Folkmoot’s financial struggles may re-define festival

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Folkmoot’s financial struggles may re-define festival

cover The popular Folkmoot international festival will become a shadow of its current self in 2014 if its financial outlook doesn’t take a quick turn for the better.

A culmination of items — the elimination of government support, mediocre ticket sales and less than needed additions to its sponsorship base — have led to the erosion of Folkmoot’s reserve fund.

Folkmoot is losing about $50,000 a year. As of yet, it has been unable to close that gap despite increased revenue from sponsorships and grants and cuts in expenses. The organization has had to tap into a reserve fund setup during Folkmoot’s early years to help cover some of its costs. At its peak, the foundation fund held nearly $900,000. That is now down to about $480,000 — only enough to continue supporting Folkmoot for another five years or so.

“We have almost depleted that (fund),” said Karen Babcock, executive director of Folkmoot USA, the nonprofit that organizes the festival. “We have sort of emergency flashers going.”

Such warning signs mean that Folkmoot USA must change and change soon if it hopes to continue. Possible modifications include altering its partnerships with businesses, identifying more places to cut and creating a multi-year strategy. The most tangible option currently on the table is shrinking the festival — reducing the number of international groups that perform each year and making the two-week festival a one-week event.

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“We have to make a change,” Babcock said. “We can’t wait.”

Folkmoot brings more than 200 international dancers and musicians from nine countries to live and perform in Western North Carolina for two weeks. The event is based in Haywood County and features ticketed performances, children’s workshops, a parade and a street festival.

The only thing keeping the festival safe from any radical changes next year is the fact that it’s the 30th anniversary — a celebration that Babcock wants to do right and in keeping with the traditions of Folkmoot.

“The 30th anniversary should be left alone,” Babcock said. “If that wasn’t the case, I would want to move forward immediately.”

Public needs to step up

Part of the problem is people are not buying tickets. Of the more than 50,000 people who attend Folkmoot’s free events — International Festival Day and the parade — only about 4,200 bought tickets to one of its paid performances last year.

“People take Folkmoot for granted,” Babcock said. “I am here to say, ‘It is not a sure thing.’”

Historically, the free sneak-peaks of visiting countries spanned both weekends of the festival — the parade was one weekend and International Festival Day another. This year, International Festival Day will be moved to the first weekend along with the parade in the hope of enticing people to purchase tickets to a performance for the remainder of the festival’s run.

“Hopefully that will encourage people to come to the festival,” said Dr. Christopher Wenzel, president of the Folkmoot USA board of directors.

A 35-member board and a seven-person executive board oversee Folkmoot, from its financial operations to recruitment of performing groups to its long-range vision.

A separate board manages the reserve fund, known as the Border Memorial Foundation named after Folkmoot founder Dr. Clint Border.

The nonprofit is looking to boost ticket sales by offering a family-friendly coupon. The coupon, which is available at Folkmoot’s Hazelwood office, admits one child, 12 or younger, free with each paying adult. A family of four need only purchase two adult admissions to attend a show.

Already this year, ticket sales seem to have improved. As of early last week, the nonprofit surpassed last year’s ticket sales by $2,000 if measured at the same point, according to Babcock, who added the disclaimer that sales fluctuate every year.

“It’s very nice to have positive information,” Babcock said. But, “Ticket sales are not going to be the thing that saves us.”

Folkmoot USA has also upped its revenues through corporate sponsorships and grants by $45,000 during the past four years. And though the nonprofit has already cut its expense by $90,000 since 2008, the festival is still hemorrhaging money, leading Babcock to wonder if Folkmoot is more what people hope to see rather than what the nonprofit can realistically afford.

“Maybe we are just living beyond our means, and we need to find a better way to accommodate relativity,” Babcock said. Folkmoot’s budget is $351,000.

Where the money goes

What many people do not realize is exactly how much Folkmoot USA pays to attract the various international groups. The groups are not paid to perform and in fact must pay their own way to the United States.

However, Folkmoot covers all their expenses once they reach a nearby airport including travel from the airport to Haywood County, lodging and meals as well as a small daily stipend.

Simply feeding 200 people for two weeks — particularly hungry dancers burning lots of calories each day — is not cheap. Nor are the buses, fuel and drivers to transport the performers to and from venues around WNC.

Folkmoot USA hires 60 people for the two-week stretch to care for the groups, from making meals to driving buses. The nonprofit must also pay a fee for the various venues that host performances.

Folkmoot gets axe

A big part of Folkmoot’s budget issues, as with many other nonprofits, is the loss of government funding, which it had come to rely on.

“We are very dependant upon government funds to run our organization and keep the festival going,” Wenzel said.

Folkmoot historically got county and state funding, up to $100,000 per year. However, government funding has dried up. State funding was lost in the late 1990s, and most county funding dried up during the recent recession.

County commissioners cut all annual contributions to nonprofits in 2008, and Folkmoot was among those to get the axe. The county’s tourism agency, which taxes overnight tourists to the tune of $1 million a year to support tourism marketing and initiatives, still funds Folkmoot, but it is no longer guaranteed.

“Funding is drying up everywhere,” Babcock said.

The organization has tried to wiggle its way back into the state budget, but it was always ended up cut. Former state Sen. Joe Sam Queen, D-Waynesville, tried for several years to get the funding reinstated, but in a dour economy, money is scarce, particularly for non-essentials.

“It is not always available,” said Queen, who was integral in getting Folkmoot the designation of official international festival of North Carolina.

Queen said he is a proponent of funding Folkmoot because its economic impact in Western North Carolina is in the millions. It also exposes outsiders to the area and vice versa.

“Its impact is not just Waynesville” where the festival is headquartered, Queen said. “It helps the whole region.”

The county has yet to restore any of its funding to Folkmoot as well. County commissioner Chairman Mark Swanger said the county leaders reviews their revenues and possible expenses each year, but the economy is not currently robust enough to warrant reinstating Folkmoot’s funding.

Funding for Folkmoot is not out of the realm of possibility for the future, however, Swanger said.

“It is going to depend in large part on the economy, and the revenue stream the county receives,” Swanger said. This year, “Revenues did increase some but basically only enough to maintain county service.”

Folkmoot trickle down

Every year, Folkmoot attracts thousands of visitors who sleep in area hotels, eat in area restaurants and shop in area stores.

An economic impact study done by Western Carolina University in 2008 showed that Folkmoot 2007 brought in more than $4 million in business to the area.

Scaling back the festival could affect how much revenue businesses see.

“I would think that there would be a ripple effect,” Babcock said.

The Downtown Waynesville Association often hears from lodging owners that customers come to town specifically for Folkmoot and schedule their rooms in advance.

“I think people do make plans far ahead,” said Buffy Phillips, head of the association. “Folkmoot has had a huge impact on our economy since the beginning, and I do hope it continues.”

But, proving that people visit specifically because of Folkmoot — versus attending a Folkmoot performance while they are here anyway — is something Babcock plans to investigate and hopefully compile tangible proof.

The results could help Folkmoot secure more funding from the Haywood County Tourism Development Authority, whose main objective is to attract overnight visitors to the county.

Lynn Collins, executive director of the Haywood County TDA, applauded Babcock for her efforts at a TDA board meeting in April.

“I often wonder how many (people) come every year as part of vacation,” Collins said.

Although there is nothing the TDA can do this year, Collins said, there is often some extra funding available at the end of the fiscal year that the agency can award to various groups. However, the TDA doesn’t find out until the fall how much money was left over from the year, she said.

Since the Folkmoot’s inception in 1984, it was a given that the TDA would award the festival up to $12,000 for marketing every year out of its general fund. However, last year, the tourism agency yanked that source of annual funding for Folkmoot.

Now, it must apply for funding from each town’s slice of tourism money.

The board felt it was “more appropriate” that Folkmoot apply for the towns’ share of the tourism money like other events, said Alice Aumen, chair of the TDA board.

This year, the organization asked for a little more than $12,000 but received $8,475.

How much funding Folkmoot obtains from the county tourism board in years to come will partially depend on what the members plan to spend their money on. In the last year, the tourism board has focused on growing its advertising efforts and on new events.

During the two-week international festival, the dance groups travel around Western North Carolina for performances from Hickory and Burnsville to Franklin and Bryson City. This year, one show will also take the dancers out of the state to Jonesborough, Tenn.

During the 1980s and 1990s, Folkmoot regularly featured 12 different countries, but in recent years, that number has dropped to nine. Not because of budget cuts per se but simply because that is how many groups agree to come each year.

“We invite a lot more,” Babcock said.

Many groups aren’t able to raise enough money to pay their airfare to get here, a problem exacerbated by the global economic slump. And in an era of heightened national security, groups are also having more trouble getting visas than ever before.

However, in the next couple of years, Folkmoot will have to make a conscious decision whether to drop the number of groups to seven.

“Personally, I think cutting the number of countries would not be beneficial,” said Carrie Keith, owner of Twigs and Leaves Gallery on Main Street in Waynesville.

The Folkmoot board will have to decide for itself if cutting performers is the right move. Although it will save money, the performers are Folkmoot’s bread-and-butter, the reason people come.

“(Any final decisions) will be the result of very careful thought,” Babcock said.

At an April tourism board meeting, a couple of board members criticized Folkmoot for hosting performances outside of Haywood County when much of its funding comes from inside the county.

“I think some of our concern … is when they went to those venues outside Haywood County, why were they not able to get some funding (from those counties)?” Aumen said.

Babcock helped quell the matter with information about where the vast majority of people see shows or attend other Folkmoot-related events. About 56,000 people, or 97 percent of Folkmoot’s audiences, buy tickets to performances or take part in free events in Haywood County, according to numbers provided by Folkmoot USA.

Last year, Folkmoot USA sold 1,560 tickets to its shows outside of Haywood County. The nonprofit sold 4,200 tickets to its nine Haywood County performances, not to mention the estimated 50,000 individuals who pack into downtown Waynesville for the Parade of Nations and International Festival Day, both free events.

When discussing when and where to cut, the Folkmoot USA board will consider which venues are most lucrative and see the largest crowds.

“We would look at the venues; we would look at the counties we are in and how successful they are,” Babcock said.

In the end, decreasing the number of performances or venues could boost the number of people who attend the remaining performances, according to at least one Folkmoot USA board member.

“Maybe we would have better participation at the ones we do have,” said Neal Ensley, a Folkmoot board member.

“I don’t think overall it would hurt the program a whole lot,” he added.

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