Guest: Levy, Reynold
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THE OPEN MIND
Host: Richard D. Heffner
Guest: Reynold Levy
Title: The Performing Arts in America
I’m Richard Heffner, your host on The Open Mind. And I first met my guest today when he was still President and CEO of the International Rescue Committee, one of the world’s largest organizations to provide relief, protection and resettlement services for refugees around the world.
Before that he had been head of the AT&T Foundation, where he worked diligently to support the Performing and Visual Arts. And still earlier had distinguished himself as Executive Director of New York City’s famous 92nd Street Y, a leading artistic, educational and social service institution.
In other words, Reynold Levy had long been involved in the world of giving, or searching out funds, from the corporate community, from the foundation world, from the world of generous individual benefactors and putting them to work supporting good causes.
Indeed, I had assumed that my guest’s intriguing and candid account of corporate philanthropy, wisely titled Give and Take and published by Harvard Business School Press would be a subject here on The Open Mind, but Lincoln Center, New York City’s magnificent cultural center of the performing arts got to him first. And now I want to talk with Reynold Levy as its new President. Welcome.
LEVY: Thank you.
HEFFNER: You know I saw … I know I want to get … focus on Lincoln Center, but I saw that wonderful CNN program that was done about you and the International Rescue Committee, I watched it last night and I was so taken with the dangerous positions that you and your colleagues had put yourself in. I wondered whether you would find Lincoln Center and its fractions even more dangerous.
LEVY: Well, the work at the International Rescue Committee certainly puts the issues … at Lincoln Center in, in perspective.
HEFFNER: No bullets?
LEVY: No bullets and, in fact, as is the case in many institutions … great institutions around the country, extraordinary people of great talent, of good will who are eager to re-build and re-new what is already regarded as the world’s leading performing arts institution.
HEFFNER: You know you talked about re-build and re-new and every time I walk past Lincoln Center or am there for a performance … wonder well,“ what is all this talking about renewing and re-building, I love it as it is.”
LEVY: Many members of the audience feel that way, and we’re delighted by it. When Lincoln Center was first built about 40 years ago, its budgets were the budgets of the buildings, were cut at the last minute, pretty much … about two years, three years before construction. And the net effect of that was to create facilities that were less than optimal. So, for example, Avery Fisher Hall is one of the few halls that house a great orchestra that has no rehearsal space. And whose facilities for artists’ changing rooms are very modest and very cramped. Facilities for filming, very modest and cramped as well. And so it is around the campus where a substantial number of features of buildings require up-dating and modernization. And where audience expectations for amenities have significantly increased over these decades.
HEFFNER: Interesting you call it a campus. Why? Think of it as a university perhaps?
LEVY: Well, the, the … this is … Lincoln Center is a federation of non-profit cultural agencies varying from schools like the Julliard School and the School of American Ballet to performing arts institutions like Lincoln Center Theater to Lincoln Center Inc.’s own productions and, of course, the Metropolitan Opera, the New York City Opera, the New York City Ballet. These agencies are very much connected by their physical proximity, but also by the fact that they share a common plant, they very often share a common brand name and they share common facilities often.
For example, “Lincoln Center Live” remains the only nationally produced program for the performing arts in the country. And every one of the constituents’ benefit. So, in that sense we think of ourselves not only physically, but functionally as a campus.
HEFFNER: And the competition that must exist for raising funds … and I can’t help but think of your own experience and this book of yours … wonderful book of yours … a candid account of corporate philanthropy … Give and Take. What tensions must there be between and among institutions that are all culturally involved and all must be searching for funds.
LEVY: There is a remarkable loyalty of segments of the public to particular art forms. And the overlap that one would suspect is, is significantly less than you would surmise. So that the opera fan enormously devoted to opera is often … not always … but often unlikely to give to … substantially to a theater or to the Lincoln Center Film Society. So that each of the organizations at Lincoln Center has their own very loyal set of supporters. There are those who give to Lincoln Center and we hope many more will give to Lincoln Center because of its importance as a civic institution in, in … New York. And because of its importance as an educational institution in New York.
The building around it has been phenomenal, real estate values have gone up inordinately since Lincoln Center was created. New organizations have developed. We’re talking about an institution that serves 5 million patrons; that teaches 200,000 students from public schools and 3,000 teachers, just from the Lincoln Center Institute alone. And that has an enormous impact on our tourist industry in New York City. So the … and employs 9,000 people. And spends about $550 million a year. And, as I go around the country and indeed, around the world, Lincoln Center is so identified as the largest and most consequential of performing arts institutions.
HEFFNER: Well, that’s what I wanted to ask you about. Its rivals, and I didn’t mean internally, I meant what other cities, nations have centers that begin to come close to encompassing what Lincoln Center does?
LEVY: I don’t know of any. I think there’s been a significant growth of museum campuses in, in the world since Lincoln Center was created. And there have been a significant number of performing arts centers in other cities, but very few … in fact, none approximate the range of performing arts institutions that Lincoln Center …represents in terms of two opera companies, a ballet company, a theater, film to great schools, a library for performing arts. This integration and coherence of multiple facilities is, is truly unique.
HEFFNER: Now the … do I understand that you said the budget of $500 million?
HEFFNER: In these times … how difficult is it to raise that kind of money?
LEVY: Well the $500 million dollars is what is spent …
HEFFNER: Spent … expenditures.
LEVY: … about twenty … about 40% of that is contributed income, roughly.
HEFFNER: You say “contributed income” …
LEVY: Donations from the public, from individuals, foundations and corporations. The balance is ticket revenue and other forms of, of earned income.
HEFFNER: Suppose we looked at it the other way, the 60% of the earned income. What’s happened to the ability, in these times, to raise the 40%?
LEVY: So far, so good. Each of the companies at Lincoln Center have reported that last year which we were very worried about because of the impact of September 11th, virtually every institution met their contributed income target. I think we were very much helped by a Mayor who identified theater and the performing arts generally as an important component of the resurgence of New York and with which New York was to be identified.
And I think we were very much helped by audiences flocking to all of the theater spaces at Lincoln Center and so very much engaged in our life and our activities. We have a distinct advantage compared with other non-profit institutions. The donor can see the work that they support, can palpably see and feel the work we support and those it affects.
HEFFNER: Why, why isn’t that true of other institutions, to the same degree?
LEVY: Well, if you’re a social service institution much of the work of healing is slower to have its impact, often occurs behind closed doors. If you’re the head of the International Rescue Committee and promoting the cause of refugees, they, they are very far away physically from the donor and from the consciousness of the donor and bridging that gap is a major challenge. I was able as President to take perhaps 60 or 70 donors during the course of a year with me to Kosovo or to the Congo. But a limited number and so you’d have to be very imaginative about the ways in which you would translate what’s done for refugees in relieving their suffering to a public.
At Lincoln Center I invite the donor to join me at a concert and/or at a film or at “Mostly Mozart” or the Lincoln Center Festival. And often the programs in effect sell themselves.
HEFFNER: What do you feel generally now about the status of such organizations, such institutions, I should say, as Lincoln Center and their capacity to sustain the same level that they’ve enjoyed of contributions or increasing levels as must always be needed. Now, set aside Lincoln Center, which is unique. What is happening throughout the rest of the nation?
LEVY: Let me first address New York City where Lincoln Center is located because we are extremely concerned, I think the arts community in general is extremely concerned that the impact of 9/11 and of the reduction in the stock market values and its impact on tax collections in New York will result in some very significant budget reductions in, in New York City …
HEFFNER: But, excuse me … you’re saying that didn’t happen after 9/11 …
HEFFNER: Your concern is about what will happen a year later and beyond.
LEVY: Correct. The Mayor has identified a $6 billion dollar budget gap in, in New York City and the State, it is well known, has very little additional money to help to support the City and municipalities across the state. So those organizations that receive a fair amount … arts organizations that receive a fair amount of City funding are bracing for significant budget cuts.
In addition to the degree that individual contributions come from people who hold appreciated stock, there’s not much of that around, given the recent stock market reductions, so that’s not a good signal. And foundations give away income from their assets and their assets have been declining as well, to the degree that they’ve invested in the stock market, as most have. So foundation payouts are likely to be less than they have been in recent years.
And then finally, corporate earnings are down and there’s a direct relationship between contributions and earnings … as earnings go up, contributions go up and as earnings go down, contributions go down. So from each of the major sources of giving, including government, there’s great concern, and I would add not only on the part of arts institutions, but social service institutions, those institutions that serve the poor are worried about the current climate.
HEFFNER: Well, of course, I’m not unfamiliar with that problem. The Open Mind has been around for 46 years, but I don’t know whether it will continue to be around because it is so difficult to find underwriting, if you want to call it that. What does that do to your ability to plan for Lincoln Center?
LEVY: We are, right now, in the middle of planning for a major redevelopment campaign of the, of the campus. Which calls for raising something on the order of $800 to $900 million private dollars over the course of a decade, above and beyond the $200 million dollars we now raise each year. And so we are examining, with great care, how we articulate the needs of Lincoln Center for this capital campaign, the first ever, since the creation of Lincoln Center. And examining very carefully what our appeals are to the thousands, tens of thousands of patrons who have significant assets that we hope they’ll share with Lincoln Center.
HEFFNER: And government?
LEVY: The New York City has been extraordinarily generous. This effort to plan this re-development campaign began with a $240 million dollar commitment , over ten years, which was established at the end of the Giuliani Administration. And which Mayor Bloomberg has enthusiastically endorsed.
At the beginning of Lincoln Center, when it was first created, 16% of the funds came from New York City, and this campaign is modeled in a similar way. That the $240 million dollars would represent 16% of the total; the other 4% would come from the State and roughly 80% would come from private dollars.
HEFFNER: Now, let me move the scene, or the stage to the nation itself. What’s happening elsewhere. Other cities? Other states? Other institutions?
LEVY: I think a very similar impact. Most state legislatures have moved from balanced budgets to deficits. They are considering tax increases; they’ve been impacted by a slow-down in the economy and many impacted as well by a jittery stock market, which has affected 401(k) plans, affected pension funds and therefore the amount of money that municipalities need to invest in pension funds in order to keep their level adequately high for paths. So I think as you look around the nation Mayors and Governors are expressing concern about their capacity to protect levels of service. And you see increasing news reports about higher tuition levels at state universities, or about further tightening of the welfare rolls, increase in eligibility requirements for nursing homes, or for day care services. This will be a very challenging time, I think the years immediately ahead.
HEFFNER: That’s an interesting word … it’s accurate, of course, “challenging”. I might have used depressing. You’re not depressed by that, are you?
LEVY: I’m not at all. We live in a country of extraordinary wealth. When President Clinton came into office, the Dow Jones Industrial average was at 3,200, with the 20% reduction in the stock market this year, the Dow Jones is at 8,500. It’s, it’s almost 300% higher than it was at the, at the … ten years ago. So the aggregation of wealth has been extraordinary.
And there are hundreds of thousands of Americans who’ve been very fortunate in their lives, been able to take care of themselves and their children and their own needs and are looking to have an impact; to have some consequence beyond their own material success.
Non-profit institutions in general, Lincoln Center in particular, in my view, do them a favor by allowing them to connect some of that wealth with the good it can do.
HEFFNER: Are we more, or less, generous, in this area, than people in other parts of the world?
LEVY: We are far more generous. In Europe the tendency is for the performing arts and museums to be disproportionately funded by, by government and by tax resources. In the US a far greater percentage by earned income and by contributions from individuals, corporations and foundations. Indeed, at Lincoln Center I would say overall our government support is probably about 4% to 5% of our total budget. In Europe a smaller Lincoln Center might have something on the order of 80% to 85% percent of funds coming from municipalities and from the national government.
HEFFNER: Now, which society is more or less benighted, which society is more or less concerned with cultural matters, with education. The society that turns to government or the society that does the opposite?
LEVY: I think a balance is … needs to be struck. It is no accident that over the last 20, 25 years you will see here in America organizations called “The Friends of Oxford University”, “The Friends of Cambridge University”, “The Friends of the National Theatre”. As support from the tax rolls somewhat wanes, the interest and desire to emulate America somewhat in reaching out to individuals, corporations and foundations has transpired in Europe. And similarly, I think, the cuts to cultural funding in the States and in the Federal government which were repeated and continuous in recent years have stopped. And the National Endowment for the Arts appropriations have increased even in a Republican Administration. And, so I think there’s beginning to be a recognition that both the community, as represented by taxes, and individual initiative and energy together is what works best for supporting these institutions.
HEFFNER: And the business community, here as opposed to overseas?
LEVY: Much more generous here. More of a tradition of business giving. And more of a belief that there is an intimate connection between giving and successful business. That on the margins individuals are prepared to give to institutions that care. And express that caring by supporting critical institutions in the community. On the margins employees want to work at places that express their values. The same employees who give their own money to charity want to work at a place that expresses those values. And so many corporations have found giving to be fully consistent with business success in terms of employee morale, in terms of the contributions that giving offers to burnishing the brand, in terms of successful advertising.
HEFFNER: Is there any indication that there has been a shift, one way or another in businesses’ perception of the value of corporate giving … give and take.
LEVY: My book projects and, and charts a continued progress in that regard. And a very optimistic view of corporations’ role. Indeed, the most recent scandals and questions about corporate governance, I think, underline the desirability of corporations contributions to society and, and to community. And I think corporations will be looking, increasingly for opportunities to present themselves as positive actors in our society.
HEFFNER: You mean because of a negative patina now?
LEVY: Yes, I think there are many, many positive reasons. But I think there are also, one wants to forestall or neutralize potential blows to the reputation of companies.
HEFFNER: Where do you think you will find that? What kinds of, in what areas will you find that operating? Which kinds of corporations? I mean… Enron … its too late..
LEVY: I really think the impact will be general. My colleagues, my former colleagues in public relations, in advertising, in contributions have less of a difficult time explaining to their senior executives why a contribution can be useful to the company than perhaps they did five years ago. So I think it will be a general phenomenon and not particular to, to any industry. Although I suspect that those who have been most tarnished are most likely to look hard at their prior practices.
HEFFNER: We just have a minute left, but I wanted to ask you, in terms of your reconstruction, rebuilding, expansion plans for Lincoln Center. Are we talking about moving out in the community? About going beyond the acreage that you have now.
LEVY: Yes. Lincoln Center has been doing a good deal of traveling and will continue to do a good deal of traveling around the boroughs. The New York Philharmonic, as it plans for a new home at Lincoln Center, it will take four years to build that new home, and so the New York Philharmonic will be playing at many places around New York City. And right now many of our ensembles play frequently in the parks and in other venues around the city. And that will continue.
HEFFNER: So you’ll be on the move.
LEVY: We’ll be on the move.
HEFFNER: Thank you for moving here for this past half hour. I appreciate very much your joining me, Mr. Levy.
LEVY: Been a pleasure.
HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. If you would like a transcript of today’s program, please send four dollars in check or money order to: The Open Mind, P. O. Box 7977, F.D.R. Station, New York, New York 10150
Meanwhile, as another old friend used to say, “Good night and good luck”.
N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.