Staffers at the Kennedy Center are bracing for more cuts following the dismissal of several employees and a message from administrators that the performing arts center is in poor financial shape, a claim several of them dispute.
On Wednesday, the center’s interim president, Richard Grenell, foreshadowed future layoffs in a post on X, writing that the “path forward” starts with “cutting executive pay and downsizing the staff where possible.” At the same time, leaders previewed some of the ways that offerings at the center may change following President Donald Trump’s takeover in February, suggesting a shift in focus toward programming the new leaders believe to be more commercially promising.
And in an email to the staff on Wednesday, Donna Arduin, the center’s new chief financial officer, called the center’s financial situation “difficult” and wrote: “For years, the Kennedy Center has been budgeting to lose money.”
“Ambassador Grenell has hired new Department leaders with lower salaries than those they replaced, including his salary which is dramatically lower than the previous President’s,” she wrote. She added that the nonprofit arts institution will “adopt business practices with performance goals” and rely on “Key Performance Indicators to drive business decisions going forward.”
Arduin wrote that “instead of balancing our bottom line, we have spent all the funds that were raised on paying off part of The REACH debt, leaving us $40 million in debt with no cash to pay our bills. We have an operating deficit of over $100 million dollars and are roughly $225 million dollars behind on capital maintenance needs, projects which are long overdue.”
The Reach is the most recent addition to the center’s campus, a $250 million expansion completed in 2019 that hosts a variety of programs, much of it curated and programmed by the social impact team, most of which was laid off on Tuesday.
Several staffers disputed Arduin’s claim of a $100 million deficit, pointing out that it appears this is only the case if just ticket sales — and not donations and grants — are counted as revenue. The center, like most arts nonprofits, relies heavily on donations. The staffers spoke on the condition of anonymity because they feared retaliation.
Roma Daravi, the Kennedy Center’s head of public relations, did not respond to questions about how the deficit described by Arduin came about nor did she provide any documents showing the current fiscal state of the organization, despite several requests.
The most recent available tax filings, for the fiscal year ending in September 2023, show that the center made a profit of $6,495,064.
Its total revenue that year was $286,438,548, with the main sources of revenue being $140,861,307 in contributions (such as grants and donations, which made up 49.2 percent of the total revenue) and $129,917,134 from program services (such as ticket sales and subscriptions, making up 45.4 percent).
The more than $100 million loss that Arduin described in her email would be “a very big operating loss for an organization of this size. I am surprised at that report, and I would want to know more,” said Karen Gahl-Mills, a professor of practice and director of arts administration programs at Indiana University who studies nonprofit management (and who specified that she does not speak on behalf of the university). From the reported 2023 figures to a major loss the following year, “… It would be a breathtaking drop in revenue,” she said.
“The statement that we have an operating deficit of over $100 million is inaccurate,” one Kennedy Center staffer with direct knowledge of the center’s finances said in a message. “Our audited FY23 financial statements, which are publicly available via ProPublica, show that this figure excludes essential nonprofit revenue streams such as contributions, grants, and endowment support.”
The staffer added: “Nonprofit organizations are designed to rely on philanthropic and institutional support in order to fulfill their mission. Using an ‘earned revenue minus expenses’ framework oversimplifies the picture and applies a for-profit lens that doesn’t reflect how nonprofit business models work.”
Describing how organizations like the Kennedy Center operate, Gahl-Mills said: “Nonprofit performing arts organizations have two big revenue streams: earned revenue — things like ticket sales — and contributed revenue — things like donations and grants. Contributed revenue is part of their structure. Their costs often exceed what they can recoup in ticket sales, so they raise money to make up the difference. This is best practice in the sector.”
Asked about the staffer’s claim about the Kennedy Center’s finances, Daravi replied in an email: “Whomever your source is that said the numbers are not accurate, clearly doesn’t understand what the term operating deficit means.”
After being asked to elaborate on how the center saw such a tremendous drop in revenue, ostensibly in one year, Daravi responded by defining the term “operating deficit” and suggesting the previous leadership intentionally drove the center into the red.
Her emailed response, in full: “I understand this can be confusing to grasp. An ‘operating deficit’ is the net margin from operations. Net margin is revenues minus expenses. The extreme mismanagement of funds is certainly shocking and was designed to leave the Center in the red.”
Arduin did not respond to a request for comment.
The Kennedy Center on a rainy evening in September 2024. – (Craig Hudson/For the Washington Post)
The staff has shrunk since Trump’s takeover of the center early last month, which began with the removal of chairman David M. Rubenstein and president Deborah Rutter along with three other staff members: its head of public relations, general counsel and a vice president who worked in development.
At least 10 staff members have resigned since Trump’s takeover of the center. Additionally, two more high-ranking administrators recently tendered their resignations: Ellen Palmer, the center’s vice president of corporate engagement, and Leslie Miller, the senior vice president of development.
Miller, who resigned Tuesday, was escorted from the building on Wednesday by the center’s head of security, though it is unclear why. Her last day was supposed to be at the end of next week.
Palmer addressed the crowd of the Mark Twain Prize on Sunday and thanked the Kennedy Center staff to tremendous applause. Later in the evening, prize recipient Conan O’Brien did the same — and the crowd leaped to its feet.
The center laid off at least five members of its small social impact team on Tuesday. The team primarily produces its own programming in smaller spaces around the Kennedy Center and consults throughout the organization on events with the mission of reaching new and diverse audiences. It also runs the Millennium Stage, which hosts free performances four nights a week in the center’s Grand Foyer and free weekly movie screenings. Daravi said Millennium Stage programming will not be impacted.
The team’s Impactful Connections program, for example, is a partnership with District of Columbia Public Libraries. The center would offer a free shuttle from various libraries to the center for free performances. In fact, all social impact programs were free to the public. It is unclear whether the center plans to stop all such programs, though one staffer said the new leadership directed the programming team to “shut down all social impact programming” on Tuesday.
“It would be quite difficult for the center to continue doing the level of work it was doing without the number of staff that we had,” one former social impact staffer said. “We were a relatively small team that supported a large, wide range of events and programs. With less than our full staff, I don’t see how the programs can continue.”
“It’s more than the programs,” the staffer continued. “It’s the relationships that we have with the community that are the most important. The new leadership has no relationship. They wouldn’t know the community if they were looking at it.”
Arts organizer and artist Philippa Pham Hughes is currently the “social practice resident” at the Kennedy Center through the social impact program.
Her own work seeks to find common ground between those on opposing sides of the political divide — for example, through a series of dinners she has hosted in which people with differing political views have conversations. Everyone should feel welcome to enjoy and be transformed by the arts, Hughes said — a goal she feels has been jeopardized by the new leadership.
“If I truly believe in that idea, then I should not be booing JD Vance or anyone who wants to be in that room,” Hughes said, referring to a recent incident in which the vice president was loudly booed by Kennedy Center audience members upon taking his seat at a performance of the National Symphony Orchestra. “I should welcome them into that room, because I want them to be transformed. For me, social impact is about that very idea of believing in the transformative power of art and spreading that to everyone.”
“I can’t help but feel like this is an attack on democracy,” Hughes added, referring to Trump’s takeover of the Kennedy Center and the ensuing the dismissal of employees who worked to expand its audience. “… We should not just brush it aside as just, you know, poor little artists. It’s bigger than that.”
The Reach at The Kennedy Center on Feb. 14, 2025 – (Shedrick Pelt/For The Washington Post)
On Wednesday, Grenell told the conservative commentary website the Washington Reporter, “I think it’s actually criminal for leadership to spend so wildly while asking the public to pay for programming.”
Taxpayers fund a small amount of the center’s operating budget, and those funds go only to maintenance of the building. Its operating budget in 2024 was $268 million. Of that, only $45 million came from federal appropriations.
Grenell has declined multiple interview requests from The Washington Post since he was tasked by Trump with running the Kennedy Center in February.
“We had spent way too much on programming that doesn’t bring in any revenue,” Grenell told the Washington Reporter. “And while I’m all for arts education, we can’t go into debt to do arts education; my solution is to bring in common sense programming that brings in enough money to use that money for niche programming in the future.”
The leadership changes have led to some cancellations of popular bookings. Some well-known names and productions, including Issa Rae, Rhiannon Giddens and the musical “Hamilton,” have canceled upcoming dates in protest of the takeover.
During a recent board meeting, of which The Post obtained audio, one member, unidentifiable by voice alone, said the center will be booking non-equity shows, which “make a lot more money.” Equity refers to the union of professional stage actors.
An upcoming production of Broadway’s “Legally Blonde” has been postponed, though the reason is unclear.