In this blog I frequently challenge the philanthropic nature of the really big universities (and some that are small) and hospitals. Sometimes I refer to museums as well, particularly those that are really big and pay outrageous salaries to the execs -- oops, Presidents.
A Wall Street Journal article on Symphonies has helped me understand the business model of Orchestras, and for sure, there's no question that "nonprofit" describes these institutions. Here's the financial formula:
Orchestras lose money on their operations—ticket sales do not cover the cost of presenting the concerts, even at prices that often exceed $100 for premium seats. For most of the second half of the 20th century, the difference was made up with funds from recording income (which for most ensembles disappeared entirely about 15 years ago) and gifts from individuals, foundations and corporations.
Now, what was it I was saying about salaries? Note though, this does appear to be the going rate to retain "talent". In Cleveland, Conductor Franz Welser-Möst received compensation of $1,316,120. Concertmaster William Preucil (the orchestra's most highly paid member) received a salary of $414,159 and benefits of $19,658."
The focus of the WSJ article is how the business model for orchestras must change with the times and has changed in some other communities. The article concludes stating:
...the survival of orchestras involves the reduction of their cost base, and for that to happen, managements across the country need to make their financial situation transparent to their musicians and make them full partners in creating fiscal viability for the enterprise.
Hm, now what about other nonprofit sectors?