Strong fundraising and ticket sales lead to a third consecutive year of balanced operating results
Board Chair Marilyn Carlson Nelson announces a search for President and CEO Kevin Smith’s successor
The Minnesota Orchestra’s 2017 Annual Meeting today celebrated the artistic and financial milestones of the Orchestra’s 2016-17 season, a year in which the Orchestra launched a new Mahler recording project, toured the state of Minnesota, extended Music Director Osmo Vänskä’s contract, performed with cellist Yo-Yo Ma for the first time in 15 years, piloted its first Young People’s Concert webcast—and achieved a balanced budget.
“The Orchestra’s 2016-17 earned revenue, fundraising efforts and investment activity were all strong, and the result is our third consecutive year of balanced operating results,” said Board Chair Marilyn Carlson Nelson, who served as host for the meeting. The Orchestra’s Fiscal 2017 net operating results yielded a balanced budget with a surplus of $79,000 on a $32.6 million budget. In addition, the organization’s total net assets increased, year over year, from $175 million to $183 million. The Orchestra’s annual endowment contribution was based on its policy of a 5 percent draw for operations.
In his comments during the meeting, President and CEO Kevin Smith shared that he would step down from his position at the conclusion of Fiscal 2018, as has long been planned. “I came out of retirement in 2014 to lead the Orchestra in an interim capacity,” he said. “That interim position evolved into a multi-year contract which expires at the end of August 2018, and at that time I will head back into retirement. I will do so feeling extremely confident about where the Minnesota Orchestra is headed.”
Nelson reported that a search for Smith’s successor has been launched. Life Director Nancy Lindahl and former Board Chair Warren Mack are leading the 15-person search committee, comprised of Orchestra board, staff and musicians. “A top priority is to identify a new leader who is committed to participating in and further developing the collaborative culture that is fundamental to the Orchestra’s success,” said Nelson.
The Minnesota Orchestra’s 2016-17 season opened with Music Director Osmo Vänskä leading a high-voltage performance at the Minnesota Vikings inaugural game in U.S. Bank Stadium before a crowd of 66,000, and included three performances of Mahler’s mighty Resurrection Symphony at Orchestra Hall. Additional artistic highlights of the year included the announcement of Vänskä’s three-year contract renewal which extends his leadership through the 2021-22 season; concerts with soloists from violinist Joshua Bell to cellist Yo-Yo Ma; moving performances of Copland’s Lincoln Portrait narrated by retired Minnesota Supreme Court Justice Alan C. Page; tour concerts in Florida and Minnesota, including engagements in Willmar, Bemidji and Grand Rapids; and the release of two recordings on the BIS label, one featuring Sibelius’ Kullervo and the other Mahler’s Fifth Symphony, which has been nominated for a 2018 Grammy Award for “Best Orchestral Performance.”
It was also a season in which singer-rapper-writer Dessa made an acclaimed debut with the Orchestra; Associate Conductor Roderick Cox led a memorable December performance at Shiloh Temple International Ministries on Minneapolis’ northside which launched a partnership that has since deepened; the Orchestra offered its first Young People’s Concert webcast, reaching audiences in 315 cities across 22 countries; and the organization paid tribute to Pops Conductor Laureate Doc Severinsen on his 90th birthday and Andrew Litton at the conclusion of his 15-year tenure as Sommerfest Artistic Director. Two beloved former Minnesota Orchestra music directors passed away during the season, Stanislaw Skrowaczewski and Sir Neville Marriner, both of whom were celebrated by the Orchestra.
“The power of music to heal, to unite, and to inspire is at the core of the Minnesota Orchestra mission,” said Kenneth Freed, violist and co-chair of the Artistic Advisory Council. “Whether embarking on a Mahler recording cycle, touring Greater Minnesota or working on counterpoint with a local children’s choir, the musicians are committed to bringing our ‘A game’. As we listen to each other on stage, we are also listening to our community and looking for new and innovative ways to move audiences with great music. I think I speak for everyone onstage when I say that playing for our passionate community is a privilege we all cherish.”
Total expenses for Fiscal 2017 were $32.6 million, an increase over the prior year’s $31.7 million. Earned revenue totaled $10.5 million in Fiscal 2017, a nearly $1 million increase over the prior year’s $9.6 million. “Concert attendance for the year was solid,” said Smith. “Our total capacity for all concerts held strong at 87 percent.” This mirrors the prior year’s result. Income from rental opportunities and food and beverage sales continued to be a growing revenue source, exceeding more than $1.5 million and marking a 19 percent increase over the prior year.
Exceptional fundraising efforts remained a major factor in helping the Orchestra to achieve a balanced result. The organization raised a total of $18.4 million in Fiscal 2017 from its annual Guaranty Fund, Symphony Ball, Oakleaf Trust distributions, Investing in Inspiration gifts, and gifts released from restrictions. This marks an increase of $400,000 over Fiscal 2016.
“Our number of contributors has risen to more than 7,400 donors, and this growing base is essential to our future,” said Smith. “Support from donors at all giving levels continues to be the most critical factor in achieving balanced operations, and we are immensely grateful to this community for the way it values the Orchestra.”
In Fiscal 2017 Board-designated draws from investments for operating support totaled $3.8 million and were limited to a 5 percent draw for operations across all endowments and trusts. The Orchestra’s three main endowments (MOA, Oakleaf and Building for the Future) grew to $121.9 million, up from the $119.3 million reported at the end of Fiscal 2016. However, the Orchestra retired an outstanding $5.6 million debt related to the 2013 Orchestra Hall renovation project which decreased the organization’s total invested assets from $132 million in F2016 to $130 million in F2017.
“Our strategic plan outlines three primary fiscal goals: to maintain balanced budgets, to eliminate debt and to build long-term assets,” said Smith. “In Fiscal 2017, we hit all three of these targets, and now we will continue building on that steady progress to ensure a solid financial foundation for future seasons, too.”
MINNESOTA ORCHESTRAL ASSOCIATION BOARD ELECTION RESULTS
Directors elected to a first term: H. Yvonne Cheek, Maurice Holloman, Kate T. Kelly, Mary G. Lawrence, Patrick G. Mahoney, Minsok Pak, Anita M. Pampusch, Dimitrios Smyrnios, Gordon M. Sprenger
Re-elected Directors (second term): Joseph T. Green, Laurie Hodder Greeno, Matthew Spanjers, Aks Zaheer
Re-elected Directors (third term): Karen L. Himle, Michael Klingensmith
Emerita Director: Jane P. Gregerson
Retiring Directors: Emily Backstrom, David L. Boehnen, Mary Lou Kelley, Michael Langley
Executive Committee: Margaret A. Bracken, Evan Carruthers, Y. Ralph Chu, Kathy Cunningham, Luella G. Goldberg, Joseph T. Green, Laurie Hodder Greeno, Karen L. Himle, Jay V. Ihlenfeld, Michael Klingensmith, Allen U. Lenzmeier, Nancy E. Lindahl, Martin R. Lueck, Warren E. Mack, Kita McVay, Anne W. Miller, Marilyn Carlson Nelson, Kevin Smith, Mary Sumners, John Wilgers, Aks Zaheer
Chair Marilyn Carlson Nelson
Chair Elect Margaret A. Bracken
Vice Chair John Wilgers
Secretary Aks Zaheer
Treasurer Martin R. Lueck
President and CEO Kevin Smith
Gwen Pappas, Director of Public Relations
Emma Plehal, Public Relations Writer and Coordinator