How local arts institutions are faring
Hard-earned stability allows cultural organizations to look ahead
Challenged by the economic realities of the past and the uncertainties of the present, San Diego arts institutions have reached a point of stability where they can look to the future.
Several organizations are quietly discussing expansion, while others are planning endowment campaigns as the arts slowly move out of five years of survival mode and into what could become a period of significant growth.
“The number of different institutions that are going through studies is staggering,” said Christopher Beach, president and artistic director of the La Jolla Music Society. “And the dollars they are all looking for are major dollars. No one has announced (a capital drive), but there’s going to be a lot of them.
“What that means is, people are optimistic about the future.”
Since 2007, San Diego cultural institutions have been scrambling as the housing market crashed, the recession hit, the stock market turned erratic and government funding diminished.
Numerous organizations enacted budget cuts, reducing staff and cutting programs, while casual donors vanished and key supporters were asked to give, and then give again, to nonprofit institutions that cannot pay the bills on box office and admissions alone.
But a study of the financial data for 2012 from San Diego’s 12 flagship arts organizations and interviews with the leaders of those institutions show the situation has stabilized.
“We more than broke even last year and we had some healthy reserves that we haven’t had in a long time,” said Michael Hager, the museum’s executive director. “And we’ve raised $13 million out of the $15 million that we set aside for special projects (mostly for 2015).
“Things are improving.”
When all 12 organizations are considered together, contributions were up 15 percent and attendance was up 4 percent — to more than 2.4 million. Income for the 12 organizations was up (4 percent, to a total of $136 million), and expenses were slightly down (2 percent, to $124 million).
Most significantly, nearly all of the institutions were operating in the black.
Only the Museum of Contemporary Art San Diego showed an operating deficit in 2012 (reflecting in part a 7 percent drop in attendance), although that was more than covered by a $4.5 million surplus the museum generated the previous year. At the Natural History Museum, attendance was up 47 percent, driven largely by its “Titanic” exhibit and significantly contributing to a 44 percent increase in earned revenue and an operating surplus of $1.6 million.
“We’re all still facing extraordinary issues,” said the San Diego Opera’s CEO, general and artistic Director Ian Campbell, who cut the opera’s season from five to four productions in 2008 and doesn’t see returning to five any time soon. “But I think there is a sense of optimism.”
That optimism is prompting discussions in board rooms of cultural institutions all over the city, although plans remain vague and discussions are preliminary.
The San Diego Air & Space Museum is increasingly feeling the need for more space to display its massive collection of aircraft, many of which are stored off-site. Next door, the Starlight Bowl sits abandoned, as the unceasing noise of planes landing at the Lindbergh Field continues to be a challenge.
The San Diego Museum of Art also needs more space and is formally exploring what it might do with the underused area now housing its cafe and sculpture garden.
Others, including the Old Globe Theatre and the New Children’s Museum, are talking about strengthening their endowments.
The Museum of Contemporary Art San Diego is looking to expand both its La Jolla facility and its endowment, although its board has yet to approve either. MCASD has begun searching for an architect with the goal of having him or her on board by early 2014. The decision on whether to expand in La Jolla will be made by the museum’s trustees later in the year partly on the basis of the architect’s proposals.
“If the board votes to proceed with that, that will bring a lot of wind into our sails institutionally,” said MCASD Director Hugh Davies, who cited instability in the institution’s development office (now corrected) as one of the reasons the museum’s fundraising was lower than anticipated in 2012. “And what we really need to strengthen the institution for the long run is to build the endowment.”
The museum’s aspiration to potentially convert Sherwood Auditorium (the primary venue for the La Jolla Music Society) into art galleries as part of the expansion has forced the Music Society to contemplate its own capital drive, possibly in support of a new concert hall.
Given that the Music Society, like the symphony, emerged from the economic recession financially stronger than when it entered it, it’s in a good position to consider its options.
“Some of the things we cut, we didn’t restore,” said Beach. “But we’ve created other things. The simple answer is: Yes, we’re back.”
Arts administrators are not optimistic, however, that they will ever again see the relative euphoria of 2006.
“I think there is a new normal and there have been a lot of lessons learned,” Hager said. “We were probably staffed more than we should have been in 2007. We’ve learned to stretch during the lean years as everybody did more with less.”
Hager, and others, also cited better “analytics” in terms of marketing and identifying exactly who is visiting the museum or attending a performance and a “new rigor” in the business office and fundraising operations.
And cultural organizations have been reminded that just opening the doors and expecting people to show up because art, culture and science is good for you is not enough.
“We need to be good street fighters,” said James Kidrick, president and CEO of the Air & Space Museum. “By that I mean we need to connect to the constituents out there. We need to remember selling isn’t about selling; selling is about buying. So if you aren’t selling what they are buying, it really doesn’t matter; you can go out of business.”
Cultural organizations have proved to be surprisingly good street fighters in an economic climate that continues to be unsteady and promises to get even more challenging if those potential capital campaigns gear up, demanding millions of dollars more from a community.
Is there enough money out there to support our cultural aspirations?
Michael Murphy, managing director of the Old Globe Theatre, believes there is, and like many arts leaders, he sees a growing understanding of the importance of culture to a city with aspirations like San Diego.
“People are optimistic about San Diego,” Murphy said. “We’ve gone through some tough times, but people believe in San Diego, They believe in our industry, our people, our culture. We will continue to change, but I think people very much love this city and want it to continue to grow.”