O.C. Arts Circles Keep Eyes on Economy : Philanthropy: Most nonprofit groups have yet to feel the recession’s pinch on donations, but that hasn’t abated concern that giving may take a dive in coming months.

A day after the notorious stock collapse of 1987, the nation’s chief arts official predicted that the plunge probably wouldn’t have disastrous, long-term effects on private arts philanthropy.

“The basic economy remains good, considering interest rates, unemployment and inflation,” Frank Hodsoll, then-chief of the National Endowment for the Arts, told The Times. “If the overall economy is strong, giving will continue strong.”

Today, those words could sound a death knell as the nation’s arts community enters 1991. Consider:

* On Wednesday, the Bush Administration pronounced that the economy appears to be in the middle of a recession that is likely to last until the summer.

* Friday, the Labor Department reported that unemployment jumped in December from 5.9% to 6.1%, its highest level in more than three years.

* The prospect of war in the Middle East continues to loom.

* Closer to home, a recent survey indicated that charitable donations in Orange County sagged in 1990.

“In a county already known for its parsimony, the median (annual charitable) donation dropped from $285 in 1989 to $223, despite the 9% increase in median household income,” said UC Irvine social ecology professor Mark Baldassare, who conducted the 1990 Orange County Annual Survey with Cheryl Katz.

Baldassare also predicted that 1991 could mean rough times ahead for charities, in view of “declining consumer confidence and widespread fears about the economy.”

What does all this mean for the county’s nonprofit arts institutions, most of which would expire on a diet restricted to box-office receipts?

Are these institutions seeing a decline in donations from the private sector--from individuals, corporations and foundations? If so, have they or will they radically change the way they plan to raise money? And are they worried that the months ahead will mean even fewer contributions?

“To date, it’s more difficult for us this year to be successful with corporations and foundations,” said Erich A. Vollmer, executive director of the Orange County Philharmonic Society. “Corporations are taking their time in making (philanthropic) decisions and I think corporate budgets are going to be tight.”

Vollmer, however, was the only arts official to report difficulty roping in donations from corporations and foundations and to cite plans to change fund-raising strategies.

In the months ahead, the Philharmonic Society will seek smaller donations (around $20,000 versus $50,000 typically) from a greater number of corporations (three versus two), Vollmer said, and put more emphasis on courting individual patrons rather than businesses.

Despite this, Vollmer said that by December--eight months into its fiscal year--the organization had raised more toward its goal of $700,000 in private funds than it had by the same time in 1989. While its operating budget for 1990 increased from $2.5 million to $2.8 million, cash donations rose from $349,026 to $388,704.

Meanwhile, officials at several of the county’s other major arts groups say they have felt no pinch in donations, and several major corporations and foundations that support local culture predict that their giving will remain stable.

Of six arts administrators surveyed, all said that they are monitoring the shaky economy with renewed, somewhat concerned scrutiny, echoing the feeling of a key national arts leader.

“Everybody’s worried, and the economy took a very deep drop in November and December,” said Anne Murphy, executive director of the American Arts Alliance, which represents 350 arts organizations. “My guess is that the effects (of those two months) will be seen in ’91.”

That concern may become even more pronounced in the long run, according to Craig Smith, editor and publisher of the Corporate Philanthropy Report, a Seattle-based newsletter. Smith said in a recent report that the recession is not likely to have much impact on corporate philanthropy in 1991. “Usually there is a two-year lag before changes in profits are felt in corporate contributions.”

According to preliminary figures, Orange County organizations thus far are meeting or are ahead of fund-raising projections for fiscal 1990-91, which for each began at least three months ago. None expressed serious worries about donations in the coming months.

Patrick J. Flynn, general manager of Opera Pacific, said that from Sept. 1 to December, the company had received $450,000 in cash and pledges, versus $300,000 during the same period in 1989, Flynn said. The troupe’s total 1990-91 budget is $4.5 million, up from $4.2 million the previous year.

“Thrilled” with the response, Flynn repeated the sentiment of other officials who either already employ all the strategies they can think of or don’t see the need to forge any new fund-raising techniques. “If it’s not broken, why fix it?” he said.

By last month, corporate donations received by December at the Garden Grove Symphony increased slightly over the same time a year ago, said general manager Yaakov Dvir-Djerassi.

The orchestra’s expenses are up from about $250,000 to $320,000, but cash contributions from corporations also rose by about $20,000 to more than $90,000, he said. Individual donations remained stable at about $60,000, he said.

Officials at the county’s two major museums also say they were sitting pretty at the end of 1990 and feel optimistic about the future.

Charles Desmarais, director of the Laguna Museum of Art, said that by December, the museum had received $370,000 in cash and pledges toward its $800,000 goal of contributed public and private income. Expenses this year total about $1.4 million.

By the same time in 1989, $133,000 had been raised, he said, explaining that part of the large increase is due to the receipt of more government grants this year. Still, development staff additions in 1990 have helped buoy all fund raising, he said.

Year-end figures were not available from the Newport Harbor Art Museum, which has a $1.5-million fund-raising goal.

“I think we are certainly where we were last year, and I’d predict we’re somewhat ahead” in cash and pledges over last year, said development director Margie Shackelford. “We had a really strong November and December in terms of private fund raising. We’re seeing no ill effects from the economy.”

The county’s largest theater troupe, South Coast Repertory, has also seen an increase in private and public contributions, which jumped (in cash and pledges) from $710,000 by December, 1989, to $741,000 by last month, said SCR General Manager Paula Tomei. The troupe’s goal this year is $1.6 million. It was $1.5 million last year.

“At this point, we’re all watching everything more closely than last year, so if we do need to make any changes in our plan we’ll be ready to. But we haven’t done anything yet,” Tomei said.

Despite the rosy reports from arts groups, some corporate donors are cutting back. AT&T; and Philip Morris have announced a reduction of funding and other major corporate arts donors are expected to do the same, according to Los Angeles Theatre Center managing director Robert Lear.

But among officials at one foundation and several corporations that have provided millions of dollars to Orange County arts groups, none predicted a definite decline in arts support, and only a few indicated even the possibility of a reduction.

At Western Digital Corp., based in Irvine, arts support is not discretionary and will therefore not be eliminated entirely, said Robert Blair, vice president of corporate relations. But “it’s likely in (a certain) economic environment that the charitable donation level could be down from the prior year,” Blair said.

Those corporations expressing confidence that their giving levels will remain stable include the Mission Viejo Co., Digital Equipment Corp., the McDonnell Douglas Employees’ Community Fund Inc. and the Fluor Corp.

Fluor spokesman Rick Maslin said arts giving at the international, Irvine-based corporation could decline if profits drop, adding that Fluor officials and several industry observers put the construction and engineering giant in good stead for 1991.

“We’re certainly not recession-proof, but we’re looking at the coming year with quite a bit of optimism,” Maslin said.

Notably, during the recession of the early 1980s, when Fluor suffered a period of decline, the company maintained strong arts support, “primarily because we were fulfilling commitments on pledges made in 1980,” he said, to the Orange County Performing Arts Center and elsewhere.

Last year, Fluor gave about $25,000 total to the Center, to SCR and to the Orange County Business Committee for the Arts, Maslin said.

Another generous county arts patron, the $47-million, Newport Beach-based Harry and Grace Steele Foundation, also had good news for the local arts scene.

“We’re going to keep going along on the same keel,” foundation trustee Al Burnand said. The foundation gave $1 million to the arts in Orange and Los Angeles counties in 1990, the bulk of that amount to Orange County, he said.