Insight June 15, 2010, 3:41PM EST

New York City Ballet: Dancing Through Recession

Kathy Brown, executive director of the NYCB, talks about the economic and creative challenges—and opportunities—facing arts organizations

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Paul Kolnik

Kathy Brown

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Pressure to cut costs, find new revenue sources, rethink what doesn't make money, and increase repeat business are confronting all businesses during this tentative economic recovery. For Kathy Brown, executive director of the New York City Ballet, the issues are particularly acute. "Ballet tickets become an unjustifiable luxury to people without jobs, and donations dry up as traditional philanthropic sources also fall victim to a challenging economy," observes Brown, who assumed the newly minted position in December 2009.

Among the initiatives that the ballet has undertaken: forgoing costly, full-company tours unless they are underwritten; experimenting with a dramatically smaller ensemble touring group; and creating and opening a spring festival, "Architecture of Dance," which featured seven world-premiere ballets and four commissioned orchestral scores, interspersed with existing repertoire. "The festival allowed us to appeal both to NYCB's core audience—which appreciates new works, along with the familiar—and to new and younger audiences, who welcome the diversity of cultural attractions that the festival offers," Brown says, "from new music and dance to architecture and fashion."

Brown recently spoke with Businessweek.com Management Editor Patricia O'Connell about her role at New York City Ballet and her goal of " demystifying ballet to make it more accessible to more people." Edited excerpts of their conversation follow:

What did you see as the opportunity and the challenge in taking over an arts organization at this time?

Everyone—in the nonprofit world as well as the for-profit world—is grappling with the most difficult economic environment that they've ever seen. The other challenge for those of us in the performing arts is there has been a dramatic change in how people consume culture and the choices available to them.

The opportunity is in revisiting budget practices and pricing models, and being entrepreneurial and creative about audience outreach and donor cultivation. This kind of situation forces you to be more creative in your solutions.

Q: How does a traditional arts organization—particularly one that is about live performance—use social media and technology?

A: We have a Facebook page and we have found that Twitter has become a useful tool in helping break down some of the barriers and the mystery. Having our dancers tweet makes them very human and approachable.

And our home at Lincoln Center, the David H. Koch Theater, has just undergone a major renovation that included installation of equipment for recording and distributing in high-definition video and digital sound. Now we can capture content to use in audience development, education programs, and fundraising.

Q: How much do you depend on contributed income vs. operating income?

A: We have an annual operating budget of $6o million. About one-third of that is contributed income. The foundations have been hard hit [in the economic downturn] and most of them calculate their giving based on a three-to-five-year average, so it is going to take a few years, even after the economy turns around, for their contributions to go back up.

Q: When corporations cut staff, the effects are often not obvious externally, though they may be felt acutely internally. "Do more with less" is a common corporate mantra. In an artistic organization, you can't do that. But you have pressures to cut, too. How do you cope?

A: There is that issue of cutting to the point where it goes beyond the ability to recoup, once things get better.

You want to do everything you possibly can to maintain your artistic integrity and your artistic talent. To protect that, we would make much harder decisions on the administrative side.