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Culture Shock

The New York Post

July 6, 2003



July 6, 2003 -- While city budget cuts for arts organizations weren't as deep as feared and the economy appears to be rebounding, the pain is far from over for museums, performance halls and gardens all around town.

Still reeling from the effects of the 2001 terrorist attacks, cultural institutions are struggling with endowments ravaged by the bear market, declines in gifts and a drop-off in attendance - particularly by big-spending foreign tourists. And that's on top of less city and state funding.

"The combination of these issues has created a serious climate for us to do business," said Karen Brooks Hopkins, chairwoman of the city's Cultural Institutions Group, a consortium of arts organizations.

"I think we're looking at another pretty tough year," added Hopkins, who is also president of the Brooklyn Academy of Music.

A growing concern is the city's failure to lure back international visitors since 9/11. Foreign tourists, who typically spend more at cultural institutions than domestic travelers, have stayed home because of fears of terrorism and SARS, and weak global economies.

The number of international visitors to the city this year, while seen edging up from 2002, will be down 20 percent from 2000, according to NYC & Co. projections.

"Certainly, foreign visitation is way down," said Harold Holzer, spokesman for the Metropolitan Museum of Art, which expects a $2.2 million operating deficit for fiscal 2003 and $3 million of red ink in 2004. The weaker dollar is "probably preventing a really disastrous foreign visitation picture," he noted.

At the Met, the typical visitor now hails from the metro area or is a short ride away on Amtrak, Holzer said. International visitors, who formerly accounted for at least 20 percent of attendance, now represent about 10 percent.

The American Museum of Natural History, which used to attract a quarter of its visitors from abroad, also has seen declines. Overall attendance remains off 20 percent since 9/11, leading the museum to close several entrances, reduce weekend hours and cut 250 jobs, said spokeswoman Anne Carty.

Also weighing on arts budgets are skyrocketing insurance costs, often doubled after 9/11, and shrinking endowments, which will allow less spending this year - despite stocks' rise. The reason: Institutions typically use a three-year average of a portfolio's value to determine spending. This year's amount covers 2000-02, when the Dow plunged nearly 30 percent.

At the Frick Collection, which receives no direct city or state aid, nearly 60 percent of funding comes from its endowment, which has fallen 20 percent from early 2001 to $185 million, said Robert Goldsmith, the museum's deputy director. The Frick's heavy dependence on foreign tourists - formerly one-third of admissions - and fewer gifts also pose problems.

"We've had lots of foundations tell us they had to cut way back because they don't have the funds," said Goldsmith, who has also seen corporate sponsorships fall. So the Frick cut its staff 10 percent.

Gifts to non-profits are projected to fall 15 percent this year amid the slow economy, estimates Charity Navigator, which tracks non-profits. Cultural institutions are expected to see a bigger decline, of 20 to 25 percent.

"People will continue to give to the school they graduated from" and to groups providing basics like food, said Trent Stamp, who heads Charity Navigator.

Meanwhile, New York state's new budget axed arts funding 15 percent. The city reduced funding for organizations in Hopkins' CIG by close to $12 million after threatening to cut $28 million.

"It won't obviously solve all the problems," said Hopkins, who is cutting BAM's opera program to one next season from three. Not far away, the Brooklyn Museum of Art is preparing to close Aug. 4-19.

On the bright side, the New York Botanical Garden in the Bronx won't have to close 100 acres to the public because of reduced city funding, as anticipated, said spokeswoman Lisa Stillman.

But other measures will proceed. The garden will hike admission fees and scale back community and school programs. Not long ago, it eliminated a vice president of marketing post.

"We have virtually no marketing program," Stillman said.

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