Laurence Léveillé | Staff Writer
Keeping Chautauqua Institution affordable for visitors while maintaining its facilities and programming is a financial challenge.
Tim Renjilian, a member of the Institution’s board of trustees, and Sebastian Baggiano, Institution treasurer and vice president for finance and community services, discussed bringing more people to the grounds, maintaining affordable prices and philanthropy to improve the sustainability of the Institution during Wednesday’s Trustee Porch Discussion on the Hultquist Center porch.
The board’s challenge is to preserve the Institution’s environment in terms of programming, facilities and affordability, Renjilian said. To ensure that, the board must look at revenues, expenses and capital.
As costs for artists and speakers increase, the board must find ways to keep costs affordable for visitors. There are also maintenance, upkeep and depreciation to consider, he said.
The board controls four basic tools to maintain financial sustainability: price, volume, expenses and philanthropy. Each year, it must find a way to balance those to make the proper cost reductions and to make enough revenues to keep the Institution affordable, Renjilian said.
Philanthropy can ensure sustainability and maintain program quality, because it has no downsides, he said. If costs are cut too much or prices are raised too much, that creates a problem.
Baggiano discussed the Institution’s financial planning model. It uses elements of revenue and expense and makes assumptions based on historical information and trends.
The Institution’s earned revenue represents about 80 percent of its overall revenue, he said. Philanthropy represents about 20 percent, 70 percent of which comes from the Chautauqua Fund. Earned revenue, about 60 percent of profits, includes gate and parking prices.
Philanthropy is critical because it is similar to an annual campaign, and because money received is spent during that same year, Renjilian said. In comparison, the Institution’s endowment funds are focused on long-term operations.
Chautauqua also has a capital planning model. Each facility is in a category: old simple; new simple; old complex; or new complex. Simple and complex refer to the facilities’ mechanical systems, Baggiano said.
Models are then used to predict and project the annual cost for the facilities. He said the average cost is about $4 million.
Another model focuses on goals that will help maintain sustainability — attracting more people, affordable ticket prices and philanthropy. That model and the financial planning model have different assumptions.
“They need to be different, because the financial planning model tells us that we have to be sustainable,” Baggiano said, “and this model tells us we won’t be, at some point, out in the future, unless we make changes.”
Questions from attendees revolved around how the Institution plans to maintain financial sustainability if it lacks diversity.
One Chautauquan said he and two international students, one from Korea and one from Japan, visited the Institution last week. He said the two students thought Chautauqua was for elderly and retired Caucasian people.
People are also concerned about the gate costs.
The Chautauquan said focusing on philanthropy might be beneficial in terms of fundraising, but he is not sure if it would be helpful in the long term.
Renjilian said staff and board members are focusing on ways to improve Chautauqua’s diversity and that the grounds cannot be a place only for the “1 percent.” They have addressed the issue in small ways through outreach and engagement with invited speakers and artists.