By Maria Saporta
Friday, June 07, 2012
It’s the beginning of a new era for the Woodruff Arts Center with the June 4 naming of Virginia Hepner as its next president and CEO.
Hepner, who will be the first woman to lead the multidimensional arts and cultural institution since its founding in 1963, comes to the table with a strong business background and with a deep passion for the arts.
She spent 25 years with Wachovia Bank before entering the world of managing arts organizations, serving as interim executive director for the Atlanta Ballet and as interim director for Young Audiences, one of the four divisions of the Woodruff Arts Center.
In her new role that begins July 1, Hepner will need to call on all her skills and expertise to help the Woodruff Arts Center strengthen its financial and operational footing while enabling its four divisions — the Atlanta Symphony Orchestra, the High Museum of Art, the Alliance Theatre and Young Audiences — to continue to produce great art.
“The product that the Woodruff Arts Center is producing is fantastic,” said Larry Gellerstedt, CEO of Cousins Properties Inc., who is chairing the Center’s board. “The art is extraordinarily strong. But like any arts organization, these are tough times economically.”
Penny McPee, president of The Arthur M. Blank Family Foundation, put it this way: “It’s a very difficult job at a very difficult time. But I’m confident Virginia is up to the challenge.”
The Woodruff Arts Center is unique among comparable arts organizations in the country by having visual and performing arts under one roof. While its four entities are separate operating units, the Center actually is one legal tax entity. That creates an interdependent relationship among the artistically independent entities.
As a result, whoever is CEO of the Woodruff Arts Center must perform a delicate balancing act to provide sound managerial oversight of an organization with four entities — each with its own mission, staff and boards.
“We must make sure the management structure is as efficient as it needs to be without compromising the artistic direction at each of the divisions,” Gellerstedt said. “I think Virginia will be able to show us how to make each division as efficient as possible and make sure we are managing our resources in the most efficient way. But the Woodruff Arts Center board has no business telling Robert Spano about the musical direction of the symphony.”
The most complex division — which accounts for about half of the operations of the Woodruff Arts Center — is the Atlanta Symphony Orchestra. In the past several years, it has been operating with a significant deficit, becoming a financial drain on the Center and its endowment.
Atlanta is not alone. Symphonies across the country are struggling financially, and some have even declared bankruptcy. Because the ASO is not its own legal entity, that is not an option for Atlanta.
“Symphonies are very expensive art forms,” said Ben Johnson, retired managing partner of law firm Alston & Bird LLP and a past chairman of the ASO board. “The symphony has 95 players who are paid 52 weeks a year whether they’re on stage or not.”
Currently, the ASO management is in the middle of contract negotiations with its musicians, making this a particularly sensitive time for the organization.
“The collective bargaining agreement is up in the middle of August,” Gellerstedt said. “The negotiations process began in January and is progressing. The overall big picture is that symphonies across the country are having to face significant financial challenges. I’m optimistic that we will come up with something that works.”
Joe Bankoff, the outgoing president of the Woodruff Arts Center, said the “basic business model” of today’s American symphony “does not work.” Bankoff said “it’s going to take some adjustments,” not just in Atlanta but around the country.
Johnson said the ASO is drawing in audiences with many of the concerts selling out. But because its Symphony Hall is relatively small, its ability to raise ticket revenue is limited.
Unlike many other nationally renowned symphonies, the ASO receives virtually no public support. Johnson said that the Baltimore symphony has received about $4 million in federal, state, county and city funds a year. In Atlanta, the symphony receives less than $100,000 in public funds, he said.
“If the Atlanta symphony were to get $4 million in public support, it would not be running a deficit,” said McPhee, who has been closely involved with the symphony and the center.
McPhee added that it was important for Hepner and her board to not make “the symphony a scapegoat for everything that’s wrong” at the Center.
“I think it’s easy for everything to get blamed on the symphony,” she said. “But there are other issues.”
Funding is a key one. According to a recent national study by McKinsey & Co., Atlanta is a generous philanthropic community in its giving to educational and religious institutions. But it is not especially generous when it comes to the arts.
Combine that with limited public funding for the arts, and its easy to see why metro Atlanta’s arts institutions struggle.
“We don’t live in an era that is as willing to expend public funds on the arts,” Johnson said. “It’s a big challenge in terms of funding for the arts.”
Hepner and Bankoff, through their roles with the Metro Atlanta Arts and Cultural Coalition, worked valiantly to try to get a fractional sales tax approved where local communities could invest in the arts, economic development and quality-of-life initiatives. Although a bill came close to passing two years in a row, the effort failed.
Considering the great art that the Woodruff Arts Center is able to produce with limited income, Johnson said: “We get a lot of bang for our buck. Everybody over there is trying to do the best they can in an environment of constricted revenue and constricted support.”
In addition to Bankoff’s retirement, the Woodruff Arts Center also is saying good-bye to Beauchamp Carr, who led the Center’s annual corporate campaign for the past 35 years.
“You have to view this as an opportunity to find the next generation of leadership or find a new model to raise the corporate campaign,” Johnson said. “The trick is to broaden and deepen the base.”
Hepner agreed, saying the annual campaign is “very important for our financial stability and engagement” with the community.
“My approach will be to take a fresh look at it to figure out what’s the best way to go forward,” she said. “We need more than $8 million to $9 million.”
In the past year, the Woodruff Arts Center board also adopted a new governance structure with an active governing board that includes the chairs of the four divisions.
“A year ago, I would have said that the governance structure was the biggest challenge,” McPhee said of the Woodruff Arts Center. “But I think the board has made some significant improvements.”
“We all have a real desire to grow the collective audience in Atlanta and the region and the state. There’s more to do,” Hepner said. “But I can tell you, it will be a lot more fun to grow the organization.”