For many arts organizations struggling with the financial mayhem caused by the coronavirus pandemic, one issue could mean the difference between life and death. What will patrons who bought tickets to canceled shows decide to do about it?
Many groups offer three choices to advance ticket holders: Receive a full refund, accept a credit to a future show, or donate the value of the ticket to the organization as a gesture of generosity during hard times — by far the most desirable choice for the arts community during a period when ticket revenue is nonexistent.
Some cash-strapped groups don’t even have that kind of flexibility.
Pageant of the Masters, a popular annual Laguna Beach summer attraction, announced on May 11 that it would cancel its 2020 season. At the time, refunds were promised to all Pageant ticket holders. Those who chose to donate their tickets to the organization would receive a tax benefit and would be entered into a drawing for a walk-on role in the 2021 Pageant.
But refunds proved to be more difficult to issue than planned. In an email issued late last month, Festival of the Arts president David Perry warned patrons requesting refunds to expect a delay, and he urged them to consider taking credit toward the 2021 Pageant of the Masters or donating the cost of their tickets to the festival.
“You are our loyal patrons and we always want to do the best by you and make you proud of our organization,” Perry stated in the email. “And now, we have found ourselves in the very uncomfortable and difficult position of asking you to please work with us because we are in a serious cash flow bind. We are very sorry, but we simply cannot meet the demand for refunds at this time. In light of this difficult period, we could really use your help.”
On the festival’s website, patrons seeking refunds are warned that they will receive a lower priority than those seeking to donate their tickets:
“We are handling thousands of responses each day with a very limited staff working remotely, so please anticipate a longer than usual processing time. We are truly appreciative of your patience. Donations and ticket credits will be processed first.”
The festival’s financial woes are by no means unusual. Across Orange County and throughout the nation, cultural groups large and small are struggling to make ends meet at a time when government assistance is running out and earned revenue is still a distant dream.
Last month, the Segerstrom Center for the Arts reduced its staffing by about two-thirds — more than 500 full-time and part-time positions. “It’s very heartbreaking and very tough to have to deal with,” Segerstrom Center president Casey Reitz told Voice of OC. “This is one of the financial impacts of what COVID-19 has done to the Center. The shutdown has been significant. It has eradicated 75% of our income at the Center, which is ticket sales. We’re doing this in order to stay solvent as best we can.”
In a videotaped appeal on the Segerstrom Center’s website, Reitz laid out the case for ticket givebacks.
“The Center needs your help to get through these next months. The Center is a not-for-profit organization, and 75% of our budget comes through ticket sales. For the rest, we depend on community support and individuals like you. So right now, as our theaters are dark, your generosity is crucial. … One way to help is to donate your tickets to canceled performances and receive a tax deduction for the total ticket value.”
Shortfalls and Emergency Campaigns Everywhere
The same story is playing out elsewhere in Orange County and beyond.
The Los Angeles Philharmonic Association is facing an $80 million budget shortfall after canceling its 2020 seasons at the Hollywood Bowl and Ford Theatres. In the spring, its principal venue, Walt Disney Concert Hall, was closed to public performances. The organization asked Hollywood Bowl subscribers and ticket holders to donate their tickets to support a $35 million fundraising campaign called Play Your Part.
Anaheim’s Chance Theater has launched a campaign, Make Them Hear You, that aims to raised $200,000 to help the mid-size theater through its present cash crunch. A plea on the company’s website presents its situation in stark terms:
“Your support is vital in these unprecedented times as we have experienced significant losses due to the impact of COVID-19. If you have the means, please consider making a fully tax-deductible gift of any amount to help all of us get through this together.”
Some arts organizations have fared better than others with ticket giveback donations. And they seem to be a more popular option for season ticket holders than single-ticket buyers. More than 30% of season subscribers have donated their tickets at Los Angeles’ largest theater organization, Center Theatre Group. Among single-ticket buyers, however, only 15% donated.
The hemorrhaging will continue unabated across the nation for arts organizations, according to a paper published recently by SMU DataArts, an arts research group at Southern Methodist University, and Jill Robinson, chief executive of TRG Arts, an arts consultancy. The paper estimates that total revenue loss will be $12.4 billion from March 2020 to February 2021 among the nation’s 35,000 nonprofit arts groups with annual budgets over $50,000. Almost half of those losses will be in ticket sales and other earned income; the other half comes from a drop-off in donations and investment income.
While the pandemic is affecting arts organizations worldwide, the U.S. faces special risks. Government funding for the arts is minuscule here compared to many other countries. The National Endowment for the Arts has a meager $75 million fund under the Cares Act earmarked for emergency grants to nonprofits around the country.
“In other countries the government plays an avuncular role,” said Michael M. Kaiser, former president of the Kennedy Center and presently chairman of the DeVos Institute of Arts Management at the University of Maryland. “Our government has never played that role. There is no sense that the [National Endowment for the Arts] feels responsible.”
Paul Hodgins is the senior editor of Arts & Culture at Voice of OC. He can be reached at [email protected].