Budapestborn Iván Fischer founded the Budapest Festival Orchestra (BFO) in 1983 and is internationally acclaimed as a con ductor and composer. Now widely consid ered to be one of the leading orchestras in the world, the BFO performs about 30 weeks a year in Budapest, New York and elsewhere around the world and records commercially on Philips Classics. With the BFO, Maestro Fischer has incorporated such unorthodox ideas into practice as allow ing individual orchestra members to con tribute to concert programming, holding surprise concerts where the program is not announced and offering renowned concert opera performances.

In August 2012, Maestro Fischer be came Music Director of the Konzerthaus Berlin and Principal Conductor of the Konzerthausorchester Berlin. He has been guest conductor of some of the finest sym phony orchestras of the world, including the BBC Symphony, Berlin Philharmonic, Cleveland Orchestra, Royal Concertgebouw Orchestra (Amsterdam), London Symphony Orchestra and the Los Angeles Philharmonic Orchestra. He was earlier Music Director of the Kent Opera and Lyon Opera and Principal Conductor of the National Symphony Orchestra in Washington, DC.

AKA has assisted the BFO to strengthen its international governance and global fundraising.

Strategy Matters: What are the greatest opportunities/possibilities facing the performing arts in Europe, the United States and globally today? What are the key steps to address them?

Iván Fischer: We need to distinguish be tween the relevant traditions in Europe and those in the United States. In Europe, performing arts initially had been the “toy” of the aristocracy and later “inherited” by the bourgeoisie/citizens. European per forming arts organizations have primarily been maintained by states and cities. This means, in practical terms, taxpayers’ money. In the United States, the performing arts have always been financed by enthusiastic individuals—often of European origin who immigrated to the U.S. and felt a strong civic pride.

Let’s first consider the problems of the European model. The danger for performing arts organizations is the squeeze on state and municipal budgets, because in difficult times culture is always an easy target of spending cuts. At the same time, there are no traditions of fundraising or philanthropy that might reasonably replace shrinking subsidies. Therefore the main challenge for Europe is to learn these techniques and methodologies from the United States.

Let’s now look at the difficulties in the U.S.: The giving potential of philanthropy that maintains the art at the moment is highly vulnerable to the waves of the market. When stock markets go down, there is less giving. In times of recession or downturn of the economy, the giving potential de creases. So there are waves or cycles and these would need to be equalized in order to ensure continuous artistic activities.

As their primary defense mechanism against negative cycles, American art organizations have built up large endowments. However, these endowments themselves are also in danger in case of stock market crashes. The value of the endowment, and possibly even more importantly, the annual income drawn from the endowment, also go down. So, on the one hand, the endowment can be seen as insurance—but on the other it can also be seen as dead money, which one doesn’t use but is as much in danger of economic decline as the giving potential of the people in the first place.

SM: What will be the situation/ characteristics of the performing arts in Europe, the United States and globally in ten years?

IF: When considering the future of perform ing art organizations in the United States, there is an additional difficulty that needs to be mentioned over and above financial vulnerability. This is the almost extreme in fluence of trade unions within the art world. Practically, philanthropy is not only expected to finance a symphony orchestra that the audience hears playing, but also its retired musicians! There are huge pension funds linked to these art organizations, and with time these have become an extremely ex pensive feature to feed. Overall I think that in ten years time, probably there will be fewer symphony orchestras in the United States. Many will have growing difficulties maintain ing the same level of philanthropy that they still enjoy today.

In Europe, governments will probably merge a few of their local orchestras, opera companies, or theatres. There is already a clear political desire to spend less on cultural organizations. At the same time, I don’t expect that a lot of philanthropy will emerge in Europe because people perceive the role of the state as the central vehicle to fund art. So my prediction is that there will be fewer arts organizations on both continents. This is not necessarily a problem, because it will create more competition, higher qual ity and a “natural selection” process.

SM: You have recently developed a strategic plan for the Budapest Festival Orchestra. What was the motivation for doing so? How will you measure the success of the plan?

IF: In Hungary, we are in a par ticular situation: Hungary is neither West Europe nor the United States, which means no philanthropy to the extent expected in the U.S. and no public funding at the level of Western European orchestras. So we have to have a very specific strategic plan, where we address our particular geographic and political situation, because we are forced to think ahead. We need to consider also how we could finance the orchestra in case the very vulnerable Hungarian state sup port might shrink in the future. The level of our public funding has nothing to do with quality: the Budapest Festival Orchestra is highly competitive, but Hungary is highly economically vulnerable at the moment. In order to ensure longterm sustainability, we were looking for solutions that could take advantage of the extraordinary international success the orchestra en joys—and turn this success into financial sustainability. My prediction is that there will be fewer arts organizations in both the United States and Europe. This is not necessarily a problem, because it will create more competition, higher quality and a “natural selection” process.

SM: Budapest Festival Orchestra’s support structure is exceptional in relying heavily on international friends organizations. How does this structure inform your strategy and organizational settings, including human resources?

IF: This question has to do with longterm thinking. If we were to think only for one year ahead, we would not say that we rely on international friends because at the moment, our largest income is from Hungarian state subsidies and only a marginal income comes from international friends organizations. However, if we think long term, then we envision a decline of Hungary’s capability to fund the arts and we see an increasing impact of our international friends and their potential to help. Consequently, we are strongly developing the growth and outreach of our friends groups in several important cities of the world and enhancing our organizational capacity for international networking in order to ensure the orchestra’s future. This process does require some sacrifices and we want to make sure that our staff and our board can provide the skills, human and financial resources required for this ambitious international development program.

SM: How can the flexibility of operations be maintained while programming is uniquely longterm (concerts often booked five years ahead)?

IF: Five years is probably too much, but we certainly plan several years ahead. Indeed, no orchestra in the world could do that if their finances were not secured for at least the same period of two or three years. We are in a vulnerable position because our municipal and state subsidies are usually granted for the forthcoming financial year only. Thus, we have to take certain precau tions to manage the gap between artistic and budget planning. We have developed some financial reserves, although it is not even comparable to the significant endowments of U.S. arts organizations. Still, our reserves in the bank do provide for a little flexibility by helping to overcome shortterm cashflow difficulties, which regularly occur.

SM: Where would you like to see Budapest Festival Orchestra in five years?

IF: Founded almost exactly 30 years ago, the young Budapest Festival Orchestra has be come one of the world’s foremost symphonic ensembles. In the next few years I would like to see this outstanding success bringing along a much stronger embeddedness of it in the international business community as well as a raised “brandawareness” in the general public. I would like the Budapest Festival Orchestra to be seen as the international artistic treasure it in fact has become by now. The widespread acknowledgement of this treasure, along with the commitment to sustain and protect it, will ensure the orchestra’s undisturbed future existence. In other words, I would like to see the orchestra to continue its present artistic achievements and consistently raise awareness and sup port around the globe.

SM: What are the most important lessons you’ve learned over the past several years as the BFO has developed a strategic plan and begun to build a strong international organization?

IF: In our case, to implement a strategic plan is even more difficult than to compose it. The implementation is especially difficult because in Hungary we don’t have the tradition of various professional departments. It is relatively easy to implement a strategic plan in the United States where you have professionals in the marketing, development, PR or other organizational departments who would all understand the concept and the specific tasks implied by the strategic plan. Unfortunately, most of these professions have very little presence in Hungary—espe cially with the strong international experi ence that our orchestra’s operation clearly requires. Thus, our staff often first needs to acquire the knowledge, methodology and the mentality of these professions to enable the organization to implement our strategy.