Culture cash may be ending run
By Katie Worth
Examiner Staff Writer 10/6/08
San Francisco’s arts and culture organizations, such as the San Francisco Opera, say they are keeping a close eye on the nation’s financial crisis because they may see big losses if the United States enters a deep recession. Museums and theaters are heavily subsidized by corporate sponsorship, private donations and charitable foundations, all of which have a lot to lose in the current financial crisis, say economists including Daniel Vincell of San Francisco State University.
If Wall Street sustains more losses similar to last week’s Dow industrials plummet, museums and theaters will not only see the value of endowments shrink, but also feel the pinch as other major donors’ wealth diminishes. Those donations are the lifeblood of organizations such as the San Francisco Symphony, which in 2005 received $63.4 million in donations.
To make matters worse, future donations from two large corporate sponsors are up in the air. In 2007, Wachovia gave $5.5 million to local nonprofits while Washington Mutual gave $3.8 million, according to the Business Times. WaMu has been absorbed by JPMorgan Chase & Co. Inc., and two other banks are battling for Wachovia.
While most of San Francisco’s big arts organizations have not started to see serious losses so far, many are nonetheless already considering contingency plans to avoid multimillion-dollar losses.
The San Francisco Opera saw about $11.5 million evaporate in the two years after the Sept. 11 terrorist attacks — a painful but educational period for the organization, Chief Financial Officer Michael Simpson said.
“We’re putting together contingency plans so we’re prepared to react the first day we come in and realize that something tangible has happened to our funding,” he said.
He said the opera may even think about producing less expensive operas in coming years if the crisis continues. His counterparts at the San Francisco Symphony and the San Francisco Ballet have been making similar backup plans, he said.
Many of the large foundations that donate to the arts in The City are also paying close attention to the national crisis.
The $450 million Koret Foundation, which awarded $7 million to arts organizations in 2007, has seen recent declines in the value of its stock holdings, said Susan Wolfe, foundation director of grant-making programs. But its money is invested diversely enough that it hasn’t made the organization rethink its grant donations.
“We’re watching and waiting, just like everybody else,” she said.
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