Economy hits a sour note

The Philadelphia Orchestra is cutting expenses and staff to make up for a budget shortfall. From WHYY’s Arts and Culture Desk, Alex Schmidt reports.

The Philadelphia Orchestra is cutting expenses and staff to make up for a budget shortfall. From WHYY’s Arts and Culture Desk, Alex Schmidt reports.

Transcript:
Ticket sales and individual giving are both down for the Philadelphia Orchestra, but the biggest hit may be from a 30 percent loss on the value of its endowment. Large orchestras often cover as much as 30 percent of their operating costs from their endowments.

Jesse Rosen is President of the League of American Orchestras. He says small orchestras haven’t been reporting the same problem.

Rosen: “Orchestras that don’t have endowments are not impacted by any kind of volatility in the stock market. Orchestras with endowments, depending on how young or old, how they’ve been invested, they’re experiencing the consequences of a drop in the stock market, and that impacts the income stream coming from the endowment.”

Rosen says the decision to decrease an orchestra’s dependence on its endowment varies city to city, and factors like giving history and wealth of the local population must be considered.

Listen:
Click on the play button below or right click on this link and choose “Save Link As” to download. [audio: arts20090312orch.mp3]