Surplus or Deficit: The Four Essential Balances
Board members spend a significant portion of every meeting reviewing financial statements. Repeated shortfalls and a large accumulated deficit can spell the end of the opera company. Financial reports are the center of attention, too, because they can be fit on one page, distributed via e-mail and discussed in short meetings. But on opening day of Opera Conference 2018, Marc A. Scorca suggested that finances are only one of four essential balances for board members to monitor.
Financial deficits result from a number of familiar factors. Does your company have a strong development program that recruits, acknowledges and stewards donors effectively up the donor ladder? Do you have productive marketing strategies across multiple platforms and media? Success in fundraising and marketing, however, are frequently the result of other critical factors.
Does your company have an artistic surplus or deficit? Does each season strengthen (surplus) or weaken (deficit) your company’s reputation in the community? Is the artistic quality compellingly good, such that board members are motivated to encourage friends, family and neighbors to attend? That subscribers renew and recruit others to subscribe? That people are excited about making contributions over and above the price of tickets?
With only a few productions each season, your opera company is likely “dark” most of year — in contrast to local museums that open nearly every day. In the current competitive philanthropic environment, opera leaders have to develop authentic partnerships and programs that increase the public value of opera beyond the walls of the opera house. You have a civic surplus when allies who may not like opera express their support of your company as essential to the health of your city and its citizens.
Does your company operate with a human deficit, lacking enough people with the right skills at all levels of operation: staff, board and volunteers? Reducing staff is a frequent tactic to avoid a financial deficit. But if you do not have sufficient staff to manage the development, marketing, production, community service and governance functions, then you are at risk of incurring a financial, artistic or civic deficit.
This article was published in the Fall/Winter 2018 issue of Across the Board, a publication of OPERA America for opera company trustees.