Minnesota Orchestra suggests terms for joint independent financial review

Orchestra also recommends a fundraising feasibility study to gauge levels of new funding available in community to support musicians’ contract

(January 30, 2013) The Minnesota Orchestral Association today reinforced its commitment to undertaking a joint independent financial review with musicians by suggesting specific parameters for the analysis. Additionally, in response to a recent Union suggestion that a resumption of the concert season could be funded through a series of challenge grants from the community, the Orchestra recommended a fundraising feasibility study to accurately gauge community fundraising capacity.

In the Orchestra’s ongoing labor discussions, musicians have long sought an independent financial review, noting in a Star Tribune Op-Ed piece “we cannot and should not make a financial counteroffer without a full, joint independent analysis” and on MPR “we have to have an independent third party come in here, someone that is trusted by both sides that can verify where the actual true financial position is.”    In an effort to advance the contract talks, the Orchestral Association agreed to the musicians’ request on January 2, pending mutual agreement around the terms of the review.

“Nearly ten months into our negotiations it is important that we come to a common understanding of the Orchestra’s financial position and the fundraising capacity of our community,” said Board Negotiations Committee Chair Richard Davis. “We’ve suggested parameters for the financial review that should get to the heart of the financial questions posed by musicians.  We hope the review can now move forward quickly and serve as the foundation upon which the Union can create a counterproposal, so we can begin the back and forth negotiations that will lead to a settlement.”

The Orchestra suggested the following parameters for the financial review:

• The review should be jointly funded by the Orchestra and Union;
• The review should test the accuracy of the Orchestra’s Fiscal 2012 financial position;
• The review should test the forward-looking financial assumptions upon which the organization’s strategic plan for 2012-15 is based.

Orchestra also recommends fundraising feasibility study
The Minnesota Orchestral Association has also recommended a study to accurately gauge any levels of new funding available in the community to support the musicians’ contract, suggesting that a fundraising feasibility study could be incorporated into the joint financial review.  The recommendation is in response to a Union suggestion that the concert season should be immediately restarted and supported through new gifts raised through community challenge grants.

The Minnesota Orchestra Board and professional staff annually raise approximately $12 million to support the Orchestra, the most in charitable contributions among Twin Cities’ performing arts organizations.  “Our fundraising professionals have a good sense of the realistic fundraising capacity of our community, and we think we have accurately reflected this in our strategic plan,” said Board Chair Jon Campbell. “But this issue is absolutely at the heart of these negotiations, and we are willing to hear the musicians’ strategy around new funding possibilities and test its feasibility and sustainability with an independent fundraising expert.” 

Feasibility studies are generally considered best practice among nonprofits in order to assure successful fundraising efforts.  “The Orchestra is already a fundraising star in our community,” said Guaranty Fund Chair and Board negotiating committee member Nancy Lindahl. “Our community supports the Orchestra through our Annual Fund, our Symphony Ball and our comprehensive campaign.  We’re currently having success with an endowment fundraising challenge grant made possible by board members, and we’ve launched a new Major Gifts campaign.  Before embarking on another fundraising stretch campaign, we must be smart and do our due diligence to make sure the annual support at increased levels is possible.”    

Two board members recently pledged to match community donations to the Orchestra’s Building for the Future endowment up to $125,000.  (Funds donated to this endowment will not be accessed by the organization until a contract resolution is in place.)  Additionally, as part of the Orchestra’s new strategic plan, Board members have committed to increasing their annual gifts to the organization by 20 percent.

Background
Contract talks between the Orchestral Association and its musicians, who are members of the Twin Cities Musicians’ Union (Local 30-73), began on April 12 and are currently overseen by a Federal Mediator.  The Orchestral Association’s proposal offers a total package averaging $119,000 per musician, including an average salary of $89,000 with $30,000 in benefits per musician.  The proposal also includes 10 weeks of paid vacation and up to 26 weeks of paid sick leave. Musicians have not yet put forward a contract counterproposal.  In December, the Orchestra announced a $6 million deficit, the largest in its history, despite continued cuts in administrative expenses, new efforts to build audiences, and robust fundraising.

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