Arts organizations take different paths to surviving the pandemic
OperaDelaware General Director Brendan Cooke concedes that “singing indoors is about the least safe thing you can do these days,” but the current shutdown has left him with a bit of a quandary.
“When we’re not presenting opera, what are we?” he said.
OperaDelaware can’t offer fully staged operas these days at the Grand Opera House. So instead, it is performing from the fire escape of its Riverfront facility in Wilmington. It offered curbside pickup for T-shirts for its cancelled festival and serenaded patrons from there. That evolved into 15-minute, drive-thru events with 10 cars at a time, which evolved into Al Fresco Arias programs with attendees sitting in physically distanced spots on the parking lot. Ticket sales cover the costs of the performers but little else.
“We normally aim for an audience of 800 to 900 people, but now it’s 50 people in the parking lot,” Cooke said. “We normally have 150 to 200 people in a production; now it’s 2 to 3 people on a fire escape.”
In June, the Delaware Arts Alliance published a COVID-19 Industry Impact Report based on a survey of 65 Delaware arts and culture organizations that said they had about $5.6 million in COVID-19 related expenses as of April 15, including costs related to program cancellations and refunds and transition to virtual operations. Even worse, the report predicted that without stimulus and relief funding, more than half of the state’s largest arts organizations risked closing their doors permanently within four months.
Nationwide, the American Alliance of Museums (AAM) recently warned that one out of every three museums may shutter forever as funding sources and financial reserves run dry, based on a June survey of more than 750 museum directors nationwide.
“Museum revenue disappeared overnight when the pandemic closed all cultural institutions, and sadly, many will never recover,” AAM President and CEO Laura Lott said. “Even with a partial reopening in the coming months, costs will outweigh revenue and there is no financial safety net for many museums.”
The Delaware Arts Alliance is conducting a follow-up survey this month and Executive Director Jessica Ball expects to hear organizations weathered the initial storm and are now treading water thanks to federal and state loan programs and major programming and staffing cuts.
“I don’t believe we’ve permanently lost any organizations,” Ball said. “But a lot of performing arts organizations have seen the writing on the wall. A lot are just holding out hope for a spring 2021 season. They’re on life support now, doing whatever they can to survive and hoping for some good news.”
The Delaware Business Times interviewed 10 leaders of Delaware arts organizations over the past few weeks. The problem, most agree, is that once you cut the lifeline of fundraising galas and big performances, you’ll have a short-term survival problem. Revenues have gone down, but so have expenses. And many of the organizations have pivoted to small – often free – productions that remind patrons that they’re still out there.
They wonder when their audiences and members will be comfortable coming back and whether grants that have historically been used to support the arts are going to go toward supporting basic needs.
“Arts organizations are used to operating on a shoestring with challenges thrown in our way,” Delaware Art Museum Interim Executive Director Molly Giordano said. “The industry is very comfortable operating in that degree of uncertainty.”
But this much uncertainty?
Wesley Paulson remembers March 12 clearly.
“My artistic director was in New York for auditions and called me to tell me they had cancelled auditions and they had just closed Broadway,” said the executive director of Clear Space Theatre Company in Rehoboth Beach. “That’s when I knew this was real. We had to close a successful show [“Kiss Me Kate”] and then two more. We had a performer suggest we use [spread-out] cabaret seating for a few shows that had nightclub scenes and settings. Audiences are coming and people feel safe.”
But that doesn’t mean everything is great.
“I’m covering my direct costs, but I don’t have a cushion for Fall,” said Paulson, who is still hopeful he will be able to raise the remaining $3.3 million needed for an $8.8 million performance center. “The way our business model is set up, we generate a lot of cash flow in the summer to carry us through the fall when we only operate on weekends. We still have to pay actors, technicians, and royalties so we did get a [Paycheck Protection Program] loan for $44,000 and also received a state HELP loan, a grant from the Delaware Community Foundation and a CARES Act grant from the Division of the Arts. All that covered us through April and May when we had no revenue from shows.”
Delaware Shakespeare (Del Shakes) is not in any “existential financial crisis,” Producing Artistic Director David Stradley said.
The theater company has an annual budget around $400,000, primarily for a small staff and a low rent to OperaDelaware. It entered the pandemic with a “decent amount of reserves” and received $50,000 in National Endowment for the Arts (NEA) funding; CARES Act funding through the Delaware Division of the Arts, and a $12,000 PPP loan, Stradley said.
“At the very least we’re confident of making it through, but I can see how organizations with big buildings and large payrolls might be in a crunch,” he added.
For the Delaware Theatre Company, a $168,000 PPP loan allowed Managing Director Matt Silva to maintain 14 full-time employees on full-time pay with benefits through the end of May. But on June 1, Silva had to furlough his production team. For the rest of his remaining five-person team, a few took large pay cuts and everyone took on additional responsibilities.
There are a plenty of “ifs” to go around over the next six months.
“If the financial markets remain good, organizations with endowments – particularly if they’re unrestricted – will have enough cash, volunteer organizations can pop back up when they’re ready,” said Sheila Bravo, president and CEO of the Delaware Alliance for Nonprofit Advancement (DANA), which has devoted a section of its website to Recovery and Resilience. “But it’s the organizations in the middle that have professional staff, soft revenue, and fixed costs that are having to make hard choices.”
In June, DANA surveyed statewide nonprofit organizations to see how their needs had evolved since a survey in March. About 35 of the respondents came from the arts/history/culture sector.
Findings from this survey indicate Delaware nonprofits desperately need funding. Seventy-five percent are still offering services even though their facilities remain shut down. Two-thirds need financial support to pay for the cost of personal protection equipment (PPE) required by state order, and 52% of nonprofits who received PPP loans from the Small Business Administration (SBA) will need more to retain employees. Despite these loans, nearly a third of responding nonprofits have less than 10 weeks of available cash on hand.
Delaware’s philanthropic community has stepped up and answered the call, creating two sources of funding through a collaborative effort known as the Delaware COVID-19 Emergency Response Initiative. This group, made up of DANA, Delaware Community Foundation, Philanthropy Delaware and United Way of Delaware, has collectively distributed more than $4 million in the last five months statewide to nonprofits.
“The reality is that we don’t have a new business model because we don’t have a viable business right now,” said Mark Fields, executive director for The Grand, which laid off 19 of its 33 paid full-time staff positions earlier this month, cut the pay for 14 others, and drew down $3 million of its endowment. “We kept enough people on staff so we can gear back up. We’re doing everything we can to stay engaged with audiences. What we do requires people in the same space. We can’t go virtual because that’s not what we do. Artists can now go straight to their audiences.”
“The situation is serious, not just for The Grand but for the entire sector,” said Fields, who says he’ll need to raise $2 million to reopen by mid-2021 and $5 million to get back to pre-pandemic levels. We’re planning for a future when we don’t know when that future starts.”
For Ray Rhodes, executive director of the Wilmington-based Christina Cultural Arts Center (CCAC), the pandemic has highlighted the challenges that his organization already contends with.
“97% of our users are black and brown and under the poverty level and our mission is to provide them with quality, affordable performances and arts education. COVID and social unrest made it tougher, but we already had developed resiliency,” he said.
Rhodes said it took his organization longer to receive federal assistance than it did other organizations, but CCAC did receive $115,000 in a PPP loan about a month after it applied.
“That allowed us to continue our programming with no layoffs or furloughs,” he said. “We asked donors to let us use restricted dollars. We stayed in touch with them and asked with our hearts out rather than our hands.”
CCAC offered training classes for its staff to navigate Zoom and other applications. It used Facebook Live for programming and Rhodes expects that 75% of its music, dance, and voice classes this fall will be virtual.
“We deal with underserved populations and try to avoid forcing parents to decide between paying their rent and enrolling their children,” Rhodes said. “We want kids to beat on drums and not each other, to shoot on cameras instead of shooting guns. We postponed our recital in June until Aug. 29 and it’ll be outside with 35 performers instead of the 120 we usually have.”
Many organizations are doing their best just to stay connected with donors and subscribers to their programs.
“Our membership coordinator called our entire database and updated them on what we were doing,” said Giordano, of the Delaware Art Museum. “We did the best we could to share our content virtually. We got a PPP loan in the mid-$400,000s to help us weather the storm without layoffs or furloughs. We launched a new website in July and our subscribers, open rates, and social-media activity are much higher. And we have a great outdoor space so we’re asking how we can use that until the weather turns bad.”
Cooke said OperaDelaware has become “the Grub Hub of Opera” after borrowing a trailer from neighboring construction management firm EDiS and delivering arias to both ChristianaCare campuses during shift changes and to the Country House.
“The curious thing for us is that opera tailgating seems more accessible. While we’re staying in touch with our patrons, we’ve also seen 25% new visitors,” he said.
Like many organizations, DTC had to cancel its spring fundraiser, although some of its corporate and foundation sponsors let it keep the money, Silva said. DTC has cancelled its fall schedule but hopes to have productions in spring, assuming it has cash in the bank.
“We haven’t pivoted to online although we are working on some virtual content,” he said, adding that DTC is looking at ways it can reduce the licensing costs of using archival video and is working with some celebrities to generate new content. “But theater is about bringing people together and we don’t think inundating the virtual sphere is the way to go.”
For some, the pandemic has provided a chance to pause and think about what wasn’t working before and what changes in strategies and mindsets need to take place.
The $50,000 NEA grant allowed Del Shakes to hire four part-time associate artists who are focused on online programming and small-scale productions. The idea, Stradley said, is that it can create content like recorded sonnets that is engaging and can be monetized.
“We can dream forward a little bit so that makes this a somewhat exciting time,” Stradley said. “They are helping us think about what is possible and how we can engage with our audience, while I focus on thinking about financial survival.”
Others don’t have that same luxury.
“We’re focused on the next four to six weeks and then the next four to six weeks,” said Paulson, of Clear Space Theatre. “We’re viable if we can go back to our regular season model next summer. We did our big fundraising event in June virtually and made 25% of what we normally do, and we’ve cancelled our fall gala in September because we surveyed our patrons and 70% of them said they wouldn’t go if it was inside.”
“We will define a future of the arts in Delaware,” said Ball of the Delaware Arts Alliance. “It won’t look like it did pre-COVID, but we will have a vibrant sector. The arts have helped keep us connected and we all know the impact the arts have on business, hospitality, and tourism.”
By Peter Osborne