State of the arts: Despite recession, optimism abounds

The economic downturn that started more than a year ago deeply impacted arts organizations across the country, and San Francisco’s creative community was no exception. Local arts nonprofits have been forced to reprioritize in the wake of declining revenue and shrinking endowments.

“The sponsorship landscape has changed dramatically,” said John Buchanan, director of the Fine Arts Museums of San Francisco. “Some of our previous supporters have had to take a long look at their priorities.”

No organization better illustrates that struggle than the vitally important and city-operated Grants for the Arts, which was forced to decrease San Francisco’s support of nonprofits by almost a quarter, down from $12.7 million in 2008-09 to $9.8 million for the current fiscal year.

Major San Francisco arts powerhouses have also cut budgets and tweaked operations. At the San Francisco Symphony, the $63.8 million budget for 2008-09 was reduced to $62.5 million as a precaution.

“For the next year,” Public Relations Director Oliver Theil says, “we are working on a similar budget number, with adjustments for specific projects such as Black & White Ball and special touring and media projects.”

Even as the King Tut exhibit opened to much fanfare at the de Young Museum in June, it wasn’t enough to keep the combined budget for the de Young and the Legion of Honor from dropping to the current $45 million. At the San Francisco Museum of Modern Art, where the budget was cut a mere $1.8 million from $31.8 million to $30 million, Director Neal Benezra points to “creative ways to trim expenses, such as extending the dates of select exhibitions to save on installation costs while avoiding cuts to staff positions, salaries and compensation.”

The City’s major stage company, American Conservatory Theater, experienced a 6 percent drop from last year’s $19.5 million budget, but subscriptions and ticket sales have given it hope for a brighter future.

“It’s a good place to be after we were forced to make some hard decisions earlier this year to weather the economic storm,” Artistic Director Carey Perloff said. Planning, determination, sacrifices, and continued support from audiences and donors make Perloff “cautiously optimistic as we observe a significant upswing in our subscription and single-ticket sales this season.”

The San Francisco Opera also wasn’t immune to the weak economy, as its $72.5 million budget for 2007-08 was cut to $63 million for the current fiscal year rather than the originally planned $69 million. Performances were reduced as well, but Director David Gockley continues to present casts of world-class singers.

But the San Francisco Opera wasn’t in the same financial tailspin as many other local programs, due in part to the fact that it received the largest single contribution in its history in September 2008 when John A. and Cynthia Fry Gunn donated $40 million. Two years earlier, the company received a $35 million gift from Jeannik Mequet Littlefield.

And yet, even now with the stock market steadily improving, problems continue to haunt arts programs in The City. Just a couple of weeks ago the critically acclaimed San Francisco Lyric Opera suspended operations, unable to raise anywhere near the minimum $500,000 budget necessary to present 16 performances of four fully staged operas.

At the same time, the Golden Gate Opera Co. canceled plans for “Hansel and Gretel,” itself a holiday fundraising event.

“We wouldn’t have enough funds on hand at the final performance to pay our personnel, the union orchestra, the singers, the artistic staff, makeup artists per agreements,” Director Roberta Wain-Becker said. “We need additional donations.”

For San Francisco’s arts community, spectacular acts of survival are needed. But despite seemingly dire straits, Grants for the Arts Director Kari Schulman remains optimistic about the future.

“Arts are an ecosystem,” she said. “Not every organism needs to survive, but the whole will.”


As the arts go, so goes the economy

How important are the arts for the economy? In San Francisco alone, symphonies, operas, theaters and museums employ thousands of local residents, bring in tens of thousands of tourists and contribute millions of dollars to the economy.

The tourism industry generated $528 million in tax revenue in 2008 for The City, up 6 percent from the previous year.

There are evenings in the Civic Center area alone when thousands of people attend performances, with 3,200 seats at the War Memorial Opera House, 2,600 at Davies Symphony Hall, 900 at Herbst Theatre and thousands more at the Orpheum theater and Bill Graham Civic Auditorium.

In addition to buying tickets, those people pay for parking, purchase meals in restaurants and, if they are from out of town, stay in hotels.

Nonprofit arts and culture generates about $1.03 billion in local economic activity. The amount is divided roughly in half between direct spending by the organizations and event-related spending by audiences.

Local figures in the national Americans for the Arts study indicate that the San Francisco arts community contributes to the creation and support of the equivalent of 27,837 full-time jobs, generating $548 million in household income and delivering $93.1 million in local and state government revenue.

San Francisco’s Grants for the Arts program supports San Francisco organizations, which serve audiences of 4.2 million each year, including 1.5 million tourists.

The local economic impact is direct and palpable: When the 1989 earthquake closed the Geary Theater, restaurants in the area went out of business. Similarly, in busy Hayes Valley — itself created by the building of Davies Hall in 1980 — the San Francisco Symphony’s 10-week strike in 1996 drove several restaurants out of business. In both places, on both occasions, there was a negative impact on hotel occupancy.


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