A Little Help Here!…Part 2

We’ve all heard of no pain…no gain! We all espouse and/or have been told that we need to exercise fiscal responsibility, but what about fiscal accountability? Why is it that in a good year orchestras tout their fiscal responsibility, when in fact sometimes it’s only a good year because some of next year’s advance ticket money is spent to make it a good year…isn’t that fiscally irresponsible, cheating or maybe even fraudulent?…..

I think it’s time to reign things in, and along with a body to help orchestras in crisis that I wrote about in my last post, we might need to look at dare I say it some kind of regulatory body or at least regulations that sets up at a minimum fiscal guidelines, and at maximum enforceable rules to protect the organization, the audience members and donors whether they be individual, corporate, foundation or government, from fiscal irresponsibility.

Let’s say a patron buys a ticket for a concert in 8 months, the orchestra goes belly up, there is no refund offered and the patron realizes then that the orchestra used the money to pay current expenditures and believes the orchestra never intended to do the concert to which the likely reaction will be I’M NEVER SUPPORTING AN ORCHESTRA HERE AGAIN!!!! Maybe it’s too finicky but what about making the ticket a contract of sorts with the patron, one that sets a maximum amount that can be spent from that ticket before the concert takes place.  What about a guaranteed minimum refund if a concert doesn’t take place i.e a dynamic cash reserve account that holds collectively the portion of the ticket money that cannot be spent.  There could also be a waiver that the patron signs to allow the use of the ticket money for any purpose for the organization turning it into an unrestricted donation if the concert doesn’t take place (I don’t know if this is allowable) but also allowing the money to be spent immediately.  It sets up transparency and would also promote fiscal restraint, so that if a large cash infusion comes from the selling of tickets for an upcoming concert with a “big name artist”, a significant portion is held back and cannot be spent, until after the concert.  Ditto for any sponsorship or a donation to any specific event.

With a program that is happening because of a grant, perhaps the granting body gives 75% of the money prior to the program, and sends the rest after it’s completed.

Is there a way set up an endowment so that the draw happens after the last concert of the season, but if the orchestra folds or suspends before then, the draw automatically gets split and is used for refunds and payroll?

It’s easier said than done, and these are just thoughts, but the last few years have taught us, that a cash reserve is vital to better weather an economic storm.  Living hand to mouth turns to foot in mouth when things go south!  To establish fiscal restraint, accountability and transparency is to establish a true “Trust Account” with your constituents.