Managing the Funds of the Evansville Philharmonic Orchestra

Purpose of the Case Study The purpose of this study is to provide an overview of how a non-profit arts organization such as the Evansville Philharmonic Orchestra raises funding and balances its budget. Background The Evansville Philharmonic Orchestra (EPO) is a non-profit musical-arts organization which began in 1934 located in Evansville, Indiana. According to Investopedia.com, a non-profit organization is defined in the following manner:
A business entity that is granted tax-exempt status by the Internal Revenue Service. Donations to a nonprofit organization are often tax deductible to the individuals and businesses making the contributions. Nonprofit organizations must disclose a great deal of financial and operating information to the public, so that donors can ensure their contributions are used effectively.
Nonprofit organizations are also called 501(c)(3) organizations after the section of the tax code that allows them (Investopedia.com, 2013).

In order to be considered as a non-profit organization, an organization must benefit the public (Investopedia.com, 2013). By providing the public with the educational and uplifting qualities of music, the Evansville Philharmonic orchestra fulfills the qualities that befits a non-profit organization. The 80-piece orchestra is the largest arts organization in the Tri-State area. Each year, the organization hosts several concerts featuring classical and popular music in the Victory Theatre in downtown Evansville. World-renowned artists such as Itzhak Perlman, Joshua Bell, and Sandi Patti highlight the EPO’s performances. Several youth concerts comprise the concert season (The Evansville Philharmonic Orchestra, 2012). Volunteers from the surrounding area comprise the EPO’s board of directors. In addition to the musicians, the staff of the EPO includes a small group of full-time and part-time employees. The Evansville Philharmonic Guild and the Crescendo Club aid the Philharmonics pecuniary condition. In addition to fostering community support and fundraising for the EPO, the Evansville Philharmonic Guild acts as an advocate for the musical enlightenment of youth. The Crescendo Club raises money for the EPO through the Symphony Store, which sells various products before concerts and during intermission (The Evansville Philharmonic Orchestra, 2012). Resignation of Executive Director, Glenn Roberts After serving as Executive Director of the Evansville Philharmonic Orchestra for eight years, and obtaining 24 years of experience working for orchestras, Glenn Roberts announced his resignation late 2012. Roberts is leaving the Evansville Philharmonic Orchestra in a fiscally healthy state. Roberts stated that "financially, the orchestra is poised to balance its (almost $2 million) budget this season and end in the black, one year ahead of schedule on a four-year strategic plan we adopted in 2010” (McBain, R., 2012). In 2010, Glenn Roberts presented the decision to reduce ticket prices starting the 2010-2011 season. Now, 70 percent of the Victory Theatre’s 1,831 seating options are under $25. Prior to the 2010-2011 season, only 8% of seats were $25 and under. Season subscribers saved 18 to 36 percent under this new plan. Alfred Savia, the music director of the EPO, and others were skeptical about Roberts’ plan to cut ticket prices. Ticket sales comprise 30 percent of the EPO’s $2 million budget. Nonetheless, before the price reduction was implemented, ticket sales were down 9.4 percent for the Classics concerts and 5.5 percent for Pops concerts (McBain, R., 2010). The EPO’s decision to reduce ticket prices was modeled after the strategy of the St. Paul, Minn., Chamber Orchestra which had been implemented five years before. Jessica Elton, director of marketing and communications for the St. Paul, Minn., Chamber Orchestra, said that tickets that