Pew will not give to Philadelphia's Orchestra's financial-recovery effort, sources say

Posted: April 12, 2011

Even as it gathers pledges for a financial-recovery campaign, the Philadelphia Orchestra can't count on the support of the city's largest foundation - at least for now.

The Pew Charitable Trusts has passed on giving money to the orchestra's rehabilitation plan, several sources familiar with the decision say.

Pew president Rebecca W. Rimel confirmed that the foundation has made a decision, though she would not say what it was, or whether it was irrevocable.

An orchestra spokeswoman also declined to speak about the decision, releasing only a short statement:

"Few could rival the generosity of the Pew Charitable Trusts to so many cultural institutions and nonprofit organizations. They have been consistently supportive of the Orchestra over the years, for which we are grateful . . ."

Despite being among Philadelphia's largest and most ambitious cultural institutions, the orchestra has not enjoyed the same kind of support from Pew as similarly sized local organizations.

According to the foundation's database, Pew since 2001 has given the orchestra about $4.3 million, while awarding the Philadelphia Museum of Art approximately $23 million during the same period.

Rimel disputed the orchestra figure. Saying that "the orchestra gets funding through the Pew Center on Arts and Heritage and through a couple of other sources that would not have been evident on our website," Rimel put the orchestra figure at $8 million compared with the Art Museum's $22.6 million.

In the same decade, Pew has been generous to a number of other local cultural organizations, awarding the Barnes Foundation $24.4 million; the Kimmel Center $14 million; the Franklin Institute $10.4 million; Opera Company of Philadelphia $5.1 million; and Pennsylvania Academy of the Fine Arts $4.3 million, according to figures provided by Rimel.

The orchestra, facing declining attendance and inadequate philanthropic support, is in the midst of simultaneously seeking to lower labor costs though ongoing negotiations with its musicians - wages and pension remain the primary areas of disagreement - while pursuing a bailout plan that could include filing for bankruptcy and reorganization.

A vote on bankruptcy could come as soon as Saturday at a special orchestra board meeting. Meetings are also scheduled that day for boards of the orchestra's two related businesses, the Academy of Music and Encore Series Inc., which operates the Philly Pops. The orchestra has no sizable vendor debt, but is pursuing the bankruptcy option to alleviate its obligation to the musicians' pension fund, leaders say.

Musicians oppose the move and have sought a new labor contract with a stipulation that management will not file for bankruptcy.

Even before Pew's decision, the orchestra began lining up other foundation support. Three of the area's other largest philanthropies - the William Penn Foundation, Lenfest Foundation, and Neubauer Family Foundation - are considering participating in a recovery plan.

The orchestra will seek to raise more than $200 million over several years to gird its enterprises and help build endowment, sources involved with discussions say.

All of these philanthropies have been frequent bedfellows. Pew, Lenfest, and Neubauer have partnered in the past, most notably during another local cultural crisis: in 2006, when Thomas Jefferson University put The Gross Clinic up for sale. Pew, Lenfest, and Neubauer pledged $3 million each to keep the 1875 Eakins masterpiece in Philadelphia. (A total of $68 million was raised in 45 days to purchase the painting.)

It is not known what effect, if any, Pew's decision to not join the current philanthropic team will have on the financial campaign's chances for success. Pew's participation in such large civic projects is valued not only for the money itself, but also the vote of confidence it brings.

While Rimel would not discuss the latest decision about orchestra funding, another Pew insider suggested that the orchestra has often not qualified for funding because of its ongoing deficits. The foundation has a policy of not giving operating support to groups without balanced budgets.

Pew, however, has acknowledged violating its own policy in the past, most notably when, even though it had a prohibition against paying off debt, it contributed $5 million toward paying off the Kimmel Center's construction loans - seven years after opening day.

("It's unprecedented for us to come in this way after a capital campaign has closed," Rimel explained at the time, in 2008, "and certainly this debt burden was crippling the Kimmel. But this is an extraordinary community resource and a worldwide asset, home to many performing arts organizations with which we have relationships. So it wasn't just about the Kimmel and its future. It was about all these organizations.")

The orchestra's needs, though no smaller financially than those required to save The Gross Clinic or the Kimmel, have played out more slowly during the last decade or more.

Ticket revenue is down, and the leadership has not yet determined whether it has the kind of ongoing philanthropic support from its board and others needed to continue operating at its current size and level of ambition.

The orchestra has variously put the operating deficit at between $7 million and $14 million annually, a shortfall whose range an orchestra spokeswoman has repeatedly declined to explain.


Contact culture writer Peter Dobrin at pdobrin@phillynews.com or 215-854-5611. He blogs at www.philly.com/philly/blogs/artswatch.

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