Minnesota Orchestra pulls its budget into the black

After four years of deficits, the Minnesota Orchestra has posted a $1.1 million surplus on a budget of $42.4 million.

The state’s largest performing arts nonprofit rebounded from the pandemic in fiscal year 2023, which ended in August, with bigger audiences, the return to in-person Young People’s Concerts and more rentals of its home base, Orchestra Hall in downtown Minneapolis.

The annual report released Thursday shows the orchestra’s operating revenue, which includes ticket sales and rental income, reached $9.5 million — a 17% increase over the prior year but still well below pre-pandemic numbers.

“We’re getting back to more regular operations, which feels really good,” said Michelle Miller Burns, president and CEO, by phone. “And we also believe that it will inspire people who are supportive of the organization. It will give our donors confidence to make their philanthropic investments.

“It gives us just a little bit of breathing room operationally, too.”

It was a year of transition, with Thomas Søndergård as music director designate, and of return. The long-running Young People’s Concerts restarted, bringing nearly 30,000 youth to Orchestra Hall. Concerts included the world premiere of “brea(d)th,” a work that the orchestra commissioned in the wake of George Floyd’s murder.

Attendance rose again, hitting 82% of capacity during the 2022-23 season, compared with 79% the year before and 87% in 2019, before COVID-19 shuttered performing arts venues, upending their finances. But the orchestra kept playing, via “This Is Minnesota Orchestra” broadcasts online, on the radio and on Twin Cities Public Television.

“Because of how we were able to navigate through the pandemic and stay connected with audiences, we have seen audiences come back in greater numbers than some of our colleague organizations in other communities have seen,” Burns said.

Attendance of 82% “in any situation is a very, very good number,” said Simon Woods, president and CEO of the League of American Orchestras, a trade organization. “It’s clear that they’re outperforming the benchmark here, in terms of audiences returning.”

Woods has argued that the pandemic spotlighted how orchestras “must come back with a new will to engage with their whole communities,” as he put it in the New York Times.

The Minnesota Orchestra has taken that charge to heart, Woods said by phone this week. “If you go through all the things we need to be thinking about differently, I think the Minnesota Orchestra is doing most of them,” he said. “They’re thinking really deeply about racial equity. They are thinking hard about community. They’re thinking ... about historically underrepresented composers.

“It really is a list of all the right work, it seems to me.”

During the pandemic, as ticket sale revenue tanked, orchestras leaned on government and private support, according to a League of American Orchestras report. Across institutions, private support made up 61% of orchestras’ revenue in fiscal year 2021, compared with 46% in 2019. Meanwhile, ticket sale revenue fell from 30% to 7%.

During fiscal year 2023, total contributions — a number that includes individual donations to the annual fund, trust distributions and the Paycheck Protection Program loan forgiveness — reached $32.6 million in fiscal year 2023, up from $28.8 million the year before. PPP forgiveness accounted for $4.5 million of that number. Annual fund gifts from individuals rose to $6.5 million.

The orchestra received gifts from 13,569 donors, down from 14,447 donors the previous year.

In fiscal year 2023, contributed revenue made up 75% of the Minnesota Orchestra’s revenue. Operating revenue comprised 22%.

The first in the orchestra’s series of deficits preceded the pandemic. The nonprofit posted an $8.8 million operating loss in fiscal year 2019, then a $11.7 million deficit the following year, amid the pandemic. In the past two years, the number had been improving: The orchestra reported an operating loss of $656,000 for fiscal year 2022, following a return to weekly concerts.

The nonprofit is planning for a balanced budget for the current fiscal year, which ends in August, Burns said. Orchestra Hall was “overflowing” for Søndergård’s first concerts as music director last fall, she said, and the orchestra had a “really strong” holiday season.

“We’re always striving to have that balanced budget,” Burns said. “And we also realize that there are unknowns — boy, did the pandemic teach us that. So we know that there will be an ebb and flow.

“But over the course of time, we want to make sure that we are operating in a fiscally responsible and sustainable manner.”