Virginia Repertory Theatre’s November Theatre at 114 W. Broad St. (BizSense file)
Months after its co-founders departed, Virginia Repertory Theatre says it is at risk of having to close its curtains for good.
The nonprofit theater group on Thursday issued a public appeal to raise $600,000 in donations that it said is needed to continue to operate long enough to restructure the organization and put it on more solid financial footing.
It said it has a $1.7 million budget shortfall in its current fiscal year and an anticipated a $1.6 million deficit next year.
Without that $600,000, Virginia Rep would end operations shortly after the end of its current production of Stephen King’s “Misery,” which runs until Sept. 29, managing director Klaus Schuller said in an interview.
“We know what restructuring and other steps we need to take to reconstitute the company in a sustainable way. What we lack is the runway to get there,” Schuller said.
He said the $600,000 would keep Virginia Rep going through the end of the year and would go toward paying vendors and covering operational costs.
Budget cuts were expected to come as part of the restructuring, but Schuller declined to comment on what form those measures might take.
Klaus Schuller
Virginia Rep has an annual budget of roughly $5 million, according to recent tax filings. Schuller said the organization has 200 employees, of which 40 are full-time workers.
Virginia Rep’s appeal for funding came in the wake of its parting with co-founder and former managing director Phil Whiteway in August 2023.
Schuller said Whiteway’s exit, which followed the departure of fellow theater co-founder Bruce Miller in 2019, caused a notable number of donors to pull their support for Virginia Rep, which accounts for the theater’s financial difficulties. The donors who withdrew their support represented a $500,000 loss of revenue.
“I will not and have not said a word against the founders,” Schuller said. “But their departure did cause a fair number of supporters to back away.”
After his departure, Whiteway sued Virginia Rep alleging he was forced out of the organization because of his age; he was 71 when he was fired. Virginia Rep denied the accusation, and the theater and Whiteway settled the matter out of court earlier this year.
Another challenge is that audiences have been slow to return to Virginia Rep productions since the COVID-19 pandemic, Schuller said.
While audience numbers have increased annually in recent years, they haven’t reached what they were before the pandemic. He estimated that it could be five years before Virginia Rep sees attendance return to 2019 levels.
“We are still a long way from getting back our pre-pandemic audiences. This is something every not-for-profit theater in the country is experiencing,” Schuller said.
Schuller assumed his role in early August. He said that once he took stock of Virginia Rep’s finances, it was clear the nonprofit had a problem.
“What I discovered here was a substantially worse financial situation than I had anticipated,” Schuller said. “Pretty quickly I reached the conclusion we had no available cash and some rather substantial obligations.”
Schuller said that the theater put out a call for $600,000 to keep the lights on while it restructures, as opposed to money to erase the whole deficit. The hope is that it would be a more manageable goal in an environment Schuller said is characterized by donor fatigue in the theater sector.
“We want to be known as a reasonable and well-managed organization, and we know the hardest work has to be on us. We’re starting out asking for the smallest amount to give us the ability to do that work,” he said.
Schuller said organizations of Virginia Rep’s size typically have an endowment of $10 million to $20 million, which is a resource Virginia Rep lacks. He said the organization, should it remain in business, would seek to kick off a multiyear project to create such an endowment.
As of midday Thursday, Schuller said Virginia Rep had received at least $27,000 in small contributions and about $55,000 in larger, single donations from individuals as word circulated about its financial challenges. Schuller said he was confident the theater would be able to meet its near-term funding goal.
Virginia Rep reported a net income of $2 million in fiscal year 2023, which ended in June 2023. The prior fiscal year, the nonprofit reported net income of $1.8 million and in fiscal year 2021 a net income of $713,121, according to tax filings.
Schuller said that revenue reported for fiscal years 2022 and 2023 was buoyed by the nonprofit’s fundraising efforts related to its $3.5 million acquisition of the former Scottish Rite Temple property at 4204 Hermitage Road in 2022. The nonprofit uses the building for its Center for Arts and Education.
In addition to the Northside theater, Virginia Rep, which was founded in 2012, also runs the November Theatre at 114 W. Broad St. downtown and hosts performances at Hanover Tavern in Hanover County.