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Without donations, curtain may fall on Diablo Ballet

by Mary Ellen Hunt

August 25, 2002

What is it worth to keep a critically acclaimed professional ballet company in a community? What is it worth to keep the regional arts alive here?

Diablo Ballet's current financial crisis brings these questions to the Contra Costa community at a time when most Americans are thinking about things besides the stability of our arts and nonprofit groups. Ironically, support for arts organizations is dwindling when it may be needed the most in our educational systems as well as for our own emotional well-being.

The 8-year-old Walnut Creek-based Diablo Ballet announced on Aug. 17 that in order to survive for the next six months, it needs to raise $150,000 by Sept. 15. By next year, the city of Walnut Creek would be able to help fund them, and several other grant-giving agencies would also be able to offer support within a few months. But after the cancellation of a projected September tour to Reno (the presenting organization in Nevada filed for bankruptcy), the company finds itself with no cash to work with for the next few months.

How the company got to such a position appears obvious. Everyone, it seems, from major corporations to the average person, has been stretched financially in the past year by the burst of the dot-com bubble, the terrorist attacks and the collapse in confidence in the stock market. To many, Diablo Ballet's story will seem unexceptional, sadly typical of harsh economic times -- but there is a uniqueness to it, and a warning of what important future losses the community may face.

Budget cuts came first

At the heart of it all is the struggle that artistic director Lauren Jonas and the members of her company have endured for the past year. The company, which at its height had a budget of $1.1 million, was forced to cut back to an $800,000 budget after the downturn in the economy and the subsequent resignation of board president Ashraf Habibullah.

Habibullah, who helped finance the founding of Diablo Ballet in 1993, with Lawrence Pech and Jonas, had been supporting Diablo Ballet with nearly $400,000 a year before the last season. "He still gives what he can in in-kind donations, through his photography, through printing, but as far as giving monetarily," Jonas says, "that pretty much stopped in July, August of last year." (Habibullah was out of town and could not be reached for comment.)

Dance companies across the country, as well as other arts organizations, are seeing similar falloffs in support. At ODC/SF, general manager Lori Laqua says, "Ticket sales did all right in the last part of 2001, but in 2002, when people really saw where things stood, there was such a sharp decline. Individual contributions have gone down. Foundation support is really going down, because their portfolios took a heavy hit. And corporate support just dried up completely."

Glenn McCoy, executive director of San Francisco Ballet, echoes Laqua's thoughts. "We're having our own challenges," he says. "Corporate funding is off. Tourism is down, so we expect less from the hotel tax fund. And, naturally, if corporate funding is down, those individuals to whom we look for major gifts, who are employed by those corporations, well, we expect to see some difficulties there, too."

S.F. Ballet doing fine

San Francisco Ballet, however, is somewhat shielded against decreases of donations and ticket sales by a healthy endowment fund raised in 1996, which helps sustain their budget of $29 million. Despite some belt-tightening and layoffs, McCoy says the company was still able to meet its fund-raising goals for the fiscal year.

"The organizations that are most at risk are the ones that are not at the very largest and not at the very smallest in size," says Eric Hayashi, head of Cultural Services in Walnut Creek. "They are what I call the middleweight class. A larger-budget organization, where they have three and four more layers of resources, is able to withstand shortfalls in cash flow, or shrinkage in the economy, and a downsizing of ticket sales.

"On the flip side, the small-sized organizations can oftentimes withstand the withering economy," he says, "because they are primarily volunteer and community-driven. They don't have very many professional staff, if any. And oftentimes, these companies don't pay their artists or have professional expectations, and so they just do less."

Jonas, whose company falls squarely in the middleweight range, felt the pressures of maintaining the company at a high professional level while still trimming costs. Paying the dancers was the highest priority, but the overhead involved in simply operating the ballet company is enormous.

Insurance costs

Derek Gordon, executive director at LINES Ballet, says there are a lot of costs that the public might not realize. "It is incredibly expensive around insurance, particularly disability insurance," he says. "Obviously, dancers are athletes. One bad fall and you have an artist who is now injured and incapable of earning a living, at least for the short term. So most companies carry workers' compensation insurance. If you're a dance company, you typically have a high incidence of injury, and so they keep adjusting your premiums up and up and up. We pay $15,000 a month for our workers' compensation insurance."

Diablo Ballet has seen its workers' compensation rates rise more than 300 percent in the past four years to where it pays nearly $100,000 annually. With little room to maneuver, the company did not have the money to hire new people when the executive director left in June 2001, or when the production company manager left to return to school. The work fell to Jonas and Nikolai Kabaniev, associate artistic director.

"It was just a very, very hard year, and everyone knew it, and everyone felt it," Jonas says. "I was out of the studio more than ever, since I didn't have an executive director. I had to learn to do the day-to-day accounting. I was writing about four or five grants a month, plus I dealt with all the managing aspects of the office -- the health insurance, the workers' comp, the personnel issues, the paperwork.

"We toured a lot this year. I was the one making all the arrangements, the itineraries, the air tickets. When we were on tour, I checked people into hotels. That's how I got myself sick this year. I went to Nikolai and I said, 'Look, in order for this season to really work, I'm going to need you to assume a lot of my responsibilities in the studio and outside.' So he really stepped up and took on more responsibilities to free me up."

Disappearing sources

The spot Diablo Ballet finds itself in, however, is one which many small- to mid-range arts organizations face today. Due to the battered economy, small dance companies, symphonies and regional operas are seeing funding sources dry up. Acclaimed regional companies operate on shoestring budgets. Ticket sales have never brought in enough money to cover the extensive costs of operating a performing company, so troupes must rely heavily on contributions from several places -- foundations, corporations, city, state and federal governments and individual donors. What is perhaps surprising is how much of the mix is accounted for by individual donors, even donors not giving thousands of dollars.

"This year we saw that people who were giving $5,000 a year in the past were only able to give $400," says Jonas, "but our annual campaign actually got larger because we really asked every single person in our database, even if it was like $50 or $25 a person."

Kathleen Odne, executive director of the Dean and Margaret Lesher Foundation, says that every bit helps. "I think sometimes donors feel like if they can't make a substantial gift that it doesn't really matter. But it does. Having a really large individual donor base that gives a modest amount really helps."

By not doing so, the harsh reality is that arts groups such as Diablo Ballet could disappear.

"I think people take arts groups for granted," Odne says. "If you removed the nonprofits from the community, I think people would be amazed at how many things nonprofits provide that really contribute to quality of life. Virtually all the arts, many of our after-school programs for kids, environmental protection, there's so much that the nonprofit community does."

Community programs

Diablo Ballet, in fact, works with the city of Walnut Creek in a successful arts education program teaching classes at the Shadelands Building, where it also rehearses. In addition, the company goes to schools to perform for students who otherwise might not be exposed to a live dance performance.

Arts groups also have a surprisingly deep impact on the economy of the city. The Dean Lesher Regional Center for the Arts has attracted and housed more than half a dozen regional troupes, from Diablo Ballet to the California Symphony to Festival Opera, among others. A study conducted by Americans for the Arts in 2000 found that the anchor arts organizations in Walnut Creek generated $34 million in income for the city, not including ticket revenues. Last year alone, Hayashi says, the Regional Center hosted a thousand performances, selling $3.9 million in tickets.

"So I think it behooves us to help strategize with them how we can stabilize these organizations and ultimately help them grow, no matter whether the economy is good or bad," he says.

Peggy White, executive director of the Diablo Regional Arts Association, says, "I'm hoping that people are in a position to help and really understand how important the arts are to our quality of life and our economic vitality and the core of who we are as human beings. The Diablo Ballet is on the verge of so many wonderful things, and they are such a treasure for our community."

TO HELP

Donations to the ballet may be sent to Diablo Ballet, P.O. Box 4700, Walnut Creek, CA 94596. Pledges may also be made by phone at 925-943-1775.

The ballet promises to return contributions to their donors if the necessary amount is not raised to reinstate the season.


This article was first published in the Contra Costa Times

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