Many in the city were shocked and saddened with the announcement that the San Diego Opera would close in June this year.
How does such a large and successful nonprofit collapse? I’m not involved with the opera company, but as CFO of a nonprofit, I work with 60 other agencies, and I see the same pattern every day.
To understand, first we need to differentiate between the issues facing nonprofits and those facing for-profits, like Apple, Microsoft and Amazon. For-profit companies exist to increase shareholder value, and do so by bringing in more money than they spend. Sometimes growing companies spend more than they bring in with the hope that they will see even more profit. If for-profits don’t fulfill their purpose, they cease to exist.
With that in mind, what exactly is the purpose of a nonprofit? To add community benefit. Because of this, our democracy doesn’t tax them, but we limit their default structure so that no one person can own an organization. There are no shareholders, so there is no shareholder value to increase. Board members answer to the community if they fail to ensure the organization fulfills its mission.
So most nonprofits spend as much money as they can to provide the highest quality of service possible. Employees are passionate about their work, and the donors want their money to go toward services for the community. When nonprofits generate a profit, they usually spend it as fast as they can on programming.
We Stand Up for You. Will You Stand Up for Us?
I suggest that one or more of the backseat drivers start their own opera company, pay themselves less than 100k a year, and try to revive the art form in San Diego. It is easy to criticize, but not so easy to go and do it yourself. So what are you waiting for? Go do it if you love opera.
As someone pointed out on Twitter, the head of the SD Opera, Ian Campbell, took home $500,000 in compensation in 2011. His (ex) wife earned $282,000. Other top directors took in $190k and $151k annually respectively.
Now, I've no doubt that Mr. Campbell brought some excellent skills to his job. But part of the conversation about non-profits should surely be that they are often largely labors of love.
Mr. Campbell chose to run an organization with waning popularity, showcasing an art form that has become largely irrelevant to most of the population. His board chose to reward him very handsomely for doing a job that hundreds of younger, possibly more talented and -- dare I say it -- probably more relevant artists would have given an arm to do for a tenth of the salary.
While Campbell was overseeing the opera at half-a-million a year, it collapsed into bankruptcy.
I'm all for people being paid well to do important, civic-minded jobs. But 500 grand? That's an extraordinary amount of money for an organization struggling to stay relevant or afloat.
If Mr. Campbell and his fellow leaders at the opera truly loved their jobs, they would be doing them for far lower salaries. That's what the rest of us who work for nonprofits do.
There are very few (nonprofit or for-profit) journalists out there, for example, who could not tomorrow go and make twice as much at a PR agency or as a hack for a politician. We don't. We do a challenging, important and interesting job that we love, and that's a big part of our paycheck.
When someone is being paid an extraordinary amount of money, to do a job they should love, something's wrong with the equation.
@Will Carless "There are very few (nonprofit or for-profit) journalists out there, for example, who could not tomorrow go and make twice as much at a PR agency or as a hack for a politician. We don't. We do a challenging, important and interesting job that we love, and that's a big part of our paycheck."
That is the very definition of self-delusion.
San Diego opera needed to look to Chicago Lyric and LA Opera for examples on how to survive. Not hiring the 5 opera singers that are known through out the world is not reducing quality. Nurturing new talent is smart and effective.The board made a calculated choice based on the need to cut and run. Not on the will of the community or the will to survive. When this happens in a non for profit company usually somebody is hiding something. Perhaps a household salary of almost a million dollars a year. The fact that San Diego is willing to let this non for profit art institute go is sad and deplorable.
I propose to compose an opera about an insane sane bomber pilot. I am quite sure that it would be a smashing success.
Capt. John Yossarian
@James Weber If demand goes down, you reduce the supply. Closing up shop before you hit rock bottom seems a bit unusual, at least for the non-profit world.
To use the analogy of a sick human being, it sounds like the opera chose to die with dignity instead of facing an agonizing illness that it believes would almost certainly be terminal.
In other words, they chose to quit rather than risk any decline in strength.
@Randy Dotinga Well....hmmmm.... I think the right reporting (but hard) would be to push Cambell and Board on why Long Beach Opera is not a viable model here. That company has thrived (by its standards) trying to push the limits of the art form. It would have required a MUCH different effort at nurturing audiences. It couldn't have done "grand opera" at the civic. But it would have been a worthwhile conversation and one the board should have pushed to at least examine. But, no matter, I hope someone takes a look at LBO and sees whether something similar would/could work in SD.
@-P @Erik Bruvold @Randy Dotinga Santa Fe is an interesting idea but that is such a different model (summer festival) and would directly compete (for tixs and donors) against Pops and Globe's summer season. Plus I am near certain that Civic wouldn't have worked as a venue for summer festival so we are back to the need for a dedicated opera house.
That commentary ended more suddenly than I expected! Plenty of build up and the a quote and a one liner. Hmm.
I expect something will rise from the ashes, thats usually the way with these things. And maybe it will be targeted at a broader audience, or staged in a more cost effective way...