I have taken quite a bit of time thinking about the question of whether or not cutting arts organization budgets is a good way to their improved health. It’s a complicated question, one that the best minds in the industry can spend time arguing over ad infinitum. I’ve come to the conclusion that cost-cutting is analogous to the geometric relationship of squares to rectangles: All squares are rectangles, but not all rectangles are squares. Therefore: All cuts may save money, but not all cuts may help improve revenues. You can cut costs, but that only trims one side of the balance sheet. It doesn’t improve your revenue, it just makes it appear better because the costs it is balanced against appear smaller.
It’s also helpful to know how the public (both the foundation/donor subset and the general public at large) will perceive the cost cutting measures. If the cuts make basic sense, in the greater scheme of improving the health and efficiency of the organization, then that can be a good public relations boon for the organization. Cuts as a comprehensive and far-reaching plan are generally perceived as a good thing. Cuts for their own sake are often seen as desperate acts by an organization on the brink of collapse. Look at Honolulu and Charleston for good examples of how not to make cuts. UPDATE: and now look at what is being asked of the musicians in Detroit.