Michael Kaiser, President of the Kennedy Center, posed an important question recently on his blog hosted by the Huffington Post: “Does the symphonic orchestra model work?” It’s an interesting and provocative line of inquiry, but it might have been more accurate for him to ask whether the symphony orchestra modelS work, seeing as he touched on at least four without identifying them explicitly: business, labour, artistic leadership (closely tied to labour), and community or social engagement.
First though, Kaiser’s title begs another question. What is the symphony orchestra model? From a corporate perspective, the answer is actually quite easy: orchestras operate as a funded-loss. This is exactly what it sounds like, and Kaiser references this concept at the start of his article. Direct trade activity or earned income, in this case ticket sales, doesn’t cover expenses for most orchestras, so the deficit has to be made up through gifted income in the form of public, private and corporate donations or sponsorships. Contrary to what you might think, a funded-loss model is a perfectly legitimate way of conducting business. It’s witnessed primarily in commercial start-ups, but also in many manifestations of social entrepreneurship. In the case of start-ups, the rationale for funding the loss is the expectation that the business will ultimately becomes profitable. In the context of social enterprise, revenue is diverted from a directly profitable area of business to subsidize an activity where the returns are more social than financial, eg: David Green and Aurolab, or the Aravind Eye Hospitals. Often the social activity and its relative worthiness are leveraged to market the more profitable aspects of the business.
There’s no expectation anymore that orchestras turn a profit on concert revenue alone, regardless of whether they’re long established or recently formed. (That they once did and now can’t is actually a function of economics, relating to productivity. If you’re interested in learning more about this, check out the articles here). This thought actually has some pretty profound implications, namely that if ticket revenue is no longer sufficient to cover expenses, even if all performances were sold out, then the operating principle for symphonies has fundamentally changed. Orchestras cannot consider themselves in the concert-giving business, but in the relationship-building business.
They are also as much social enterprises as artistic enterprises.
This acknowledgment doesn’t actually require a major shift in paradigm, just industry attitude. Orchestras only started engaging in education in the last 50-60 years when compelled to justify their continued receipt of public monies. Unsurprisingly, there was initially tremendous resistance to this from within the ensembles, namely concerns it would detract from the more artistically meaningful activities. Musicians also worried that it was too far removed from the core business of orchestras – after all, they were there to perform, not to host instrument petting zoos. Today, education concerts are a fact of life even for such storied and glorious institutions as the Berlin Philharmonic. In light of this, El Sistema or like activities suddenly seem like the most natural and sincere model of community engagement. Music education on such a scale has the potential to build the largest audiences, to resonate with a greater proportion of the populace, and thus to cultivate the greatest number of meaningful relationships. There are manifest positive revenue implications inherent within that, to say nothing of the social, and fortunately there are at least two major orchestras with the vision to recognize that synchronicity. The Baltimore Symphony Orchkids program, initiated by Marin Alsop, is now in its second year, and the LA Philharmonic has had their YOLA initiative in conjunction with Harmony Project and EXPO Center for about the same amount of time. I’ve had the pleasure of working with both these groups in the past few months, and I can confirm from those personal experiences how important, how transformative these initiatives have been for the children involved, even in their embryonic program stages. It will be transformative for the parent organizations too. They will have, as Kaiser said, the “support of their communities, a large fund-raising program and, of course, exciting art.” And they will thrive.