Pacific Symphony Raises $5 Million, Erases Deficit : Funding: Executive director Louis G. Spisto says campaign’s success reflects orchestra’s continuing artistic improvement.

The Pacific Symphony has wiped out a deficit of $658,000 three years ahead of schedule and already has surpassed a $5-million fund-raising goal originally set for Sept. 30.

Its fund-raising campaign, launched in February, had raised $5.23 million as of July 30 with a number of gifts still to come in, according to orchestra officials. With that money, the orchestra has established an endowment fund of $1.15 million, the interest from which will be used for operating expenses.

Another $1 million of the total will endow an Educational Performance Fund to provide permanent financial support for in-school and other educational concerts by the orchestra. The amount was donated anonymously for that specific purpose.

“The fund-raising campaign seemed to build momentum early and never really let up,” executive director Louis G. Spisto said Wednesday, noting that by February the orchestra already had received more than $2.7 million in pledges toward the $5-million goal. He said he thinks the success reflects the orchestra’s continuing artistic improvement.

“We’ve done incredibly well, especially with individual donors, which is the strength here in Orange County,” Spisto said. “These individuals are very taken by the growth in the orchestra and the promise for the future. They have bought into our plan and made a commitment to support that plan.”

One new donor is William Dultz, a Newport Beach resident who gave the orchestra property in Laguna Beach appraised at $1.4 million. The orchestra plans to sell the land, Spisto said.

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Roger Johnson, who is heading the fund-raising campaign, said Wednesday that, in addition to several large gifts, “we had many broad-based middle and small-sized gifts. This is so important, too.

“We continued to find that support for this orchestra exceeds our expectations, no matter where we look for support. . . . Obviously we are delivering what the county wants.”

About $3 million of the $5 million is in hand, according to Spisto. The rest is in pledges to be paid over three to five years or as bequests as part of irrevocable trusts. Spisto said the money is evenly split between the two kinds of funds.

To pay off the deficit, the orchestra applied gifts from the campaign plus a surplus of $100,000 over its current operating budget of about $5 million.

The orchestra had a surplus, Spisto said, because “we kept our expenses within the budget and we reduced the expenses in some areas where we needed to, primarily in the development area.”

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The surplus reflects a steady gain; in 1992, the orchestra had a surplus of nearly $41,000. The preceding year, however, it fell short by $131,000. The deficit dates back to 1988 and 1989 and had been attributed to shortfalls in fund raising. “Ticket sales those years were fine,” Spisto said, noting that because of incoming cash flow, the orchestra “never had unpaid bills. We always kept generating income in advance.”

The turnaround in fund raising has happened because “we have an artistic program that is continuing to improve and capture the support of the community,” Spisto said. “We also showed we have gained a very strong ability to manage the annual operations successfully. And most importantly, we have a board of directors that is able to provide the leadership, especially through our board president Janice Johnson.”

The orchestra’s plan was to retire the deficit in 1996 in increments of $200,000 per year. But the gift of the Laguna Beach property means it can be retired now, Spisto said. “It is very unusual to receive a one-year payment of more than $1 million, such as this. Most million-dollar gifts are paid over years. This gift was not restricted, so it allowed us to accelerate our plans.”

Ticket revenue for the 1992-93 season increased slightly by 1.5% to a little more than $3 million. Individual ticket sales increased by about 5%; subscription sales by about 1.2%.

Earned revenue for contracted services declined markedly, however, to $371,505, about 41% less than last year. (In 1990, the orchestra earned $970,000 from outside contracts).

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Spisto said much of the loss of contacted services involved the ballet series sponsored by the Orange County County Performing Arts Center.

“Basically we only play with a (ballet) company that needs a local orchestra,” he said. “Several of the companies (this season) came with (prerecorded) tapes and one with its own orchestra.

“We do not guarantee the orchestra any set number of weeks of contracted services,” he added.

“The large picture is that we are financially stable,” Spisto said. “So now we can turn our attention to some of those special projects we’ve talked about, like recording later this year or the Vietnam War commission project next year, as well as strengthening our educational outreach programs.”

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Even before the $1-million pledge for an educational endowment, the orchestra “more than doubled” its spending on educational outreach, from $125,000 in 1992-93 to $270,000 in 1993-94, he noted. “The orchestra is doing and will continue to do more in the community. That is very important.”

Still, Spisto said, “we continue to be in a very serious recession. So we have to continue to very realistic about our expense and income projections. There is no question that generating ticket sales in this economy is a challenge, and it will continue to be a challenge. But if we can offset that with continual strength in our fund raising, then we’ll be fine.”