Doing Pretty Well for Somebody Who’s Dead
Cincinnati is a small market, not known for fabulous wealth or la-di-da citizenry. In 2009, according to this article, the Cincinnati Symphony Orchestra, like many orchestras nationally, was “facing an existential question” and ” … had to make dramatic course corrections quickly for us to continue on,” according to Trey Devey of the CSO.
They focused on growing audiences, not necessarily ticket buyers but those aware and engaged with them in any form, to grow the financial base. They increased donations by tapping into the audiences they reached through free digital downloads, radio partnerships and other mechanisms. In other words, more people exposed creates a potential pool of support, which they tapped into to increase the number of gifts to the organization by 94%.
They also restricted the percentage of the endowment that they used for operational purposes. The goal of that is to keep more of the earned interest in the bank, which grows the endowment. If you can do that for a few years, the actual gross amount you’re able to use for operations becomes LARGER than if you’d drawn it down faster while the endowment continues to grow, not shrink.
Both sides are critical and can be done by any organization. Grow exposure and awareness so that you have a base of support you can use. Manage the finances from the point of view of capital efficiency so that one day, maybe not that far away, you have the resources to be able to do more. If you’re eating the seed corn, you’re on an extinction path.
As we said the other day, death can be very liberating. The stuff the Cincinnati Symphony is doing isn’t even particularly glamorous, and that’s the point. Organizations like the New York City Opera made all the mistakes that the Cincinnati Symphony has managed to avoid.
So to organizations that supposedly have no future, I say again, now that you’re dead, what are you going to do with your life?