Arden Theatre Company Strategic Plan 2012-2015

Strategic Plan 2012/15

Arden Theatre Company 2012/15 Strategic Plan - Table of Contents 1 – Overview i. Mission ii. Values iii. Vision iv. Environmental Assessment v. Executive Summary of Strategic Goal and objectives

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2 – Artistic Programs

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3 – Education Programs

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4 – Audience Development

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5 – Fundraising

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6 – Facilities

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7 – Governance and Administration

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8 – Financial

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9 – Addendum

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MISSION In 2010, the Board of Directors unanimously adopted a revision to the Arden Mission Statement, its first revision since our founding in 1988, to include the phrase “on the stage, in the classroom, and in the community.” This updated mission statement reflects that our education programming and our commitment to serving and engaging the Greater Philadelphia community are equal priorities and crucial to our organizational success.

Arden Theatre Company is dedicated to bringing to life great stories by great storytellers on the stage, in the classroom, and in the community.

Great stories on the stage: We produce a wide range of stories in a variety of styles: classic and contemporary, intimate and epic, fiction and nonfiction, musical and dramatic. Producing the great playwrights allows us to measure ourselves against the masters of our craft, while sharing the voices of new writers gives us the opportunity to shape the future of American theatre. We embrace stories for audiences of all ages and bring the same artistic quality to all our work.

Great stories in the classroom: Kids are celebrated at the Arden. We nurture curiosity, creativity and confidence through our educational programming. We foster connections between theatre and reading and promote literacy for our young audiences. We reach thousands of students each year, introducing many of our region’s kids to theatre for the first time.

Great stories in the community: We believe in the power of stories to bring people together. We work to build a vital community of artists who excel creatively through shared experiences and with whom our audiences identify. The Arden strives to be Philadelphia’s hometown theatre; we seek community partnerships and collaborations, make our work affordable and accessible, and train the next generation of theatre leaders, contributing to the region’s cultural landscape.

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VALUES • A fierce commitment to excellence This imperative drives every aspect of our work, whether onstage, in the boardroom, the classroom, rehearsal room, offices, or shops. ● The effective and efficient use of all resources As a non-profit organization, the effective and efficient use of resources is essential to the Arden’s healthy operations. ● Collaboration and Accountability In all our activities, collaboration is vital to our collective success. Clear accountability ensures that our work is done in the most effective and efficient manner possible. ● Risk Risk is inherent in any creative process. We believe thoughtful risk-taking is not only appropriate, but healthy and necessary for the Arden’s success. ● Organizational Health We strive to make working at the Arden, in any capacity, a healthy, positive experience.

The opinions and concerns of all employees are valued and respected. ● Commitment to community and education We have a commitment to this diverse community and to education and training. We believe that live theatre offers unique opportunities for learning for both children and adults. We seek to be a good neighbor in Old City and to be an integral part of the cultural life of this region. We strive to work with local artists to partner with local institutions and organizations, and to engage our audiences in the development of our work. ● Above and beyond As a company, we all agree to put the needs of the whole above the needs of any individual. Exceptional effort is the norm. We all succeed together.

VISION The Arden will be recognized as one of Philadelphia’s great cultural treasures and one of the leading regional theatres in the country. We will draw from the best actors, designers, technicians, and arts administrators available nationally while remaining committed to homegrown artists. The Arden will be known as an important incubator for the creation of new work—plays and musicals that premiere at the Arden will be presented worldwide. Playwrights will seek to make the Arden their artistic home. Young people will be inspired, empowered and develop a life-long love of the arts when they experience the energy of Arden Children’s Theatre and participate in Arden classes.

Graduates of the Arden Professional Apprentice Program will shape the future of American theatre—here in Philadelphia and elsewhere. Our audiences will see themselves and their humanity in the stories we tell and classes we teach and have a life-long relationship with this theatre. The Arden will be a source of civic pride, the theatre that Philadelphians point to as their theatre.

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ENVIRONMENTAL ASSESSMENT •

The US economy has struggled since the financial crisis of 2008, and current indicators point to a slow and uncertain recovery. Philadelphia’s cultural community has been significantly impacted as cited in the Greater Philadelphia Cultural Alliance, 2011 Portfolio: “Despite an increase in attendance and a rise in individual donations, the region’s nonprofit cultural organizations were hit hard by the recession. Dramatic drops in the values of investment portfolios, belttightening on the part of corporate and foundation donors and cuts to government funding pushed a majority of the area’s nonprofits arts organizations into the red from FY07 to FY09. While the arts remained more accessible than ever, organizations struggled to maintain programming and manage costs in a period when revenue declined 43%.”

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As leisure time and discretionary income become more scarce, competition and demand for these limited resources sharply escalate. Philadelphia has a wide array of cultural offerings that continues to grow. According to the Greater Philadelphia Cultural Alliance, “Since 2008 the overall number of arts and culture organizations in the region has increased by 5%. Philadelphia had the highest number of new organizations (44).” Movies, home entertainment, sporting events, and new technologies are also competing for attention. According to the 2010 American Time Use Study from the US Bureau of Labor and Statistics, watching TV remains the average American’s primary recreational activity, accounting for half of our leisure time.

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Technology has had a profound impact on the arts and adapting to this rapidly changing environment presents both opportunities and challenges. Renowned arts leader Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts, observed: “We live in an age of astonishing invention. The new communication tools developed over the past 20 years are remarkable for their power and penetration. Arts organizations have been slow to exploit the power of new technology and cling to older, more expensive techniques that are not as effective. If we don’t make a committed effort, we will fall hopelessly behind and the arts will lose their place in our society.”

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The 2010 election of Governor Tom Corbett has brought changes to the state’s leadership in Harrisburg. There have also been leadership transitions at several important organizations in the region, including but not limited to the Greater Philadelphia Cultural Alliance, the Pennsylvania Council on the Arts, The Philadelphia Inquirer, and the William Penn Foundation.

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According to the 2010 US Census, the City of Philadelphia recorded a population increase for the first time since the 1940’s. While the overall increase was small (.6% increase), growth in individual neighborhoods was substantial: Center City East saw a 25% increase and double-digit increases were seen in Center City West, Fishtown/Northern Liberties, and Bella Vista. Arts participation has also increased. The Pew Charitable Trusts Philadelphia Research Initiative Philadelphia 2011: State of the City documents a 7% increase in attendance at

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Philadelphia county non-profit cultural organizations from 2005 to 2009 while national studies have shown general declines during this period.1 •

Families remain an important audience for the arts. The Greater Philadelphia Cultural Alliance 2010 Cultural Engagement Index highlighted this key finding: “Parents and caregivers of young children continue to take advantage of opportunities to engage their families in arts and cultural activities with an eye toward learning and nurturing experiences. Across life stage groups, adults with children have more active creative lives than those without children. When asked why they take part in cultural activities, most cited a desire to ‘strengthen family relationships.’ This is a critical time to more deeply engage adults in the creative development of their children.” At the same time, arts education has been reduced. According to the National Endowment for the Arts 2011 report, Arts Education in America: What the decline means in arts participation, “The percentage of 18-year olds who received any arts education during their childhood has declined 8% from 2002 (57%) to 2008 (49%), and this continues a long-term pattern of decline since 1982.”

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Philadelphia’s Professional Theatres: A Snapshot, a 2009 report commissioned by the Theatre Alliance of Greater Philadelphia, with support from The Pew Center for Arts and Heritage through the Philadelphia Theatre Initiative, summarizes the strengths and challenges facing this community: “Philadelphia Theatres have much to celebrate, including an impressive dedication to the development of new work, an increasing number of community members attending and contributing, strong trustee and foundation support, and an ability to keep expenses under control. However, some serious challenges present opportunities for change. These challenges include…a diminishing subscriber base, an increasing number of empty seats…low endowments, and negative working capital that leaves Philadelphia theatres without enough cash to cover day-to-day operating expenses.”

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Americans for the Arts National Arts Index has declined every year since 2007. The most recent National Endowment for the Arts’ Survey of Public Participation in the Arts similarly reported a 5% drop nationally.

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EXECUTIVE SUMMARY OF STRATEGIC GOALS & OBJECTIVES Despite a frequently turbulent environment, the Arden has achieved significant success over the last three years. Perhaps the most transformative achievement during this time was our calculated investment in 62-66 North 2nd Street, a 22,000 square-foot, twostory building just three doors north of the Arden. When renovated, this building will become Arden North: A Center for Education and Creativity.

Arden North will allow us to better serve our students, artists, staff, and audiences. The building will house four classrooms, two rehearsal halls, a studio theatre, and our scenic and props shops. We envision Arden North as a community hub that celebrates the artistic process. It will provide a permanent home for Arden Drama School, an upgraded space for Arden technicians, space for our expanding new play development efforts. The increased space will create the scheduling flexibility necessary to take full advantage of new audience and community partnership initiatives. Arden North addresses all of our most pressing needs and its renovation will impact the next several years of growth for the Arden.

The following plan outlines goals for every arm of the organization to collaboratively advance the work that supports our mission. All of these goals are informed by the need to balance navigating this difficult time, while still leveraging opportunities to our advantage as we celebrate the Arden’s 25th anniversary season and embark on the next quarter century of bringing great stories to life. We will do this by capitalizing fully on the tremendous artistic, organizational, and physical foundations we have built, thus fortifying our national reputation and our relationships with the artists, audiences, and key stakeholders that are at the center of our theatre’s existence.

To fulfill its mission, the Arden is committed to achieving the following goals and objectives during the course of this plan: ARTISTIC PROGRAMS We seek to attract the highest quality and most diverse theatre artists available and expand the scope of our work in order to ensure artistic excellence on our stages. To this end we will: • • • • • • •

Strengthen key artistic relationships and forge new affiliations with creative artists to bring fresh perspectives and influences to our work Build upon our use of the Independence Foundation New Play Showcase and increase our commitment to the development and production of new plays and musicals Strategically increase rehearsal time to best serve the unique needs of each production Grow our thriving Children’s Theatre program Provide competitive salaries and housing for our artists and ensure that they have the support and resources needed to produce their best work Explore additional artistic programming outside of the subscription season in preparation for the expansion made possible by Arden North Improve long-term artistic planning

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EDUCATION PROGRAMS We seek to enrich the theatergoing experience for audiences by offering production-related educational programming. We strive to develop future theatre leaders by offering the most comprehensive professional apprenticeships. To achieve this goal, we will: • • • • •

Continue to expand the breadth and depth of Arden Drama School programming Expand our teen programming to include additional Arden Drama School classes and create a Teen Council to encourage attendance at Mainstage performances and deeper involvement at the Arden Continue to serve over 5,000 students annually through Arden for All Continue to invest in the future of the field with the Arden Professional Apprentice Program Use technology in an effort to make our educational programming more “green”

AUDIENCE DEVELOPMENT As part of our ongoing commitment to the Greater Philadelphia region, we strive to reach as many different segments of our community as possible with our work.

To that end we will: • • • •

Develop and expand the Arden’s base of loyal and long–term audience members Identify and reach out to broader segments of the community in order to introduce them to our work and encourage them to return Keep our work as affordable and accessible as possible so that all those interested in experiencing our productions have the opportunity to do so Continually evaluate the effectiveness of our marketing efforts

FUNDRAISING To meet the Arden’s artistic and educational goals for the future, we require a stable flow of contributed income to underwrite our work and keep ticket prices and tuition affordable. To accomplish this goal we will: • • • • • • • •

Increase contributions to the Annual Fund and Sylvan Society 13.5% by FY15 Reevaluate our event format with the goal of creating special events that drive income, identify new prospects, and improve donor relationships Grow participation in our planned giving program, the Legacy Society, with a goal of doubling our membership by FY15 Grow operating contributions from foundations, adding at least two new national foundations as contributors by FY15 Maintain our current level of corporate support Maintain our current level of government funding by expanding and cultivating our base of supporters within the new government administrations Complete the Arden North: Building Community through Education and Creativity campaign by FY14 Complete the “Grow the Art” Artistic Fund in FY14

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FACILITIES We seek to ensure that the Arden’s performance and support spaces continue to foster greater artistic opportunity, better serve our students, artists and staff, and enhance the theatre-going experience for our patrons. To this end we will: • • •

Renovate Arden North: A Center for Education and Creativity Improve the north side of 40 N. 2nd Street Create a plan to upgrade and expand the administrative offices and support spaces

GOVERNANCE AND ADMINISTRATION We seek to attract the highest caliber and most diverse team of board/committee members, managers, and staff. To this end we will: • • • •

Develop and maintain a diverse board that is fully informed, engaged, and inspired to execute their governance responsibility and develop the resources of the organization Increase the level of engagement and overall effectiveness of board and showspecific committees Attract and retain highly motivated and well-qualified staff through aggressive recruiting, competitive salary and benefits, and a healthy working environment.

Provide the Arden’s leadership appropriate professional development opportunities, including the time off necessary for pursuing those opportunities

FINANCIAL We strive to maintain fiscal health and secure long-term financial stability in order to meet the artistic, educational, institutional goals of this plan. To this end we will: • • •

Maintain the fiscal health of the organization Maintain a healthy balance between earned and contributed income Design a capitalization strategy that enables the Arden to use their current assets most effectively

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SECTION THREE: ARTISTIC PROGRAMS Present Position Over the past three seasons, the Arden has made great strides in our artistic growth and vitality. We have deepened our commitment to new work, furthered our dedication to children and family audiences, expanded our national reach, and invested increased resources in our artists and productions.

Throughout the Arden’s 23-year history, one of our greatest strengths has been the relationships we have forged with artists in this community. Over the past three years, we have strengthened key artistic relationships with longstanding collaborators, including many of Philadelphia’s finest actors, directors, designers and playwrights.2 These remarkable artists are at the heart of what we do, and with too many to enumerate here, we single out two distinguished individuals who recently achieved milestones on the Arden stages. Actress Grace Gonglewski portrayed the indomitable Josie Hogan in A Moon for the Misbegotten marking her 20th production with the Arden, and prompting the Wall Street Journal to extol: “Ms. Gonglewski is a find. I long to see her again.”

Playwright Bruce Graham’s (the second most “premiered” Arden playwright, after Michael Hollinger) Something Intangible was developed under the auspices of the Arden’s Independence Foundation New Play Showcase and went on to premiere in our 2009/10 season, receiving seven Barrymore Awards, including Outstanding New Play and Outstanding Overall Production of a Play. These are just two of the many artists with whom we are fortunate to maintain ongoing relationships.

While maintaining these historic partnerships, we continue to introduce new artistic perspectives to our work. In 2009, Edward Sobel joined the Arden as Associate Artistic Director. Before joining the Arden, Ed was the Director of New Play Development at Steppenwolf Theatre, where he oversaw the development of more than 40 new plays including the Pulitzer Prize and Tony Award-winning drama August: Osage County. In addition to directing, Ed will lead the Arden’s new play development efforts; his expertise in navigating the new play development field coupled with his relationships with the nation’s leading playwrights makes him the ideal candidate to helm our new play efforts.

We have expanded the pool of playwrights with whom we work. We recently commissioned new plays from up-and-coming playwrights Laura Eason and Laura Jacqmin, and produced the projects we commissioned from Jordan Harrison (The Flea & the Professor), and Rogelio Martinez (Wanamaker’s Pursuit). In addition to producing new plays, we also produced, for the first time, the work of Elyzabeth Gregory Wilder (Gee’s Bend), Tony Award winner John Caird (Candide), and Pulitzer Prize winner Tracy Letts (Superior Donuts).

We have continued to reinforce our reputation as a leading producer of new plays and musicals, through work made possible by the Independence Foundation New Play Showcase. In the past three seasons, three of our world premiere productions were commissions: My Name is Asher Lev, Wanamaker’s Pursuit, and The Flea and the Professor. My Name is Asher Lev, the first Arden commission to receive a full

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The Arden Family Tree now includes 39 Philadelphia based artists who have worked on ten or more Arden shows.

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production, was the recipient of the 2009 Brown Martin Philadelphia Award and drew the highest attendance of any premiere in Arden history.

Arden Children’s Theatre has become a cornerstone of the Arden’s educational work and artistic reputation. Since its creation in 1998, over 390,000 kids and adults have attended an Arden Children’s Theatre production, making our Children’s Theatre programming one of the premier cultural activities for families in the Philadelphia region.

We have continued to grow our thriving Children’s Theatre program, as is exemplified in these milestones: •

Our steam-punk Peter Pan became the highest attended production in the Arden’s history, with 29,000 patrons attending.

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If You Give a Mouse a Cookie received four Barrymore Award nominations (including for Outstanding Production of a Play), further evidence that Arden Children’s Theatre productions are viewed by this community as first rate artistic creations.3

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The Flea and the Professor was one of only seven projects selected for the 2010 New Visions/New Voices Festival, a biennial program sponsored by the Kennedy Center to support the creation of new work for young audiences. Our subsequent world premiere production of Flea was nominated for 12 Barrymore Awards, including Outstanding Production of a Musical, and tying for the most nominations garnered by a single production.

We have also raised the Arden’s national profile. In 2010, Terry Nolen directed the world premiere of Rogelio Martinez’s When Tang Met Laika at the Denver Theatre Center.

Arden actress Mary Martello received the prestigious Lunt-Fontanne Fellowship, awarded to leading actors of the American regional theatre. Plays that premiered at the Arden continue to be produced with increasing regularity across the country: David Davalos’ Wittenberg was produced at New York’s Pearl Theatre with Scott Greer reprising his role as Faustus to critical acclaim; Aaron Posner’s My Name is Asher Lev has received over a dozen regional productions since its Arden premiere in 2009; and Michael Hollinger’s Opus was one of the top three most-produced plays in the country in 2010.4These plays are ambassadors for our work and testaments to the quality of the artistry of the Philadelphia theatre community.

There have been many productions over the years that we point to as manifestations of our mission to bring great stories to life. A signature production of the last three years was our 2010 Sunday in the Park with George. With a stellar cast, an 11-piece orchestra performing the original orchestrations5, creative and effective use of new technology, and a determination to present both acts as part of a cohesive whole, this production garnered national acclaim. Terry Teachout of the Wall Street Journal, praised: “This is by any standard a major production, one of the strongest Sondheim productions of the past decade,” and subsequently named Sunday in the Park with George one of the two best

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David Gordon received the Barrymore Award for Outstanding Set Design.

American Theatre, Theatre Communications Group 5 Our use of Michael Starobin’s original orchestrations was made possible by generous support from the Pew Center for Arts & Heritage through the Philadelphia Theatre Initiative.

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musicals in the country of 2010. However, perhaps most gratifying was Stephen Sondheim’s personal endorsement: “At a time when many larger organizations are producing reduced forms of shows like mine and the work of other experimental theater composers, it is heartening to know that the Arden exists. I applaud them for their commitment to not scaling back their art, especially in this time of economic uncertainty. I give my blessings and thanks to the Arden and everything they stand for.”

Strategic Goal and Objectives We seek to attract the highest quality and most diverse theatre artists available and expand the scope of our work in order to ensure artistic excellence on our stages. To this end we will: •

Strengthen key artistic relationships and forge new affiliations with creative artists to bring fresh perspectives and influences to our work

We will continue to be an artistic home for playwrights such as Michael Hollinger, Aaron Posner, Bruce Graham and Michael Ogborn. In the 2011/12 season, we will produce Michael Hollinger and Aaron Posner’s new adaptation of Cyrano and Michael Ogborn’s new musical Tulipomania. We will draw on Ed Sobel’s relationships with emerging and established playwrights to bring new voices to our stages.

Over the past three years we have also expanded our pool of directors, working with at least one new director each season. Collaborating with new directors such as Anne Kauffman, Ed Sobel, and Walter Dallas, has allowed us to take advantage of new artistic vision, and the professional networks they bring to the table. In each of the coming three seasons, we will hire a new director to continue to benefit from new perspectives and the infusion of new talent they supply.

One of the keys to artistic investment is the artist’s connection to a specific role or project. Over the years, key artistic successes resulted from strong artist/production pairings: James Ijames in Superior Donuts; Joilet Harris in Caroline, or Change; Ben Dibble and Jeff Coon in A Year With Frog and Toad. Over the years we have held informal readings of plays that are under consideration, and these have resulted in some truly memorable performances. Over the next three years we will continue to schedule informal readings to determine the perfect match of actor to role, or director to project.

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Build upon our use of the Independence Foundation New Play Showcase and increase our commitment to the development and production of new plays and musicals

Under the auspices of the Independence Foundation New Play Showcase, the Arden has workshopped 25 plays and musicals and produced 33 world premieres to date.

Each season we workshop at least three new works and commission one new project.

Over the next three years, we will continue to commission (or co-commission) one new play or musical each year, using the following designated funds: 2011/12 $7,500

2012/13 $10,000

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2014/15 $10,000 11

We will workshop all commissioned plays and musicals, culminating in a public reading.

Commissions are an investment in our playwrights, and workshops allow writers to work, free from the pressure of an opening night. Public readings also enable key stakeholders to participate in the developmental process, creating a community around each new play and fostering the Arden’s ongoing commitment to the creation of new work. While not every commission will result in a project that we will produce, it is our hope that these commissions and subsequent developmental workshops and readings will be a pipeline for future productions, whether at the Arden or other theatres across the country. Over the next three years, we will continue to have readings and workshop new productions using the following allocated resources: 2011/12 $7,500

2012/13 $10,000

2013/14 $15,000

2014/15 $15,000

Starting with the 2011/12 season, we will also develop new work though The Writers’ Room, a playwright residency program6 that will offer playwrights a period of time to focus on developing a project, access to the artistic resources of the Arden, and the guarantee of a modest production. This residency will be a holistic experience for writers, as well as a unique opportunity for our audiences to experience the creation of a new play firsthand. The Writers’ Room has received multi-year leadership support from both the Independence Foundation’s New Works Initiative and the Philadelphia Cultural Management Initiative (PCMI). We believe this new play development model will entice playwrights to find in the Arden an artistic home to create and develop the work.

We will also partner with other organizations equally dedicated to new play development.

In the past, My Name is Asher Lev and Ghost-Writer were co-developed at PlayPenn, and The Flea and the Professor was workshopped at the Kennedy Center’s New Visions/ New Voices festival. In coming years, we will look to deepen our relationships with Primary Stages, the Lark New Play Development Center, and New Dramatists.

Partnerships such as these bring increased expertise and artistic energies while bolstering the bottom line of our new play development efforts. The rehearsal spaces and performance venue in Arden North will provide a physical space for the calibrated expansion of our new play development work.

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Strategically increase rehearsal time to best serve the unique needs of each production

Over the past three years, all of our world premiere productions have benefited from increased rehearsal time: My Name is Asher Lev, Something Intangible, Ghost-Writer and Wanamaker’s Pursuit as recipients of the Edgerton Foundation New American Play Awards and The Flea & the Professor with the support of the Pew Center for Arts & Heritage through the Philadelphia Theatre Initiative. We have also increased rehearsal time for particularly large or complex productions including Candide; The History Boys; The Threepenny Opera; and Sunday in the Park with George. Over the next three years we will continue to strategically increase rehearsal time as we seek to balance the 6

Both the Pew Charitable Trusts and the Independence Foundation were featured in the November 2008 New York Times article “In Philadelphia, Grants Nurture New Theater,” which spotlighted the Arden’s thriving new play development program. We are honored that our historical partners in the development of new work continue to be at the forefront of the Arden’s new play initiatives.

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artistic considerations with the most strategic use of rehearsal funds. This investment will allow for greater artistic risks, more ambitious storytelling, and more accomplished performances.

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Grow our thriving Children’s Theatre program

We will continue to dedicate our best resources to the creation of Arden Children’s Theatre. As The Philadelphia Inquirer’s Wendy Rosenfield observed in a recent review of The Flea and the Professor: “The Arden does not consider your children second-class citizens. The Arden respects your kids so much it commissioned a hot young playwright…and grabbed a Barrymore Award-winning director. The results are exciting, funny and creatively imagined.”

We endow our Children’s Theatre productions with the same commitment to quality as our other work. While there is increasing competition for families’ limited time, attention and leisure dollars, the Arden’s commitment to quality remains our competitive advantage.

A challenge we consistently encounter when planning our season is the scarcity of quality Children’s Theatre scripts. In response, in 2011 we commissioned Laura Eason to write a new play specifically for young audiences. Given the importance of Arden Children’s Theatre in fulfilling our mission, we will award a commission for a new play specifically for young audiences every other year.

Though we have had great success building community investment in our thriving Children’s Theatre program, attendance has tended to fluctuate. Over the past three years, we have had tremendous success with well-know stories (Peter Pan) but less success building audience confidence in plays whose title is not as readily recognizable (The Borrowers). This is commonly referred to as “the tyranny of the title” and companies across the country are feeling similar pressures. Grounding our Children’s Theatre productions in literature has addressed that need in the past—it also ensures that we draw from rich stories, and makes the connection between literacy and theatre.

To balance our desire to maintain the highest artistic standards and respond to the current economic challenges, we will continue to give special consideration to scripts based on classic stories, introducing a wide range of families to our work.

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Provide competitive salaries and housing for our artists and ensure that they have the support and resources they need to produce their best work

The Arden is a member of the League of Resident Theatres (LORT), and we currently pay the LORT-C scale for both Arcadia and Haas Stage productions. Our Children’s Theatre work is governed by a contract negotiated by a newly-formed consortium of theatres for young audiences. We consistently exceed the salary rates for artists as outlined in this contract. We will recommit to paying a modest premium to actors who are members of the Arden’s Family Tree, in recognition of them as valued Arden collaborators. Honoring the commitment of key artists is a priority as competition for Philadelphia-based artists continues to grow.

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Our directors’ fees have not increased over the past three seasons. In order to strengthen our competitive advantage in attracting and retaining the best directors, we will increase directors’ fees over the next three seasons as follows: 2011/12 $7,500

2012/13 $10,000

2013/14 $10,000

2014/15 $12,500

We have made significant investments in our Arden support spaces and production resources. The recent renovation of the Haas dressing rooms and backstage areas will increase actor comfort and ensure we meet Actors Equity Association (AEA) standards.

We have also updated our lighting and sound systems for both the Haas and Arcadia Stage, replacing outdated equipment and eliminating rental costs. Our design teams now frequently feature artists of national repute. Providing directors and designers with up-to-date technical equipment and resources will continue to increase our ability to attract and retain leading artists and has expanded the scope of our work.

Artists are drawn to work at the Arden by the quality of their creative experiences and we need to ensure that our physical space provides equally rewarding experiences. Arden North is an important step towards that guarantee. Our new building’s proximity to our performance venue makes it an ideal location to expand our current facilities. Larger shop spaces will allow us to centralize our scene, paint, and props shops, heightening efficiency and creating more frequent opportunities for artisans and technicians to collaborate on a unified artistic vision for each production. Increased efficiencies in our technical capabilities will allow us to improve our production values, which in turn will enable us to attract and collaborate with designers of the highest caliber.

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Explore additional artistic programming outside of the subscription season in preparation for the expansion made possible by Arden North

Over the past three years, we have presented an average of 434 performances per season, maximizing the use of the Haas and Arcadia Stages. The creation of Arden North will allow for an expansion of our artistic programming outside of our current subscription series. In preparation for this growth, we will begin to explore additional programming opportunities. Over the next three years, in addition to The Writers’ Room, we will explore the addition of the following programs: •

Arden Out Loud. The Arden has a longstanding commitment to the performance of literature. This new program will feature an evening of short stories read by Arden actors, to be selected around different themes.

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First Friday Nights. We are uniquely positioned to attract audiences who are drawn to the area for the Old City First Fridays. Starting in 2011/12, we will provide a performance venue (platform) for new artists and organizations for each of the First Fridays of the year.

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Arden Toddler Series. Theatre for very young audiences has been embraced at theatres across Europe and is growing in popularity throughout the United States. Seattle Children’s Theatre, Chicago Children’s Theatre, and Imagination Stage in Maryland have all developed plays for very young audiences. Starting in the 2012/13 season, we will launch Arden Plays, creating interactive,

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participatory performances for toddlers. With this program, the Arden will become the first theatre in the country to truly produce theatre for audiences of all ages.

The 2012/13 season is the Arden’s 25th anniversary season and we have an opportunity to celebrate our extraordinary artists and rich history. Tentative ideas to commemorate this occasion include a concert of highlights from musical theatre productions, readings of landmark Arden plays, and the publication of a collection of Arden premieres.

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Improve long-term artistic planning

We will continue to improve our long-term artistic planning by prioritizing early season selection, the delegation of responsibility among our newly expanded Artistic staff, and an assertive approach to developing collaborations with our sister theatres around the country. Given the unique complexities that we face in these uncertain times, planning that capitalizes on our talented staff as well as our natural allies in the field, strengthens our ability to fulfill our mission with the highest degree of integrity.

Selecting our season early each calendar year remains a goal. Knowing the full slate of shows for the following season in January or February enables all departments to adequately plan for the coming year—and to take full advantage of opportunities that coincide with each production. We will continue to share information as it becomes available, with a goal of confirming all shows for each subsequent season by February 1.

With the addition of Ed Sobel as Associate Artistic Director, and the instatement of Matt Decker as full time Associate Producer, we have the opportunity to diversify responsibility for artistic programming. While continuing to direct Arden productions, Ed Sobel will take primary responsibility for the advancement of our new play development program. Matt Decker will primarily focus on casting and audience engagement initiatives. This diversification of responsibility will empower each individual to devote increased attention to these priorities, taking the initiative to cultivate long-term goals, while taking advantage of the support and collective wisdom of the larger Artistic team.

We will also continue to explore and pursue collaborations and co-productions with other leading theatres in the country. Sharing resources creates an opportunity to grow our art while controlling costs and expanding our creative horizons. In addition to the new play development partnership opportunities detailed earlier, we will: •

Co-commission and/or co-produce one production with Minneapolis’ Children’s Theatre Company and/or Seattle Children’s Theatre.

•

Continue to build upon our relationship with Lookingglass Theatre and explore co-developing or co-producing relationships with theatres with complementary artistic visions and values such as Writers Theatre in Chicago, Primary Stages, and Pearl Theatre in New York.

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SECTION FOUR: EDUCATION PROGRAMS Present Position The Arden has a longstanding commitment to education. Over the past six years, we have significantly grown both our education and outreach programming. This programmatic increase is reflected in the update of the company’s mission statement in 2011, appropriately communicating the priority of this programming. The Arden’s education efforts are divided into three areas of focus: Arden for All, Arden Drama School, and the Arden Professional Apprentice Program.

In previous plans, we identified the need to secure an appropriate space for an Arden Education Center. Our ability to grow our educational programming to satisfy demand has been limited by our existing space and the needs of the Arden’s production schedule. To temporarily accommodate the growth of enrollment in Arden Drama School (89% over the past three years) we rent space at the nearby Christ Church Community House and the Painted Bride Arts Center. Our purchase and renovation of Arden North is our long-term solution to enabling this program to grow, unrestricted, to serve even more students and generate increased revenue for our organization.

Arden for All (AFA) is our education outreach program, distributing free tickets, free books, and providing in-school lessons to children in need in the Greater Philadelphia area. Arden for All served more than 16,000 students during the course of the 2009/12 plan, and operates in two parts. Through AFA: Stage, we give away more than 5,000 free tickets and books annually to young people from low income neighborhoods. AFA also includes a partnership with the Philadelphia Department of Recreation to provide tickets to after-school performances for more than 1,000 students annually.

Through AFA: Classroom7 we provide free tickets and books to students in need, along with a series of in-class lessons led by Arden Teaching Artists related to each production. We return to the same schools each year, enabling us to have a multi-year impact as students progress from 3rd to 5th grade.8 When students graduate the AFA: Classroom program, they have developed problem solving skills, the ability to work collaboratively in a team, and a strong sense of self-confidence as they enter 6th grade.

To assist teachers with integrating the show-related books into their classroom curriculum, we provide supplementary lesson plans that correspond with the books, all of which conform to Pennsylvania Academic Standards and New Jersey Core Curriculum Content Standards. One teacher from Morrison Elementary School in Philadelphia said: “In a time when there is so much emphasis on test taking, the Arden For All Program reminds teachers and students there is a better way to teach children a way to make them excited about learning, a way to make learning fun, creative and engrossing. Thank you for the privilege of being part of this wonderful program. It is also a gift to teachers.”

7

Formerly “Arden In Class and On Stage” (AICOS) The national study Profiles In Excellence, Case Studies of Exemplary Arts Education Partnerships shows that exemplary partnerships between schools and arts organizations focus on expanding upon established collaborations as opposed to going into as many schools as possible, in keeping with our AFA model.

8

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Arden Drama School is our tuition-based theatre classes and camps comprised of Arden Kids Crew (Preschool – 5th grade) and Arden Teen Company (grades 6-12). Our classes are designed to engage students in fun and interactive ways, develop their imaginations, strengthen their team building skills, and instill a lifelong love of theatre. Our Play in a Day workshop received a 2010 Best of Philly award for Best Kids Class by Philadelphia Magazine. During the period of the 2009 plan, we expanded our class offerings for children in Kids’ Crew and launched Teen Company, a series of classes and camps specifically geared towards students in grades 6-12.

To ensure all children have equal opportunity to attend Arden Drama School, we offer a scholarship program which has served 106 students over the past three seasons. Thus far, scholarships have been made possible through gifts from private individuals. The following is an excerpt from a letter from one young scholarship recipient: To the donor who has helped me this year: The Arden is one of my favorite places in the world. It has become one of my escapes, a place where I can be free to express myself with no one judging me, something that isn't really possible to do anywhere else…If it wasn't for you, then I would have never been able to do what I truly love to do.

The Arden Professional Apprentice (APA) Program has garnered a national reputation for producing well-rounded, skilled, up and coming theatre professionals. The apprentices rotate through all departments of the theatre, and are entrusted with a wide range of tasks, from box office duties to assistant stage managing, and are central to the Arden’s day to day operations. In 2010, we instituted the APA Management Committee to heighten efficiency, address management issues if they arise, and to ensure the quality of experience for apprentices. The APA program attracts candidates from across the country, and the majority of the program’s graduates remain in Philadelphia upon completion of the program, contributing to the region’s cultural vitality. The program also serves as a valuable resource pool for our own staffing needs. Others go on to assume leadership positions in other arenas, most notably former apprentice Brian Abernathy (2000) who serves as the Chief of Staff to the Managing Director for the City of Philadelphia and as Vice President of our Board of Directors. Former Arden apprentices also hold cultural leadership positions on the national level. Distinguished examples include: Raelle Myrick-Hodges, Artistic Director of BRAVA! Theatre, San Francisco, CA; Jill Scott, Recording star, Grammy winner, television and motion picture actress; and Julianne Brienza, Founder and Executive Director, Capital Fringe Festival, Washington, DC. Strategic Goal and Objectives We seek to enrich the theatergoing experience for audiences by offering production-related educational programming. We strive to develop future theatre leaders by offering the most comprehensive professional apprenticeships. To achieve this goal, we will: •

Continue to expand the breadth and depth of Arden Drama School programming

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In 2010/11, more than 1,200 students attended Arden Drama School, representing an increase of more than 100% in enrollment during the period of the previous plan. We will offer Arden Drama School classes that engage students in fun, interactive ways; develop their imaginations; strengthen their team building skills; and instill a lifelong love of theatre. The addition of Arden North will enable us to expand our education programming to occupy five classroom spaces, including a design studio space, a dance studio, a resource center for teachers, and a waiting area for parents.

The Arden will maintain its commitment to all students in our region by offering need based scholarships for participants across a wide range of classes and programs. We have received funding to help subsidize scholarships, most recently from the Horner Family Foundation, to defray the cost the Arden incurs. As we continue to build Arden Drama School, we will expand programming as follows:

Arden Drama School Attendance and Revenue

attendance

$468,170 2,500

$364,700 2,000

$245,100

$306,390

1,500

$164,445

2,580

$148,740

2,166

1,000

$102,730

1,559

1,584

1,297 1,030

500

687 0

•

FY09

FY10

FY11

FY12

FY13

FY14

FY15

Actual

Actual

Actual

Projected

Projected

Projected

Projected

Expand our teen programming to include additional Arden Drama School classes and create a Teen Council to encourage attendance at Mainstage performances and deeper involvement at the Arden

We have developed a strong base of participants for our youth education programming.

Until this point this base has been defined by the age range for Arden Children’s Theatre; typically grades K – 6. We have now positioned ourselves to continue to be a home for these children as they become teens and young adults. Since adding Teen Company to Arden Drama School, teen attendance has grown 144%. Over the course of this plan, we will continue to add to the Teen Company Drama School curriculum. Arden North will provide the necessary classroom space to increase offerings designated specifically for teens and each class will have the opportunity to work in the Arden North studio theatre. We will form a Teen Council, a group that will integrate teens more fully

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into the artistic life of the company, and provide an opportunity to build their own community that is not restricted geographically, but rather bound by a common interest.

•

Continue to serve over 5,000 students annually through Arden for All

AFA is our broadest outreach program, through which we will continue to serve more than 5,000 students annually. We will serve 3rd, 4th and 5th grade classes at these schools, building a cumulative experience for students over the course of three years.

We will also continue our partnership with Camden Creative Arts High School (CAHS) which enables CAHS students to see five Arden shows and participate in master classes with visiting artists each year. Our contact at CAHS, Dr. Douglas Overtoom praised our CAHS residency: “You come back year after year, you see them improve at their art, and they see that you care about them as young artists. My kids don’t often get that kind of commitment."

•

Continue to invest in the future of the field with the Arden Professional Apprentice Program

To hire the most qualified candidates for our APA program, we will broaden our recruitment efforts to include visits to career centers and targeted career fairs at leading universities, promote the apprentice program with an increased presence online, and establish a network of alumni, professors, and stakeholders to serve as ambassadors for the program.

We will also continue to refine apprentice training under the guidance of the newly established Apprentice Management Committee. The Committee will meet weekly to assess the progress of each apprentice in relationship to his or her goals and in relationship to efficiently fulfilling the company’s needs.

•

Use technology in an effort to make our educational programming more “green”

Currently, all supplementary education materials such as lesson plans, curriculums, and study guides are emailed to teachers and can also be found online. Our Drama School brochure with course selections for the year can also be accessed through the Arden’s main website. Recent trends indicate that today’s parents and children are increasingly likely to communicate, research, and transact online. With that knowledge, the Arden will take steps to phase out our direct mail campaign and further utilize online marketing for Arden Drama School.

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SECTION FIVE: AUDIENCE DEVELOPMENT Present Position The Arden’s audience base grew considerably during the first part of the 2009/12 plan, with solid subscription sales continuing to be among our key strengths. Overall ticket sales grew 21% from June 2008 through June 2010. The 2009/10 season was the highest attended in Arden history, with more than 111,000 attendees, almost 8,000 of whom were subscribers who renewed at a record rate of 87%. Ticket revenue exceeded $2.25 million and our houses sold at 88% capacity.

The 2010/11 season, in contrast, was our lowest attended season in five years; in part, a reflection of the economy during that period. Both single ticket and group sales declined, by approximately 30%, reducing total capacity utilization to 74%. Fortunately, our subscriber base renewed at 80%, anchoring our attendance, and resulting in subscription income reaching an all-time high of $1.1 million.

Subscribers make up the largest group of Arden patrons, representing 64% of our audience base. While on a MAINSTAGE national level, theatres Number of Subscriptions FY09 to FY11 continue to report declines 9,000 in subscription sales, the Arden has consistently 8,000 retained Mainstage 1,393 7,000 subscribers at a more than 1,174 80% renewal rate. The 6,000 Arden’s Leap of Faith 5,000 campaign, our offer to patrons to subscribe at a 4,000 discount before season 6,542 6,345 3,000 selections are announced, accounts for more than half 2,000 our subscriber renewals 1,000 annually. This trend testifies to the loyalty of 0 Arden subscribers and the FY09 FY10 strength of our brand.

CHILDREN'S THEATRE Additionally, from FY08 to Number of Subscriptions FY09 to FY11 FY11, the Arden increased its retention rate of first 3,000 time subscribers (among subscribers, the group 2,500 least likely to renew) from 46% to 51%.

Renew

1,317

6,348

FY11

Renew

2,000

In analyzing the decline in single ticket sales in our 2010/11 season, we found the determining factors to be the structure of the season, and the lack of

1498

1047

1,500

1332 1,000

500

1098

888 481

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0

FY09

FY10

New

FY11

New

name-recognition of the plays. Our 2010/11 season featured three world premieres, none of which had a commonly known reference.9 We also shifted our traditional season structure in order to capitalize on participation in the Philadelphia International Festival of the Arts. Consequently, the later run of The Flea and the Professor, which closed June 12, was less successful as it conflicted with end of school year activities.

Made possible through a grant from the Wallace Foundation, we contracted an outside consultant to conduct market research to analyze our audience base. In December 2009, John Elliot Research identified a significant churn rate among single ticket buyers.

Since the 2005/06 season, 65% of the Arden’s Mainstage audience and 73% of the Arden’s Children’s Theatre audience purchased only one show per season. In response to these findings, we continue to explore new methods to encourage repeat attendance among these target audiences, including a new communication strategy to provide ticket buyers background material and “insider” information on the play and production prior to seeing it and offering show specific discounts immediately after they attend a production.

We also renewed our efforts to reach out to past single ticket buyers to discover why they have fallen into dormancy and encourage them to return.

To evaluate the efficacy of our marketing, we closely monitor the source codes of all ticket sales. This data reveals our top sales drivers to be (in order) word of mouth (including email and social media), direct mail, and our website. By designing campaigns based on this data, we have been able to maximize the impact of our marketing dollars: the Arden’s percentage of marketing costs in relation to earned income is 21%, compared to the national average of 30%.10 Over the past two years, we have reduced the cost of acquiring and retaining Mainstage subscribers from $.05 down to $.04 to make a dollar. We currently spend $.44 per dollar for Mainstage single ticket sales, up from $.39 two years ago, but still an impressive return on investment. Electronic marketing in particular has proven to be a low cost and effective method of reaching audiences: our emails have an open rate of 29% and a click-through rate of 3.5%, both higher than national averages.11 Beginning in 2008, we have utilized Google Analytics to track interactions with our website, and increase the efficacy of our online presence. Our success in reaching our base via email and online content has led us to devote more resources to our electronic marketing initiatives.

Strategic Goals and Objectives As part of our ongoing commitment to the Greater Philadelphia region, we strive to reach as many different segments of our community as possible with our work.

To that end we will: •

Develop and expand the Arden’s base of loyal and long–term audience members

Subscriptions are consistently the single greatest source of earned revenue for the Arden, and require the least amount of resources for acquisition and retention.

9 In contrast to our FY10 adaptation of a popular Chaim Potok novel, My Name is Asher Lev; the novel served as a point of recognition, and promoted sales.

10 Theatre Communications Group TheatreFacts 2009 industry report (http://www.tcg.org/pdfs/tools/TheatreFacts_2009.pdf) 11 National averages, as reported by Patron Mail, are 17.94% and 2.08% respectively.

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Consequently, the Arden will continue to prioritize converting single ticket buyers to subscribers, and will cultivate loyalty in our existing subscriber base by providing a great value, quality customer service, and deepening our audience’s connection to all aspects of our work. Our three year projections for subscriptions, as well as single tickets and group sales, are outlined on the graph below.

Total Ticket Revenue FY09 - FY15

Single $

Group $

$2,455,656

$2,500,000

$2,380,770 $2,246,461 $2,132,275

$2,000,000

Sub $

$304,285 $1,891,807

$299,950

$2,162,847

$2,217,045

$255,077

$329,800

$801,100

$807,800

$341,000

$343,000

$203,665 $858,260

$1,500,000

$882,384

$854,600

$898,700

$596,354

$1,000,000

$1,213,956

$500,000

$1,106,670

$1,079,445

FY11

FY12

FY13

FY14

FY15

Actual

Projected

Projected

Projected

Projected

$1,083,916

$1,091,851

FY09

FY10

Actual

Actual

$949,941

$1,185,170

$0

To achieve these subscription goals, we will continue to publicize our popular Leap of Faith and Priority Renewal options for subscription via e-mail, print pieces, and onsite at Arden performances and events. (We implemented the Leap of Faith campaign for Children’s Theatre for the first time in spring 2010, to great success; it accounted for 410 subscriptions) We will also use direct mail to target both lapsed and prospective subscribers with pieces tailored to those specific patrons’ buying habits. Research conducted by Karma and The Patricia King Group, indicated that repeat single ticket buyers were not aware of the benefits of subscribing—for example, an average of 8% of Children’s Theatre audiences attend both Arden Children’s Theatre shows each season, but do not commit to a subscription. In order to more effectively communicate this value, we will raise the prominence of subscription benefits in our print pieces, online communication, and institute a Subscriber Ambassador program to encourage referrals from current subscribers. In addition, we will specifically highlight discounts and flexible ticket exchange in our communication to Children’s Theatre audiences, deemphasizing the calendar commitment commonly associated with the concept of “subscribing.”

As a certain degree of turnover of our Arden’s Children Theatre audiences is unavoidable as children age, we will continually prioritize the acquisition of new Children’s Theatre audiences. Analysis of our current tactics has revealed that parents of young children use the web and email much more than direct mail; accordingly, we will enhance our online campaigns for Arden Children’s Theatre. To identify new audiences, we will utilize data modeling to generate ideal patron profiles to help us better

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identify our target market for Arden Children’s Theatre and we will explore opportunities to capture names and addresses of our school group student attendees.

•

Identify and reach out to broader segments of the community in order to introduce them to our work and encourage audience members to return.

Direct mail continues to be our most effective mode to reach new audiences. We will continue to send targeted print pieces to patrons of other area cultural organizations, using the Target Resource Group through the Greater Philadelphia Cultural Alliance List Co-op to manage our list trades, purchases, and to provide tools to analyze return rate.

As traditional media coverage for the arts has decreased, we’ve necessarily become more creative in our outreach to the community. In response to the shift from print media to online journalism, we will continue to develop relationships with local and national bloggers, to cultivate the Arden’s reputation in the online community. Similarly, to enhance our online advertising campaign, we are participating in Google Grants, Google’s online in-kind advertising program for non-profits. Google Analytics also enables us to track referring sites,12 thus identifying our most effective marketing initiatives. We consistently record high referral rates from Facebook, Phillyfunguide, and B101’s website (B101 is an especially popular referring site during Children’s Theatre.)

Over the next three years, we will seek to expand our online marketing presence by pursuing additional in-kind online advertising programs.

Partnering with other area cultural organizations, such as the Free Library of Philadelphia, the Rosenbach Museum and Library, and the National Constitution Center, has proven to be an effective approach to acquire new audiences. We will continue to explore cross promotions appropriate to specific shows, such as a partnership with the Pennsylvania Horticultural Society in conjunction with our production of Tulipomania, and the National Museum of American Jewish History with our production of The Whipping Man. We will also significantly increase our efforts to establish the Arden as a premier destination for leisure travelers to Philadelphia. Our location in Old City, and proximity to such historical landmarks as Independence Hall, Christ Church, and the Betsy Ross House, puts us in an ideal geographic position to take advantage of the Philadelphia tourism industry. To this end, the Arden has designed a visitor campaign that includes a concierge program with Where Magazine, Search Engine Marketing, and a ticket partnership with the Independence Visitor’s Center.

•

Keep our work as affordable and accessible as possible so that all those interested in experiencing our productions have the opportunity to do so

In the interest of ensuring that the Arden experience remains accessible and affordable, in spite of current economic hardships, the Arden has kept ticket prices steady at their pre-recession rates. Over the next three years, we will reexamine our pricing structure with the intent of instituting a modest 5% increase to account for inflation. We will also continue to provide discounts for seniors, students, teens, and families with young 12

Referring sites include any website from which users clicked through to visit the Arden’s website.

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children. The Target 2 for 1 program, which offers half-price tickets to families for specific performances of Arden Children’s Theatre, has sold 13,500 tickets over the past three seasons. Nearly half of the households who took advantage of this program were first time ticket buyers. Due to a shift in Target’s funding guidelines, 2011/12 will be the final season they sponsor this particular program. However, given the unequivocal success of this initiative in driving ticket sales and attracting new audiences, we will prioritize securing a new corporate sponsor for this program, so that it may continue uninterrupted into the 2012/13 season.

We will also continue our outreach to local schools in need through Arden for All, our program which provides free tickets to underserved students. (See EDUCATION.) Our commitment to underserved audiences likewise extends to audiences with special needs. We currently offer Shadow Signed performances for Children’s Theatre, to provide a fuller artistic experience for our audiences with hearing loss, and are the only theatre in Philadelphia to do so.13 In addition, we will continue to make available Large Print Programs and Assisted Listening Devices, and routinely offer Open Captioned and Audio Described performances.

•

Continually evaluate the effectiveness of our marketing efforts

We will leverage technology-based research to help us better understand and serve our patrons and improve the efficacy of our marketing tactics. To this end, we will: 9 Complete an annual patron survey to collect non-transactional information, such as patron perceptions and background information, to gain a deeper understanding of our consumers.

9 Use our ticketing software as well as external sources to track and analyze patron transaction behavior.

9 Utilize website analytics to track and monitor consumer behavior online. We will measure website content effectiveness and purchase conversion as well as monitor the ease of use of the ticket purchase path.

9 Utilize email analytics to design email campaigns with increased open-rates, click-through rates, and conversion rates.

9 Invest in Search Engine Optimization (SEO) and our Search Engine Marketing (SEM).

9 Use intelligent barcoding and customized promotion codes and messaging and timing tests to guide direct mail and advertising strategies.

13 Unlike traditional ASL interpreting, in which the interpreter is located to the side of the stage, our interpreters are included onstage and incorporated into the action, becoming part of the stage picture, allowing our patrons with hearing loss to enjoy the performance more fully.

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SECTION SIX: FUNDRAISING Present Position Throughout the economically turbulent period following the adoption of the 2009/12 plan, the Arden’s base of contributed support has remained solid and consistent. Our largest source of support continues to be foundation giving, which comprises 39% of the Arden’s contributed income, significantly higher than the national average of 16%.14 We receive tremendous support from major Philadelphia-based foundations, including The Pew Charitable Trusts, the William Penn Foundation, and the Independence Foundation.

In addition, the Arden has successfully expanded its reach into the national funding community receiving funding from the Shubert Foundation, the Edgerton Foundation, the Horace Goldsmith Foundation, and the Harold and Mimi Steinberg Charitable Trust. We have also successfully cultivated gifts from new funders such as the Geraldine R. Dodge Foundation and the Horner Family Foundation.

We have been successful in leveraging capacity building grants, such as the 2007 Excellence Award from the Wallace Foundation, increasing the Arden’s earned income.

The Wallace grant expanded Arden Drama School, supported the position of Education Director, and encouraged crossover audiences from Children’s Theatre to Mainstage.

(See AUDIENCE DEVELOPMENT for full details on the Wallace Foundation grant.)

Other such capacity building grants include multi-year grants from the Philadelphia Cultural Management Initiative and the Independence Foundation to support the launch of The Writers’ Room, our new playwright residency program.

The recession had a significant effect on corporate giving, which decreased 17% in FY09, but rebounded 14% over the following two seasons. One of the catalysts that propelled the Arden’s increase in corporate gifts has been Pennsylvania’s Education Improvement Tax Credit (EITC) program. Our participation in the EITC program fuels our in-school arts education program, garnering support from companies such as PECO, Comcast, Susquehanna Bank, and ACE Group. We recognize that the future of EITC is subject to change and so must be monitored.

Federal, state and local government budget reductions have resulted in cuts over the past three years that cumulatively reflect a reduction of 44% in government funding.

Despite these cuts to annual funding, the Arden has taken advantage of several onetime opportunities for Government support, receiving support from short-term granting programs such as the NEA American Masterpieces Award, for our production of Candide, and the NEA Recovery Act, which resulted in support to preserve two staff positions in the face of budget cuts. In addition, thanks to the stalwart advocacy of Arden Board members, the Arden received $1 million dollars for our Arden North capital project through the State Redevelopment Assistance Capital Program (RACP).

During the last strategic planning process, we identified individual giving as the area with the most potential for philanthropic growth. Despite a challenging economy, individual giving did not decline over the past three years, but rather, held steady at the same level we experienced during the term of our previous strategic plan. To elicit increased levels of support from individual donors, we have focused on deepening engagement, with more opportunities for personal connection with senior staff and artists, personalized 14

Theatre Communications Group 2009 survey

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cultivation, and innovative ways of demonstrating our appreciation. The Arden also instituted the practice of displaying a Subscriber and Donor Acknowledgement Board in the lobby which recognizes subscribers and donors in attendance at each performance.

Individual Giving Board Sylvan Annual Fund In addition to $250,000 these cultivation efforts, we $200,000 also engaged an outside $150,000 consultant (made possible $100,000 through a grant from the $50,000 Philadelphia Cultural $0 Management FY08 FY09 FY10 FY11 Initiative) to advise us how to maximize our existing resources for fundraising. This consultation included an in-depth analysis of our Sylvan Society and Annual Fund prospects and resulted in a standardized procedure and format that we now follow when researching potential new funders. This system is currently being used by our part-time research assistant, who was engaged to aid in identifying new funding prospects and cultivation opportunities within our existing donor base.

In our 2009/12 strategic plan we projected that 29% of our subscribers would make a gift by 2011. The current national average for subscriber gifts is 26%.15 Over the course of two years from 2008/09 to 2009/10 we grew the number of subscriber-donors by 24% to 730. However, the number of overall subscribers has also increased, bringing the percentage of subscribers who donate to 21%.

The Arden’s annual giving program, the Sylvan Society, has maintained a steady line of income over the past three seasons. While there has been a 20% decrease in number of members, the average size of gifts has increased by 30%. This can be attributed to the successful implementation of a challenge grant from the Hamilton Family Foundation, which doubled the impact of new and increased gifts over the past two seasons.

Focusing on contributions that can secure the Arden’s long-term health, we instituted a planned giving program called the Legacy Society. Though this program is still in its infancy, with very little cultivation the Legacy Society already boasts six members.

Special events continue to be both a source of income and a tool in donor cultivation.

The 2010 Granfalloon (our biennial gala fundraiser) was the most successful in Arden history, both best attended and highest grossing, raising over $185,000 for our artistic and educational programming. Held in the exclusive Ralph’s Café in the new Comcast Center overlooking the Philadelphia skyline, this event, featuring honoree N. Peter Hamilton, elevated our Granfalloon to new heights, literally. In the years between 15

Virginia Stage Company. LORT Subscription and Donor Research. Rep. Norfolk, VA, 2009. Print.

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Granfalloons, we have experimented with different models for our smaller fundraising events with varying degrees of success. $200,000

Event Expenses vs. Gross Income FY05- FY10

Total Expenses Total Gross Income

$185,830 $180,000

$158,818

$160,000

$140,000

$117,915

$120,000

$100,000

$79,577

$80,000

$60,000

$72,102 $58,425 $45,453

$45,213

$48,415

$43,231

$40,000

$24,775 $20,000

$20,951

$15,687

$14,231

$0

FY05

FY06

FY07

FY08

FY09

FY10

FY11

During the period covered by the 2009/12 plan, the Arden managed two separate capital campaigns: the Fund for the Future and the Arden North campaign. By the second quarter of 2011, we raised $1.8 million for the Fund for the Future, successfully completing the “Secure the Building” portion of the campaign and enabling us to complete all upgrades to our public and artist support spaces by the fall of 2011.

In summer 2010 we began the early phases of the Arden North capital campaign as we identified and purchased the building at 62-66 North 2nd Street. (See FACILITIES for full details on the building.) Arden North: Building Community through Education and Creativity is designed as a $5.8 million dollar campaign to support the purchase and renovation of 62-66 North 2nd Street as well as seed a building reserve fund. This campaign is currently in the quiet phase, but we have successfully secured $2.2 million in early leadership and major gifts for the building.

Strategic Goals and Objectives To meet the Arden’s artistic and educational goals, we require a stable flow of contributed income to underwrite our work and keep ticket prices and tuition affordable. To accomplish this goal we will:

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•

Increase contributions to the Annual Fund and Sylvan Society 13.5% by FY15

In order to address the projected decline in government funding and the ongoing concern about the volatility of corporate giving, we will focus our energy on the area with the most potential for growth, individual giving. As quoted in The Washington Post, Chuck McLean, GuideStar’s vice president, states: “The bottom line is that individual giving drives philanthropy.” By investing in growing our individual donor base, we will guarantee ourselves a diversified base of support. Our strongest prospect pool for new individual donors is our subscriber base and frequent ticket buyers--patrons who purchase two or more shows annually over two successive years.

To this end, we will increase our donor base of subscribers who donate from 21% to 25% (or an increase of 150 subscriber-donors) by FY15. We will increase the retention rate of our Annual Fund donors from our average of 50% (from 2007/08 to 2009/10) to 60% by FY15. In addition we will address the churn in membership of our Sylvan Society maintaining our successful acquisition rate of 12% and increasing retention by 10%. In order to meet these goals, we will capitalize on the prospecting work that has been completed over the past two seasons, putting individual cultivation plans into action to encourage this growth. Our new Writers’ Room program presents us with a unique opportunity to secure leadership gifts from donors who are specifically interested in the development of new work.

•

Reevaluate our event format with the goal of creating special events that drive income, identify new prospects, and improve donor relationships

Over the course of the previous plan, Arden special events exhibited divergent levels of success. The timing of the Arden’s 25th anniversary in 2012/13 (traditionally an “off year” in which we would mount our smaller scale event) presents us with the opportunity to experiment with a variation on our standard event model. We have found that staff expend comparable time and resources on our off year events, without the same return on that investment. A trial period will help us determine if holding our gala event annually would generate increased revenue without monopolizing staff time and talent to the extent of becoming counterproductive. Accordingly, our tentative schedule for special events over the next three years is as follows: 2011/12 season – Granfalloon (spring date) 2012/13 season

25th Anniversary Opening Night – To kick off our 25th anniversary season, we will hold a special inaugural celebration on the first opening night of the season. This event will generate excitement for the season of celebration as well as income.

25th Anniversary Jubilee – a gala, to be held in the spring, with a similar format and scale as the Granfalloon

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2013/14 season – Traditionally this would be a Granfalloon year. We will take into account the results of the prior two seasons and make a determination if it is more effective to hold a Granfalloon annually, or biennially.

•

Grow participation in our planned giving program, the Legacy Society, with a goal of doubling our membership by FY15

Having established a basic planned giving program, our next step for growth will be identifying a board member to chair a Planned Giving Committee and assist in designing a strategy to publicly launch this initiative. The Arden currently accepts bequests; however, outside expertise in this area is necessary to set up more sophisticated methods of planned giving, such as charitable gift annuities. We will also look to offer a unique benefit, distinct from Sylvan Society events, such as an annual dinner with a member of Arden leadership. We will put this benefit into place by FY15.

•

Grow operating contributions from foundations, adding at least two new national foundations as contributors by FY15

We will broaden our prospect research to investigate potential funding from family foundations with an interest in our educational and artistic programming. Continuing to capitalize on the Arden’s artistic success, we will use national recognition (such as recent reviews in The Wall Street Journal) to leverage new funding. The addition of The Writers’ Room provides an opportunity to cultivate relationships with national foundations such as the Doris Duke Foundation and the Mellon Foundation. We will also look to take advantage of the Theatre Communications Group’s grant making opportunities.

•

Maintain our current level of corporate support

In the interest of better stewarding our current corporate funders, we will work with our corporate partners to maximize the amenities included in sponsorships such as employee benefits and participation, as well as advertising opportunities. We will continue to cultivate corporate leaders in an effort to identify potential new sources of corporate support.

The Arden will also continue to participate in Pennsylvania’s Educational Improvement Tax Credit program, and promote the educational impact of our Arden for All program to corporate leaders and decision makers.

We will work to increase in-kind support by 10% annually over the next three years.

Areas of potential solicitation for in-kind donations include hotels, airlines, and additional Dining Partner program restaurants.

•

Maintain our current level of government funding by expanding and cultivating our base of supporters as administrations turn over.

The Arden’s Advocacy Committee has proven to be an invaluable resource for informed perspectives on the current state of affairs, networking with the Arden’s elected representatives, and guiding our efforts to access available resources from our state and local governments. The Committee has ensured that the Arden has retained a high

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profile among our representatives, and that we are aware of the opportunities to solicit and secure government support. As the political environment continues to shift, the Committee will address the cultivation of new committee members to ensure that the Arden maintains a bipartisan base of support, and that our financial aid from government sources remains constant, rather than dependant on electoral cycles.

•

Complete the Arden North: Building Community through Education and Creativity campaign by FY14

The Arden North campaign is currently targeted at $5.8 million dollars, with $2.2 million dollars currently raised. This campaign is led by the Board of Directors, with a steering committee chaired by Lee van de Velde and Peter Hamilton. We anticipate commitments from identified sources to total $3 million (more than 50% of our goal) by early 2012, at which point we plan to break ground and launch the public phase of the campaign. While the economic climate is challenging, the ability of Arden North to not only enhance our mission but also to increase earned revenue and improve efficiency provides a competitive and persuasive case for support.

•

Cultivate support for the Artistic Fund

By separating “Grow the Art” into its own campaign we can leverage the physical expansion into Arden North to catalyze giving to this fund. We will raise an additional $1.2 million dollars for the Artistic Fund, which will enhance the Arden’s ability to take artistic risk and grow our artistic programming well into the future. The earnings on the Artistic Fund will be spent to increase artist salaries, support additional rehearsal weeks when needed, and fund commissioning of new work. It will be the final phase of the Arden’s growth plan over the past ten years, and a true milestone in the Arden’s journey to provide for the future of the company, above and beyond subsidizing current programming on a year to year basis.

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SECTION SEVEN: FACILITIES Present Position The Arden’s theatre building at 40 N. 2nd Street and Artists’ House at 250 N. Lawrence Street play a significant role in our capacity for growth and financial stability. Over the past three years, we have invested considerable resources (over $1.2 million) in the renovation and upkeep of these two buildings to ensure that they support the Arden’s ever-growing audiences and operations for years to come.

Renovations at 40 N. 2nd Street included: •

Securing the theatre building envelope including replacement of the roof, masonry repair, and upgrading the building’s internal drainage system.

•

Upgrading the public spaces including new restrooms and refurbishing lobby windows to improve energy efficiency.

•

Renovating the Haas backstage spaces including the Charles and Dr. Mindy Goldberg Rose Green Room and Dressing Rooms.

•

Replacing the fire safety system.

•

Investing in core production technologies, including upgrading the Arcadia Stage electrical service and purchasing new lighting, sound, and video equipment for both theatres.

Improvements to 250 N. Lawrence Street included: •

Replacing the heater.

•

Purchasing new furniture and appliances.

•

Repairing the exterior walls and roof.

The Facilities Committee, led by board member H. Hetherington Smith, has taken a leadership role in driving the upkeep and prioritizing sustainability planning for our properties in a way that is both cost efficient and environmentally responsible given the physical constraints of our facilities. In 2011 the committee adopted a Systems Replacement Plan (SRP) for tracking and addressing future renovation, maintenance, and replacement needs for our two buildings. The Building Asset Reserve Fund will ensure that funds are set aside annually to meet these needs. The Facilities Committee is charged with guaranteeing adherence to the needs and timeline outlined in the SRP. A longtime Arden goal has been to identify and secure a permanent set and props shop.

A more recent goal has been to identify and secure an appropriate space for the Arden’s growing educational programming. In 2010, in response to these pressing needs, and a rare market opportunity, the Arden purchased the property at 62-66 N. 2nd Street to address both of these goals.

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62-66 N. 2nd Street is a 22,000 square foot two-story building located three doors north of the Arden’s main theatre building. When fully renovated, this space will become Arden North: A Center for Education and Creativity and will house four classrooms, two rehearsal halls, a studio theatre, as well as our scenic and props shops. Arden North will provide the space needed to realize our vision for the future. It will include: • • • •

A permanent home for Arden Drama School Centralized home for our scenic, and props shops Space for expanding new play development efforts Increased opportunities for community partnerships and mentorship of smaller arts organizations

Arden North will allow us to better serve the needs of our students, artists, writers, staff, and audiences. It will stimulate increased foot traffic and activity, improving the quality of life in Old City and serving as an economic driver for neighborhood businesses.

Strategic Goal and Objectives Our goal is to ensure that the Arden’s performance and support spaces continue to foster greater artistic opportunity, better serve our students, artists and staff, and enhance the theatre-going experience for our patrons. To this end we will: •

Renovate Arden North: A Center for Education and Creativity within the period of this plan

The Facilities Committee is overseeing the design and development of Arden North. We have hired the architectural firm of Richard Conway Meyer Architect to design the project. Working with members of the Facilities Committee, Meyer and the engineering team have completed the schematic design phase and are currently in the design development phase of the project.

The committee will begin the pre-construction phase of the project in the fall of 2011.

They are currently exploring a phased approach to the development of 62-66 N. 2nd Street, an approach that was instrumental to the successful renovation of 40 N. 2nd Street. 16 We anticipate that the first phase of this construction project will be put out to bid by early 2012.

•

Improve the north side of 40 N. 2nd Street

The north sidewalk of 40 N. 2nd Street adjoining Cuthbert Street will become a frequent path for pedestrians with the addition of Arden North. To date, only nominal improvements have been made to this side of the building. The Facilities Committee will create a plan for necessary improvements, including increased lighting and repairing the sidewalk to facilitate a natural and safe path between the two buildings.

•

Create a plan to upgrade and expand the administrative offices and support spaces

16

This phased approach to renovating 40 N. 2nd St. was praised in the article From Promising to Paragon in the 2010 William Penn Foundation Annual Report.

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We have outgrown our current administrative offices located at 40 N. 2nd Street. With the completion of Arden North, the current rehearsal space located above the offices can be repurposed to accommodate our need for more office space. Over the next three years, the Facilities Committee will design a plan to expand the administrative offices and support spaces. Funds for this expansion are budgeted in the Systems Replacement Plan and will be supported by the Building Asset Reserve Fund.

Â

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SECTION EIGHT: GOVERNANCE AND ADMINISTRATION Present Position The Arden is governed by a dynamic and engaged Board of Directors that represent a true cross section of the Arden community, all of whom are dedicated to carrying out the mission of the organization and furthering the goals of the company. The Arden’s board currently consists of 32 members. The composition of the board is guided by the Board Development committee. The goals of the Board Development Committee are threefold: to increase board participation, build a more diverse board, and periodically assess organizational needs.

Over the past three years, increased board engagement has empowered the organization to respond to the changing landscape and encounter equally the challenges and opportunities that have arisen. The board has provided leadership support towards special campaigns and initiatives, most significantly the acquisition of Arden North.

Acutely aware of the Arden’s need for additional space (as articulated in the past two strategic plans) the Board unanimously voted to purchase this building and committed funds to ensure its acquisition and renovation.

Current Board President Ellen Foster succeeded David Fryman in 2010, who continues to serve on the Board. We are fortunate that several of our former Presidents remain members of the board, allowing the organization to build on a strong foundation, by capturing institutional memory and organizational knowledge. During her tenure thus far, Ellen has sought to increase board engagement through clear articulation of goals combined with a greater connection to the artistic work of the company.

At the close of the 2010/11 season, at the recommendation of the Board Development and Executive Committees, the Board voted to establish the Cornerstone Society, to recognize and thank leaders of the Arden for contributions that have moved the organization forward in a significant way. The founding members of the Cornerstone Society are: former board member and Arden advocate in the corporate and civic community, Frederick W. Anton, III; Gerard J. Conway, Sr., founding Board Chair of the Arden; Carole Haas Gravagno, former board member and Chair of the successful campaign to secure the Arden’s New Home in Old City; and Aaron Posner, playwright, director, and Arden co-founder.

As we have grown into a larger institution, we’ve taken steps to formalize our standard practices in a series of written, board-approved policies. These policies allow us to better communicate our standards and business practice values to our larger organization. In June 2011, the Board officially adopted a Whistle Blower Policy and Conflict of Interest Policy.

Led by Board President Ellen Foster, the Board will also formalize a succession plan for the Arden in the 2011/12 season. The priorities of the succession plan will be to address raising salaries at the management level to grow our ability to retain and develop our staff, to ensure that the Board encompasses the diverse range of skills and expertise to provide leadership through future executive transitions, and to formalize a procedure to annually evaluate the readiness of the Arden to successfully navigate organizational turnover. To that end, Ellen Foster has proposed instituting a succession scorecard, to

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be completed on an annual basis, through which we can rate our preparedness for future successions as related to a variety of components.

Attracting and retaining a talented and motivated staff has been one of the organization’s strengths in the past, and continues to be an essential ingredient to ensure the Arden’s future success. In 2010, we strengthened our leadership team with the addition of a new staff position, dedicated to realizing the goals of the Arden North campaign: Director of Institutional Advancement. Having worked previously at the Arden as Director of Community Relations, Jessica Calter brings both institutional knowledge and a wellcultivated wider perspective of Philadelphia arts organizations to the position. In response to recent fiscal challenges, staff salaries have remained steady over the past three years. We have not instituted layoffs, salary reductions, or furloughs.

Strategic Goal and Objectives We seek to attract the highest caliber and most diverse team of board/committee members, managers, and staff. To this end we will: •

Develop and maintain a diverse board that is fully informed, engaged, and inspired to execute their governance responsibility and develop the resources of the organization.

Over the next three years, the Board Development Committee will seek out and cultivate new board members who can strengthen the board’s fundraising capacity, connection to the community, and raise the level of engagement. The Board Development Committee is working to increase the board’s overall effectiveness without increasing the number of board members.

Board members currently serve a two-year renewable term. Board members have voluntarily elected to rotate off the board and, if appropriate, often return at a later date with renewed energy and fresh perspective. Over the next three years, the Board Development Committee will reevaluate instituting a term limit policy.

•

Increase the level of engagement and overall effectiveness of board and show-specific committees

The importance of active and effective Board committees cannot be overstated. Over the next three years, we will work to maintain and increase the effectiveness of longstanding board committees, including Board Development, Finance, Facilities, Personnel, Planning, Special Events, and Individual Giving. We will continue to articulate specific action steps for each committee, to establish a clear sense of the organization’s expectations and parameters for success. We will also provide ample staff support to ensure that our efforts and priorities are aligned across the organization.

We will continue to convene show-specific task forces in conjunction with productions offering unique audience development opportunities. We will also continue to seek out opportunities to deepen our engagement with current and potential donors through committee contacts, recognizing that committees are invaluable in identifying prospective board members and future Arden stakeholders.

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Finally, we will build the Arden North Committee to ensure that we have the energy, expertise, and resourcefulness required to transform our vision for Arden North: A Center for Education and Creativity into a reality.

•

Attract and retain highly motivated and well-qualified staff through aggressive recruiting, competitive salary and benefits, and a healthy working environment

The Arden’s staff is the driving force behind the annual operations of the company. Staff retention and recruitment is vital to maintain the quality of the Arden’s work. Though our overall retention rate is positive, the Arden also has a history of losing committed, talented staff to larger institutions that are able to offer access to a deeper infrastructure, more support staff, and significantly higher salaries. As we weather the current economic environment we will ensure that staff salaries remain within the range of the industry standards for organizations of comparable size and producing a similar volume of work, as reported in the Theatre Communications Group annual survey. The Arden will continue to provide quality benefits which include a competitive health insurance program, a flexible savings plan, a matching 403b program, and short-term and longterm disability.

The Personnel Committee is monitoring staff salaries and benefits packages and will investigate non-salary benefits that would demonstrate appreciation and respect for our staff’s dedication. Though we are not projecting the addition of many new staff positions, we will hire a Facilities Manager once Arden North is operational. With the addition of Arden North to our current buildings, the Arden will own and operate over 90,000 square feet of space. A Facilities Manager will ensure that our three buildings are efficiently operated and properly maintained.

•

Provide the Arden’s leadership appropriate professional development opportunities, including the time off necessary for pursuing those opportunities

The Arden is firmly committed to staff professional development because of its inherent benefits in terms of employee job performance, job satisfaction, and prospects for promotion, but also as an important element of succession planning.

We believe that by identifying each individual's developmental needs we pair staff with meaningful opportunities for learning. The Personnel Committee is committed to assisting in this effort and senior staff will include reports of their efforts in this regard at the Committee’s regular meetings.

Arden co-founders Amy Murphy and Terry Nolen have spent nearly twenty-five years building and growing the Arden. Over the next three years, the Board will seek to provide Amy and Terry with the support and resources (both staff and financial), necessary to allow them to take advantage of professional opportunities external to the Arden and, if desired, a three month sabbatical from the organization.

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SECTION NINE: FINANCIAL Present Position The 2009/12 Strategic Plan was approved by the board in the summer 2008, immediately preceding the economic crisis in September of that year. In response to this crisis, the Arden adjusted the proposed budget and revised its three year projections.

Despite economic conditions, the company’s operating budget remained steady with a 4% growth in expenses over the past three years. The company experienced a significant drop in ticket sales in the 2011/12 season, consistent with the drop in the consumer confidence index.17 Year-end surpluses, along with the purchase of the building at 62-66 N. 2nd Street, acted as catalysts for significant change to the company’s financial position with a 27% growth in assets over the period of the 2009/12 plan.

The Arden has maintained a strong financial position notwithstanding turbulent economic times, and made strides in maturing the financial management of the company. In the article From Promising to Paragon, appearing in the William Penn Foundation’s 2010 Annual Report, Matt Blanchard praises the Arden’s fiscal management: “Three years into a global financial crisis that has hobbled many arts organizations in the region, the Arden is growing its annual budget past the $4.5 million mark, expanding its funding of new plays, and has plans to develop a neighboring building. The turbocharged drama here is about positive capitalization - the Arden’s financial ability to achieve its mission, survive the unexpected, and fund future innovation.”

By the close of FY11, the Arden successfully completed the “Secure the Building” portion of the Fund for the Future capital campaign, which enabled us to complete the planned renovations of the spaces that serve our audiences and support the work onstage. In order to continue to protect our investment in our capital investments, in the spring of 2011, the Board adopted a Building and Capital Asset Reserve Policy that institutes a Building Reserve Fund to be used for upkeep and necessary upgrades to our facilities. The target amount of this fund is determined by the Systems Replacement Plan, and will be funded with a cash equivalent of a percentage of the annual budgeted depreciation. The Building Reserve Fund is a Board-designated fund that will be managed by the Finance Committee.

The Arden owns three major physical assets: the theatre on 40 N. 2nd Street, artist housing at 250 N. Lawrence Street, and the newly purchased 62-66 N. 2nd Street. In the summer of 2009, the Arden’s balloon mortgage on 40 N. 2nd Street matured, and we elected to refinance the remaining balance. Through a complete and thorough bidding process led by a subset of the Finance Committee, the Arden’s building was remortgaged at $705,000 with a favorable term and rate. During this refinance, Actors’ House, which was leveraged in the previous note, was not taken as collateral; that property is now unencumbered.

In the first quarter of 2010, we were presented with a real estate opportunity which would answer our additional space needs, increasing the Arden’s facility square footage by almost 50%. Capitalizing on the 2010 buyer’s real estate market and with full support of 17

The Conference Board Consumer Confidence Index® http://www.conference-board.org/data/consumerdata.cfm

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the Board, the Arden purchased the foreclosed building located three doors down from our current theatre and office space. The development of 62-66 N. 2nd St. will build the company’s earned income potential and eliminate the need to rent shop, parking, and classroom space, resulting in a cost-savings of almost $50,000 annually.

The Finance Committee weighed the relative strengths of several mortgage proposals to secure the best deal for Arden North. We were able to put a down payment of 20% on Arden North, and carry the mortgage within the company’s normal operations— demonstrating the company’s strong financial operating position. The Arden’s debt to net assets ratio after the completion of this purchase is .47, compared to .32 prior to the building’s purchase in FY10.

Over the past decade, our Finance Committee has created a clearly defined fund system for the company’s reserves, which includes: 1.

Endowment - while small, the endowment fund prompted the creation of an endowment policy and infrastructure. The Arden is now positioned to raise funds to increase the endowment when the economy recovers.

2. Fund for the Future - which consists of two funds: “Secure the Building,” (funds used for the building improvements as discussed in the FACILITIES section) and “Grow the Art” (invested funds with earnings to be used to support the development of new work.)

3. Board-designated Building Reserve Fund - established to maintain the theatre facility after the summer 2011 renovations.

Strategic Goal and Objectives We strive to maintain fiscal health and secure long-term financial stability in order to meet the artistic, educational, institutional goals of this plan. To this end we will: •

Maintain the fiscal health of the organization

The Arden experienced a period of healthy growth during the course of the previous plan. Future growth is projected to be more gradual, given current economic conditions.

We will emulate proven successful season planning models (from prior Arden seasons) to maintain ticket sales as a vital source of income. Specific measures will include producing new plays in our smaller Arcadia space and producing our second Children’s Theatre show early in the spring to capitalize on sales to school groups. These tactics will minimize the inherent financial risks associated with artistic programming, without sacrificing production quality or inhibiting creative innovation.

The development of Arden North will foster new and increased revenue sources. Arden Drama School has exhibited 40% growth over the past two seasons, which supports the case for more classrooms in which to offer additional programming, and which will generate increased revenue from tuition. The Arden’s current schedule of operations does not allow for the opportunity for other organizations to rent our theatres regularly.

The construction of a studio theatre space in Arden North will create an opportunity for a new stable line of rental income.

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Expenses are projected conservatively, with allowances for cost increases. As the economy recovers, potential growth in expenses related to programming and staffing will be reexamined. Our plan for staff investment and calculated expansion is further enumerated in the GOVERNANCE AND ADMINISTRATION section of this plan. The Finance Committee will continue to monitor monthly activity, budget variances and the progress of current campaigns.

•

Maintain a healthy balance between earned and contributed income

While working to maintain the Arden’s fiscal health without sacrificing the quality of our programming, the Arden will aim to preserve the target ratio of Earned to Contributed Income. Our target ratio is 55-60% Earned Income to 40-45% Contributed Income.

•

Design a capitalization strategy that enables the Arden to use its current assets most effectively

To allow the Arden to continue to mature and advance as an organization, the Finance Committee will refine and manage a more transparent fund structure. Each Boarddesignated fund will have a clearly defined policy that will outline the ways in which these funds will be invested, how they may be used, and how the policy may be revised.

To date, the Arden has raised $280,500 for the Grow the Art portion of the Fund for the Future. These funds are being held in a designated account in the form of Exchange Traded Funds and cash. The original intent for this fund was to invest the donations and to spend the earnings specifically on the development of new work, once the fund’s principal reached $1,500,000. This policy will be more clearly defined during the term of this plan.

The Arden has managed its operations with a healthy cash flow with accumulated surpluses and a targeted level of cash on hand at all times. The company has benefited from consistent financial management for the entirety of its 23 year history. In order to maintain this positive financial position and to formalize a tenable succession plan, the Finance Committee will establish an operating reserve fund with a clearly defined policy during the term of this plan, and will analyze the potential revenue sources to create the fund.

Building the Arden’s endowment will become a priority after the completion of the Arden North capital campaign and will most likely be a featured goal in our 2016/19 strategic plan. During the term of the current plan, we will capitalize on opportunities to augment this fund as they arise, with special focus on planned giving prospects who have an interest in providing for the Arden’s long-term future.

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2011/12 Proposed Operating Budget

2011/12 Proposed Capital Budget

2012/13 Proposed Operating Budget

2012/13 Proposed Capital Budget

2013/14 Proposed Operating Budget

2013/14 Proposed Capital Budget

2014/15 Proposed Operating Budget

Operating Earned Income Ticket Income Arden Drama School Rentals Royalties Interest/Earnings Income Miscellaneous Income Total Earned Income

2,226,168 250,350 13,000 5,000 20,000 105,000 2,619,518

2,272,471 306,390 29,600 5,000 20,000 105,000 2,738,461

2,440,289 364,700 71,600 5,000 20,000 115,000 3,016,589

2,517,047 468,170 117,200 5,000 20,000 120,000 3,247,417

Operating Contributed Income Board Contributions Individual Contributions Foundation Grants Corporate Gifts Government Grants Fundraisers - Granfalloon/Other Total Contributed Income

150,000 375,000 727,250 341,000 100,000 150,000 1,843,250

155,000 400,000 853,750 341,500 100,000 100,000 1,950,250

155,000 400,000 756,550 351,500 100,000 175,000 1,938,050

158,000 425,000 880,000 278,500 125,000 100,000 1,966,500

Capital Contributed Income Board Contributions Individual Contributions Foundation Contribution Corporate Contribution Gov't Contribution Total Capital Income Total Income Operating Expenses Production Outreach New Play Program APA Program Drama School General Operations Occupancy Marketing Box Office Development Personnel Debt Service Depreciation Expense Current Capital Expense Total Operating Expenses TOTAL INCOME TOTAL EXPENSES Gain/Loss

4,462,768

138,500 221,500 537,500 235,000 600,000 1,732,500 1,732,500

685,736 67,710 100,000 3,500 101,395 299,583 228,700 490,700 28,000 129,500 2,093,787 38,678 184,597

4,688,711

142,500 596,500 302,500 100,000 400,000 1,541,500 1,541,500

699,009 70,846 100,000 3,500 87,075 310,355 238,248 491,720 29,120 89,500 2,236,880 36,565 288,021

4,954,639

142,500 296,500 602,500 100,000 0 1,141,500 1,141,500

716,381 73,070 100,000 3,500 100,250 322,388 247,778 505,565 30,285 131,480 2,394,843 34,318 288,021

5,213,917

2014/15 Proposed Capital Budget

82,500 146,500 502,500 0 0 731,500 731,500

742,637 75,373 120,000 3,500 141,175 331,904 257,689 521,987 31,496 93,539 2,529,216 31,929 288,021

4,451,885

319,981 319,981

4,680,837

312,944 312,944

4,947,879

204,602 204,602

5,168,467

163,030 163,030

4,462,768 4,451,885 10,883

1,732,500 319,981 1,412,519

4,688,711 4,680,837 7,874

1,541,500 312,944 1,228,556

4,954,639 4,947,879 6,760

1,141,500 204,602 936,898

5,213,917 5,168,467 45,451

731,500 163,030 568,470

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ADDENDA •

Organization History

p.42

•

Board Responsibilities

p.43

•

11/12 Board List with Affiliations

p.44

•

Building and Capital Asset Reserve Policy

p.47

•

Conflict of Interest Policy

p.49

•

Accounting Practices

p.51

•

Investment Policy

p.55

•

Endowment Policy

p.58

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Arden Theatre Company - Organization History Founded in 1988, the Arden is a full-service professional regional theatre, offering the highest quality theatrical productions and educational programs to the artists, audiences and students of Greater Philadelphia. Our mission is to bring to life great stories by great storytellers – on the stage, in the classroom and in the community. The Arden consistently stages high-quality productions that include a range of classics, contemporary pieces, musicals and new American theatre. Each season we produce five Mainstage and two Children’s Theatre shows.

In 1995, we purchased an abandoned building in Philadelphia’s Old City neighborhood, which we transformed into a thriving, two-theatre performing-arts complex. Our presence has helped Old City emerge as one of the region's most popular destinations, and our economic impact on the revitalized neighborhood has been significant.

We have received numerous honors, including 54 awards and 272 nominations from the Theatre Alliance of Greater Philadelphia’s Barrymore Awards for Excellence in Theatre, the most awards of any theatre company in Greater Philadelphia. The Arden is a fourtime winner of the Philadelphia Inquirer’s “Theatre Company of the Year” designation.

We have also received five Philadelphia magazine “Best of Philly” awards and three “Best of Philly Kids” awards, as well as the City Paper’s Reader’s Choice Award and the prestigious “Great Friend to Kids Award” from the Please Touch Museum for our Arden Children’s Theatre work. The Arden recently received 5 Philadelphia Weekly “Best of 2008/09” Awards including one for “Best Theatre Company.” For our accessibility efforts we were named a “Keystone of Accessibility” by the Commonwealth of Pennsylvania, and we received the 2002 “Accessibility Beyond the Ramp” Award from Creative Access and the 2009 Commitment to Cultural Access Award from Art-Reach.

In 1998, Arden Children’s Theatre, Philadelphia’s first resident professional children’s theatre program, was founded on the dual premises that children’s theatre must maintain the same high production values as our nationally-respected Mainstage shows and that theatre should be affordable for children and their families. We chose to price Children’s Theatre tickets 40% lower than our Mainstage shows to allow more families to attend our Children’s Theatre performances. Since its inception Arden Children’s Theatre has become one of the Philadelphia region’s premier cultural landmarks, exciting and illuminating the hearts and minds of children who benefit from the sheer enjoyment and thought-provoking ideas and themes it generates. Arden Children’s Theatre was named Philadelphia Magazine’s “2007 Best of Philly” Theatre for Kids.

The Arden’s Education Department includes Arden for All (AFA), our theatre access and education program for underserved young people; Arden Drama School, our afterschool, Saturday, and summer camp classes for students in grades K-12; and the Arden Professional Apprentice Program, a nationally renowned comprehensive theatre management training program.

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Responsibilities and Expectations of Arden Board Members The Board of Directors is an essential part of the health and vitality of the Arden Theatre Company. In partnership with staff leadership, board members are responsible for ensuring that the Arden fulfills its mission and remains fiscally strong and institutionally healthy. To meet that responsibility board members work to strategically advance the organization in three critical areas: Leadership, Fundraising and Positioning. Board members serve a two-year term and should be willing to make the Arden one of their top three volunteer commitments. In addition to subscribing to the five-play season and attending Arden Children’s Theatre performances, the following are specific expectations in each key area: Leadership • Attend and participate in regularly scheduled board meetings (usually four per year, plus any special meetings as needed) •

Provide high-level expertise and guidance as needed by staff in areas such as: legal, finance and accounting, real estate and construction, property management, fundraising, audience development, human resources and labor relations, diversity and planning

•

Provide meaningful service on any assigned board committee (Advocacy, Board Development, Development, Facilities, Finance, Marketing, Personnel, Planning)

•

Purchase two Arden five-show subscriptions

Fundraising • Join the Sylvan Society with an annual gift of $1,000 or more •

Provide significant access to potential financial resources by leveraging any appropriate contacts for corporate, foundation, government and individual support

•

Support the biennial Granfalloon gala and any other fundraising events either personally or via an affiliated corporation or foundation

•

Make a gift of personal significance to any special fundraising campaigns outlined in the Arden’s strategic plan or otherwise adopted by the board

Positioning • Extend the Arden’s reach into strategic segments of the community (corporate, philanthropic, political, diversity, etc.)

•

Serve as strong positive advocates in the community, generating interest and awareness in our productions and programs

•

Identify potential board members and Sylvan Society members and cultivate their interest by bringing them to Arden performances and events

•

Be supportive and knowledgeable of the Arden's mission, activities and programs

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Arden Theatre Company 2011/12 Board of Directors with Affiliations

Brian Abernathy Chief of Staff to the Managing Director, City of Philadelphia Designee, Philadelphia Planning Commission Designee, Philadelphia Industrial Development Corporation Nancy Burd President, The Burd Group NPower PA Joy De Jesús Former Development Director, Pennsylvania Real Estate Investment Trust Member, Zoning Board of Adjustments for Collingswood, NJ Member, Urban Land Institute Philadelphia Michael A. Donato Vice President, SBA Lending, Susquehanna Bank Nancy Elfant Philomusica Chorale Weavers Way Co-operative Robert Elfant President, Elfant Wissahickon Realtors Martin Elfant Inc. Mt. Airy Business Improvement District Valley Green Bank Direct Mortgage Loan Company Philcard Properties Ellen Foster Board Chair, Birney Charter School, Philadelphia PA Regional Representative, Partners in Health Program Committee Member and Partner, Globalislocal Fund

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David Fryman Ballard Spahr Chair of the Board, People’s Emergency Center Matthew Garfield President, Garfield Refining Company President Emeritus, Walnut Street Theatre Prince Theatre of Chestertown, MD Free Library Company of Philadelphia International Precious Metal Institute Elizabeth Gemmill Universal Display Corporation Beneficial Mutual Bancorp Board, Franklin Institute Board, Presbyterian Foundation Board, YMCA of Philadelphia Albert M. Greenfield, III President and Managing Director, Albert M. Greenfield & Co., Inc. Albert M. Greenfield Foundation Richie Ashburn-Harry Kalas Foundation Astral Artists Darrel German Regional Vice President, TD Bank Ronna Hall Jacobson Strategic Communications Academy of Music Franklin Institute Jefferson Hospital Philadelphia Orchestra PA Conference for Women Advisory Council Joanne Harmelin CEO, Harmelin Media Bryn Mawr Film Institute Penn Liberty Bank Philadelphia Children’s Alliance Theatre Alliance of Greater Philadelphia The Philadelphia Zoological Society 44

Lynn Haskin Director of External Affairs, Philadelphia Association of Community Development Corporations Executive Committee Member, Old City District Chair, External and Member Relations, and Governance Committee Member, International Economic Development Council Board of Directors, Christ Church Preservation Trust Forum of Executive Women Steve Heumann Board, Theatre Exile Board, Theatre Horizon Finance Committee, Brandywine Health Foundation Long Range Planning Committee, Tredyffrin-Easttown School District Nancy Hirsig The Nepal Foundation Susan Jacobson Principal, Jacobson Strategic Communications Settlement Music School Emeritus Trustee, Worcester Academy Marion Anderson Award Trustee Barbara Kaplan MANNA Terry Lynn Lokoff Child Care Foundation Cornell University Hospital Caring Clowns Virginia Kimmel Philadelphia Art Alliance Holly Kinser Executive Vice President, S. R. Wojdak & Associates

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Richard Maimon Principal, KieranTimberlake Fellow, American Institute of Architects Business Advisory Council, CHAD, Charter High School for Architecture & Design John McCawley Director, Energy Acquisition, PECO Energy Andrea Mengel Independence Foundation Chair, Department of Nursing, Community College of Philadelphia Board, Independence Foundation Amy L. Murphy Managing Director, Arden Theatre Company Non Profit Finance Fund Local Advisory Board 2008 Katherine Houghton Hepburn Fellow Susquehanna University Board, Greater Philadelphia Cultural Alliance Terrence J. Nolen Producing Artistic Director, Arden Theatre Company Charles Rose Executive Vice President, Karr Barth Associates, Inc. America-Israel Chamber of Commerce Drexel University, School of Arts and Sciences The Wellness Community Hether Smith Senior Vice President/Branch Manager, Studley, Inc. President, Women’s Campaign International Board, Membership Committee, Central Philadelphia Development Corporation Lee van de Velde Philadelphia Live Arts Festival and Philly Fringe Philadelphia Ranger Corps

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Stephen Wolfson Former Executive Vice President of Charming Shoppes, Inc 1812 Productions Theatre Horizon Diane Dalto Woosnam Philadelphia Art Alliance Artspace, Inc. Philadelphia Orchestra Association Annenberg Center for the Performing Arts Indiana University Art Museum Women's Resource Center Ellen Yin Owner, Fork Restaurant Board, Old City District Board, Delaware River Waterfront Corporation

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Arden Theatre Company Building and Capital Asset Reserve Policy

Purpose of the Reserve: The purpose of the reserve policy for Arden Theatre Company is to ensure the stability of the mission, programs, and ongoing operations of the organization and to provide a source of internal funds for organizational priorities such as building repair and improvement and capacity building.

The Building and Capital Asset Reserve policy will be implemented in concert with the other governance and financial polices of the Arden and is intended to support the goals and strategies contained in these related policies and in the strategic plan.

Definition of Scope and Goal: Building and Capital Asset Reserve The Building and Capital Asset Reserve is intended to provide a ready source of funds for repair or acquisition of buildings, leaseholds, furniture, fixtures, and equipment necessary for the effective operation of the organization and programs.

The target amount of the Building and Capital Asset Reserve will be determined by the systems replacement plan, but will be at least equivalent to 50% of three years of accumulated depreciation. The target amount held will be determined by the Finance Committee and will be reviewed in line with the strategic plan.

Accounting for Reserves: The Building and Capital Asset Reserve Fund will be recorded in the financial records as Board Designated Building Reserve as a sub-division of Unrestricted Net Assets. The Reserve will be funded and available in cash or cash equivalent funds. The Reserve will be held in a separate bank account or investment fund, in accordance with investment policies.

Funding of Reserves: The Arden will create a separate Building and Capital Asset Reserve by setting aside the amount of cash equivalent to 50% of depreciation expense in the annual budget for the next three years.

With the purchase of the building at 62-66 North 2nd Street, a reserve for the new facility will be seeded by setting aside funds received from the capital campaign in the amount of 2% of building costs.

Once created the reserve will be funded in accordance with the systems replacement plan. With the oversight of the Facilities Committee, the General Manager will take responsibility to maintain a detailed analysis of building components including the individually evaluated condition, projected life span, and estimated replacement value.

Use of Reserves: Use of the Building and Capital Asset Reserves requires three steps: 1. Identification of appropriate use of reserve funds.

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The Producing Artistic Director, Managing Director and staff will identify the need for access to reserve funds and confirm that the use is consistent with the purpose of the reserves as described in this Policy.

2. Authority to use Reserves.

Authority for use of up to $50,000 of Reserves is delegated to the Managing Director in consultation with the Chair of the Finance Committee. The use of Reserves will be reported to the Finance Committee and to the Board of Directors at their next scheduled meeting, accompanied by a description of the analysis and determination of the use of funds and plans for replenishment to restore the Reserve fund to the target minimum amount. Use of Reserves in excess of $50,000 must be reviewed by the Finance Committee and recommended to the Board for approval.

3. Reporting and monitoring.

The Managing Director is responsible for assuring that the Building and Capital Assets Reserve fund is maintained and used only as described in this Policy. Upon approval for the use of Reserve funds, the Managing Director will maintain records of the use of funds and plan for replenishment. He/she will provide regular reports to the Finance Committee/Board of Directors of progress to restore the fund to the target minimum amount.

Relationship to Other Policies: Arden Theatre Company shall maintain the following board-approved policies, which may contain provisions that affect the creation, sufficiency, and management of the Reserve fund. y Financial Control Policies o Budget Policy o Investment Policy o Sale of Assets o Purchase of Assets Review of Policy: This Policy will be reviewed every three years during the strategic planning process, by the Finance Committee, or sooner if warranted by internal or external events or changes.

Changes to the Policy will be recommended by the Finance Committee for approval by the Board.

Finance Committee Approved: 5/19/11 Board Approved: 6/3/11

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Arden Theatre Company Conflict of Interest Policy We, the Directors of Arden Theatre Company, resolve that no member of the Board of Directors shall participate in any discussion or vote on any matter in which he or she or a member of his or her immediate family has potential conflict of interest due to having material economic involvement regarding the matter discussed. When such a situation presents itself, the director must announce his or her potential conflict, disqualify himself or herself, and be excused from the meeting until discussion is over on the matter involved. The President of the meeting is expected to make inquiry if such conflict appears to exist and the board member has not made it known.

Conflict of Interest Statement (to be signed annually by each member) No member of the Arden Theatre Company Board of Directors, or any of its Committees, shall derive any personal profit or gain, directly or indirectly, by reason of his or her participation with Arden Theatre Company (ATC). Each individual shall disclose to ATC any personal interest which he or she may have in any matter pending before ATC and shall refrain from participation in any decision on such matter.

Any member of the ATC Board, any Committee or Staff who is an officer, board member, a committee member or staff member of a vendor agency shall identify his or her affiliation with such agency or agencies; further, in connection with any credit policy committee or board action specifically directed to that agency, he/she shall not participate in the decision affecting that agency and the decision must be made and/or ratified by the full board.

Any member of the ATC Board shall refrain from obtaining any list of ATC clients for personal or private solicitation purposes at any time during the term of their affiliation.

At this time, I am a Board member, a committee member, or an employee of the following organizations: (list) Now this is to certify that I, except as described below, am not now nor at any time during the past year have been:

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1) A participant, directly or indirectly, in any arrangement, agreement, investment, or other activity with any vendor, supplier, or other party doing business with the ATC which has resulted or could result in personal benefit to me.

2) A recipient, directly or indirectly, of any salary payments or loans or gifts of any kind or any free service or discounts or other fees from or on behalf of any person or organization engaged in any transaction with the ATC. Any exceptions to 1 or 2 above are stated below with a full description of the transactions and of the interest, whether direct or indirect, which I have (or have had during the past year) in the persons or organizations having transactions with the ATC) (list) Date: ____ Signature: _______ Printed name: ______ Arden Theatre Company Philadelphia, PA 19106

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Arden Theatre Company Accounting Practices

Box Office Settlements Box Settlements are tallied daily by the Box Office Staff.

The Box Office Manager reviews the settlements, credit receipts and deposits The settlements are given to the Business Manager with the credit receipts; the deposit is dropped in the safe.

The Business Manager or Executive Asst. reviews the settlements, tallies the credit receipts and enters them into Quickbooks.

Not less than every 3 days, the Business Manager or Executive Asst. prepares and delivers a bank deposit of all cash currently on hand and processed. Cash deposits are documented in the Cash Statement worksheet on the Business drive before they are entered in to QuickBooks.

Checks are deposited remotely daily using the scanner located on the Business Management desk. Once checks have been scanned they are voided and kept in the Business Manager’s check files.

Payroll Payroll is calculated and submitted from each department in to the payroll mailbox no later than 12 noon on Monday.

The Business Manager collects the payroll and prepares that week’s payroll.

Between 11am and 12pm on Tuesday the Business Manager will get a call from the payroll service and submit the week’s payroll. Direct deposit filing takes two days.

Tuesday is the latest that the payroll can be called in to guarantee that the employees’ direct deposit will go through on Thursday pay day. In cases when an office holiday falls on a Thursday, the payroll must be phoned in to the service on Monday to assure a Wednesday pay day.

The payroll arrives the following day. The Business Manager reviews the accuracy of the payroll and forwards the check requests and paychecks to the Managing Director for review and signature.

The Business Manager transfers the total cash required to cover that week’s payroll from Fox Chase Checking acct #xxx5296 to Fox Chase Payroll checking acct #xxx5288 via Fox Chase Online Banking.

After 3 pm on Thursday, the Business Manager distributes payroll to employees.

By Friday, the Business Manager has entered the payroll into QuickBooks.

Disbursement of Funds The Business Manager collects the check requests from the various departments for payment.

Checks are written no more than 2 times a week, unless necessary. All checks are approved by the Managing Director before they can be written by the Business Manager. Once written, all checks go to the Managing Director with their corresponding paperwork, contracts, and/or receipts if applicable.

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The Managing Director signs each check. All checks over $10,000 must be signed by the Managing Director and one other eligible signer.

Financial Control Policies Cash on Hand The theatre will maintain a sufficient cash hand to enable us to maintain a petty cash fund of $5,000 maximum. Petty Cash is to be reconciled monthly. Box Office must reduce its cash on hand to a maximum of $200 daily. Any cash on hand must be counted by at least two employees. The Business Manager will not be the first to count cash on hand but may be the second. Any discrepancies in cash deposits should be noted by the Manager and/or initialed by the Business Manager.

Charge Card Policy - Purchases Charge Cards are reconciled monthly.

American Express charge purchases over $5,000 must have the approval of the Managing Director or the Producing Artistic Director.

The Production Mastercard Account has a maximum of 6 cards on the account. The spending limits are as follows: Up to $12,500 limit for the Managing Director and Production Manager.

Up to $5,000 limit for the four additional card holders from the department.

The Administration Visa account has a maximum of 6 cards on the account. The spending limits are as follows: Up to $25,000 limit for the Managing Director and Producing Artistic Director.

Up to $5,000 limit for the General Manager, Development Director and the Associate Artistic Director.

All uses of a charge card must fall within budget guidelines and budget approval policies.

Charge Card Policy - Receipts All Credit Card charges are processed daily. Charge receipts are forwarded to the Business Manager accompanied by the daily settlement. Refunds must have approval of department manager. Refunds over $500 must have approval of the Managing Director. Charge card receipts are maintained in the Business Manager’s office in a locked cabinet. Previous years receipts are maintained in the archives under lock and key.

Check Scanning All checks deposited into Fox Chase Bank will be deposited online via the check scanner kept on the Business Manager’s desk. Check scanning will occur daily (if check settlements exist), no less than once a week. Any checks which have not been deposited will be kept in the safe. Funds may only be deposited to an operating checking account and access to the expressway deposit system will be restricted by password. Once a batch has been scanned each check will be voided. The voided checks will be kept locked in the Business Management office until the monthly bank reconciliation has occurred. Once reconciliation is complete, checks will be shredded immediately.

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Information Security It is the policy of the theatre to trade its mailing list with other Delaware Valley non-profit organizations. It is the policy of the theatre not to sell the list. Exceptions to this policy must be approved by the Executive Committee. It should be noted that patrons have the ability to exclude their information from any dissemination of the list.

Receipts Policies The Business Manager or designee is responsible for the deposit of all cash and check receipts within three days of receipt.

Any overnight cash or checks will be secured in the safe.

Check Writing Policies The following have check signing privileges: Managing Director Producing Artistic Director Director of Institutional Advancement President Treasurer Checks over $10,000 must have two signatures as follows: Managing Director or Producing Artistic Director and one of the following: Director of Institutional Advancement, President or Treasurer Employee Expense All employee expenses, both reimbursement and credit card purchases, must be submitted with receipts attached. The expense must be initialed by the department manager and approved by the Business Manager.

Budget Policy Management will present an operating budget to the Finance Committee. The Finance Committee will review and recommend the budget to the board. The board approves the Operating Budget at the annual meeting. The budget must be approved 15 days before the end of the prior fiscal year.

Sale of Assets Sale of any asset over $5,000 must be reviewed by the Finance Committee and approved by the Board. The sale of assets under $5,000 must be approved by the Managing Director and the Department Head or the Business Manager.

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Purchase of Assets Unbudgeted purchase of assets over $10,000 must be reviewed by the Finance Committee and recommended to the Board for approval.

Any purchase of unbudgeted assets under $10,000 must be approved by Managing Director, Department Head and Producing Artistic Director and must be reported to Finance Committee at the next finance committee meeting.

Annual Review These policies will be reviewed and updated annually during the budget process by the Finance Committee. These policies will be recommended for approval by the Board.

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Arden Theatre Company Investment Policy Statement Mission The Mission of the Arden Investment Policy Statement is to set forth investment objectives that will provide for capital preservation and long-term growth given certain risk tolerance parameters.

It will also provide a basis for investment performance evaluations.

Objectives The investment portfolio shall be managed to achieve the following objectives: • • • •

To protect the value of the assets held in the portfolio by following prudent investment practices To maintain adequate liquidity to meet foreseeable cash needs To carefully balance risk and return, earning a return consistent with the applicable risk level as identified in this statement The target return over the long period will be a total return that provides growth in excess of the rate of inflation

General Investment Guidelines Investments in the portfolio will include but not be limited to: marketable securities including common and preferred stocks, mutual funds, convertible securities, U.S. Government and agency bonds, corporate bonds, money market funds, treasury bills, domestic certificates of deposit, bankers acceptances, and time deposits.

Asset Allocation The portfolio will be invested in three major asset classes: equity securities, fixed income securities and cash equivalents.

The percentage of equity securities in the account will be commensurate with the level of risk and amount of short-term market volatility that the Arden’s Board is willing to accept.

The ranges for these three asset classes will be: Equity 0% to 30% Fixed Income 50% to 80% Cash Equivalents 20% to 100%

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The exact allocation among the three asset classes shall be maintained at the discretion of the Board of the Arden Theatre Company.

Specific Investment Guidelines Equity Securities Investment in equity mutual funds shall carry a Morningstar rating of “4 star” or better, have minimum assets of $300 million and a minimum 3-year performance track record.

Investment in individual equity securities (common stock), shall be limited to large capitalization stocks ($5 billion or greater) that are listed in either the S&P 500, Dow Jones Industrial Average or NASDAQ indices.

No common stock shall exceed 5% of the market value of the portfolio. The holdings in any industry will be limited to 15% and exposure to any one sector shall not exceed the percentage represented by that sector in the S&P500.

The proxy voting will be the responsibility of the Finance Committee of the Arden unless by Board directive is relegated to an outside advisor.

Common stock gifted to the Arden will be held in a Board designated account until the final disposition is determined by the Finance Committee. The holding period is not to exceed 120 days for date of the gift. Any such gifted stock in the Board designated account will have a stop-loss order entered with the appropriate broker.

The stop-loss order will be set at a level of 20% below the gifted price.

Fixed Income Securities Fixed income securities must be rated investment grade or better by either Standard and Poors’ or Moody’s rating agency at the time of purchase. Split rated credits will be considered to have the lower of the split rating. If the credit rating is lowered to below investment grade after purchase, the security will be sold within 30 days.

Arden will invest no more than 10% of its Fixed Income portfolio in one corporate entity.

The following are eligible debt investments: U.S. Treasury and agency bonds, corporate bonds, and cash equivalents.

Fixed income mutual funds, if purchased, shall carry a Morningstar rating of “4 star”, have a minimum of $500 million in assets and a 3-year performance track record.

Cash Equivalent Securities All cash will be held in high-quality instruments with a rating of A-1 or P-1 at the time of purchase. If credit is downgraded, the instrument will be sold immediately.

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Temporary cash balances may be invested in a 2A-7 money market fund or overnight repurchase agreement collateralized at 105% of value by government securities.

Cash held in banks will be limited to FDIC limits and cash held at investment houses will be limited to the SIPC limits.

Reporting The Finance Committee will review the Arden’s investments at a minimum of two times per year. A report will be made to the full Board at the annual meeting providing a performance reporting versus the appropriate indices and re-balancing recommendations.

The equity portfolio will be benchmarked to the S& P 500 index, the fixed income portfolio will be benchmarked to the Lehman Intermediate Government and any cash will be benchmarked to the 90-day U.S. Treasury Bill.

Other All investments shall be denominated in U.S. dollars.

Investment policy and guidelines will be reviewed annually.

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Arden Theatre Company Endowment Fund Investment Policy Statement Purpose: These board designated funds are to be invested with the objective of preserving the long-term, real purchasing power of assets while providing a relatively predictable and growing stream of annual distributions in support of Arden Theatre Company’s operations. These board designated assets shall be treated as available for investment. These assets will be invested in a manner that would achieve the greatest total return within the investment guidelines using the acceptable objectives outlined below.

This statement of investment policy is set forth by Arden Theatre Company Board of Directors in order to: 1. Define and assign the responsibilities of all parties.

2. Establish a clear understanding for all involved parties of the investment goals and objectives of Fund assets 3. Offer guidance and limitations to all Investment Managers regarding the investment of Fund assets.

4. Establish a basis for evaluating investment results.

5. Manage Fund assets according to prudent standards as established in common trust law 6. Establish the relevant investment timeframe for which the Fund assets must be managed.

Delegation of Authority: The Arden Theatre Company Board appoints a Finance Committee to recommend to the Board, (a fiduciary) their direction and monitoring of the investment management of Fund assets, on behalf of Arden Theatre Company. As such, the Finance Committee is authorized to delegate certain responsibilities to professional experts in various fields. These include but are not limited to: 1. Investment Management Consultant. The consultant may assist the Finance Committee in: establishing investment policy, objectives, and guidelines; selecting investment managers; reviewing such managers over time; measuring and evaluating investment performance; and other tasks as deemed appropriate.

2. Investment Manager. The investment manager has discretion to purchase and sell the specific securities that will be used to meet the Fund's investment objectives.

3. Custodian. The custodian will physically (or through agreement with a sub custodian) maintain possession of securities owned by the Fund, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. The custodian will also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Fund accounts.

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4. Additional specialists such as attorneys, auditors, and others as needed may be employed by the Finance Committee to assist in meeting its responsibilities and obligations to administer Fund assets prudently.

The Finance Committee will not reserve any control over investment decisions, with the exception of specific limitations described in these statements. Managers will be held responsible and accountable to achieve the objectives herein stated. While it is not believed that the limitations will hamper investment managers, each manager should request modifications which they deem appropriate.

If such experts employed are also deemed to be fiduciaries, they must acknowledge such in writing. All expenses for such experts must be customary and reasonable, and will be borne by the Endowment Fund as deemed appropriate and necessary.

Investment Objectives of the Endowment Fund: 1. Maximize long-term total returns (capital and income) utilizing prudent investment strategies.

2. Increase market value targeting a return, over the long period that provides a total return with growth in excess of the rate of inflation so as to maintain the purchasing power of the endowment.

3. To protect the value of the assets held in the portfolio by following prudent and diversified investment practices.

4. To carefully balance risk and earning a return consistent with the applicable risk level as identified in this statement.

5. Investments in the portfolio may include but not be limited to: marketable securities including the common and preferred stocks, mutual funds, convertible securities, U.S. Government and agency bonds, corporate bonds, money market funds, treasury bills, domestic certificates of deposit, banker’s acceptances and time deposits. Additional investment choices may be made with specific approval from the Finance Committee.

Guidelines and Procedures for Monitoring Funds: The Investment Manager is responsible for reviewing the investments, their performance and their managers on a quarterly basis. The review will be performed by applying the above criteria keeping within the allowable investments outlined by this investment policy statement.

Performance will be measured by using the comparable benchmark listed in this investment policy statement.

Benchmarks Used to Review Investment Performance: Performance review of the investment will be assisted with printed reports that provide benchmarks of comparable character with each class in the portfolio assets. The Board recognizes the allocations of the investment may change over time. The benchmarks, therefore, will change to monitor the performance of the particular class of assets.

Definition of Risk The Finance Committee believes that any person or organization involved in the process of managing Arden’s assets understands how it defines risk so that the assets are managed in a manner consistent with the Fund's objectives and investment strategy as Arden Theatre Company

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designed in this statement of investment policy. The Board of Directors considers the tolerance for risk to be classified as medium. Arden’s risk/return trade-off is classified as moderate.

Review of Investment Policy and Performance: The expectations for statement frequency, activity reporting and update meetings are as follow: 1. Monthly or Quarterly printed performance statement of assets with appropriate benchmarks to the Managing Director and members of the Finance Committee.

The printed reports will be clearly presented and easily understood.

2. The Board of Directors will receive semi-annual reviews on performance and related matters from the Treasurer.

Reports may include: • investment performance vs. appropriate benchmarks • Evaluation of plan expenses • Current market and economic conditions • Any other financial issues Acceptance Policies: Acceptable gifts will typically fall into one or more of the four general categories.

1.

2.

3.

4.

Bequests Cash or Cash Equivalents Outright gifts of property (stocks, real estate, and/or others) Income producing gifts (trusts, annuities, etc).

The general policy shall be to convert any non-cash gift to cash at the first opportunity and to invest the cash. Exceptions to this might include property a) which can be effectively used in accomplishing our mission or b) upon which acceptable restrictions have been established by the donor.

Arden Theatre Company may reject any offered contribution for any reason deemed valid by the Board and its legal counsel. Decisions of the Board in this regard are final.

Withdrawal Policies: Normal Withdrawal of a Portion of Earnings is planned as a part of the budgeting process and follow these guidelines: 1. No withdrawal may be made if the average annual Endowment Market Value is less than $200,000.

2. The goal will be to withdraw annually a sum that is in the range of 2%-5% of the average annual endowment market value. In this way, it is expected that the Endowment will grow, irrespective of new contributions. The sum to be withdrawn is recommended to the Board by the Finance Committee.

3. With good cause, the Board, by majority vote of those voting, may direct that more than 5% be withdrawn in one calendar year. The withdrawal may not

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exceed the average annual total investment return achieved during the three previous calendar years.

Withdrawal of Board Restricted Principal: It is the intent of this Board to avoid the “withdrawal of Board-Restricted principal� in all cases except one in which the very existence of Arden Theatre Company is financially threatened. The action to withdraw principal must be done in the form of a loan. The loan will follow formal, legal guidelines showing a rate of interest at the prime rate and a repayment schedule to be determined by the Board and not to exceed 15 years.

The action to withdraw principal, in the loan form described above, must be approved by at least 75% of the then existing Board membership. Notice of a meeting to consider the above actions must be sent to all voting members of the Board not less than 10 days before the scheduled meeting.

Withdrawal of Donor-Restricted Principal: Any donor-restricted principal must be treated in accordance with the wishes of the donor.

Policy Changes: This policy will be adopted and may be amended with the approval of at least 75% of the then existing Board membership.

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