Tag Archives: merge lane

Investment Income Excitement

Let’s pretend you’ve been asked to analyze the investment income of eight corporations. Consequently, eight shiny charts have just been delivered to your desk…

graph (34)

graph (35)

graph (36)

graph (37)

graph (38)

graph (39)

graph (40)

graph (41)


Before you go any further, scribble down some thoughts, free of any preconceptions you bring to this blog. Who is doing the best? Who is doing the worst? Who is under-performing? Who is over-performing? Who had the best and worst years? Are there any questions you’d like to ask the men and women in charge of these corporations about the investment decisions they’ve made over the last few years?


Continue reading


Filed under Uncategorized

What Michael Henson Doesn’t Want You To Read

Awareness of the Minnesota Orchestra lockout grows daily. However, if you’re just tuning in, I imagine it’s tough to know where to start. So to make things easier, I tagged some entries “merge lane.” These are entries that don’t require any background knowledge about what’s been going on. Pick a few merge lane entries to read, and soon you’ll be up to speed!


Welcome to the Minnesota Orchestra lockout information highway!

However, if you prefer to tackle things chronologically, I do keep an extensive “table of contents” here. And you can always explore topics using the tags in the right-hand column of the blog.

For this particular “merge lane” entry, I gathered 25 quotes that contradict the narrative Minnesota Orchestra CEO Michael Henson has been selling the last couple of years…in other words,”What Michael Henson Doesn’t Want You To Read.” Enjoy!


An orchestra does not recover easily, from such drastic cuts, if ever. – former Minnesota Orchestra music directors Edo de Waart, Stanislaw Skrowaczewski, Neville Marriner, Star Tribune editorial, 6 October 2012

Continue reading

Leave a comment

Filed under Uncategorized

My MPR Commentary

I’m a contributor to Minnesota Public Radio now!

Minnesota Orchestra’s ‘fresh start’ needs to go beyond talks with musicians

So – yeah! A big thanks to everyone at MPR who helped to make this happen. It’s an exciting opportunity, and I’m grateful for it.

If you feel moved to, please share my article via the social network of your choice. Facebook, Twitter, Google+, email, or printing it out and actually sharing it with someone when you speak to them face to face.

And if you want to get news and links like this RIGHT AS THEY HAPPEN, feel free to like SOTL on Facebook.

And Mr. Henson, or Mr. Campbell, or Mr. Davis…any time you want to contact me, feel free… We’re waiting… *checks watch* *smiles politely*

Once again, I reiterate: I am not a scary individual. I am ninety pounds, 5’5″, and disabled. You would win in a fight. What are you afraid of?


Filed under Uncategorized

Some Economic Impacts

As we gear up for a hearing on January 23 that will focus on the economic impact of the NHL and orchestra lockouts, here is a post I wrote on my SOTL Facebook page (which, by the way, you should “like” if you haven’t already).

Orchestrate Excellence asks, “How has the Minnesota Orchestra lockout affected you personally or economically?”

Here are some facts about the economic impact of the Orchestra’s lockout…

Continue reading


Filed under Uncategorized

A Layman’s Guide to the Minnesota Orchestra Lockout, Part 2

Here’s a sequel to my Layman’s Guide to the Lockout. The first Layman’s Guide covered events from August to mid-October. This one will summarize events from mid-October to late December.


After the extraordinary sold-out gala concert at the Convention Center on October 18, there was a vague hope among patrons that maybe negotiations would start moving again. But unfortunately, if anyone thought that the Minnesota Orchestral Association, or MOA, would stop canceling concerts, their hope was misplaced.

Prior to canceling the next stretch of shows, the MOA put up a new page on their website called “Misrepresentations vs. Reality.” I fact-checked the MOA’s statements in an essay called “Misrepresentation, Reality…Misrepresentation of Reality.” In that essay, I asked:

The only interesting thing about this crap is the fact that management found it necessary to post it. Is this a sign that they’re having difficulty winning over their public? Or that they’re gearing up to pull an SPCO and cancel concerts through December 31st within the next few days, and they want to be prepared for the surge of confused PO’d patrons who will be coming to their website looking for an explanation?

On November 8, the MOA canceled concerts clear the way to the end of 2012. As I wrote in my next blog entry, “Either I’m psychic, or management is laughably transparent.” A flood of patrons surged to the Minnesota Orchestra’s Facebook page, expressing their anger and frustration at the stalemate. Most of them laid the blame squarely at the feet of the MOA.

Continue reading


Filed under My Writing

SOTL Glossary

The conflict between the Minnesota Orchestral Association and its musicians is obviously a hugely complicated one. Consequently, it’s full of lots of names, specialty terms unfamiliar to lay audiences, and even the occasional in-joke (popcorn?). So if you’re ever confused about a name or a term or an in-joke, let me know, and I’ll add it to the SOTL Glossary.

Bold phrases indicate names or terms that are explained elsewhere in the glossary.


990s. Forms the Minnesota Orchestral Association (or MOA) has to file with the IRS. More information about 990s here. Thanks to Drew McManus, we have the MOA 990s from FY 1998, 2000-6, and 2009-2010. The 2011 990 is available on the website Guidestar. I’m still waiting on a copy of the 2012 990.

Advent calendar. I sent an Advent calendar of questions to Michael Henson in December of 2012. He didn’t acknowledge it. (I also sent Christmas cards to Jon Campbell and Richard Davis; I never heard back from them, either.) You can read about my foray into Advent-calendar-based-activism here.


One side of Michael Henson’s homemade Advent calendar

Continue reading


Filed under Lists

Some Observations on Charts

I’ve been studying the Minnesota Orchestral Association’s 990s that Drew McManus so generously released to the public in late November. If you’re remotely interested in this conflict, and have no life, they’re great fun to dig through. (Want to know what the President of the MOA was paid in 1999? Want to know how wildly income from grants and contributions has varied over the years? Want to know how much the MOA pays Vengerov or Ma? The 990s will tell you.) I’m hoping that Mary might comment on the “vintage” 990s at some point, whether on this blog or in another public space, but in the meantime, I wanted to point something out.

Last night I was constructing some charts for my own personal use, and fiddling with this kids’ graph-making website, when I realized something no one had ever taught me: charts are wildly subjective.

Continue reading


Filed under My Writing

What Can One Person Do?

Seeing the Locked Out Musicians of the Minnesota Orchestra in Beethoven 9 was a hugely emotional experience, and I really need some time to process it before I write a single word on the subject. Needless to say, the musicians were fabulous…and so was the audience, if I may say so myself!

Sooooooooo, while I’m busy processing… Here’s an utterly fabulous piece to prove that last point. Here’s SOTL reader Rolf Erdahl, discussing both his protest at the Minneapolis Club at the Minnesota Orchestral Association’s annual meeting on December 6, and, even more importantly, what you can do. Don’t feel helpless. You have a part to play. I promise!


You know those cartoons about the crazy guy dressed is sackcloth and ashes carrying the sign “The End is Near”?

On Thursday, Dec. 6, I was that guy standing outside the Minneapolis Club where the Minnesota Orchestra Board was holding their annual meeting.


The crazy guy

The only difference was I was wearing white tie and tails, and my sign was a posterboard with the shape of a cello cut out from the top, and a message that read, “SOMETHING’S MISSING!!! BRING BACK OUR MINNESOTA ORCHESTRA”

I’ll now describe the reasons behind my actions and tell you how the day went. If you want to save time, skip to the important part of this message at the bottom for some suggested answers to the question “What can one person do?”

Continue reading


Filed under Not My Writing

Is Minnesota Orchestra Management Lying To Us, Part 3: Yes

Yesterday proved to be an important day. Graydon Royce penned and published the single most important article yet written about the orchestral apocalypse. So go read it. Now. Please.

Let’s all take a moment to acknowledge that Graydon Royce is the King of Minnesota Orchestra Investigative Reporting.

Your crown, dear sir.

The article begins:

For four years, the Minnesota Orchestra board has walked a tightrope between managing public perceptions about its financial health and making its case to cut musicians’ salaries.

I’m not writing in a newspaper, and I’m not speaking on behalf of anyone but myself, and I don’t need to be delicate, so please, allow me…

The Minnesota Orchestral Association lied to the public about its fiscal health in order to get what it wanted. Yes, I know that we’ve sidestepped the L-word in the past. I wrote “obfuscations” once; the MOA then wrote about “misrepresentations“. So I’m going to be the first to be blunt, and say lie. They lied. They lied, as in “they presented false information with the intention of deceiving.”


Continue reading


Filed under My Writing

What We Know About Minnesota Orchestra’s Finances – and What We Don’t, Part I

There is an old stereotype that artists are terrible with numbers. Many enforce the stereotype (me, for instance), while others defy it. Happily, Mary Schaefle defies it, and she is today’s guest blogger!

Mary is a Twin Cities nonprofit professional and community violinist. You may have seen her name in the comment section here at SOTL, on Facebook, or on the Musicians of the Minnesota Orchestra’s website. I highly recommend reading the two letters she sent to Minnesota Orchestra management; you can find those here and here. I’ve been staying away from too much in-depth analysis of numbers, because I obviously don’t know much about non-profit nitty-gritty. Happily, however, Mary does, and she offered to take a look at some of the public documents discussing the Orchestra’s finances, so that we might at least try to figure some of this stuff out on our own. Hey, if management isn’t going to answer our questions, what else are we supposed to do?

You can take a look at some of the forms she refers to online. Unfortunately I can’t link directly to them, but if you sign up for a free account with Guidestar, and look up the Minnesota Orchestral Association, you can download some of the documents she mentions. If you have any questions or refutations to make, the comment section is open, and Mary will answer you directly, and I will edit the original article as needed. How’s that for service? I’d be so delighted if management would do the same for us, but for some reason that’s too much to ask… Anyway. Many thanks to Mary for contributing such an interesting piece. I hope we get some answers to the questions she raises, and soon.


Minnesota Orchestra’s management has told us they are making “difficult and necessary decisions” and can only spend what they earn. So what do we know about the Minnesota Orchestra’s finances? Tax returns and audited financial statements give us some answers, but unfortunately more questions. There will be plenty of numbers in this post, but I’ll try my best to explain terms.

Remember that I’m not an accountant and certainly not a CPA. I am a person who cares deeply about the Minnesota Orchestra, and who likes to dig through nonprofit tax returns and financials. They can tell you a lot about the organization as long as you have a lot of time and either a translator or a basic understanding of nonprofit finance.

Endowment Income – Is That the Problem?

Management has pointed to the 2008 recession and the resulting decrease in endowment revenue as a key problem. The Orchestra’s endowment lost $12.9 million that year (reported on the 2008-2009 tax forms which are available at Guidestar). They’ve since experienced modest gains of $6.3 and $5.6 million (990, Schedule D, Part V).

But endowment challenges are much larger than a one-time decrease in size. Organizations assume they will receive a certain amount of income from the endowment each year. Those estimates can be conservative, assuming smaller returns, or they can be wildly optimistic. Looking at the Orchestra’s strategic plan, those 2008-09 investments were projected to be $201.4 million. The actual assets were $135.3 million, a difference of $52.2 million before the market tanked. The $12.9 million loss was piled on top of that. The 2007 projections are somewhere between overly optimistic, flawed, and just plain wrong. Perhaps this was the genesis of the financial problems.

Let’s get to how that impacts us today. Back in 2009, our endowment “paycheck” was lowered by 13% compared to our projections. Then things got even worse and our 2012 “paycheck” is expected to be 45% lower. They know the 2007 projections are wrong, but just keep using them. Why do they appear in the 2011 Strategic Plan? Do management and the Board have a new set of projections for future years? A review by an investment analyst, which is typically not part of an audit, is needed.

The Endowment Draw and Two More Questions

Comparing tax returns to media statements and the Minnesota Orchestra website raises two more questions. The draw on the endowment (the income or “paycheck” I mentioned above) has been excessive according to management. They are correct that a 19% draw could deplete the endowment in just over five years. That one is simple math.

According to our friend the 990, the endowment distributions (read “draw”) were 16.3%, 9.4% and 7.8% from 2008-09 through 2010-11 (Schedule D, Part V). As I pointed out in the comments section of Emily’s earlier post on the endowment, the draw amounts released by Minnesota Orchestra do not match their tax forms. That means percentages are off as well. Yes, we once again need that accountant.

Now onto an item that – at least for me – is really troubling. Audited financial statements list “Board Designated Draws from Investments” in the Statement of Operating Activities. Think of this as the amount taken from the endowment (draw) to support concerts, education programs and the day-to-day business of an orchestra (operating activities). In 2008-09 and 2009-10, amounts reported on the financial statements are fairly close to those on tax forms.

But the difference in 2010-11 is just over $6 million. You read that right. The Board withdrew $12.1 million from the endowment, but only $6 million was used to run the Orchestra. I’ve scoured the financial statements and don’t know where the remaining $6.1 million was spent. The money was used somewhere – but where? Financing long-term debt? Expenses related to the Hall renovation? Why did the Board and management decide to withdraw such a large amount in 2011 and only use half for the operations of the Orchestra?

Now is a great time to reiterate that I’m not a CPA. A clarification from an accountant would be wonderful. Perhaps closer to necessary.

For those who like to verify my figures, unfortunately the audited financial statements are not available on the Orchestra’s website or on Guidestar. I’d suggest requesting a copy from the Minnesota Orchestra.

Turning To Investments

Minnesota Orchestra owns plenty of stock. In the 2010-11 and 2009-10 years, Minnesota Orchestra reported gains (or income) of $7.8 million and $2.8 million when they sold securities (Form 990, part VIII). We don’t exactly know how that income was used, but I think we can all agree that bringing in more money is a good thing.

Unfortunately, 2008-09 is again the spoiler. The Orchestra sold a large amount of stock at a $13.9 million loss. It is well known advice to buy stocks low and sell high, and the 2008 market was low as a contrabassoon. It’s possible the stock was on its way to becoming a penny stock. But why would they own such a volatile, risky stock? It could be a bad decision or bad investment advice – to the tune of almost $14 million. I know you’re ready with my next line. A review by an investment analyst would certainly help explain some things.

The Wrap-Up…And More Numbers Coming

For those who’ve stuck with me through this post, you might wonder why I spent so much time and effort on the endowment. It’s because the Orchestra’s management emphasized the shrinking endowment as a key factor in sending their books into the red. So far we’ve confirmed the endowment decreased during the recession. But we’ve also looked at faulty estimates, endowment draws not matching tax returns, some bad investment advice, and an endowment draw where only half the funds go to the work of the Orchestra. If you came here for answers…well hopefully the title gave you a hint.

There are other problems cited by management, including declining ticket revenue, musicians’ salaries, and donors’ restrictions on their gifts. But that means digging into the financials, tax forms and media statements again. Trying to digest too many numbers at once jumbles everything for me, so I’m going with manageable chunks. Check in later for the current state of Orchestral Apocalypse (thank you, Emily, for what you’ve been doing!) and for a few more facts and figures.


You’re welcome, Mary, and thank you!

So…what do you think? I’m in absolutely no position to judge; this kind of stuff is way beyond my personal sphere of expertise. (I do, however, trust Mary.) Are there any experts out there who can help to shed some light on what’s going on? Have any other patrons been looking at the documents that Mary references? If so, what did you find? Now would certainly be an excellent time to hear directly from the MOA…

You can read Part II of Mary’s series here.


Filed under Not My Writing