually we went past our ticket goal for that concert by about $5,000. We met our goal for the holiday Sears Centre concert, but for the rest of our events, our total lagged behind our goals."

The orchestra had a real scare a few weeks ago when sales projections dropped from about 14 to 15 percent above originally anticipated levels to about 14 to 15 percent below, a net change of just under 30 percent.

"We were very concerned," Lonis said. "If we track a total ticket sales of $1 million (including single tickets) and are actually at $730,000 to $750,000 for subscriptions, all of a sudden we're extrapolating from that data that we may be down as low as about $700,000 in projected revenue. That's when be started thinking 'Oh, my gosh, not only did we hit the wall in development, but now we were also hitting the wall in subscription sales.'

"But, over the past few weeks, all of a sudden the projection dropped from a 14 percent lag to a little but below 7 percent. So now, we're seeing an upward trend in our sales."