Major symphony orchestras in the United States regularly spend more money than they take in, and some dip so far into endowments that they risk their long-term survival, according to a new report.

The research was commissioned by the Mellon foundation requested a factfinding study of (1) cyclical and trend developments in the economic health of the symphony orchestra industry and (2) influences on performance and nonperformance revenues and expenses of orchestras. The hope is that analyses of these influences will clarify decisions facing symphony orchestras and help individual symphonies to assess and project their own economic health.

'The industry should realize that there is an inherent long-term economic challenge,' said Robert J. Flanagan, the Konosuke Matsushita Professor of International Labor Economics and Policy Analysis at the Stanford Graduate School of Business and the study’s author. 'Nowadays, even if symphonies filled their halls for every concert, the vast majority would still not be able to cover their performance expenses.'

Although recessions exacerbate their woes, Flanagan said many symphonies have financial troubles even in good times. Attendance has been declining for most types of concerts, and orchestras may not be adequately scrutinizing the returns to their expenditures on marketing and fundraising, said Flanagan, an amateur musician since childhood who plays clarinet and saxophone. He said larger symphonies, for example, appear to spend nearly twice as much on fundraising as they realize through donations.

For more opinion and reaction to the research, see the blog at ArtsJournal.com. 

http://www.gsb.stanford.edu/news/research/flanaganorchestra.html