Culture Crunch: The Recession and the Arts

How will the show go on?

On their first date, Barack and Michelle Obama went to the Art Institute of Chicago. Back then it was possible for them to go to a museum without attracting much attention. But when Michelle paid a visit to another museum a few weeks ago, people took note. On May 18, the First Lady traveled to New York City to inaugurate the newly refurbished American Wing of the Metropolitan Museum of Art. Later she moved on to the city’s other Met–the Metropolitan Opera House–to celebrate the opening night of the American Ballet Theatre and speak to the glamorously packed house about the importance of the arts to “our future as an innovative country.”

As a moment of social and cultural pageantry, the visit was a hit. But it carried an anxious subtext. The Great Recession has struck museums and performing-arts groups with a vengeance. No one expects the Federal Government to bail them out. But the people who run these organizations–and the people who care about them–were eager to see in the First Lady’s appearances a sign that the White House knows just how bad things have gotten for them.

And how bad is that? You could start with the Metropolitan Museum. The nation’s largest and wealthiest art museum is in no danger of disappearing. But having watched its mighty endowment shrink last year from $2.9 billion to $2.1 billion, its administrators decided a few months ago to cut staff 10%. The Met is not alone. Endowments have shrunk everywhere, and sizable budget cuts have been the rule at museums in Atlanta, Baltimore, Denver, Detroit, Indianapolis, Los Angeles, Philadelphia and San Diego. In February the 35-year-old Las Vegas Art Museum simply gave up and shut its doors for good.

In the world of performing arts, the news has been just as bleak. All around the country, orchestras, opera houses, theater troupes and dance companies are cutting salaries, jobs and programs. A few have simply collapsed. The Hartford-based Connecticut Opera closed this year after 67 seasons. So did the 58-year-old Baltimore Opera Company. “Most organizations have been hurt,” says Robert Lynch, president of the advocacy group Americans for the Arts. “But arts organizations aren’t driven by profit. They’re driven by mission. And they’ll do anything to survive.”

The problem is that these groups have been hit in all three of their main revenue streams. For many of them, audiences are down sharply, because in a recession a theater ticket or concert seat can seem like an indulgence. Meanwhile, with corporate profits tanking and charitable endowments badly deflated, donations and underwriting have also been drying up. And as state and local governments contend with huge deficits, arts spending has been a major casualty. In Michigan, where the struggling Detroit Institute of Arts recently laid off 20% of its staff, the 2010 budget proposed by Governor Jennifer Granholm would cut arts funding to exactly nothing.

Finding ways to tweak the revenue stream is not as simple as raising prices. For instance, for most museums that charge admission, fees at the door account for less than 10% of annual income, so hiking ticket prices doesn’t do much to close a budget gap. And because many museums benefit from taxpayer support, any attempt to charge more can turn into a battle over the right of the public to have affordable access to a place it subsidizes.

That’s what the Art Institute of Chicago–venue of that Obama first date–discovered recently. In April the museum, which gets about $6.5 million a year in support from the city, announced plans to increase admission for adults from $12 to $18 while eliminating its separate charge for special exhibitions. In response, Chicago alderman Edward Burke threatened to end the museum’s city-supplied free water. Eventually a compromise was reached: the institute would charge out-of-town visitors the full amount, but Chicagoans would get a $2 discount. James Cuno, the institute’s director, says he’s very aware that because museums have obligations to the public, they can’t operate like just any business. “Our goal is to increase access to the collection,” he says. “That’s the business we’re in. We’re not in the business of making money.”

Help from the Top?

While it struggled to pull the economy out of its tailspin, the White House and Congress paid fitful attention to culture, not all of it welcome. During the debate in February over the federal stimulus package, the Senate passed a version of the bill that explicitly barred money from theaters, museums and other arts groups. Though that provision was removed in the final version, it impressed on the arts community that it had to remind leaders that “real people” work in their sector of the economy, which provides 5.7 million jobs and nearly $30 billion in tax revenue.

Eventually the stimulus package included an additional $50 million for the National Endowment for the Arts (NEA). President Obama has also proposed increasing the NEA budget next year by $6 million, to $161.3 million. And in May he nominated a firecracker, the Broadway producer Rocco Landesman, to be the NEA’s next chairman. But at the same time, arts groups are worried about what they see as a serious threat to their donor base: the White House proposal to reduce as much as 20% the tax deduction that higher-income families can take for charitable contributions.

“The people who are dealing with economic policy [in the White House] are not talking to the people who are dealing with cultural policy, because they don’t see any connection,” says David A. Ross, former director of the Whitney Museum of American Art in New York City and the San Francisco Museum of Modern Art. “What’s clear is that there is a direct connection between economic recovery and cultural spending.” Ross would like to see a federal rescue mission for the arts, a $250 million fund to stabilize museums and libraries. That would be only a small fraction of what we’ve just spent to bail out the banks, but the probability that Congress and the White House will be allocating that much additional money for cultural institutions is roughly zero.

So back to the private sector, which, after all, has been the lifeblood of American arts since the 19th century. But how to operate there at such a treacherous time is a puzzle for a lot of arts groups. This is why Michael Kaiser, president of the John F. Kennedy Center for the Performing Arts in Washington, established Arts in Crisis, a free consulting service for arts groups on the verge of a nervous breakdown. Kaiser is something of a rescue artist. Over the years, he has swooped in as a director to save the Alvin Ailey American Dance Theater in New York City, the Kansas City Ballet and London’s Royal Opera House, which had just canceled every performance for the next year and a half when he got there in 1988. In February the Kennedy Center launched a website–artsincrisis.org–where beleaguered administrators could go for advice on fundraising, programming, budgeting and marketing. Kaiser and his staff sometimes pay house calls to ailing organizations, and so far they have fielded more than 350 requests for help.

Kaiser’s message to all of the groups is to resist the temptation to cut their programming and their profile. When times are bad, it’s crucial to make yourself interesting and vital and to let everybody know you’re there. “Organizations that are cutting performances and marketing are going to be the losers,” he warns. He also cautions them against reaching for the most familiar programming–Beethoven’s Fifth! The Nutcracker! Grease!–in the hope of drawing guaranteed crowds. “I talked to an opera company recently that has done some adventurous programming,” he says. “But this season they were just doing things like La Bohème. It wasn’t selling at all, and I’m not surprised. People have seen lots of La Bohème. They don’t need to see another one.”

One of the shell-shocked organizations that went to Kaiser for advice was the Beck Center for the Arts, a theater and arts-education group near Cleveland. In January ticket sales and donor money “fell off a cliff,” says Lucinda Einhouse, the Beck Center’s president. In April she traveled to Washington to meet with Kaiser. She went home and instituted some, if not all, of his gospel. Marketing will be maintained. But the theater will mount fewer shows next year, and some will be chestnuts like Fiddler on the Roof and Peter Pan.

Will it work? “It’s too soon to tell,” she says. “But after we had that sharp decline, we did an urgent appeal to the community, and we got more than 800 contributions in one month–over $152,000. They came with all of these notes from people about how much they cared about the Beck Center. It really made a statement that especially in troubling times, it’s important to people to have the release and escape of the arts and an opportunity to dream.”

For now, at least, the biggest dream of all may be a balanced budget.

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