Five years ago, many were predicting that Cleveland – a city in worse social and economic crisis than Detroit – would not sustain its cultural amenities. How wrong they were. The orchestra has just turned in a budget surplus and boosted its endowment to $172 million.
Gary Hanson, its president, will be retiring on a high. Press release below.
CLEVELAND — The audited financial results of The Cleveland Orchestra’s 2013-14 fiscal year were reported at the Annual Meeting of the Musical Arts Association on Tuesday evening, December 2. President of the Board of Trustees, Dennis W. LaBarre, announced a year-end budgetary surplus to the assembled Association members at the meeting in Severance Hall, the Orchestra’s home concert hall since 1931. The Musical Arts Association is the non-profit organization that owns and operates The Cleveland Orchestra, Severance Hall, and Blossom Music Center.
Financial achievements of the past year included the third consecutive balanced annual budget —through increased ticket revenues, increased contributions, and ongoing cost control. At year end, the Orchestra’s 2013-14 revenues of $49.6 million exceeded expenses of $48.7 million. This was achieved with year-over-year revenues increasing 3% from 2012-13, while expense growth was held at just 1.5% over the previous year. This is the third consecutive year of balanced operating results, each made possible by special fundraising secured to support operations during a campaign to increase the endowment and the Orchestra’s long-term financial strength.
Advance copies of the Orchestra’s published Annual Report were distributed at the meeting and will be made available to all Musical Arts Association members in the coming weeks. The report features year-end messages from Dennis LaBarre and Executive Director Gary Hanson, as well as a financial summary and an overview of the year’s concert and community activities. The report highlights the thousands of individual, corporate, and foundation donors, plus contributing government agencies, all of whom made the positive outcome possible through their support.
In his message, Mr. LaBarre outlines the numbers for the year — including a record $10.6 million in Annual Fund support. He highlights the Orchestra’s Sound for the Centennial Campaign, with efforts to date having achieved $62 million in cash and pledges to the endowment, and $50 million in legacy commitments. The endowment today stands at $172 million — up from a low of $97 million following the financial crisis in 2008. Building on this success and strong vote of support from Northeast Ohio, the Trustees and staff will now focus on the Campaign’s successful completion by 2018.
“Expanding the endowment to provide a greater contribution to operating budget will provide the Orchestra with the financial strength to remain secure during future difficult economic cycles,” Mr. LaBarre said at the Annual Meeting. “Once this is achieved, we can focus our fundraising efforts on an ever stronger Annual Fund and special fundraising for specific artistic and community initiatives.”
“The achievements of the past year were considerable,” said Mr. Hanson in his remarks. “The annual financial results reinforce the success of recent years, while artistically the Orchestra reached new heights. From coffee shops to cathedrals, from Blossom to Severance Hall, over the past year we continued our dedication to community engagement. Our second annual neighborhood residency, titled ‘At Home in Lakewood, Ohio,’ served to strengthen the bond between The Cleveland Orchestra and the citizens of Northeast Ohio. Concert attendance by young people under age 25 surged to over 41,000 in the past year, with young people now making up over 20% of the audience for classical concerts at Severance Hall, taking us well on our way toward securing the youngest audience of any orchestra.”