The center was forced to seek one-time funding (from foundation grants, reimbursements from a contractor and money from its own trust fund) to fill a $735,000 shortfall in its 2007 budget; it will also use $440,000 from the 201 State Foundation (about half the foundation's net assets) to operate within its$11 million budget.
That extra money, however, will dry up in 2008, according to the paper, which quotes James Ruhly, chairman of the Madison Cultural Arts District board (which oversees the center) as saying, "I'd be foolish to say I didn't have the nightmare scenario that it's not going to work out."
If the Center can't meet its budget in the future, the board might have to ask Madison taxpayers to bail it out.
Tom Carto, the incoming director of the Overture Center (whose tenure begins January 15) was reportedly hired because of his fundraising experience. He told the paper that the center plans to market its programs better and generate more revenue from other means such as rentals.
In its second full year of operation last year, about 80% of the center's $10.9 million budget was generated from ticket sales and other earned revenue, according to the Journal. This year, however, the center projects a 29% drop in ticket sales (to $4.1 million, about $1.6 million less than 2006) — in large part because the center was unable to book as many popular Broadway shows in 2007 as it did in 2006.
The Overture Center was created with a $205 million donation by philanthropist W. Jerome Frautschi. About $100 million of that was put into a trust fund and the rest was added to a $115 million loan. According to the Journal, the trust fund, valued at nearly $107 million in November, is obligated to provide $1.4 million to the center for operating costs annually as long as the fund value remains above $104 million.
Operating funds were initially expected to be subsidized by interest earned on the trust fund, but the interest income was lower than expected.
The Overture Center is home to the Madison Symphony Orchestra, Madison Opera, Madison Ballet, and Wisconsin Chamber Orchestra, as well as several dance and visual arts organizations. The center's current fundraising drive worries some of its tenants. Brian Johnson, executive director of Madison Ballet, told the paper, "Certainly, any additional fundraising any nonprofit does affects other nonprofits in some way."
Richard Mackie, executive director of the Madison Symphony Orchestra, added that Overture officials are attempting to fix "a flawed business plan." He told that paper that additional fundraising drives have long been considered, even before the building was completed. "I think we have every reasonable assurance that donors (will) know exactly to whom they're giving, and to whose benefit. It's certainly ethical for the Overture Center to raise money, as long as the donors don't think that that money is being raised for the benefit of the resident organizations."