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Performing Arts

How to Save a Symphony

After declaring bankruptcy and shutting down, San Diego's orchestra is back on its feet, with the community's help and a few key donations.

June 09, 2002|DIANE HAITHMAN

SAN DIEGO — It seems fitting that San Diego billionaire Irwin M. Jacobs, a former university professor who built his fortune from digital wireless communications technology, would communicate the stunning news via e-mail:

"The amount we have in mind is $100 million."

Symphony executive director Douglas Gerhart cried when he found the Dec. 26 missive in his e-mail when he stopped by his office over the holidays. He knew that Jacobs, 68-year-old founder and chief executive of Qualcomm Inc., and his wife, Joan, 69, planned to make a sizable gift to the symphony--"but I dared not dream of $100 million," the largest single donation ever made to a symphony orchestra.

Gerhart did not tell anyone about the e-mail for a few days. "It was such an enormous, life-changing event for the San Diego Symphony, and I wanted to process it for a while," he admits. "I needed a few days to absorb it and celebrate it very privately."

Plenty of other symphony supporters spilled tears in their champagne when Gerhart made the announcement Jan. 14, before a gathering of about 1,500 people at Copley Symphony Hall. "People I did not even know came up to me with tears in their eyes, talking about how they dreamed of a day like this one," Gerhart says.

The orchestra closed the ceremony by playing Dvorak's "New World" Symphony, one of Irwin Jacobs' favorite pieces and certainly apt for the moment. Although the gift will be made over time--$5 million a year for 10 years, followed by a $50-million bequest--when all the money's in the bank, the donation will result in The San Diego Symphony, with an annual budget of $8.8 million, sitting atop an endowment about twice that of the Los Angeles Philharmonic, which has an operating budget of about $50 million.

The Jacobses also plan to donate $2 million annually for orchestra operations during the next 10 years, raising their total contribution to $120 million.

Still, as jaw-dropping as the gift might be, the donation represents neither the first chapter--nor the last--in the story of the San Diego Symphony. Just six years ago, the orchestra found itself in the midst of a very different chapter: Chapter 11--bankruptcy--forced the organization to shut down for two years beginning in 1996.

Nor was that the first time the orchestra had faced financial disaster. Although the board of directors stopped short of filing for bankruptcy, the San Diego Symphony ceased operations in 1987 to raise money to pay off its many creditors.

Much has been written in the press about the orchestra's Chapter 11 filing--but little about how it was able to come back to life, four years before the Jacobs donation made philanthropic history. Symphony officials and the Jacobses themselves describe their donation as the result, rather than the cause, of the orchestra's rebirth.

Call this story Chapter 12: the tale of how, from the 1996 bankruptcy to the symphony's rebirth in 1998, the musicians, the community, a key $2-million donor, local politicos and a popular thirtysomething conductor with innovative--some call them crazy--ideas rallied to save The San Diego Symphony.

How do you bankrupt a symphony orchestra? The same way you bankrupt any other business: Spend more money than you've got.

In the case of the San Diego Symphony, the number of opinions on how black turned to red is roughly equal to the number of people you ask. Chalk it up to some combination of weak board leadership, faulty management, a slate of expensive guest artists, and an aggressive audience-building campaign that slashed ticket prices but ate into potential revenues.

Although a symphony goes bankrupt just like any other business, the game of rebuilding a nonprofit arts organization must be played by different rules. This is especially true of a symphony orchestra--because no matter what the financial constraints, a symphony still needs the same number of musicians to be a symphony. You can't save the company by laying off the string section.

The situation is further complicated by musicians' union contracts and audience expectations: An orchestra must commit to an annual season of performances, eliminating flexibility in matching supply to demand.

The story of the San Diego Symphony's bankruptcy is typical, observes Charles Olton, chief executive and president of the American Symphony Orchestra League, a New York-based service organization. "I think that the success of a nonprofit organization is fundamentally dependent on the quality of leadership," he adds.

Olton says statistics refute the common misconception that orchestras are closing in mass numbers because the classical music audience is dying off. Actually, the audience for classical music has never been bigger, according to the league's statistics. It reports that 32 million people attended a symphony concert in 2001, up from 27 million 10 years ago.

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