On Thursday, failing to make payroll, the leadership of PAM finally got around to requesting that the bankruptcy court judge release $250,000 from over a million dollars in the endowment funds to cover the school expenses over the summer.
According to the Intelligencer Journal New Era, “The troubled Pennsylvania Academy of Music says it is too cash-strapped to cut paychecks. To tide it through until students return to the fall, PAM asked a judge to let it tap its $1 million endowment.”
Non -payment of staff has gone on for two weeks while the board and leadership dithered, failing to make the request for freeing up of funds on hand that should have been filed within days of the seeking protection under Chapter 11 of the Bankruptcy Act. The very purpose of the Act is to provide liquidity to enable businesses to continue to operate. To file for Chapter 11 and not then seek relief under it is inexplicable.
The current distinguished and well meaning leadership not only is unfamiliar with the business challenges at hand, but their time is consumed by other pressing matters unrelated to the Academy… in the case of board president Dr. Holmes Morton, sometimes matters of life and death.
Also, much time has been devoted to “inventing the wheel” and chasing theories rather than spending a few hours reviewing the records of the Business Committee that advised the previous board and debriefing those involved.
Concerning a move in 2011 to the Brunswick Annex, a non-musician Board member told NewsLanc: “This project is far beyond the reach of current Board of PAM, technically & financially.” Had the sought help from others with the expertise, the effort could be underway.
Two things:
- The only way a non-profit institution devoted to the arts can function properly is through dual leadership – art and business – and support from philanthropists.
- The proper goal is to achieve a level of annual deficit that can be covered through contributions from supporters. In PAM’s case, that means raising $250,000 a year through grants and private donations, not over $1,500,000 as was the situation in the past.
The view of PAM’s leaders: Until current activities can be funded, talk of the future would be misperceived by the community as inappropriate and unsound. Furthermore, they believe that PAM must have a balanced budget to move forward.
They do not comprehend that current relatively modest funding needs would be swiftly met if potential major donors had a sense that the school would continue and might ultimately achieve its full potential. Given a good location and a viable plan and the right person to place the calls (not the Watchdog for obvious reasons), adequate funding probably could be raised on five phone calls.
One leader who has both a business and education background should be sufficient. PAM is so small. It surely doesn’t need two leaders. There are plenty of folks graduating from arts management programs who could handle the job. But I think it is far more important for the next leader to have some education experience. PAM is a school first and foremost. Its leaders need to understand private school markets and how to recruit students in a crowded market.
You are right to suggest that donations could be used to help cover holes in the budget. But to keep the institution acutely attuned to its market, it should try to construct a budget based primarily on tuition revenues. Supplement those revenues with donations for program start-ups (PAM never fronted a full student orchestra because it lacked a decent brass program), special projects and scholarships. But keep the school keenly aware of its market by grounding its budget in tuition revenues.
Alas, it might be too late for any of this. Why did PAM not make provisions for its move? Why was it caught unawares by the move when any disinterested observer could see that MU, with a prep program of its own, was unlikely to share space with a competing program?
I do not agree that PAM should be allowed to tap into its scholarship fund to pay teacher salaries and other operational expenses. That money was given by doners with the understanding and expection that it would be used to pay for lessons for deserving music students preparing for a career in music. Rather than allow PAM to use this money to cover its budget deficit, it could and should be returned to the donors or else given to Millersville University to be awarded to deserving pre-college music students in its preparatory division.
PAM’s website states that it has 30 “international” faculty members. Yet Friday’s Lancaster Newspaper story says that as of May 27, when it filed for bankruptcy, it had 13 “annually salaried faculty”. Some of these teachers teach for other institutions in addition to teaching at PAM. A clarinet teacher at PAM also teaches at F&M, for example.
PAM still claims “over 300 students”, although what is meant by “students” has never been explained by anyone connected with the Academy, even though this question has been asked numerous times.
Quality music education in the Lancaster area does not depend upon nor revolve around PAM. Music education was alive and well before PAM came and it will be after PAM is gone.
At that time, according to the filing, it had 13 annually salaried faculty and 10 hourly support staff on its payroll, all paid monthly.