Tag: budget

Artist Financial Profile: loadbang

An instrumental ensemble of 4 Caucasian men
A discussion with Executive Director Andy Kozar

In 2007, four friends at Manhattan School of Music—Andrew Kozar, Jeffery Gavett, Philip Everall*, and William Lang—were spending significant amounts of time together talking about new music at school, and also at the bar. Realizing they could be performing new music with each other instead of just talking, they began rehearsals for what would become a concert series in an abandoned library at MSM called “Will and Andy’s Power Concerts.” These concerts were only 20-minutes long and, “just like a power nap,” they were all you needed to freshen up your day. Since these friends represented trumpet, baritone voice, clarinet, and trombone, repertoire was lacking. Their first concert program included performances of an Earl Brown graphic notation score, a few barbershop quartets (yes, they sung them), and a piece Jeff wrote for the group.

Fast forward 12 years and these four friends had become loadbang, a “formidable new music force” in the new music scene. I had the pleasure of speaking with their executive director and trumpet player, Andy Kozar, over the phone. Andy was gracious enough to tell me more about how the ensemble started, the history of their finances, a bit about their individual lifestyles, and the ins and outs of how loadbang operates as an integral piece of each members’ musical and financial activity. If you are looking to start an ensemble, I hope this article will offer you a sample working model for best practices.

Non-profit financials

Before we dig into loadbang’s financials, it’s important to note that the financials of any nonprofit are accessible to the public. Every non-profit is required to annually file a Form 990 and many can be accessed through Guidestar.org. The IRS website states:

Forms 990 and 990-EZ are used by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033.

and continues with:

Some members of the public rely on Form 990 or Form 990-EZ as their primary or sole source of information about a particular organization. How the public perceives an organization in such cases can be determined by information presented on its return.

In short, a 990 does not always provide a clear picture, but the form can give the overall details of the financial health of an organization, primary activities and how much was spent on them, the names of the board of directors, and the compensation of the highest-paid officials in the organization. For the real tax nerds wondering what section 6033 is, here you go.

Before I called Andy, I pulled loadbang’s most recent 990 filed in 2018, from the 2017/2018 concert season (their fiscal year runs July to the end of June).

Andy Kozar

Andy Kozar

Revenue

With all the success that loadbang has achieved, some may be surprised that this ensemble is only a portion of each of the members’ incomes. This is why many musicians belong to several performing groups, in addition to their own freelance and teaching or composing work. Looking at the Form 990, the 2018 revenue amounted to $66,319.94 for the season. Expenses totaled $68,958.12, resulting in an organizational deficit of ($2,638.18) for the year. The revenue alone is not enough for any one of the loadbang members to comfortably live in New York City, yet loadbang is a very well managed organization and has set a great trajectory.

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Their 990 reveals that $47,233.33 of the revenue is from “program service revenue.” Essentially this is ticket sales and artist fees, making up 71% of the gross revenue. The other 29% is from “contributions, gifts, and grants” and “gross profit (or loss) from sales of inventory”. This information reveals that loadbang is funded primarily through performance activity. Andy mentioned that loadbang had 38 performances during the 2017/2018 concert season.

The other significant part of loadbang’s revenue is in the “contributions, gifts, grants, and similar amounts received.” This amount adds up to $18,750, approximately 28% of the organization’s total revenue. This money was most likely from received grants for concert and recording projects from organizations listed in the support section of their website. For those who noticed, the missing 1%, or $337, was profit from CD sales.

Talking with Andy, over the years that loadbang has been an ensemble, revenue has grown every year through increases in activity, and the ensemble developed a simple way to put money back into the business: since there are four members, loadbang divides the revenue—after deducting travel expenses—into five parts: a piece for each member to sustain their living, with the fifth part going back into the organization. They did this from the very beginning, allowing their nonprofit to grow the money they need to develop projects and offset occasional deficits like they saw in 2018. Even nonprofits have to put money back into the business to maximize potential and fund their own growth.

Expenses

Some readers may be wondering, “If they had an overall deficit in 2018, how did they make any money?” The members of loadbang paid themselves first. This is represented in line 13 of the 990 “Professional fees and other payments to independent contractors” of $50,047.15. A couple things to unpack here: this amount was probably not just paid to the quartet, as there could be other composers, sound engineers, and artists at large who are part of the loadbang economic activity. The other thing to note is that loadbang has decided to pay themselves as independent contractors, which is a non-employee status that allows organizations to pay performers and other contractual employees without paying payroll taxes or being responsible for their contractors’ owed income taxes. This is the most common way for musicians, composers, and other creatives to be paid. It is also reflective of the way the members and collaborators of loadbang make their other incomes—through gigging.

Other expenses listed on the 990 are printing, publication, postage, shipping ($987), occupancy—rent for concert space rental for self-produced concerts ($1,683), and “other expenses” of $16,000 that ends up being “travel expenses” as outlined by Schedule O. All of these expenses result in a deficit for the year of $2,638. Because loadbang reliably allocates funds as part of its annual budget to build the organization, a net loss for the 2018 year is not a big deal.

I asked Andy about recordings, because everyone wonders: do you make any money from the CD sales?

His response:

No, not at all. It’s a huge money pit. We don’t look at the records as a money-making thing. They are kind of the business card—you show people what you can do at the highest level—and it sets loadbang apart from new music organizations because all of the rep exists only for us. We have a responsibility to record the pieces. As long as the record is good, it can raise our profile in interesting ways.

Loadbang’s discography is impressive. With 12 albums to their name, they are cementing their impact on new music into history, while simultaneously making it easy for booking agents and institutions to hear examples of their programming. So like many arts projects, the CDs aim to pay for themselves but aren’t necessarily an important part of their profit creation, though Andy did say they occasionally get small royalty checks.

Lifestyle

With any talk about income, lifestyle discussions are often omitted but are very important to understand the nature of the business and how that plays out in the day-to-day existence of a performer. Andy was very candid during our discussions about lifestyle and was willing to share a bit about his own life, his other places of work, and the general performing activity of the other loadbang members. The intention of loadbang was never to go full time, as the loadbang members enjoy the variety of activities they participate in across different groups or solo performing, teaching, composing, and general freelancing. As Andy said about his work with loadbang, “It’s a piece of the puzzle—at this point I like all of the pieces of my puzzle… they all bring different benefits”

Andy is both the executive director of loadbang and their trumpet player. Looking at page two of their Form 990, it looks like Andy makes a little bit more than his ensemble members due to his leadership position, but he is not pulling a sizeable income from that activity. Andy also teaches at Longy School of Music at Bard College, in Cambridge, Boston. There, he is the chair of the Winds and Brass Department, co-director of Ensemble Uncaged, and the co-director of the Divergent Studio at Longy. Andy also freelances regularly in New York City, and composes and records quite often. To throw another complication into the mix, Andy’s wife, Corrine, is a tenure-track professor of voice at Susquehanna University in Pennsylvania. They have a townhome in Pennsylvania, but he spends part of the week in Boston and New York City. His schedule for a “normal” week looks like this:

Sunday-Tuesday:       Longy School of Music, Boston
Tuesday-Saturday:     Go back to NYC or Pennsylvania, or back and forth

But normal weeks are actually not the norm. Andy explains, “Normal is usually getting on a plane and going somewhere. Somehow it feels that’s impossible to be normal.” For now, the thriving music careers of Andy and his wife work well. They have to spend regular time coordinating schedules so they can be in the same places at the same time, but so far, their 2.5 years of marriage has been working out great.

For the rest of loadbang, the guys are more or less in New York City freelancing or on faculty at the Longy School of Music. I asked how they all ended up as faculty at Longy, and Andy told a quick story of how he started there four years ago and all of a sudden there were faculty openings for voice, clarinet, and trombone. His supervisor bounced the idea of the rest of loadbang coming on board, especially for their summer contemporary music program, Divergent Studio. It seemed to just work out from there!

So you want to start an ensemble?

Imagine you have a few friends who want to start a chamber group and have visions of becoming the next Kronos Quartet, Eight Blackbird, or Imani Winds. Although it is an excellent goal, be realistic about how an ensemble fits into your financial picture. Many ensembles start with nothing and have to put money back into their ensemble just to get it off the ground. Sometimes artistic fees barely cover travel and rehearsal costs, but you do the gig anyway to start to make a name for yourself (something you may do in your own career, but which can carry extra challenges in a group context). Realize that even the most successful ensembles are often just a piece of their founders’ incomes. As Andy put it:

I don’t mean to sound like a grumpy old man (I’m only 34), but sometimes there’s an expectation that comes from naiveté, that if you finish school and start a group and you’re doing cool things then you should be getting cool gigs….No one owes you anything—you don’t deserve a gig necessarily.

The best groups put the insane hours in following other ensembles, tracking down opportunities, and cold calling for the next gig. After speaking with Andy, I combined some of his sage advice into a shortlist of tips to get your ensemble going:

1. Play the gigs!

Don’t be too proud to take a gig. Gigs come from the hard work of networking, building relationships, and mimicking the groups you want to be like. If you can be willing to work, you will be more receptive to opportunities.

2. Send proposals out like your batting average relies on it.

It’s rare that someone will hand you a great gig. The more proposals you send out, the higher your chances of getting a contract. Your batting average increases. In our conversations, Andy said that 85-90% of the work loadbang gets is from reaching out to people and sending them proposals. The longer you do something in new music, the larger your network becomes. Only recently has loadbang seen an uptick in times they are approached to do a gig. For reference, early on, when loadbang would send out 100 proposals, they would only get seven to eight responses.

3. You may as well ask.

Even if you think a project or an idea is a long shot, it never hurts to ask—the worst someone can say is “no.” Early on loadbang thought it would be cool to get a commissioned piece from a skilled composer who they really loved, who just happened to be Charles Wuorinen. So they asked Wuorinen, thinking it would be a long shot. Apparently it wasn’t, and Wuorinen’s piece is featured on this CD.

4. Believe in your project.

Performers don’t start ensembles to become rich. They start groups out of passion and creative desire. This passion is also observed by your audience, collaborators, and funders, etc. As Andy put it:

If you’re really excited and believe in the project you’re doing, that reads. And if the product you have is good, you’re more likely to, over time, have some sort of modicum of success (however you define it)—it can be infectious.

Having passion from all members of your performing group so important. It communicates to your followers. It motivates you when keeping the ensemble going is a struggle. It keeps you honest about why you are pursuing the work.

5. Align your goals with your finances.

As an observer, I added this myself, after poring over my notes from my conversation with Andy. When anyone is seriously pursuing a project, they align their finances with their goals. Early on, loadbang put money back into the organization. This is the same for any small business. Sometimes you have to put more dollars in than you want to, but if you are serious about longevity and financial stability, it is important to organize your finances from the very beginning.

For performers and composers looking to start an ensemble, I hope this article was insightful. Do not forget that you have a plethora of amazing examples in the new music industry from which to draw knowledge. Success is not always left to the fates—you can steer your own ship in the direction of your choosing. Andrew Kozar also told me that you are welcome to reach out to him if our NewMusicBox readers have any questions, by emailing him at loadbang @ loadbangmusic.com.


*The bass clarinet position at loadbang has switched a few times, from Philip to Carlos Cordeiro, and since interviewing Andy, loadbang recently announced that Adrian Sandi is now on the roster.

William G. Baumol and You: (Broader Economic) Context Is Everything

pills and money

This is the first publication of a line of research I’ve been working on for more than a year. I’d like to thank the New Music Gathering, the San Francisco Conservatory, Peabody Conservatory, and most recently Seattle Pacific University for giving me opportunities to speak about this research. Video of my talk at Seattle Pacific is embedded below. I’d also like to thank the more than a dozen artists, administrators, and economists who’ve shared their experiences with me and helped me make sure this work isn’t only theoretically sound, but also of practical use for working artists. Last but not least, I’d like to thank NewMusicBox for helping me reach out to some of those working artists last year, as I was preparing this material for January’s New Music Gathering. I’m still at the beginning phases of this work, so if you’re curious about it, have a use for it, or want to participate, please get in touch: [email protected]

pills and money

The music industry is changing really fast. Nobody knows what’s going on, or what’s going to happen next. Nobody’s career is like anyone else’s, and we’re all making it up out on our own. But there’s this one piece of economics that can help make sense of what’s going on, help us make better decisions as artists, and even help us make long-term plans.

That piece of economics? Baumol’s Cost Disease. In the 1960s Baumol noticed that some kinds of work get more productive because of technical advances. These are things like manufacturing, calculation, and robotic factories: anything where new technology makes things faster and cheaper. For Baumol, this is the “productive sector.” Then there are categories of work where technology doesn’t make it faster. No new iPhone app is going to make it take less than four worker-hours to perform a one-hour string quartet. The usual grouping of such industries is healthcare, education, and the performing arts (us). We’re the “stagnant sector”.

As things in the productive sector get cheaper and cheaper, stuff in the stagnant sector gets more and more expensive (by comparison) to produce. So it gets harder and harder to keep paying artists, teachers, and doctors well for producing, by comparison, less and less. That’s cost disease.

In the popular arts press, cost disease usually gets invoked to justify shrinking the orchestra or firing the dancers. It’s presented as a bogeyman, a bad thing that happens to our field. But it’s actually an observation about relative productivity that touches the entire economy and has implications for everyone, both good and bad. If you’re interested, Baumol wrote a second book during the debate over Obamacare. He talks about what people have gotten wrong about his work over the years (quite a lot), and he talks about how the problem isn’t just with things getting too expensive. There’s a problem when things like guns and fossil fuels are getting cheaper, too.

He makes one brilliant argument about how the forces moving these prices all exist within the context of a single economy — the rate of inflation governing all of this is an average of all the prices. No matter how high the costs of healthcare, education, and the performing arts grow, we can afford them as a society. Maybe we can’t afford them as individual businesses, but with enough political will, we can have the things we want.

There’s one thing Baumol doesn’t do–and I haven’t seen any other economists do it either–and that’s extend this work into the realm of the individual artist. Honestly, we’re too small a segment of the economy to get that much attention.

It’s well established how cost disease forced us out of the institution and into working on our own. But once we got here, Baumol kept being useful. Because suddenly, we were like big orchestras with mixed staffs of productive office workers and stagnant musicians. As independent working artists, we’ve got our artistic practice (stagnant and not being made faster by technology), and all the extra administrative work that we didn’t have to do before, like marketing, finances, taxes, business incorporation, etc., etc. (productive and being made faster by technology).

Baumol does provide a good account of businesses like this, with mixed inputs, including orchestras and individual artists: we’re called “asymptotically stagnant.” That is, as the productive stuff gets faster and faster over time, it will shrink to practically nothing as part of our cost of doing business, and we’ll eventually become mostly about the stagnant side: in our case, the actual art.

Publishers are a great example to show how this works. Originally, publishers were important because they had the means to print paper. They owned the machine. That made them important and powerful. They also had a bit of a distribution network and a promotional system, but that was less important than the engraving and printing. Over time, the cost of printing has dropped. Now most of us can make professional-level scores ourselves, and we can play with PDFs off of tablets. But publishers are still important, although more for their distribution networks and marketing capacity than for the actual means of production. The cost of the physical printing has dropped so low that it’s a negligible fraction of the cost of running the business, or of the value publishers add; the only thing left is the human labor part: that network. It’s taken a long time, and the process isn’t finished, but it is inevitable: the part of the work that can’t be automated will be all that’s left.

Piracy in the WSJ

Sample coverage from the Wall Street Journal

It’s not just publishers, either. Most of the businesses that artists encounter as counterparties in our lives are being strongly influenced by the relative productivity changes that Baumol describes. Record labels, venues, agents, merchandise makers, PROs, orchestras: everyone’s getting their business models messed with by the same economic forces, and when one of these institutions starts to implode, as happens all too frequently, we can use cost disease to tell a quick and dirty (but very useful) story about what’s going on.

All you have to do is sort the things that institution does into two piles: stagnant and productive. Once you’ve done that, you know what’s getting cheaper and what’s getting more expensive. This can explain very dramatic changes, largely because of how powerful compound interest is. The difference between a 1% growth rate (below inflation, so getting cheaper in real dollars) and a 3% growth rate (above inflation, so getting more expensive in real dollars) can get very big in just a few years and lead to dramatic consequences. This is possibly my favorite feature of cost disease analysis: you don’t need to know what something costs, or even in most cases how fast its price is changing. You just need to know whether it’s automatable or not, and that tells you whether the price is going up or going down. That’s really all you need to know. Then you can usually tell where the pressure is coming from, and what someone’s trying to do about it. This can help you read the news, and it can help you figure out when the person you’re negotiating with has a weaker position than they’re letting on.

Individual artists are like that, too. Our artistic practice will never get more productive, but everything else can get faster and faster and faster over time thanks to technological advances. This leads to one of the first lessons of cost disease for individual artists: expect the way you do office work to change rapidly. You’re not going to find the right tool for travel booking or promotion early in your career and have it be the best tool for your whole life. We can keep our art-making habits the same, but our business habits should change.

We even know something about how they’ll change: they’ll get cheaper. Instead of buying an ad and printing signs, we can send emails and host a website on a cheap server. Instead of paying a travel agent, we can use an interlocking set of search sites and calendar applications to organize tours. And while we still might need to pay an accountant with experience in the arts to do our taxes, we can make that job faster and shorter by documenting our accounts with metadata in something like mint.com. And we can expect those things to keep getting cheaper and faster over time.

There is a part of our marketing work that won’t get faster, though. In truth, marketing and communications have components in both the “stagnant” and “productive” sectors. We still have to write the email, even though we can inexpensively send it to thousands of people. There’s a core of communication that isn’t going to get faster, even though new telecommunications technology has changed pretty much everything in the last few decades.

When we look at those non-art making tasks and see their financial costs going to zero, we can start to see what’s really important in deciding how to do these things: time. You’re not investing dollars in that new ad campaign, but the time you’re committing to it is more important, and increasingly expensive. So when you’re picking a platform to promote yourself, think about how easy it is for you emotionally to use Twitter or Tumblr or Pinterest or whatever comes next, because if you commit to a platform you hate, you’ll be wasting all that time psyching yourself up to post, instead of naturally taking an Instagram photo of your lunch without giving it a second thought.

As artists we have very unpredictable financial lives. But we know that our weeks will have the same number of hours in them for the rest of our lives. So when we make long-term plans, it’s a lot more effective to base them on the time we have than the money we hope to earn.

Most people go through their careers at regular jobs earning an average of 4% more per year over the course of their lives. That’s how our economy prices labor. That’s how much more valuable our time gets year by year, and that’s how much our pay should be growing: significantly faster than the 2% inflation target set by the Federal Reserve.

For me, that’s a strong way to advocate for the arts. I don’t like to base my arguments on increasing test scores, economic development, or personal enrichment–although those things are awesome and do come from the arts. When I’m forced to justify the arts in a narrow outcomes-based context I feel like I’ve already lost, because the reason art is so interesting is how hard it is to pin down to just one dimension.

I like to argue like this: we need to make a commitment as a society to paying health care workers, educators, and artists enough to support them as well as any typical worker in our society. Baumol’s analysis shows that we can have as much of these things as we want. We just need the will to commit to paying for them.

The Art of the $100 Guitar

Video presentation by Molly Sheridan
Image of signed guitar courtesy Steve MacLean

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Nick Didkovsky and Chuck O’Meara had something of a running joke going when it came to expensive guitars. The men would often taunt one another via email, trading ads for various high-priced instruments as they came up for sale alongside the suggestion that the recipient consider making the big ticket purchase. So Didkovsky says he was surprised to open “Subject: The Guitar of your Dreams” and find a link not to a $100,000 Fender, but to a nameless electric guitar going for $100 on the respected vintage guitar site Elderly Instruments.

“Maybe three or four of us should buy it together and share it,” Didkovsky fired back, but the joke turned onto a serious conversation, and he and O’Meara sent out a few emails to colleagues to gauge interest in a possible project. “By the next day, and this is no exaggeration, we had 25 guitarists on board who said ‘I would love to do a track with this.’ And we didn’t even own the guitar yet.”

On Oct 20, 2010, they made their buy. “It’s a very unique object,” Didkovsky explains, pointing out that the instrument’s one surviving pickup resembles an old radio. There is no brand name on it; though many have opinions, no one is really sure of its pedigree. And it has seen some wear and tear. “It’s replete with failures,” he admits. “You have to meet it on its own ground.” It’s the antithesis of guitar fetishism—it’s attractive because it’s so cheap.

Since that initial pitch, a wide spectrum of guitarists have responded to the siren call of the $100 Guitar Project, the players arriving through a network of friends and colleagues. No curatorial bar was set, no competition encouraged, no stylistic walls erected. It has been a community exercise, each musician taking ownership of the instrument for a week, encouraged to come to the project without preconceived ideas and to simply explore whatever the guitar suggests to them. Each participant is asked to record a short composition “that honors the guitar in some way,” then sign the guitar’s body (it now hosts archeological layers of signatures) and pass it on, often in person. After 65 participants opted in—enough music to fill a double CD release—the project stopped accepting more names. Bridge Records will release the complete set of recordings in December 2012.

“It’s really the story that is so beautiful about this,” says Didkovsky. “People have been very generous and that exchange has been spectacular.”

Tracking the $100 Guitar Map

Oh, the Places You’ll Go: Tracking the $100 Guitar

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Much like the initial call, Didkovsky sent out word that a NewMusicBox story on the project was being filmed (see video above) and, on less that 24 hours notice, he and five of the project participants crowded into his Midtown practice space in New York City for a chat.

Mark Solomon quickly honed in on the element of nostalgia that pervaded the project in his mind. “What touched me about this particular conception is that every guitarists on the planet remembers their first guitar; it’s like your first love. And it’s generally a piece of crap—a $100-ish instrument.”

Blowing up that idea of the uniquely personal experience with the guitar, Bruce Eisenbeil pointed out that the resulting compositions will give listeners the chance to explore the styles of all kinds of musicians. “This one instrument is being used as a mode of expression. What is it that informs all of these people at this time? How do they make music? Why do they make music?”

Still, was this a gimmick, a serious art project, or did it encompass elements of both?

Caroline Feldmeier wasn’t shy about admitting that she was “crazy, crazy obsessive” about her composition. “I received the guitar from Nels Cline. So I knew there was a very high bar, and I definitely wanted to produce something that would be consistent with the high level of talent that is part of this project.”

Jesse Kranzler agreed, pointing that he “had to take it seriously to some extent,” since he was more accustomed to working alongside bandmates than playing alone in a solo context. Still, he acknowledged, “it’s kind of hard to take it too seriously when it’s such a fun, light-hearted project.”

Distilling down the enthusiasm in the room for the scope and talent the project encompassed, Joe Berger said plainly, “I think it’s going to be one of the most talked about guitar projects when it comes out. I’m certainly going to be talking about it.”

For his part, Didkovsky seems to have recovered his investment and then some. “Putting it out in the world, letting networking take it over, seeing it tumble from hand to hand, player to player, and without guiding it too much seeing what came out…It’s enriched my life tremendously.”