About the Orchestra's Financial Challenges
What is the extent of the Minnesota Orchestra’s financial challenges?
The Orchestra's expenses are growing faster than its revenues. The gap will widen dramatically until the organization eliminates this structural deficit and balances its budget. Failure to do so will deplete our endowment by 2018.
Will management and administration also reduce its compensation?
The Orchestral Association has managed its management/administrative staffing costs efficiently over a long time. In all, total costs in the organization—excluding musicians—have decreased by 6 percent since 2002.
Since the start of the 2007 musician’s contract, the Minnesota Orchestra administrative team has taken a salary reduction, a wage freeze and had their pension contributions from the Association reduced by more than 40 percent. The average full-time staff salary was $53,000 in fiscal year 2008 and increased to $54,000 by fiscal 2012. (In that same time period, the average musician salary increased from $113,000 to $135,000.) The average staff member earns three weeks of vacation a year. On the Orchestra’s 12-member management team, only two leaders currently earn more than the musician’s current base salary.
Additionally, President and CEO Michael Henson has volunteered to reduce his salary package by the same reduction musicians take. The size of the administrative staff has decreased by 20 percent since 2009 due to layoffs—and the MOA contributes 24 percent less to administrative staff medical coverage than it contributes to the musicians' medical coverage.
How does the organization plan to balance its budget?
The organization's new strategic plan leads the orchestra to a balanced budget and financial sustainability by 2013, through a combination of expense reductions and increases in earned and contributed revenue.
To find out more about the Orchestra's current financial situation, click the sections of our Strategic Plan below for a look at the challenges we face:
- Revenue comes from three income streams
- Income streams have been flat or declining
- MOA's invested assets are lower than projected
- Nearly 80 percent of expenses are concert related
- Musician costs have increased vs. all other costs
- MOA has an unsustainable financial structure
- A new sustainable financial structure is needed