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Minnesota Orchestra

s h o w c a s e C

D ECEM BE R 2 0 11 | A N N U A L R E P O RT 2 0 1 0 -11 DECEM

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Minnesota Orchestra 2010-11 season

Applause all around: audiences responded with raves to the Orchestra’s stellar performance at Carnegie Hall in February—

shining in the spotlight

“The orchestra sounded terrific on Monday night at Carnegie Hall.” — The New York Times, March 2, 2011

Pho t o : R icha rd T er mine

annual report

as they did all season long at home.


A Letter from the Chair and the President

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ooking over the past two seasons of our collaboration, abundant highlights come quickly to mind: sharing the thrill of Board members and friends who joined Carnegie Hall and BBC Proms audiences in feting Music Director Osmo Vänskä and the Orchestra; bringing our Orchestra to listeners across the U.K. via a series of highprofile BBC broadcasts; energizing the Orchestra Hall renovation project with exciting designs; working with extraordinary young professionals—our next-generation leaders—in Crescendo Project; and marveling at the buses that surround Orchestra Hall on Young People’s Concert days, transporting our next-generation listeners to hear the Orchestra for the first time. These have been remarkable milestones, all set in sharp relief against the challenging local and global economies of the last two years. Our Orchestra, like most in the industry, has long been skillful in managing an out-of-alignment financial structure. But the persistent economic headwinds have intensified all challenges across our industry. Essentially, our expenses exceed our revenues, and this misalignment will escalate dramatically in the years ahead unless we reset the model and correct the imbalance. Here’s the bright spot: we have seen this issue developing, and we’re ready to face it head on. At last year’s Annual Meeting, we reported that we were embarking on an organization-wide strategic planning process to outline a bold path forward. Our Board recently approved this new plan, which balances great artistry with financial viability, addressing our current financial deficit and the organization’s larger structural imbalance. The tenets of our Vision for a Sound Future are threefold: 1) grow our community connections, 2) heighten our artistry and world-wide presence, and 3) rebuild a financially sustainable foundation. As articulated

in our strategic plan, we will capitalize on the renovated Orchestra Hall to attract new audiences; strengthen artistry and reputation through regular touring, broadcasting and recording; and engage with the community through intensive exchange and collaboration. We will develop new performance formats and content; re-scope the number of our concerts to align supply and demand appropriately; implement major cost reductions; and achieve ambitious but realistic goals for increasing earned and contributed revenue. The renovation of Orchestra Hall—a critical component of the strategic plan (offering significant audiencebuilding and revenue-generating opportunities)—gives a clear indication of all that we can achieve. Our rigorous process has led to a carefully sized Hall project that will deliver an expanded venue to better serve audiences in 2013, with fundraising completed, and with no debt outstanding. Our community has contributed generously to this capital project, differentiating it from our shortterm needs and supporting our broad vision for the Orchestra’s next 30 years. Achieving the goals of a new strategic plan will require rigor, but challenging times bring about our best work—and this plan does indeed represent our best. It demonstrates that it is possible for an orchestra to offer exceptional artistic experiences, connect with its community and operate in a fiscally sustainable manner. We need to do all these things so that our next-generation leaders and listeners may experience the Minnesota Orchestra in all its splendor for decades to come.

Richard K. Davis Chair of the Board

Michael Henson President and CEO

“The Minnesota Orchestra under Osmo Vänskä is as impressive as ever.” — BBC Music Magazine, April 2011 DECEMB ER 2011

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Phot o : R ic ha rd T ermine

music in the comm

a brilliant season Highlighting a year of greatness for Osmo Vänskä and the Minnesota Orchestra

Phot o : Gr eg Helgeso n

was an acclaimed Carnegie Hall concert in February. Powerful performances of two Sibelius symphonies and Beethoven’s mighty Violin Concerto, with the exceptional Lisa Batiashvili as soloist, yielded thrills for audience members and underscored the

“Spiritual calm pervaded the music in this engrossing performance… It was fascinating to hear these elusive…scores performed with such directness and intelligence.”

“[Conducter Laureate] Skrowaczewski is enduring, vital and free of artificiality.”

— The New York Times, March 2, 2011

— Star Tribune, October 22, 2010 Pho t o : Gr eg H el ge s on

unveiling new horizons

Orchestra’s role as our state’s cultural ambassador.

Osmo Vänskä opened the Orchestra’s 108th season with the drama of a major world premiere—the cello concerto Towards the Horizon, commissioned from Einojuhani Rautavaara and superbly performed by cellist Arek Tesarczyk, from the Orchestra’s own ranks. Vänskä led another world premiere in April: Mysteries of Light, the Third Piano Concerto of James MacMillan, with Jean-Yves Thibaudet at the keyboard.

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“Alsop delights with Brahms” — Star Tribune, May 2, 2011

Marin Alsop, who led the Orchestra and Associate Principal Second Violin Jonathan Magness in Dvořák’s lyrical Violin Concerto, was among the season’s star guest conductors; Gilbert Varga and Yan Pascal Tortelier also took the podium, as did Mark Wigglesworth, Dmitry Sitkovetsky and Vasily Petrenko. Additional Orchestra members in the solo spotlight at classical concerts were John Snow, Anthony Ross, Marni Hougham, Michael Gast and Steven Campbell.

Alsop, S udbin, Vänskä, B er neche pho t o s: Gr eg Helgeso n

“Exceptional solos and section work abounded…” — Pioneer Press, March 11, 2011

extraordinary artistry

munity

Great Performances

“…Likely to stand with the very best Beethoven Concerto sets on disc.” — ClassicsOnline.com The first disc in a new cycle of Beethoven piano concertos, featuring the Fourth and Fifth, was hailed for supreme elegance and impassioned energy—and showed pianist Yevgeny Sudbin to be an ideal partner for Osmo Vänskä and the Minnesota Orchestra. Sudbin, violinist Viktoria Mullova and other renowned soloists were welcomed back to the stage this season, while stellar clarinetist Martin Fröst made his Orchestra Hall debut. Marking a glorious end to the subscription season was Orff’s Carmina burana, with soprano Alicia Berneche.

poetry on record “…A performance that discovers new things to say about this familiar music…” — The Telegraph [London], February 18, 2011 DECEMB ER 2011

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magnificent mozart “…A wonderful romp.”

— Star Tribune, January 22, 2011

A ll Ma g ic F lu te p ho t o s: G reg Helg eso n

music in the comm

Repertoire in four Mid-

“Vänskä drew exceptionally energetic and vivid playing from the orchestra… nuances that most other conductors just leave on the page.”

Winter Mozart programs conducted by Osmo Vänskä spanned the great composer’s symphonies, concertos and chamber works; the series culminated in captivating performances of his cherished opera, The Magic Flute. Tenor Sean Panikkar shone as Tamino, while Raymond Ayers and Amanda Jenkins were

— Post-Bulletin (Rochester), January 19, 2011

memorable as Papageno and Papagena, and Robert Neu’s

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“…Grand in all the right ways.” — ClassicsToday.com, January 2011 Anticipation grew for the renovation of Orchestra Hall in 2012-13, with

In June Orchestra Hall was visited by

KPMB Architects

some 900 delegates attending the national

of Toronto refining

conference of the League of American

design decisions

Orchestras, co-hosted by the Minnesota

and finalizing

Orchestra and the Saint Paul Chamber

contract documents.

Orchestra. Far-reaching discussions

The Orchestra’s

were sparked by League President Jesse

Building for the

Rosen’s address on challenges now facing

Future campaign, a portion of which supports the Hall renovation, achieved $92.6 million

the orchestra industry.

toward a $110 million goal. Also this year, the City of Minneapolis selected landscape

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architect Tom Oslund to redesign Peavey Plaza, the public space adjacent to Orchestra Hall.

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R en d eri ng : KP M B Arc hit ec ts

Photo: Greg Helgeso n

designs on the future

set and stage direction drew bountiful applause.


inside the classics

munity

Great Performances

Delving into masterpieces via lively conversation and illuminating performances, co-hosts Sarah Hicks and Sam Bergman engaged audiences with works of Dvořák, Ravel and Stravinsky across a tremendously successful season of Inside the Classics.

“New composers score with fresh work”

“The Composer Institute is a wildly helpful, one-of-a-kind experience.”

— Pioneer Press, November 1, 2010

— Taylor Brizendine, 2010 Composer Institute participant

the future onstage Seven composers took bows for the new works they unveiled at the Future Classics concert that marks the culmination of the Composer Institute, which also includes mentoring sessions, seminars and workshops. Working with composer Narong Prangcharoen was Aaron Jay Kernis,

All p ho to s t his p a g e: G reg H el g es o n

director of the Institute; Osmo Vänskä spoke with Wang Jie about her score.

“Vänskä’s Messiah is dynamic and stirring” — Twin Cities Daily Planet, December 8, 2010

Osmo conducts Messiah Osmo Vänskä’s first Minnesota Orchestra performances of Handel’s Messiah lent rich drama to the holiday season, which was also brightened by “A Scandinavian Christmas,” “Jingle Bell Doc” and additional concerts.

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Photos other than Crescendo Project: Greg Helgeson

music in the comm “The band cooked at an extraordinary tempo.” — Pioneer Press, February 27, 2011

hot pops, cool jazz The U.S. Banks Pops Season encompassed a dazzling array of performers— from Idina Menzel in November, with Principal Pops and Presentations Conductor Sarah Hicks leading the Orchestra, to Pink Martini in July, when Associate Conductor Courtney Lewis took the podium. Sparkle of another kind ruled at “ ’80s Rewind” concerts, with artists and audience members alike in retro costumes. Star vocalist Dee Dee Bridgewater shared the stage with trumpeter Irvin Mayfield, the Orchestra’s artistic director of jazz, in a Piper Jaffray

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Photo: Becca Dilley

a rising crescendo

Jazz event that delivered yuletide sizzle to an enthusiastic crowd.

The young patrons group Crescendo Project introduced more new members than ever to the Orchestra’s music via an innovative program each month.

Behind-the-Scenes events included a “Road to Orchestra Hall” mock kazoo audition and a popular “Art of Conducting” workshop in which Alyson Heller took the baton. Many also gathered—in full ’80s regalia—to attend the “ ’80s Rewind” concert in May.

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A N N UA L REPORT 2 0 1 0 -1 1


munity

Great Performances Sommerfest Artistic Director star soloists and magnificent music to his ninth Minnesota Orchestra Sommerfest. The genial Philippe Quint dazzled with Mendelssohn’s sweeping

Violin Concerto, and the festival finale—Strauss’ beloved comic opera Der Rosenkavalier—drew raves for

Photo: Greg Helgeson

Opera photos: Tim Rummelhoff

sommerfest charms

Andrew Litton brought

strong portrayals, with bass Manfred Hemm as an unforgettable Baron Ochs and mezzo Renata Pokupić as the passionate young Octavian.

“[Litton and the orchestra] brought out the opera’s interwoven laughter and loss, the waltzes buoyant…” — Pioneer Press, July 25, 2011

of all ages took in the sights and sounds

of four free, outdoor Symphony for the Cities concerts led by Courtney Lewis. Tens of thousands turned out for the performances in Hudson, Plymouth, Winona and Excelsior—where the lakeside setting makes for a perfect musical celebration of Independence Day each year.

Ably chairing “Puttin’ on the Glitz” was Cathy Farrell, who involved Photos: Ann Marsden, Terry Gydesen, Rich Ryan

Music lovers

music in the great outdoors

Photos: Tim Rummelhoff

a glittering Symphony Ball not only husband Jack but additional family members in making Symphony Ball 2011 a brilliant success. More than 900 guests attended the Ball and Crash the Ball, which together raised $1,057,000 to support the Orchestra’s education and outreach programs. Notable attendees included Honorary Chair Beverly Grossman and Karen Baker, as well as Board Chairman Richard

“…Passion, sensitivity and gusto… This Orchestra is a gem.”

Davis and wife Theresa—a recent Ball chair herself.

— River Valley Voice [Terry Rindfleisch] blog, Winona, October 19, 2010

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music in the comm Photos: Greg Helgeson

“I had never been on a real stage— it feels wonderful to be applauded. I felt good because I knew I had done a great job. Thank you for giving me this experience.” — Roseville elementary student after performing Ode to Joy at a YP concert, December 2010

striking chords with kids and teachers Throughout the year, a variety of educational programs connected 75,000 students to the Orchestra. With literacy learning as a focus of January’s “Musical Tales” Young People’s (YP) Concerts, Minneapolis Public Schools Superintendent Bernadeia Johnson narrated as Courtney Lewis conducted and Steven Campbell performed as soloist in Tubby the Tuba. In additional YP and Target Free Family concerts, student string players joined the Orchestra onstage to perform Beethoven’s Ode to Joy during “Sleigh Ride” concerts, and trumpeter Charles Lazarus provided “American Riffs” solos. Photos: Greg Helgeson

Families also began enjoying YPs together at home—via free Music On Demand downloads of “Musical Tales” and “American Riffs” programs.

“It was a blast hearing and seeing the music come alive!”

“The Orchestra’s Young People’s concerts provide a rich opportunity to engage our students in literacy through listening to music tell a story. Students ask questions, make connections and develop comprehension skills.”

Thanks to Legacy funding, the Orchestra traveled to Dawson and Brainerd in April to present three full-symphony concerts and a host of educational activities, from ensemble performances to master classes. Acting Principal Bass William Schrickel talked strings with Dawson second-graders. Brainerd students who had performed

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Photo: Greg Helgeson

— Joanne Toft, Minneapolis Public Schools Photo: Mele Willis

outreach on tour

Photos: Mike Aulie

— Third-grader, December 2010

The University of Minnesota Symphony Orchestra experienced a side-by-side rehearsal with the Minnesota Orchestra, a separate rehearsal led by guest conductor Marin Alsop and

at Orchestra Hall with the Minnesota All-State Orchestra in

more, all within an ongoing collaboration funded by the Pennock

February reconnected with Courtney Lewis the day of the

endowment. Joining Alsop onstage were U of M Symphony director

Orchestra’s concert there.

Mark Russell Smith and School of Music director David Myers.

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munity ypsca

Education and Outreach | Volunteers

young people’s symphony concert association

Members of YPSCA, the Minnesota Orchestra oldest volunteer organization, supported music education through many activities linked to Young People’s Concerts—and geared up for their centennial in 2011-12. Guiding students to their seats was Nancy Peters, one of the 49 volunteer ushers organized by Herb and Alice

and 10 other finalists, pianist

Cederberg to fill Orchestra Hall, take children to their buses and fill the hall again, all with amazing precision.

Austin Frohmader took top

Marjorie Frishberg chatted with YP

prize in the School Music

conductor Courtney Lewis at one of several

Auditions, winning a chance

receptions she organized to honor

to perform in a

Orchestra members, YPSCA ushers,

Young People’s

Mentors and other donors.

Photo: Greg Helgeson

Concert with the Minnesota

The Vecchione-Erdahl Duo prepared students from nine

Orchestra

Robbinsdale elementary schools for their YP concert experience;

early in

gifts of $150 or more from 70 Musical Mentors helped provide

2012.

tickets and busing.

wamso

Photos: Marian Hoffman

From a field of 47 applicants

minnesota orchestra volunteer association WAMSO again supported the Orchestra with a Guaranty Fund gift of $50,000 for general operations and well over 3,000 hours of volunteer support. WAMSO also continued to provide superb music education for children and adults through five programs: the Young Artist Competition, Kinder Konzerts in the Hall, Kinder Konzerts on the Road, Family Concert lobby activities and Accent—Music Appreciation for Adults.

The Kinder Konzert ensemble performed Max Found Two Sticks,

WAMSO volunteers are the heart and soul of its music education

the latest in a long series of works WAMSO has commissioned;

programs—and they are essential to many Minnesota Orchestra

composed by Janika Vandervelde, it was based on a story by Brian Pinkney.

events. This year WAMSO provided:

Collaborating with the Orchestra and Target to present pre-concert

• 95 Coffee Concert volunteers (ushers, hostesses, bus captains) • 30 volunteer docents for Kinder Konzerts and Kinder Konzerts on the Road

activities at Target Free

• 75 Symphony Ball volunteers

Family Concerts, WAMSO

• 36 volunteers for Target Free Family Concert lobby activities

helped family members of

• 48 Fanfare Evening volunteer ushers

all ages learn more about musical instruments.

To receive WAMSO’s annual report, with more information on season highlights, call (612) 371-5654. DECEMB ER 2011

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summary of financial position AUGUST 31 2011

ASSETS

AUGUST 31 2010

($000 OMITTED) AUGUST 31 AUGUST 31 2011 2010

LIABILITIES Current Liabilities

CURRENT ASSETS Cash & Cash Equivalents Contributions & Other Receivables Prepaid Expenses & Other

Total Current Assets Long Term Pledges & Receivables

$2,066 7,477

$1,744 9,190

1,190

1,164

10,733

12,098

9,711

14,576

Accounts Payable Line of Credit

$2,317 0

$3,128 0

3,556

3,434

10,940 7,509

10,940 9,649

$24,322

27,151

($17,187) (7,509)

($10,356) (9,649)

Total Operations & Pension Plans (24,696) Hall Financing, Capital Assets & Annuities 12,865 Board-Designated Endowment (1,521)

(20,005) 11,388 (4,684)

Deferred Concert Revenue Long-Term Liabilities Long-Term Debt Unfunded Pension Liability TOTAL LIABILITIES

INVESTMENTS Endowments Building For the Future Fund Beneficial Interest held in trusts Hall Fund Hall Renovation

69,012 3,122 61,477 7,056 19,244

74,599 0 56,088 6,342 8,132

2,555

2,260

Total Investments 162,466 Hall Renovations 3,303 Capital Assets, Net of Depreciation 5,734

147,421 1,884 6,260

Other Investments

Unrestricted Net Assets Operations Pension Minimum Liability

Total Unrestricted Net Assets Temporarily Restricted Net Assets

(10,310)

(13,301)

35,745

35,573

Permanently Restricted Net Assets 142,757 Other Assets TOTAL ASSETS

567

948

$192,514

$183,187

s um m ary o f operating res ults YEAR ENDING YEAR ENDING AUGUST 31 AUGUST 31 2011 2010 REVENUE & OTHER SUPPORT

TOTAL NET ASSETS

$156,036

TOTAL LIABILITIES & NET ASSETS $192,514

$183,187

financial overview INCOME BY SOURCE Board-Designated Draws

Contributions

Earned Revenue Concert Ticket Sales & Fees Touring Fees Other Revenue

$6,882 353 1,964

$7,246 421 2,059

Total

9,199

9,726

7,743 485 3,042 1,057

7,624 1,600 2,976 980

12,327

13,180

6,018

7,930

$27,544

$30,836

133,764

$168,192

45%

22%

Contributions & Gifts General Support & Restricted Grants Tour Funding Oakleaf & St. Paul Fdn. Distributions Symphony Ball

Total Board-Designated Draws TOTAL REVENUE & SUPPORT

EXPENSES Salaries & Benefits Direct Concert Expense Tour Expense Advertising & Promotion Symphony Ball Interest and Financing General Administration & Facility

TOTAL EXPENSES NET OPERATING ACTIVITIES

$21,887 3,586 325 1,543 299 645 2,166

$21,031 3,884 1,056 1,908 345 686 1,918

$30,451

$30,828

$(2,908)

$8

This is a summarized version of the financial statements audited by LarsonAllen LLP.

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Earned Revenue

33%

Fundraising Administration

8%

5%

EXPENSE BY ACTIVITY

Program

86%


A Message from the Treasurer

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ver the last 12 months, the Minnesota Orchestra mobilized a strategic business planning process that was as thorough and far-reaching as any in which I’ve participated, and I’d like to thank the members of the Board’s Financial Planning Subcommittee who helped develop the new plan’s strong financial underpinnings. Our task was substantial: to reset the organization’s revenue/ expense ratio in order to eliminate the Orchestra’s structural financial imbalance, which has existed for many years and has become particularly detrimental in today’s economy. The resulting plan, Vision for a Sound Future, outlines a path to financial sustainability by 2013 without sacrificing great artistic experiences for our audiences or service to our community. Fiscal 2011 was a year in which the troubled economy significantly affected our ability to generate revenue. The Orchestra is reporting an operating loss of $2.9 million, attributable to a decrease in endowment revenue, a decrease in earned revenue and an increase in contractual costs, as the organization continues to manage its five-year musicians’ contract. On the revenue side, total earned revenue decreased from the prior year by 5.4 percent, or $527,000. Our total paid capacity for the year ended at 71 percent—virtually holding even with last year’s 72 percent, a steady result in a down economy. Our total contributions of $12.3 million were down over the prior year due to a reduction in grants for touring projects. Our annual operating contributions and gifts were up 1.6 percent over Fiscal 2010, and our total number of donors increased by 9.9 percent over the previous year. These last two points bode

well for our future, yet overall, due to the economy, we are seeing a leveling off in donor contributions and gifts when compared with four years ago. Like many nonprofits, the Minnesota Orchestra utilizes a 12-quarter rolling average to calculate endowment draw. This means the true impact of the recession is only now causing a significant reduction in our draw, which is down by $1.8 million over the prior year. While our total investments for Fiscal 2011 climbed to $162.4 million, this was fueled primarily by $11 million in incremental Orchestra Hall renovation contributions over the last year. We will draw these funds to pay for construction costs as the Hall renovation project moves forward. Like donor gifts, our endowment levels, too, are trending down over the last four years, due to the economy. Finally, we’ve worked exhaustively and effectively to offset areas of loss through cost efficiencies. In Fiscal 2010 we reduced total expenses by $1.6 million; this year we decreased total expenses by a further $376,000 despite salary and benefit increases of 4.1 percent, which were driven mainly by contractual increases. And so we return to the essential fiscal issue facing the entire orchestral industry: we need to align our cost structures with our revenue generation capabilities. The strategic plan leads the organization to this alignment (and resulting balanced budgets) by 2013, through further major expense reductions and ambitious but achievable increases in earned and contributed revenue. We will arrive at this worthy destination, and we thank you, our patrons, donors and community, for your support along the way.

Jon R. Campbell Treasurer

“... One of the country’s most innovative orchestras.” – Pittsburgh Post-Gazette, July 8, 2011

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