Recession Suddenly Stunts the Country's Cultural Growth Spurt

The Kennedy Center, led by Michael M. Kaiser, has cut its budget and launched the "Arts in Crisis" initiative.
The Kennedy Center, led by Michael M. Kaiser, has cut its budget and launched the "Arts in Crisis" initiative. (By Nikki Kahn -- The Washington Post)
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By Paul Farhi and Jacqueline Trescott
Washington Post Staff Writers
Sunday, May 3, 2009

As the world's richest art institution, the J. Paul Getty Trust has never been too concerned about pinching pennies. Visitors to the Getty Museum complex in the posh Brentwood section of Los Angeles are bathed in opulence from the moment they arrive. Awaiting them in the parking lot is a state-of-the-art driver-less tram that whisks them to the Getty's manicured grounds atop a view-spanning hill.

But these days no one, not even the Getty, can escape the gravitational pull of a worldwide economic crisis. With its investment portfolio shrinking from $6.4 billion to $4.2 billion since mid-2007, the Getty said last week that it would slash its operating budget by 22 percent and its staff by 14 percent. While the Getty says admission will still be free, the cost to ride that magic tram will effectively go up, when parking fees increase from $10 to $15 in July.

Arts organizations large and small can relate to the Getty's problems. Once flush with corporate and private donations, rising ticket revenue and government subsidies, many nonprofit arts groups now find themselves reeling. Cuts of every kind -- staff and artist layoffs, furloughs, canceled performances and tours, truncated seasons -- are widespread.

"I have never seen a situation like this in my 25 years in the business," says Michael M. Kaiser, the president of the Kennedy Center and a veteran arts administrator. After cutting its own budget by 6.5 percent -- a modest trim by current standards -- the Kennedy Center in February started an Arts in Crisis program to counsel troubled organizations. Some 350 have already sought advice.

Some major institutions, like the Getty and New York's Metropolitan Museum of Art, have scaled back exhibitions amid mounting portfolio losses (the Met says it has lost $800 million, or 28 percent, of the value of its portfolio since last summer). Other noted organizations have closed: Among them, the Milwaukee Shakespeare theater company, the Connecticut Opera, the Las Vegas Art Museum, Opera Pacific in Orange County, Calif. In March, the 58-year-old Baltimore Opera Company voted to liquidate. The Sacramento Ballet has canceled the rest of its season. To raise funds from reluctant lenders, the Metropolitan Opera in New York had to use its Chagall paintings as collateral.

The recession has slammed the brakes on what has been one of the most fecund periods for the arts in America, with a steady surge in the growth of community theaters, dance troupes, museums and other kinds of arts groups over the past two decades. Even a small town like Missoula, Mont. (population 64,081), now boasts its own symphony orchestra, two ballet companies, a prize-winning repertory theater and an annual International Choral Festival.

Many arts organizations, in fact, had managed to thrive through previous recessions, most recently the mini-bust that followed the bursting of the tech bubble and the terrorist attacks of 2001.

But arts administrators say this recession feels altogether different: deeper, more widespread, nastier. Unlike in previous downturns, the battering is coming from all sides. The stock market's decline has shrunk the endowments on which many organizations depend. The banking crisis has cut off funds from reliable corporate patrons. State and local tax funds, until recently a growing source of support, have been slashed, too.

Maryland, for one, will clip its annual arts grants by 18 percent in the next fiscal year. The Virginia Commission for the Arts budget has been sliced by 15 percent this year and next. Bucking the trend: The Smithsonian, which administers 18 art and history museums and galleries in Washington and New York. Although its endowment has taken a 30 percent hit since late 2007, the Smithsonian's federal funding -- comprising the bulk of its budget -- grew 7 percent this year, to $731.4 million. Plus, the institution is on pace to meet its year-end fundraising goal of $120 million. The "demand" side is hurting as well. The housing bust and rising unemployment have cut into disposable income, making it harder to sell tickets to the sorts of events -- symphonies, recitals, ballets -- that are supposed to transport people from their daily cares.

"We've all seen upturns and downturns," says Cookie Gregory Ruiz, executive director of Ballet Austin, "but this is pretty extraordinary. . . . It's an economic tsunami."

Arts administrators say they are fighting a subsidiary effect of the recession, a creeping perception among their largest and most reliable corporate supporters that contributing to the arts is somehow elitist and excessive at a time of rising unemployment and general economic hardship. A number of museum directors, according to the American Association of Museums, have postponed or canceled capital campaigns, which means that a boom period of building and physical expansion has halted.

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