Friday, June 3, 2011

Southern Theater moves forward with sustainable plan

Minneapolis, Minnesota

The Southern Theater will move into the 2011/12 performance season with a renewed board of directors and reaffirmation of its mission, a sustainable business plan that reduces costs and increases access to performers, and a full-time staff of one.

The Southern’s 15-member board has taken urgent steps to stabilize the organization amidst its immediate financial crisis and adopted a “Plan for a Sustainable Southern” that projects 40-weeks of performance activity, a first-year budget of $165,600, and a revenue ratio of 2-to-1 earned-to-contributed income.

Since 2008, the theater had presented 28 to 47 annual engagements, with an annual budget of approximately $1.1 million.

“The plan will preserve the historic, 101-year-old theater as a unique venue for artists and the community while laying the groundwork for a viable business model,” said Anne Baker, chair of the board of directors.

“For at least seven years, the theater has shouldered too much of the financial risk of presenting and producing performances of dance, music, theater, and film, and has not effectively made the case to enough individuals, foundations, and corporations that donations, sponsorships, and underwriting will produce sufficient added value to merit full support,” said Baker.

“This plan allows us to stabilize and to focus on the chronic issue of negative cash flows caused by organizational, strategic, managerial, and operational problems,” she added.

Key elements of the plan may be summarized as (a) reducing annual expenses to a minimum in order to make the space accessible to more artists at a cost that is as low as possible, (b) “keeping it simple” by establishing a reliable platform of earned income on which to strategically build future programs, (c) adding fully underwritten programming when feasible, and (d) staffing by a knowledgeable professional who is accountable to an engaged and energized board.

The board of directors has named Damon Runnals to the new position of general manager. Runnals, 32, has served as the theater’s production and operations manager since September 2008. He received a BA degree in Theater Arts from Hartwick College in Oneonta, New York.

Runnals will assume his duties on June 10, when the position of executive director, held by Gary Peterson since January 2010, will be eliminated. Peterson has been elected to the Southern’s board of directors. Over the past six weeks, the theater has eliminated eight other positions due to adverse financial circumstances.

“On behalf of our board,” Baker added, “I want to offer our sincere gratitude to all of the Southern staff members whose commitment to the performing arts attracted critical acclaim to the theater and inspired us all.”

On April 21, the Southern announced that it needed to raise $400,000 by April 30 in order to provide one year’s working capital, pay vendors, and present a full season of curated work in 2011/12. That plan would have preserved the employed expertise of several people and a range of marketing, front of house, and back of house services for artists and audiences.

On May 3, the theater reported that it had raised $50,000 from its annual gala, held April 30, and an additional $45,000 from online gifts by nearly 300 donors.

Members of the board returned to the drawing board and considered various, alternative business scenarios before settling on the new “Plan for a Sustainable Southern” and its provision for a single employee.

The primary goals of the plan are to keep the theater open and available to artists and audiences, and to protect the basic presentation model supported by rental agreements. However, the Southern and the community will have the capacity to supplement the model further through underwriting opportunities for mission-aligned program activity. The Southern also will have office space available for rent to nonprofit organizations.

Since April 9, in response to its crisis of operational and financial distress, the Southern’s board of directors has taken ownership of past mistakes with an eagerness to restore institutional integrity; examined the financial behavior that led to the crisis and established the policies and procedures necessary to match the theater’s cash position and down-sized requirements; set in motion a process of forensic financial review by an outside party; and renewed efforts to enhance the composition of its membership.

With the Southern’s immediate crisis now under control, the board will re-double its efforts to turn its attention to pay creditors, raise operating and underwriting capital, and find additional ways to take advantage of the many offers of assistance that the theater has received from artists and others.

“As the arts ecosystem and climate continue to change, this plan gives us hope and vision for what the Southern can yet become for artists and audiences, and that it is worthy of support,” said Baker. “We hope to schedule one or more benefit concerts. We also will move forward with our online auction during August and, of course, we will continue to accept donations online” [].

As a 501(c)(3) organization, all financial gifts to the Southern are tax-deductible to the full extent allowed by law. Southern Theater, 1420 Washington Ave., S., Minneapolis, MN 55454.

Southern Theater mission

The Southern Theater, a 210-seat theater in Minneapolis, cultivates artistic exploration by providing a vibrant home for performance, fostering a multiplicity of voices, and catalyzing connections among artists and audiences.

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