Minnesota Orchestra reports $2.9 million deficit
Today at its annual meeting the Minnesota Orchestra announced it had posted an operating deficit of $2.9 million on an annual budget of $30 million.
Chairman Richard Davis said the deficit is attributed to a decrease in endowment revenue, a decrease in earned revenue and an increase in contractual costs.
Davis says in November the Board of Directors approved a strategic business plan that should lead the organization back to financial sustainability by 2013.
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The economy has impacted our ability to generate the revenue necessary to keep up with rising fixed costs. Like most in our industry, we've been skillful in managing an out-of-alignment financial structure--but the persistent economic downturn has intensified this fiscal challenge. We know that this imbalance will dramatically escalate in the years ahead unless we reset our model, and this is the work that we must now do.
Some noteworthy numbers:
During the 2010-11 season, the Orchestra's total earned revenue decreased from the prior year by $527,000.
Approximately 70,000 people attended free Minnesota Orchestra events over the course of the year.
Annual operating contributions and gifts were up 1.6 percent over Fiscal 2010, and the total number of donors increased by 9.9 percent over the previous year.
The Orchestra's endowment draw was down by $1.8 million over the prior year.
Minnesota Orchestra reduced total expenses by $376,000--on top of a five percent expense reduction from the prior year--despite salary and benefit increases of 4.1 percent, which were driven mainly by contractual increases.