This book analyzes the economic challenges facing U.S. symphony orchestras and contrasts the experience of orchestras in the United States (where there is little direct government support) and abroad (where governments typically provide large direct subsidies). Using a rich database on orchestra finances and operations, the book explains the tension between artistic excellence and financial jeopardy that confronts most symphony orchestras and analyzes the efficacy of proposed solutions. The economic difficulties facing orchestras are rooted in the limited opportunities for increasing productivity in the arts and declining demand for classical music performance, which produce ongoing cost pressures and structural budget deficits. Recessions exacerbate the deficits, but even in good economic times, orchestras face ever-growing structural deficits and the risk of bankruptcy. The book analyzes the possibilities and limitations of three complementary strategies for addressing orchestras' economic challenges, raising performance revenues, slowing the growth of performance expenses, and increasing nonperformance income, and demonstrates that none of the three strategies alone is likely provide economic security for orchestras. Raising performance revenues requires audience-building activities, but even orchestras that could fill their concert hall would not eliminate their structural deficit. Reducing the growth of costs will also narrow but not eliminate deficits. All U.S. orchestras require significant nonperformance income (consisting largely of donations from individuals, foundations, and businesses, along with investment income from endowments) to cover their operating deficits, but there is no guarantee that the amounts raised will match the deficits. The book analyzes the determinants of each element of donations and examines the governance of orchestras and management of their endowments. Throughout these analyses, the book considers how orchestra policies, the economic capacity of the community, and competition with other performing arts influence the three strategies. Finally, the book provides an extensive analysis of the financial status of orchestras in other countries and finds that the large government subsidies received by most foreign orchestras does not protect them from most of the economic challenges encountered by U.S. symphonies.
