Mr. Chairman and Members of the Senate Committee on Finance: My name is Richard H. Wangerin. I appear before this Committee on behalf of the nation's more than 1,400 symphony orchestras and in the capacity of President of the American Symphony Orchestra League. The League, chartered by the Congress, serves as the nonprofit, tax-exempt educational, service and research membership organization of the nation's symphony orchestras, and derives its basic support from dues paid by those organizations. The League's voting membership consists of nearly every one of the nation's leading symphony orchestras and hundreds of the lesser known symphony orchestras established in the smaller cities. The League maintains permanent national offices with professional staff in Fairfax County, Virginia. the In presenting the case of the nation's symphony orchestras we are, in effect, presenting also the case of other performing arts organizations ballet companies, the opera companies, the chamber music ensembles, the choral groups. The basic economics of all these groups are similar. They share common concern over the effects of certain provisions in the proposed legislation. We know that the members of this Committee and of the Ways and Means Committee, members of our Congress and of the Executive and Administrative branches of Government have no intention of deliberately causing hardships for the nation's cultural organizations, of curtailing the arts, or of reducing their financial support. But what apparently is little understood is that many of the provisions under consideration for improving certain aspects of our tax structure will have disastrous side effects for symphony orchestras and all other organizations that depend on charitable contributions for a large part of their support. Cultural and arts organizations especially will be hard hit; they come at the tail end of philanthropic giving. People generally make contributions to symphony orchestras only after they have given to their churches, their colleges, their hospitals, their community chests. Since this is so, we feel certain that symphony orchestras and other arts groups will bear even more than their aliquot share of the reduced giving that inevitably will result from passage of H. R. 13270. If the provisions of the House Bill that adversely affect charitable giving are adopted in toto and without substantial modification, we are convinced the ultimate result would be the demise of most of our symphony orchestras as we know them today. They inevitably would have to turn to government for direct subsidy. We have little hope that at this time government would give the massive support required to finance the orchestras and other arts groups in view of the already pressing and ever-growing demands upon government funds to meet basic human needs. We believe that our symphony orchestras are a vital part of our national life, and we beseech you most earnestly to continue the Federal Government's present methods of stimulating private support of symphony orchestras and other cultural organizations through the incentives that the tax laws presently provide. I. SYMPHONY ORCHESTRAS ARE VITAL TO THE TOTAL CULTURAL AND EDUCATIONAL LIFE OF Symphony orchestras are part and parcel of our modern nation that operates on the philosophy that the total citizenry should have equal opportunity to partake of the nation's total cultural activity. Gone are the days when great music, great art, great beauty were reserved for the enjoyment of only the affluent. Today, there are over 1,400 symphony orchestras in operation in the towns and cities of this nation; 382 of them exist in the home states of just the 17 mem bers of this Committee. The nation's orchestras exist in large and small cities. They present concerts in hundreds of other towns and cities many of which are too small to main tain their own orchestras. Altogether, the nation's symphony orchestras play approximately 11,000 symphony concerts a year (an average of over 30 concerts a day) to an estimated gross audience of at least 20 million men, women and children, plus a radio and TV audience of uncounted millions. The orchestras play approximately 3,500 concerts for school children each year and hundreds of free concerts in the nation's parks and civic auditoriums. Over a third of a million persons are directly involved in the work of these orchestras - including over 80,000 musicians who perform in them, and over 250,000 men and women who serve on the orchestras' volunteer governing boards and committees. Invariably, the top business, industrial, cultural, educational and religious leadership of each community is to be found on these boards and committees. Frequently, the top political, governmental and labor leadership also is represented. The presence in a community of highly trained symphony musicians enables other sponsoring groups to organize local opera companies and chamber music groups. The presence of these musicians strengthens the teaching resources of the community and enriches the music of the churches. The nation's 1,400 symphony orchestras provide the only significant employment for musicians in this country who study and train for a career in per formance of so-called "serious" instrumental music. It is the orchestras that provide the motivation for millions of young people to engage in the study of music today. Just as our libraries make available the world's literature to the total population, just as our museums make great art available to the people, the nation's symphony orchestras bring to life the world's great music for the enjoyment and cultural development of the citizens of their home cities. This, then, is the role of the nation's symphony orchestras in the spiritual, cultural and educational lives of our people a role that goes back 127 years to the founding of the nation's first symphony orchestra, now known as the New York Philharmonic. Today, the citizens of every town and city of significant size undertake to establish and maintain their own symphony orchestra just as they support their own local libraries as part of the total cultural and educational facilities of their communities. II. THE BASIC ECONOMIC STRUCTURE OF U. S. SYMPHONY ORCHESTRAS AND OTHER ARTS ORGANIZATIONS REQUIRES THE SUBSIDY OF CHARITABLE GIVING FOR THEIR VERY EXISTENCE You well may ask why, if symphony orchestras are so treasured throughout the nation, if so many millions of people want to hear them play, if they serve educational needs of so many children then why should their financial support have to be of such pressing concern to this Finance Committee? The reason is very simple and is to be found in the basic economic structure of symphony orchestras. Such orchestras are comprised of large numbers of highly from 65 to over 100 musicians are required to play this music. This means that symphony orchestras are very expensive to operate so expensive that even the box office revenue from capacity audiences meets less than half the costs. The remaining costs must be met through some form of subsidy. When we appeared before Congressional committees in 1963 relative to tax proposals which at that time would affect symphony orchestras, we reported that the nation's orchestras were operating on a gross annual expenditure of $30 million, of which they could earn 55%, or $16 million, and that they were dependent on contributed income for the other 45%, or $14 million, of their annual operating costs. In the intervening six years, population increases and greater demands for concerts for students have served to greatly expand the musical and educational public services required of orchestras. Musicians' salaries have spiralled upwards as have other basic operating costs. Today, the United States symphony orchestras are operating on a gross annual expenditure of $85 million. They are earning approximately $41 million as compared to $16 million six years ago. Nevertheless, the current earnings repre sent only 48% of total costs as compared to an earning power of 55% of costs six years ago. As a result of these changes, the nation's symphony orchestras must now develop $44 million a year in contributed income as compared to $14 million in 1963. The worsening financial condition of the symphony orchestras is clearly indicated by these figures. The future looks even more bleak. To understand the basic economics of the performing arts, it must be remembered that: |