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Hult Center for the Performing Arts

Strategic Benchmarking Report

January 2009Updated March 2009

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Table of Contents

Background & Methodology page 3

General Overview & Comparisons page 13

Management Structure page 20

Earned Revenue & Community Engagement page 25

Fundraising page 36

Alternate Revenue Streams page 43

Observations & Recommendations page 49

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Hult Center for the Performing Arts

Background & Methodology

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Background

• How do the operations of the Hult Center compare to the industrypractice?

• Why is the Hult Center different?

• What variances are due to management decisions, rather than environmental factors?

• What characterizes a financially sustainable model for a publicly operated performing arts center?

In June 2008, the City of Eugene retained AMS Planning & Research Corp. to conduct a strategic benchmarking exercise to aid the assessment and planning process for the Hult Center of the Performing Arts. In particular, AMS’s assignment was to explore answers to the following questions:

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Background Review and Depth Interview Observations

AMS reviewed Hult Center background documents, particularly the Cultural Policy Review conducted by WolfBrown; the Cultural Services Division Business Plan for 2006-08; the 2007 Library, Recreation and Cultural Services Annual Report; and the Cultural Services Division Strategic Work Plan. AMS Principal Steven Wolff also conducted a series of depth interviews to understand the Hult Center’s goals as well as the evolving arts and culture landscape in Eugene.

– The Hult Center is the cornerstone of Eugene’s cultural community, and therefore has a responsibility to be a leading regional arts organization.

– The Hult Center has insufficient capital to achieve its desired level of activity and related financial performance.

In order to focus the benchmarking, AMS was directed to explore the following key areas:

– Broad Attendance as a Measure of Success– Alternate Sources of Revenue– Management Structures

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Broad Attendance as a Measure of Success

There are many measures of success for cultural organizations – including intrinsic and instrumental benefits.1 Based on our review of relevant Hult Center materials, it was clear that attendance would be a key measure of success:

– In the Library, Recreation and Cultural Services Annual Report, increased participation was mentioned in the first paragraph as the most important indicator of the department’s success in 2007.

– The vision described in the Cultural Services Department Strategic Work Plan declared that the arts should be “available to all,” and the mission statement emphasizes that services should be available to “all citizens.”

The challenge for the Hult Center is to increase attendance and engage all facets of the community. In benchmarking, AMS used the following questions as guides:

– How do comparable performing arts centers engage the community in the broad sense?

– What strategies have comparable performing arts centers initiated to increase overall attendance?

– How do comparable performing arts centers support their resident companies and other renters efforts to increase attendance?

1The different measures of success for arts organizations are vast and center-specific – each organization has to determine the most relevant measures based on its mission and vision. For some examples of the most current thinking on performance measures for cultural organizations, see The Urban Institute and The Center for What Works’ “Candidate Outcome Indicators: Performing Arts Program” and Alan S. Brown’s Assessing the Intrinsic Impacts of a Live Performance.

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Alternate Sources of RevenueThe Hult Center must cultivate additional revenue to support long-term and

sustainable operations for a variety of reasons.

1. Since the passage of Measure 47 limiting property tax increases,municipal funding for the Hult Center has come mostly from the Transient Room Tax, not from the City’s General Fund.

2. Second, there is pride in the Hult Center’s free offerings, and while these events benefit the community, they require subsidy.

3. Third, the Cultural Policy Review and our on-site interviews characterized the financial situation of many of the Hult Center’s resident companies as precarious, so it is unrealistic for the Hult Center to expect to recover real costs from them.

4. Finally, the Cultural Policy Review also discussed the competitive environment for private sector funding, with potentially few new funding sources available.

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Alternate Sources of RevenueIn terms of strategic benchmarking, the key questions for research were:

• What kinds of municipal support do comparable performing arts centers receive?

• How do comparable performing arts centers engage in fundraising?

• Do comparable performing arts centers have endowments? How large? What were the funding sources for these endowments and what werethe cases for support?

• What alternate sources of revenue have comparable performing arts centers developed?

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Management Structures

• How do the missions of comparable performing arts centers tie into the overall cultural policies and objectives of their respective municipalities?

• What is the management structure of comparable performing arts centers? What are the structural relationships to municipal government? Who programs these centers?

• What are the relationships between comparable performing arts centers and their resident companies? Are there areas in which they share resources?

• What other strategic relationships have comparable performing arts centers developed to share resources and achieve common goals?

• Thus, should the operating structure for the Hult Center, or even its mission, be changed?

As the Cultural Policy Review noted, the management structure of the Hult Center has essentially not changed since its opening 25 years ago. Yet, performing arts centers have evolved substantially. Our guiding questions when benchmarking comparables were:

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Comparable Organization Selection Criteria

• Located in a Core Based Statistical Area (CBSA1) of similar population size to Eugene’s CBSA

• Performance spaces of comparable size to the 2,500 seat Silva Concert Hall and the 500 seat Soreng Theatre.

• Located within an urban (as opposed to a suburban) setting.• Similar variety and frequency of presented activities. • Operated in a similar fashion to the Hult Center.

An effort was also made to select organizations in the western part of the country though this was not completely practical.

AMS worked with City of Eugene staff to develop a list of comparable organizations that could serve as instructive benchmarks. While there are no direct analogs, the criteria for selection were:

1The term "Core Based Statistical Area" (CBSA) is a collective term for both metro and micro areas defined by the U.S. Office of Management and Budget. A metro area contains a core urban area of 50,000 or more population, and a micro area contains an urban core of at least 10,000 (but less than 50,000) population. Each metro or micro area consists of one or more counties and includes the counties containing the core urban area, as well as any adjacent counties that have a high degree of social and economic integration (as measured

by commuting to work) with the urban core.

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Benchmark “Facts in Brief”Alaska Center for the

Performing Arts

Alberta Bair Theatre for the Performing

Arts

Broadway Center for the Performing Arts

The Clay Center for Arts and Sciences

Fox Cities Performing Arts Center Mesa Arts Center Overture Center for

the Arts Walton Arts Center

Location Anchorage, Alaska Billings, Montana Tacoma, Washington Charleston, West Virginia Appleton, Wisconsin Mesa, Arizona Madison, Wisconsin Fayetteville, ArkansasCity Population 360,592 149,114 199,663 305,873 218,408 493,077 544,682 423,381

Facilities

4 venues: Evangeline Atwood Concert Hall - 2,000 seats Discovery Theatre - 700 seats Sydney Lawrence Theatre - 340 seats Elvera Voth Hall - 180 seatsAlso has three lobbies, a patrons' lounge, and a "sky bridge" which is available for rent

Main Concert Hall - 1,416 3 venues: Pantages Theater - 1,169 seats Rialto Theater - 742 seats Theater on the Square - 302 seatsThe Pantanges Theatre lobby and the rehearsal hall are available for rent. There are also scene and costume shops onsite.

2 venues: Maier Foundation Performance Hall - 1,883 seats Walker Black Box Theater - 150 - 200 seatsFacility also has a science museum, art gallery, planetarium, café and gift shop

2 venues: Thrivent Financial Hall - 1,200 seats Kimberly-Clark Theatre - Flexible seatingThe Founders Room, the lobby, and "Entrance 21," a private lounge, are all available for rent.

4 venues: Tom and Janet Ikeda Theater - 1,588 seats Virginia G Piper Repertory Theater - 588 seats Nesbitt/Elliott Playhouse - 200 seats Farnsworth Studio Theater (Black Box) - Flexible seatingAlso has 5 art galleries with 5,500 of exhibition space, 14 visual and performing arts studios, and a "shadow walk" consisting of outdoor gardens, sunken courtyards, and informal performance spaces.

4 venues: Overture Hall - 2,251 seats Capitol Theatre - 1,000 seats The Playhouse - 350 seats Promenade Hall - Flexible seating Rotunda Stage - 200 seatsAlso has a number of spaces available for rental, including the lobby, a lounge, two studios, and a terrace.

3 venues: Baum Walker Hall - 1,200 seats Studio Theatre - 300 seats Starr Theatre - 240 seatsAlso has a dance studio / multi-purpose room and an outdoor amphitheatre available for rent.

Operating Structure

Facility is owned by the Municipality of Anchorage and managed by a 501(c)3 non-profit organization

Owned by the City of Billings and managed by a 501(c)3 organization

City owns facilities and an independent 501(c)3 manages them.

501(c)3 organization 501(c)3 organization Owned and managed by the City of Mesa.

Owned by the Overture Development Corporation, a 501(c)3 organization, and managed by the Madison Cultural Arts District, a government entity governed by city, county and state appointees.

Facility is jointly owned by the City of Fayetteville and the University of Arkansas. A 501(c)3 organization manages the operations.

Operating Budget $2.2 million $1.6 million $3.1 million $7.9 million $15.8 million $4.0 million $11.5 million $7.2 million

Programming & Resident Companies

Presents a variety of offerings including a Broadway series, classical music, dance, family programming, film, opera, and theater.Alaska Dance TheatreAlaska Junior TheatreAlaska Theatre of YouthAnchorage Concert AssociationAlaska Concert ChorusAnchorage OperaAnchorage Symphony OrchestraWhistling Sawn Productions

Presents a Broadway series, classical and popular music, dance, opera, theater, and variety programming.

Presents a variety of offeringsNorthwest SifonettiaTacoma City BalletTacoma Concert BandTacoma OperaTacoma PhilharmonicTacoma School of the ArtsTacoma Symphony OrchestraTacoma Youth SymphonyThe Christmas Revels

Presents Broadway, cabaret, classical music, dance, theater and variety programs. West Virginia Symphony Orchestra is the Center's only resident company.

Presents Broadway, cabaret, classical music, dance, theater and variety programs. Fox Valley SymphonyLaurence University

Ballet EtudesEast Valley Children's TheatreMesa Encore TheatreMetropolitan Youth SymphonySonoran Desert ChoraleSouthwest Shakespeare CompanySymphony of the SouthwestXico, Inc.

Bach Dancing & Dynamite Society Children's Theater of Madison Kanopy Dance Company Li Chiao-Ping Dance Madison Ballet Madison Museum of Contemporary Art Madison Opera Madison Repertory Theatre Madison Symphony Orchestra Wisconsin Academy's James Watrous Gallery Wisconsin Chamber Orchestra

Presents a Broadway series, classical music, dance, jazz, family, and variety programming. No resident companies, but leases space to a professional theatre company and a visual arts educational organization at reduced rates.

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Methodology• AMS used publicly available information to conduct many analyses, including Form 990s and municipal

budgets.

• AMS invited all benchmarks to participate in an interview to discuss mission, management structures and community engagement. Five of these organizations participated.

• Benchmarks self-defined the term “resident company.” A resident company is typically a producing or presenting organization that has a direct relationship with its performing arts center. The specifics of this relationship vary and could include: first choice of calendar dates; subsidized rental rates; and/or shared services such as box office services, marketing support, or administrative space.

• In addition to publically available data, AMS invited all benchmarks to provide detailed financial information. Four of eight invited performing arts centers did not wish to participate fully, while one performing arts center provided income information only. The three larger performing arts centers did participate fully, and provided supplementary financial information that provides insight on how the Hult Center might expand its operations. These performing arts centers are referred to as “aspirational comps” in this report as their operations provide important “goal posts” on how the Hult Center could generate more revenue or expand its operations, if desired. “Aspirational” does not refer to artistic or programming goals.

• For some analyses, AMS used data from its PAC Stats project, which collects financial data from 30 major performing arts centers largely in North America. Looking at this data set helps provide some insight on “best practices” within the field.

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Hult Center for the Performing Arts

General Overview and Comparisons

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• In the chart below, the earned and contributed revenues of all comparable organizations are displayed in terms of both dollars and as a percentage of total revenues.

• The Hult Center’s overall revenue is below the average for its benchmarks, suggesting that another $2 million in gross revenue, depending on marketing investment, is a worthy “goal post” to consider in its planning efforts.

• Interestingly, the Hult Center is not far behind the median and average dollar amounts for contributed revenue, suggesting that another $450,000 -$600,000 may be reasonable, depending on the Hult’s investment in fundraising.

Totalin dollars as a % in dollars as a % Revenue

Alaska Center for the Performing Arts $383,405 46% $443,081 54% $826,486Alberta Bair Theatre for the Performing Arts $1,176,166 77% $341,888 23% $1,518,054Broadway Center for the Performing Arts $1,102,498 35% $2,005,434 65% $3,107,932Mesa Arts Center $3,804,130 93% $265,000 7% $4,069,130Hult Center for the Performing Arts $2,726,277 62% $1,668,940 38% $4,395,217Clay Center for the Arts and Sciences $1,846,829 28% $4,712,749 72% $6,559,578Walton Arts Center $4,202,224 58% $3,018,604 42% $7,220,828Overture Center for the Arts $9,315,919 79% $2,404,357 21% $11,720,276Fox Cities Center for the Performing Arts $13,898,781 86% $2,315,729 14% $16,214,510

Average $4,272,914 63% $1,908,420 37% $6,181,335Median $2,726,277 62% $2,005,434 38% $4,395,217

Earned Revenue Contributed RevenueEarned and Contributed Revenue Comparison

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• Most benchmarks rely more strongly on earned revenue rather than contributed revenue.

• Those Centers with the highest contributed revenue also have the largest institutional investment in fundraising.

Earned and Contributed Revenue Comparison

$0

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AlaskaCenter

Alberta BairTheatre

Broadw ayCenter

Mesa ArtsCenter

Hult Center Clay Center Walton ArtsCenter

Ov ertureCenter

Fox CitiesCenter

Earned Revenue Contributed Revenue

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• Expense ratios show what percentages of an organization’s operating budget are devoted to a particular category of expenses.

• The Hult Center is the only organization among this group that has no fundraising expenses.

• Please note that these expenses include the $430,000 of internal services that the Hult Center receives from the City of Eugene.

Program Services General & Administration Fundraising Internal Services Total Expenses Program Services General & Administration Fundraising Internal ServicesAlaska Center for the Performing Arts $1,695,512 $519,040 $17,093 $0 $2,231,645 0.76 0.23 0.01 0.00Alberta Bair Theatre for the Performing Arts $1,414,619 $84,249 $115,015 $0 $1,613,883 0.88 0.05 0.07 0.00Broadway Center for the Performing Arts $1,484,802 $348,572 $432,278 $0 $2,265,652 0.66 0.15 0.19 0.00Clay Center for the Arts and Sciences $6,932,710 $490,601 $428,786 $0 $7,852,097 0.88 0.06 0.05 0.00Fox Cities Center for the Performing Arts $10,962,549 $4,170,934 $688,371 $0 $15,821,854 0.69 0.26 0.04 0.00Overture Center for the Arts $7,154,390 $4,237,682 $113,643 $0 $11,505,715 0.62 0.37 0.01 0.00Walton Arts Center $4,271,439 $2,640,634 $294,042 $0 $7,206,115 0.59 0.37 0.04 0.00

Hult Center for the Performing Arts $2,419,708 $1,716,210 $0 $430,000 $4,565,918 0.53 0.38 0.00 0.09Average $4,541,966 $1,775,990 $261,154 $53,750 $5,895,875 0.77 0.30 0.04 0.01Median $3,345,574 $1,117,625 $204,529 $0 $4,565,918

Expense ComparisonsExpense in $ Expense Ratios

Expense Category Comparison

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Alberta

Bair Theatre

Alaska Center

Broadw

ay Center

Hult Cente

rWalton

Arts Center

Clay Center

Overture C

enter

Fox Citie

s Center

Program Services General & Administration Fundraising Internal Services

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• After the Hult Center, the Alaska Center and the Overture Center spend the smallest percentage of their budgets on fundraising. However, they receive the largest government subsidies, reducing the need or incentive for additional private fundraising.

• Organizations with smaller budgets tend to have a higher percentage of expenses go towards general and administrative costs.

Program Ratio Comparison

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Hult Center Walton ArtsCenter

Ov erture Center Broadw ay Center Fox Cities Center Alaska Center Alberta BairTheatre

Clay Center

Program Services General & Administration Fundraising Internal Services

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• Aspirational comps spend a significantly higher percentage of their budgets on programming and marketing expenses.

• All aspirational comps spend some percentage of their expenses on fundraising.

• The large percentage of the Hult Center’s expenses are spent on theatre operations, relative to its support of resident company and rental activity. It is important to note that costs to support additional activity are incremental, not proportional. Therefore, should the Hult Center increase its program offerings, efficiencies of scale would allow the Center to amortize these expenses.

Expense Ratio Comparison - Aspirational PAC's

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Fox CitiesCenter

Walton ArtsCenter

OvertureCenter

Hult Center

IS/ITCommunicationsHRInst. MarketingOtherEducationFundraisingRetailAdministrationFinanceTheatre OperationsBuilding OperationsProgramming

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• Two of the aspirational comps provided detailed information about staffing structure.

• Most notably, both organizations have education staffs, fundraising staffs, and larger marketing staffs than the Hult Center. The inference is that the Hult Center should contemplate an expansion in these areas if it intends to grow its operations.

• The Hult Center has 82 volunteers that work 4,920 hours. By comparison, Fox Cities and Overture have 577 and 615 volunteers respectively, and both pools work approximately 21,000 hours annually. There may be an opportunity for the Hult Center to expand its volunteer base.

F/T P/T Salaries Benefits F/T P/T Salaries Benefits F/T P/T Salaries BenefitsAdministration 5 1 $220,131 $115,113 3 $318,885 $382,662 5 1 $333,756 $85,073Building Operations - Custodial 4 4 $201,353 $105,294 0 4 $137,402 $164,882 11 6 $412,030 $105,024Building Operations - Engineers / Maintenance 0 0 $0 $0 0 0 $0 $0 8 2 $354,903 $90,463Building Operations - Security 0 0 $0 $0 0 7 $24,999 $29,999 1 16 $59,787 $15,239Building Operations - Other Building Operations 0 0 $0 $0 0 0 $0 $0 1 0 $41,281 $10,522Development 0 0 $0 $0 4 1 $235,041 $282,049 2 0 $92,620 $23,608Education 0 0 $0 $0 2 0 $77,162 $92,594 3 3 $130,946 $33,377Finance 1 0 $45,821 $23,961 2 1 $181,704 $218,045 2 0 $116,752 $29,759Information Services 0 0 $0 $0 1 0 $42,010 $50,412 0 0 $0 $0Marketing 1 0 $83,487 $43,658 5 0 $273,208 $327,850 6 1 $246,067 $62,721Programming 1 1 $82,061 $42,912 2 0 $106,539 $127,847 2 0 $145,788 $37,161Retail 0 0 $0 $0 1 43 $148,351 $178,021 0 0 $0 $0Theater Operations - Box Office & Ticketing 2 6 $221,726 $115,948 3 11 $264,548 $317,458 8 16 $424,512 $108,206Theater Operations - Front of House Staff / Ushers 1 70 $72,168 $37,739 1 24 $151,350 $181,620 2 64 $184,585 $47,050Theater Operations - Other 1 25 $94,895 $49,624 4 0 $133,281 $159,937 5 0 $707,235 $180,270Theater Operations - Stagehands 2 14 $640,992 $335,195 0 0 $0 $0 5 247 $543,672 $138,579

TOTALS 18 121 $1,662,634 $869,444 28 91 $2,094,480 $2,513,376 61 356 $3,793,934 $967,052

Fox Cities Performing Arts CenterHult Center Overture CenterStaffing Comparisons

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Hult Center for thePerforming Arts

Management Structure

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Mission StatementsThe mission statements of the comparable organizations are similarly broad to each

other and to the Hult Center’s, which is “to enrich the cultural life of our region”:

“To engage the community in the arts, we present a broad spectrum of high-quality performing arts programming.”

“The mission of the Clay Center for the Arts & Sciences , West Virginia is to inspire creativity, life-long learning and wonder through experiences in the arts and sciences for all people of West Virginia and the region.”

“The mission of the Broadway Center for the Performing Arts is to provide outstanding venues in which we and others can entertain, educate and enable people of all ages.”

“The mission of the Fox Cities Performing Arts Center is to serve as a gathering place for the community, to engage in educational opportunities and to enhance understanding and enjoyment of life through the creation and presentation of the arts. We will do this by providing a premier venue for performing arts attractions and a dynamic environment for our arts organizations.”

“Our mission is to bring great artists and entertainers from around the world to Northwest Arkansas, connecting and engaging people through inspiring arts experiences.”

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Relationship with Municipal Government

• Of the benchmark organizations interviewed, only theClay Center did not have a relationship with municipalgovernment. The nature of these relationships varied:

– Fox Cities Performing Arts Center: A consortium of local municipalities has a hotel room tax which is used to pay off a construction bond for the performing arts center. Additionally, one city has an additional hotel room tax that generates about $500,000 in operating subsidy.

– Walton Arts Center: The City of Fayetteville developed the performing arts center in conjunction with the University of Arkansas, and they jointly own the building. The performing arts center is managed by a separate 501(c)3. The City and University do not provide any operating subsidy, but both are rental users.

– Broadway Center for the Performing Arts: The City of Tacoma owns facilities, and the Broadway Center manages them. The Broadway Center receives $1 million a year from the City – half of which is for operational subsidy and half of which is for long-term maintenance.

– Overture Center for the Arts: Owned by the Overture Development Corporation, a 501(c)3 organization, and managed by the Madison Cultural Arts District, a government entity governed by city, county and state employees. Overture employees are city employees ($4.8M). The City also provides $1.7 million in operating subsidy, but the Overture Center pays back $500,000 to the City, mostly as a payment in lieu of taxes.

Fox Cities $500,000Walton Arts Center $0Broadway Center $500,000Overture Center $1,700,000

Public Sector Support Summary

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Resident CompaniesWhile not always called “resident companies,” each organization did have some arrangements

with local arts producing organizations.

• Walton Arts Center: Does not have “resident companies” per se, but it leases space to a new professional theatre company and a visual arts group at reduced rates. It also offers reduced rates to the University’s music and drama departments.

• Fox Cities Performing Arts Center: Has two resident partners – the Fox Valley Symphony and Lawrence University. Fox Cities offers these companies subsidized usage fees and premium calendar dates. The Symphony also uses the Center’s ticketing system for a small annual setup fee.

• Broadway Center for the Performing Arts: “Resident Arts Organizations” receive rental subsidies of approximately 25% off of general market rates. RAO’s also have first choice of dates, ahead of the Broadway Center’s own programming. The Broadway Center hosts quarterly meetings to discuss calendar, policies, pricing, and fees to build strong relationships.

• The Clay Center for the Arts and Sciences: Shares most of its back office operations with its resident companies

• Overture Center for the Arts: Shares front of house services and box office services.

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Successful Strategic Relationships

• The benchmarks that AMS interviewed did not have many successfulstrategic partnerships outside of their relationships with resident companies. They discussed some of their more successful marketing partnerships, including:

– Bookstores– Libraries– Well-known, local blogs– Other arts groups for co-marketing opportunities– Organizations such as downtown business improvement districts

• AMS’s work with the Performing Arts Centers nationally has demonstrated the most beneficial strategic relationships are regional marketing consortia, ticketing networks, information networks, local convention and visitors bureau initiatives, and community organizations.

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Hult Center for thePerforming Arts

Earned Revenue and Community Engagement

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• Silva Hall has the highest attendance per performance of this group.

• Silva Hall has lower total attendance than the average and median for these aspirational comps due to the fact that Silva Hall has fewer performances than the other venues. In expanding its operations, the Hult Center may wish to consider increasing the number of performances in Silva Hall (and perhaps these performances should be self-presented, as other data will suggest).

• Compared to this group, the Soreng Theatre is successful in terms of overall activity and attendance.

Seating Capacity

Total Performances

Total Rehearsal Days

Total Paid Attendance

Total Attendance

Attendance per Performance

Walton Arts Center - Walker Hall 1,200 139 31 100,070 111,330 801Fox Cities - Thrivent Financial Hall 2,100 170 15 199,387 207,203 1,219Overture Center - Overture Hall 2,251 121 53 167,926 177,804 1,469Hult Center - Silva Hall 2,500 95 57 135,422 152,306 1,603Average 131 39 150,701 162,161 1,273Median 130 42 151,674 165,055 1,344

Walton Arts Center - Starr Theatre 240 37 10 5,072 5,879 159Hult Center - Soreng Theatre 498 88 46 14,802 19,007 216Overture Center - Playhouse 350 146 23 31,783 34,495 236Fox Cities - Kimberly Clark Theatre Flexible seating 5 0 566 643 Not availableAverage 69 20 13,056 15,006 204Median 63 17 9,937 12,443 216

Venue Utilization and Attendance Comparison

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Fox Cities - ThriventFinancial Hall

Overture Center - Overture Hall

Walton Arts Center - Walker Hall

Hult Center - Silva Hall Average Median

Center Presentations# of events 126 69 110 8 78 90Paid attendance 172,939 92,379 81,418 10,452 89,297 86,899% of paid capacity 65.4% 59.5% 61.7% 52.3% 59.7% 60.6%

Commercial Rental# of events 11 7 27 40 21 19Paid attendance 9,363 8,508 10,918 57,277 21,517 10,141% of paid capacity 40.5% 54.0% 33.7% 57.3% 46.4% 47.3%

Non-Profit Rental# of events 12 3 18 2 9 8Paid attendance 8,867 4,226 7,734 2,844 5,918 5,980% of paid capacity 35.2% 62.6% 35.8% 56.9% 47.6% 46.3%

Resident Company# of events 6 44 0 58 27 25Paid attendance 8,218 62,813 0 64,849 33,970 35,516% of paid capacity 65.2% 63.4% 0.0% 44.7% 43.3% 54.1%

Events and Attendance by Programming Source

• Other performing arts centers present a considerable amount of programming at their own risk.

• The Hult Center hosts more commercial rentals than the aspirational comps.

• Given these two points, it is recommended that the Hult Center conduct a cost-benefit analysis of commercial rentals versus its own presentations to determine whether more net revenue could be possible with more self-presenting. More self-presentations have the potential to generate additional revenue for the Hult Center through increased fundraising or marketing sponsorships.

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• The Hult Center and its resident companies compare favorably in terms of paid attendance for classical music, opera and variety programming.

• Aspirational comps have had substantial success in presenting Broadway, so the Hult Center may wish to consider more of this type of programming, should it expand its total offerings.

Fox Cities - ThriventFinancial Hall

Overture Center - Overture Hall

Walton Arts Center - Walker Hall

Hult Center - Silva Hall Average Median

Broadway# of events 86 32 57 15 48 45Paid attendance 133,668 54,450 41,357 23,476 63,238 47,904% of paid capacity 74.0% 75.6% 60.5% 62.6% 68.2% 68.3%

Classical Music# of events 20 35 32 24 28 28Paid attendance 21,631 48,313 9,835 34,900 28,670 28,266% of paid capacity 51.5% 61.3% 25.6% 58.2% 49.2% 54.8%

Dance# of events 5 10 11 18 11 11Paid attendance 5,242 15,993 8,774 18,950 12,240 12,384% of paid capacity 49.9% 71.0% 66.5% 42.1% 57.4% 58.2%

Educational / Family# of events 21 3 33 21 20 21Paid attendance 20,177 3,423 22,651 9,119 13,843 14,648% of paid capacity 45.8% 50.7% 57.2% 17.4% 42.8% 48.2%

Opera# of events 0 4 2 3 2 3Paid attendance 0 7,517 522 6,594 3,658 3,558% of paid capacity 0.0% 83.5% 21.8% 87.9% 48.3% 52.6%

Theater# of events 3 1 4 7 4 4Paid attendance 3,885 1,332 1,389 6,973 3,395 2,637% of paid capacity 61.7% 59.2% 28.9% 39.8% 47.4% 49.5%

Variety# of events 20 31 16 20 22 20Paid attendance 14,784 36,898 15,542 35,410 25,659 25,476% of paid capacity 35.2% 52.9% 80.9% 70.8% 60.0% 61.8%

Events and Attendance by Activity Type

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These charts illustrate the amount of particular types of activity and attendance at different offerings.

• Aspirational comps present more Broadway offerings than the Hult Center, and the percentage of audiences for Broadway is higher than the proportion of Broadway events.

• The proportion of classical music audiences is lower than the proportion of classical music events.

Events as a % of Total Activity

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Fox Cities - ThriventFinancial Hall

Walton Arts Center -Walker Hall

Overture Center -Overture Hall

Hult Center - SilvaHall

VarietyTheaterOperaEducational / FamilyDanceClassical MusicBroadway

Attendance as a % of Total Attendance

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Fox Cities - ThriventFinancial Hall

Overture Center -Overture Hall

Walton Arts Center -Walker Hall

Hult Center - SilvaHall

VarietyTheaterOperaEducational / FamilyDanceClassical MusicBroadway

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• Compared to the aspirational comps, the Hult Center generates almost an average or median number of single tickets in both quantity and dollars.

• The Hult Center’s per subscription and per single ticket prices are both lower than the group average, suggesting that it could increase its prices.

Number Revenue $ per sub Number Revenue $ per ticketFox Cities Performing Arts Center 35,380 $1,794,023 $51 163,227 $8,242,521 $50Overture Center for the Arts 94,675 $4,206,874 $44 125,259 $5,598,937 $45Walton Arts Center 21,922 $822,268 $38 48,060 $1,834,148 $38

Hult Center for the Performing Arts 27,239 $881,365 $32 128,756 $4,066,740 $32Average 44,804 $1,926,133 $41 116,326 $4,935,587 $41Median 31,310 $1,337,694 $41 127,008 $4,832,839 $41

Subscription and Single Ticket ComparisonSubscriptions Single Tickets

Ticket Revenue Comparison (in $)

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

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Walton Arts Center Hult Center Overture Center Fox Cities Center

Subscriptions Single Tickets

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The marketing efficiency ratio examines how many dollars are earned in ticket sales for each dollar of marketing expense. In other words, for every $1 that the Overture Center spends, it generates $4.76 in ticket sales.

• For comparison, participants in our PAC Stats project have an average marketing ratio of $5.38. Interestingly, the smallest participants (those with $11 million budgets or less) have the least efficient marketing ratios, with an average ratio of $2.72. This disparity suggest that there are efficiencies gained as organizations increase investment in their marketing initiatives.

• The Fox Cities marketing efficiency ratio is clearly an outlier. There are several possible explanations for this seemingly high ratio: it could have marketing expenses embedded in other expense lines like fundraising, it could require producers to market its own productions, or they could have submitted their data incorrectly. Because of the impact that this ratio has on the average, the median figure is the best benchmark for this analysis.

• The Hult Center’s marketing efficiency ratio is low for two reasons. First, the Hult Center does not have as many self-presentations as this group, so its ticket revenue is substantially lower. Second, the Hult Center primarily invests in institutional marketing, which is intended to promote the resident companies as well. Therefore, a large portion of the return of marketing dollars helps the ticket sales of the resident companies.

Total Ticket Revenue Marketing Expense Marketing Efficiency Ratio

Fox Cities Performing Arts Center $9,940,618 $1,063,371 $9.35Overture Center for the Arts $4,441,536 $933,297 $4.76Walton Arts Center $2,824,954 $542,319 $5.21

Hult Center for the Performing Arts $320,610 $289,632 $1.11Average $4,381,930 $707,155 $5.11Median $3,633,245 $737,808 $4.98

Marketing Efficiency Ratio Comparison

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Successful Marketing StrategiesThe benchmarks that we interviewed had a number of strategies that have been yielding

satisfying results:

• Flexible subscriptions

• Placing shows on sale for longer periods

• “Demand pricing” – increasing prices as seating inventory is purchased for popularshows

• E-mail blasts (Fox Cities has had particular success with its e-marketing efforts)

• Fan pages on MySpace, Facebook and Twitter

• Audience segmentation by visitation habits

• Broadway Center has two different marketing strategies – a “grassroots” strategy and a “brand name” strategy. They make a concerted effort to push “grassroots”programming when people visit the website for the “brand name” programming

• Consistent focus groups and surveys of audience members

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Co-Marketing with Resident Companies

The benchmarks reported some cross promotions with resident companies such as:

• Promotion in annual brochures

• Website listings

• Marquee rotations

The Broadway Center noted that its resident companies do not like to co-mingle their brands in shared marketing efforts.

The Overture Center provides marketing support upon request for its resident companies.

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Community Engagement Programs

As part of its charge, AMS asked PAC’s how they engage their community. PAC’s listed the following activities:

•Pre- and post-lectures and events•Artist meet and greets with the local community•Community residencies including master classes with artists•In-school classes•Advisory committees for special events and projects•Events and packages for targeted groups (e.g., young professionals, families)•Facility spaces used for community events•Free performances•Free music lessons in community centers in 6 counties•“Musical Memories” program for seniors

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Community Engagement ProgramsThe Broadway Center has a particularly robust list of community engagement programs:

• 27,000-30,000 students served through school-time matinees

• On-campus performances (25-30 per year)

• After school theatre classes at 7 satellite locations

• 4-6 teacher training workshops per year

• Kennedy Center partnerships with four school districts

• Arts Impact training session with 40 teachers each summer

• Community Dialogues: 4-5 four hour dialogues each year with demographically specific community groups

• Adult Lifelong Learning classes

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Hult Center for thePerforming Arts

Fundraising

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• “Government revenues” refer to discretionary government support, such as an arts agency grant or budget line item in the general fund. “Tax revenues” are non-discretionary allocations from dedicated public revenue streams.

• All benchmarks have internal fundraising departments.

• Hult Center’s government contributions include tax revenues and additional services from municipal government.

• Only two of the organizations engage in special events, and for these organizations special events appear to comprise only a small percentage of contributed revenue. This is contrary to industry best practices, in which successful performing arts centers have a number of revenue generating special events.

• The City of Mesa’s contribution to the Mesa Arts Center’s operations was not provided.

Corporate Foundation Government Individuals Special Events (net) TotalAlaska Center for the Performing Arts $6,255 $833 $382,833 $49,500 $0 $439,421Fox Cities Center for the Performing Arts $881,435 $165,908 $536,695 $405,269 $189,371 $2,178,678Mesa Arts Center $0 $0 $0 $265,000 $0 $265,000Overture Center for the Arts $81,790 $360,771 $1,771,934 $189,862 $0 $2,404,357Walton Arts Center $1,101,368 $1,057,690 $39,483 $585,864 $57,742 $2,842,147

Hult Center for the Performing Arts $0 $0 $2,098,940 $0 $0 $2,098,940Average $414,170 $317,040 $546,189 $299,099 $49,423 $1,625,921Median $81,790 $165,908 $382,833 $265,000 $0 $2,178,678

Contributed Revenue

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• The Alaska Center, Overture Center, and the Hult Center receive a very large percentage of their contributed revenue from government sources.

• Walton Arts Center and Fox Cities have diversified revenue streams from individuals, government, foundations, and corporations.

• In this benchmark group, individual contributions make up only 10-20% of total contributed revenue.

• Two of the aspirational comps have their largest sources of revenue come from corporate support, suggesting that growth in the Hult Center’s operations may require a strategy to obtain corporate giving.

Comparison of Contributed Revenue Sources (in %)

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Mesa ArtsCenter

AlaskaCenter

Hult Center Fox CitiesCenter

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Walton ArtsCenter

Special Events (net)GovernmentFoundationCorporateIndividuals

Comparison of Contributed Revenue Sources (in $)

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$1,000,000

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Mesa ArtsCenter

AlaskaCenter

Hult Center Fox CitiesCenter

OvertureCenter

Walton ArtsCenter

Special Events (net)GovernmentFoundationCorporateIndividuals

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Distribution of Contributed Revenue

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All PAC Stats Participants All Group 4 Pac Stats Participants

% Government Support % Individual Contributions/Memberships% Sponsorships % Foundation Support% Specials Events (gross) % Corporate Support (Philanthropy)% In-Kind Gifts % Tax Revenue% Other

Data from the PAC Stats participants illustrates a typical fundraising breakdown.

• All PAC Stats participants and the Group 4 (<$11 million budgets) participants have the largest portion of contributed revenue from government sources.

• As with the Hult’s aspirational comps, approximately 10-20% of contributed revenue comes from individuals, which suggests that performing arts centers are atypical of other non-profits and rely less heavily on individual donations.

• Group 4 participants also have a large percentage (11%) of contributed revenue come from tax revenues, which is in addition to other government support (39%).

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• The fundraising efficiency ratio examines how many dollars are contributed for each dollar of fundraising expense. In other words, for every $1 that the Alaska Center spends, it generates $3.52 in contributed revenue.

• Because of the proportion of government support in relation to other contributed revenue sources, the Alaska, Overture and Hult Centers skew the average and median efficiency ratios; therefore, the efficiency analysis excludes government contributions.

• Participants in the PAC Stats project have an average efficiency ratio of $5.37.

• Given this information, a fundraising efficiency ratio of approximately $3.00 would be a conservative estimate for the Hult Center.

Total Contributed Revenue

Total Fundraising Expense

Fundraising Efficiency Ratio

Alaska Center for the Performing Arts $443,081 $17,093 25.92Alberta Bair Theatre for the Performing Arts $341,888 $115,015 2.97Broadway Center for the Performing Arts $2,005,434 $432,278 4.64Clay Center for the Arts and Sciences $265,000 $428,786 0.62Fox Cities Center for the Performing Arts $1,668,940 $442,930 3.77Mesa Arts Center $4,712,749 $50,688 92.98Overture Center for the Arts $3,018,604 $113,643 26.56Walton Arts Center $2,404,357 $294,042 8.18

Average $1,857,507 $236,809 20.70Median $1,837,187 $204,529 6.41

Average w/o Overture & Alaska $1,899,728 $293,957 18.86Median w/ot Overture & Alaska $1,837,187 $361,414 4.20

Fundraising Efficiency Ratio Comparisons

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Comparison of Fundraising Efficiency Ratios

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AlaskaCenter

Comparison of Fundraising Efficiency Ratios excluding Alaska, Overture and Hult

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Fox Cities Center Broadw ay Center Mesa Arts Center Walton Arts Center Clay Center

• Because some of the other performing arts centers have large government subsidies, their fundraising ratios skew the comparison. Removing Alaska and Overture from the comparison demonstrates more typical fundraising efficiency ratios.

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Salary Salary Adjusted for Eugene COLI % of Total Expenses

Alaska Center for the Performing Arts $50,692 $45,117 2.3%Broadway Center for the Performing Arts $47,629 $50,106 1.5%Fox Cities Performing Arts Center $84,975 $98,041 0.5%Walton Arts Center $72,949 $91,428 1.0%

Average $64,061 $71,173 1.3%Median $61,821 $70,767 1.3%

Comparison of Director of Development Salaries

• The average annual fundraising expenditure for all of the comps was $364,000.

• AMS analyzed the Director of Development salaries at benchmark organizations to determine what kind of staffing investment might be necessary.

• Using the ACCRA Cost of Living Index (COLI), AMS adjusted the salaries at benchmark performing arts centers for Eugene’s cost of living.

• Based on this analysis, $70,000 is a reasonable and competitive annual salary for a Director of Development.

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Hult Center for thePerforming Arts

Alternate Revenue Streams

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• Most of the benchmark performing arts centers have endowments.

• While the Broadway Center does not have a significant endowment, it considers its $500,000 in operating subsidy from the City of Tacoma “like (dedicated revenue from) an endowment.”

• Fox Cities is currently in the middle of an endowment campaign. It has raised $6 million of a $25 million goal.

• It is worth noting that only the Walton Arts Center has an endowment that meets the National Arts Strategies recommendation of 200% - 500% of the organization’s operating budget.

Endowment ValueAlaska Center for the Performing Arts $0Alberta Bair Theatre for the Performing Arts $1,211,304Broadway Center for the Performing Arts $4,329Clay Center for the Arts and Sciences $15,378,939Fox Cities Center for the Performing Arts $6,000,000Mesa Arts Center $0Overture Center for the Arts $3,100,000Walton Arts Center $14,756,726

Average $5,056,412Median $2,155,652

Endowment Comparison

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• The analysis below examines rental revenue, i.e., how much rental income is derived from third-party renters, including resident companies and commercial entities.

• Excluding the two largest Centers, despite differences in budget size, the majority do not have a large variance in actual rental revenue.

• The Hult Center, which is in the middle of this group in terms of operating budget, has rental revenue that is approximately the average and median of this group.

• This information suggests that increased rental revenue may not be the growth strategy with the greatest revenue potential. Instead, as mentioned earlier, “self-presented” programming has greater potential for net income.

Total Rental Revenue % of Total RevenueAlaska Center for the Performing Arts $359,515 43.5%Alberta Bair Theatre for the Performing Arts $509,263 33.5%Broadway Center for the Performing Arts $494,563 12.8%Fox Cities Center for the Performing Arts $1,162,705 7.2%Mesa Arts Center $344,596 8.5%Overture Center for the Arts $2,807,213 24.0%Walton Arts Center $418,923 5.8%

Hult Center for the Performing Arts $1,959,760 44.6%Average $1,007,067 22.5%Median $501,913 18.4%

Comparison of Total Rental Revenue

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• The Hult Center has been particularly successful in generating hall rental income, as its revenues are above the average and median for theaspirational comps.

• The Hult Center is the only organization of this group that does not have any rental income from ancillary spaces. It may want to evaluate its current spaces and see if any of them could be rented as an additional source of income.

Ancillary Space Rental Performance Hall Rental Box Office Service Fees and Surcharges

Recoverable Charges and Fees Total

Alaska Center for the Performing Arts $16,175 $153,616 $151,388 $38,336 $359,515Fox Cities Center for the Performing Arts $23,432 $504,357 $572,457 $62,459 $1,162,705Overture Center for the Arts $286,569 $510,529 $1,178,136 $831,979 $2,807,213Walton Arts Center $98,202 $254,983 $65,738 $0 $418,923

Hult Center for the Performing Arts $0 $412,646 $720,003 $827,111 $1,959,760Average $106,095 $355,871 $491,930 $233,194 $1,187,089Median $60,817 $379,670 $361,923 $50,398 $790,814

Comparison of Rental Revenue

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The Hult Center appears to have the highest percentage of rental revenues from recoverable charges & fees and one of the lowest percentage of rental revenues from actual performance hall rental. This information suggests that the Hult Center re-evaluate its rental pricing structure and perhaps increase its base rental rates.

Comparison of Rental Revenue Sources

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Performance Hall Rental Ancillary Space Rental Box Office Fees Recoverable Charges and Fees

Comparison of Rental Revenue Sources

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$3,000,000

Alaska Center Walton Arts Center Fox Cities Center Hult Center Ov erture Center

Performance Hall Rental Ancillary Space Rental Box Office Fees Recoverable Charges and Fees

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Net Concession Revenue Concession Revenue Per Patron

Fox Cities Center for the Performing Arts $228,676 $1.10Overture Center for the Arts $31,920 $0.15Walton Arts Center $20,936 $0.18

Hult Center for the Performing Arts ($61,797) ($0.36)Average $54,934 $0.27Median $26,428 $0.16

Concession Revenue Comparison

• The Hult Center is currently losing money on its concession operations.

• The Hult Center should restructure the operation so that it at least breaks-even and possibly generates a modest revenue stream. On average, aspirational comps net $0.27 for each patron, while the median for this group is $0.16 for each patron.

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Hult Center for thePerforming Arts

Observations and Recommendations

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Programming, Attendance and Utilization

• Overall, the Hult Center has been successful in drawing people to the performing arts center. The Soreng Theatre, in particular, stands out when compared to the benchmarks’ comparable venues.

• The Hult Center and its resident companies have been successful, relative to the comparables, in scheduling classical music, opera and variety programming.

• To increase earned revenue, the Hult Center should consider strategies to increase the amount of programming at Silva Hall.

• The aspirational comps have had particular success with presenting Broadway. Revisiting the nature of the Broadway programming in the market and the Hult Center’s role might be explored.

• When compared to the aspirational comps, the Hult Center has a much higher number of commercial rentals and a much lower number of self-presentations. A cost-benefit of these would be a helpful planning tool to see if one can generate more net revenue than the other.

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Programming, Attendance and Utilization

• In terms of further engaging with its community, the Hult Center could consider creating an education department and developing low-cost/high-impact programs, as many of the most successful performing arts centers have done.

• In terms of increasing earned revenue, the Hult Center would need to present more of its own programming and re-examine pricing for ticketed events.

• The Hult Center may consider increasing its investment in its marketing efforts on behalf of all programs at the Center, especially to increase paid attendance at dance, family programming and theater presentations.

• Each of these investigations should be supported by market research, which comparable Centers have found very useful. Additionally, market research can help gauge operating benchmarks to measure success in the Eugene marketplace.

• We note that while increasing earned revenue is important, donations and alternate revenue streams will also be needed to fuel any future growth for the Hult Center.

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Fundraising• The Hult Center is the only performing arts center of this group that does not engage

in any fundraising activity.

• Best practice (based on both the benchmarking group and AMS’s supplemental information) is that diversified sources of contributed revenue (government, individual, corporate, and foundation) are optimal to maintain and grow operations.

• The analysis of the benchmarks indicates that the Hult Center is likely to develop a good return on a relatively modest investment on fundraising personnel, with a conservative estimate of $3.00 raised for each dollar expended.

• Most of the benchmarks do not use special events for fundraising, and those that do, receive relatively modest net returns. This benchmark group’s experience with special events is contrary to the industry best practices, which use fundraising events for meaningful donor cultivation, stewardship and financial returns. These best practices should be used as models, should the Hult Center pursue this strategy.

• All of the aspirational comps have both individual and corporate giving programs as important parts of their contributed revenue, suggesting that the Hult Center should develop a fundraising effort.

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Management Structures• Only two of the Performing Arts Centers benchmarked are directly managed by

municipalities. The others are managed by 501(c)3 organizations. In most cases, the municipality owns the facilities and keeps the depreciation expense on its books. Additionally, the municipality still provides substantial funding to these centers.

• Performing Arts Centers directly managed by municipalities have complementary 501(c)3 organizations that engage in fundraising on the centers’ behalf (e.g., “Friends of the Mesa Arts Center”).

• Some of the benchmarks have had success in reducing overhead by sharing administrative, front of house and box office services with resident companies. The Hult Center could explore similar possibilities in its own planning process.

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Alternate Revenue Streams• The Hult Center is one of the few performing arts centers among its benchmarks

without an endowment. In its future planning, the Hult Center should consider establishing an endowment campaign to provide an additional revenue stream for general operations.

• Given the relatively small variances in rental income and given the Hult Center’s success in collecting ancillary fees, there is likely little room for growth here, other than an increase in the base rental fee.

• The Hult Center should explore increasing its own ‘at-risk’ presentations to the community. This will likely require a capital base.

• There is a likely untapped revenue opportunity that the Hult Center should evaluate in its ancillary spaces.

• The concessions operation should be restructured so that it generates net revenue for the Hult Center’s operations.