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Philanthropic Patronage Drives New York Philharmonic's Financial Viability

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Original Title:

TL;DR

  • Philanthropic patronage is essential for orchestras like the New York Philharmonic, as ticket sales cover only 30-35% of costs, necessitating individual donations to bridge the financial gap.
  • The New York Philharmonic's Shanghai residency, initiated by Gary Parr, fosters cultural exchange and donor development, creating a loyal audience and a significant Asian donor base.
  • The economic dynamism of the U.S., characterized by higher GDP growth and charitable giving, may be linked to a cultural reliance on private philanthropy for arts and social programs, unlike Europe's state-funded model.
  • Renovating David Geffen Hall improved the audience experience by reducing the hall's size and creating a more immersive, surround-sound environment, enhancing acoustics and sightlines.
  • The New York Philharmonic's success in attracting top talent, particularly in string sections, is evidenced by a disproportionate number of Chinese and South Korean musicians securing positions through rigorous, blind auditions.
  • Handel's Messiah possesses a contemporary universality through themes of hope and redemption, resonating with diverse audiences regardless of religious background due to its biblical origins and profound human sentiments.

Deep Dive

The economics of the New York Philharmonic, like many major arts organizations, are fundamentally reliant on private philanthropy to bridge a significant gap between earned revenue and operating costs. Ticket sales account for only about 30-35% of the budget, making substantial charitable contributions from individuals essential for financial viability, a model starkly different from government-funded European orchestras.

This reliance on philanthropy shapes programming and strategic decisions. For instance, the popular annual performance of Handel's Messiah, while a strong revenue generator and tradition, is maintained not by obligation but by its continued financial success and the patronage of individuals like Gary Parr, who endowed its presentation. Similarly, the Philharmonic's strategic move to establish an eight-to-nine-day residency in Shanghai, China, was driven by a dual objective: to cultivate a new audience and donor base abroad and to address the economic realities of touring. This international outpost creates a more sustainable financial model than constant touring, which is prohibitively expensive for an ensemble of 100 musicians and their instruments. The success of this initiative is evidenced by the establishment of Chinese board members and a significant Lunar New Year celebration in New York that attracts new audience segments.

The Philharmonic's operational structure, as one of twelve independent organizations under the Lincoln Center umbrella, highlights the challenges of coordination and shared resources, even as individual entities pursue their own financial and artistic goals. The recent renovation of David Geffen Hall, costing nearly half a billion dollars, represents a significant investment aimed at improving the audience and musician experience, with the smaller, more intimate space designed to enhance acoustics and overall engagement. This renovation, coupled with the upcoming tenure of music director Gustavo Dudamel, signals a period of renewed artistic and financial strength for the organization, positioning it to better navigate the complex economic landscape of classical music performance.

Action Items

  • Audit current patronage model: Identify 3-5 key donor segments and analyze their motivations for supporting the arts (ref: Gary Parr's philanthropic focus).
  • Create a framework for evaluating the financial viability of recurring performances: Analyze ticket sales, sponsorship, and endowment contributions for 3-5 core repertoire pieces (ref: Messiah's financial performance).
  • Design a pilot program for identifying and cultivating emerging arts patrons: Target individuals with demonstrated interest in cultural events and offer tiered engagement opportunities (ref: Parr's focus on individual philanthropy).
  • Develop a strategy for diversifying revenue streams beyond individual donations: Explore partnerships with corporations and foundations for 2-3 specific artistic initiatives (ref: Discussion on corporate giving and government support).
  • Measure the impact of educational outreach on audience development: Track attendance and donor acquisition from 3-5 targeted educational programs (ref: Parr's emphasis on arts education).

Related Episodes

Key Quotes

"just because we've done it and because it is a tradition is no reason to continue you should only continue if it's a good idea is it a good idea for the philharmonic to keep performing messiah we'll find out and we'll find out a lot more stay tuned for an interesting conversation with a really interesting human and we will be back very soon with the finale to our messiah series"

Gary Parr argues that tradition alone is not a sufficient reason to continue performing a piece like Handel's Messiah. Parr emphasizes that the decision to continue should be based on whether it remains a "good idea" and a valuable offering for the Philharmonic. This perspective suggests a pragmatic approach to programming, prioritizing current relevance and merit over historical precedent.

"I think education about the arts just creates people that are more balanced they have a more cultured view of the world and I think a better understanding of other people when you learn more about different types of art different types of music different types of architecture you begin to understand other cultures"

Gary Parr highlights the broader societal benefits of arts education, suggesting it cultivates more well-rounded individuals. Parr believes that exposure to diverse art forms fosters a more cultured worldview and enhances empathy by promoting an understanding of different cultures. This underscores Parr's view that the arts contribute significantly to personal development and intercultural awareness.

"Orchestras are really expensive bands yeah you have 100 musicians you have all their instruments you have a staff to support them it's expensive and so every orchestra in America struggles to break even and raise enough money and there's virtually no government support so it is entirely dependent on philanthropy of primarily individuals"

Gary Parr explains the significant financial challenges faced by American orchestras. Parr points out that the high costs associated with maintaining a large ensemble, including musicians, instruments, and staff, are compounded by a lack of government funding. Consequently, Parr states that these organizations are heavily reliant on individual philanthropic contributions to sustain their operations.

"I think it's a practical issue that um you have to have philanthropy to close the gap just to put facts on the table lincoln center itself is an umbrella organization it owns the real estate there are actually the 12 constituent organizations so juilliard does its own thing abt does its own opera and the new york philharmonic so we each have our own model"

Gary Parr addresses the necessity of philanthropy in bridging the financial gap for arts organizations like the New York Philharmonic. Parr explains that ticket sales only cover a portion of the operational costs, necessitating external funding. Parr also clarifies the organizational structure of Lincoln Center, noting that its constituent organizations, including the Philharmonic, operate independently with their own distinct models.

"I think the experience is different and it's on multiple levels the hall is smaller now and it is surround so every member of the audience on average is closer and that just adds to the experience when I was becoming chairman of the orchestra I wanted to learn everything I could I sought out Pierre Boulez who had been the music director in the 70s of course I asked him the question you know everybody tells me at that time it was called Avery Fisher Hall everyone tells me the acoustics are terrible and we needed to do something about it what do you think"

Gary Parr discusses the impact of the renovated David Geffen Hall on the audience experience. Parr notes that the hall's smaller size and surround seating bring the audience closer to the performers, enhancing the overall experience. Parr also recalls seeking the opinion of former music director Pierre Boulez regarding the previous hall's acoustics, indicating a long-standing concern about the venue's sound quality.

"I went to China I knew someone that was co chair of the Beijing Music Festival with Madam Deng who was the daughter of Deng Xiaoping and I had a meeting with her about I have a great orchestra you have great musicians we could do something together and she said go to Shanghai why Shanghai not Beijing exactly I was in Beijing this meeting was in Beijing I thought for sure it'd be Beijing and she just said Shanghai will be more connectivity to New York and is more commercial so the fundraising would be more and she was right of course"

Gary Parr recounts the strategic decision to establish a partnership in Shanghai rather than Beijing for the New York Philharmonic's international outreach. Parr explains that his contact suggested Shanghai due to its greater connectivity with New York and its more commercially viable environment for fundraising. Parr acknowledges that this advice proved accurate in facilitating the development of donors and an audience in Shanghai.

Resources

External Resources

Books

  • "Julius Caesar" by Shakespeare - Mentioned as an example of a text that requires a good teacher for understanding and as a source of lessons on power and leadership.

Articles & Papers

  • "Making ‘Messiah’" (Freakonomics Radio) - Mentioned as a series of which this episode is a bonus part.

People

  • Gary W. Parr - Presented Handel's Messiah, former chairman and current board member of the New York Philharmonic, senior managing director at Apollo, involved in philanthropic activities, particularly in the arts and education.
  • George Frideric Handel - Composer of Messiah, who relied on royal patronage in the 18th century.
  • King George II - Mentioned as an example of royal patronage to Handel.
  • Gary Parr - Senior managing director at Apollo, involved in philanthropic activities, former chairman of the New York Philharmonic's board.
  • Deng Xiaoping - Mentioned as the father of Madam Deng.
  • Madam Deng - Co-chair of the Beijing Music Festival, daughter of Deng Xiaoping.
  • Yu Long - Conductor, who provided insights into Chinese orchestras and individual artists.
  • Pierre Boulez - Former music director of the New York Philharmonic, who shared his views on the acoustics and experience of Avery Fisher Hall.
  • Gustavo Dudamel - Incoming music director of the New York Philharmonic, noted for his energy, ideas, and artistic vision.
  • Sir Colin Davis - Conductor of a 2006 recording of Messiah used by the podcast.
  • Jim Shapiro - Shakespeare friend who made the connection to Gary Parr.

Organizations & Institutions

  • New York Philharmonic - Orchestra that performs Handel's Messiah, discussed in terms of its economics, patronage, and recent renovation.
  • Apollo Global Management - Company where Gary Parr is a senior managing director.
  • Morgan Stanley - Investment bank where Gary Parr was previously an investment banker.
  • Lazard - Investment bank where Gary Parr was previously an investment banker.
  • Northwestern University - Institution where Gary Parr obtained his MBA.
  • University of North Carolina at Chapel Hill - Institution where Gary Parr obtained his undergraduate business degree.
  • Parr Center for Ethics at UNC Chapel Hill - Center chaired by Gary Parr.
  • Morgan Library - Institution where Gary Parr is a trustee.
  • Royal Shakespeare Company - UK-based organization Gary Parr explored for a prize for teaching Shakespeare.
  • The Globe (London) - Theater Gary Parr explored for a prize for teaching Shakespeare.
  • Folger Museum (Washington) - Museum Gary Parr explored for a prize for teaching Shakespeare.
  • Lincoln Center - Umbrella organization that houses 12 constituent organizations, including the New York Philharmonic.
  • Juilliard - Constituent organization of Lincoln Center, with music students who can substitute for the Philharmonic.
  • American Ballet Theatre (ABT) - Constituent organization of Lincoln Center.
  • Venetian Heritage - Organization Gary Parr was chairman of, which raised money to restore art and architecture in the Venetian empire.
  • Berlin Philharmonic - Orchestra mentioned as an example of significant government funding in Europe.
  • David Geffen Hall - Renovated hall of the New York Philharmonic, formerly Avery Fisher Hall.
  • Lehman Brothers - Financial institution involved in a rescue where Gary Parr was involved.
  • Bear Stearns - Financial institution involved in a rescue where Gary Parr was involved.
  • Fannie Mae - Financial institution involved in a rescue where Gary Parr was involved.
  • Stitcher - Producer of Freakonomics Radio.
  • Renbud Radio - Producer of Freakonomics Radio.

Websites & Online Resources

  • Freakonomics.com - Website where transcripts and show notes for Freakonomics Radio are published.
  • Mintmobile.com/freak - Website for Mint Mobile's unlimited plans.
  • Lowes.com - Website for Lowe's December deal drops.
  • Ashley.com - Website for Ashley's year-end clear-out event.

Other Resources

  • Handel's Messiah - Musical work discussed extensively in relation to its economics, patronage, performance, and universality.
  • Nicotine pouches - Product mentioned in an advertisement.
  • Ugg, Nike, Rag & Bone, Vince, Frame, Kurt Geiger London - Brands mentioned as being available at Nordstrom Rack.
  • Nordstrom Credit Card - Mentioned in relation to shopping at Nordstrom Rack.
  • Nordy Club - Loyalty program at Nordstrom Rack.
  • Tchaikovsky's 1812 Overture - Piece of classical music that hooked Gary Parr on classical music.
  • Bach's Passacaglia and Fugue in C minor - Piece of music Gary Parr remembers from a college music class.
  • Haydn Symphony No. 88 - Piece of music Gary Parr remembers from a college music class.
  • Shakespeare - Author whose works were taught by Gary Parr's 10th-grade English teacher, and for whom a prize is being established.
  • King James Version of the Bible - Source of the lyrics for Handel's Messiah.
  • Old Testament - Source of over 60% of the lyrics for Handel's Messiah.
  • New Year's Eve - Time of year when Handel's Messiah is often performed.
  • Lunar New Year celebration - Event in New York that has brought in new Asian customers for the Philharmonic.
  • Hallelujah Chorus - Specific movement from Messiah that prompts discussion about standing or sitting.
  • Classical music - Genre discussed in relation to its cost, patronage, and audience.
  • Opera - Art form discussed as being even more expensive than orchestras.
  • Broadway plays - Mentioned as a model for ticket pricing that the New York Philharmonic could potentially emulate.
  • The Greeks (Aristotle and Plato) - Mentioned in relation to ancient philosophical thought, arts, and architecture as part of a civilized society.
  • Wealth tax - Mentioned as a historical method for funding public goods in ancient Greece.
  • European model of government funding - Contrasted with the American model of individual philanthropy.
  • American model of individual philanthropy - Contrasted with the European model of government funding.
  • GDP growth - Mentioned as being higher in America than in Europe.
  • Charitable giving - Mentioned as being higher in America than in Europe.
  • Giffen Hall renovation - Discussed in terms of its impact on acoustics and audience experience.
  • Avery Fisher Hall - Previous name of the New York Philharmonic's hall, known for poor acoustics.
  • International outposts/Second home - Concept discussed in relation to the New York Philharmonic's partnership in Shanghai.
  • Individual sports (Ping pong, gymnastics) - Mentioned as areas where China excels, contrasted with team sports.
  • Team sports (Soccer, basketball) - Mentioned as areas where China does not excel.
  • Violin auditions - Process described for selecting musicians for the New York Philharmonic.
  • King George II - Mentioned as a patron of Handel.
  • Medici family - Mentioned as patrons of arts and architecture in Florence.
  • Methodist upbringing - Gary Parr's religious background.
  • Judaism and Christianity - Religions whose bridge or overlap is discussed in relation to Messiah.
  • Hope and redemption - Themes discussed in relation to the universality of Messiah.
  • "Why do the nations so furiously rage together and why do the people imagine a vain thing" - A line from Messiah discussed for its contemporary universality.
  • "Something greater than us" - A theme identified in Messiah.

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