Some amplifications and clarifications on Providence Business News’ article “WaterFire’s flame is flickering.”

First of all, we are grateful for Providence Business News’ front page story about WaterFire Providence entitled “WaterFire’s flame is flickering.” (November 7-13, 2011 edition) WaterFire Providence, like so many Rhode Island businesses, nonprofits and individuals, has been negatively impacted by one of the state’s most challenging economic periods since the Great Depression. The article, and subsequent media, accurately captures the overall financial challenges that WaterFire, like so many other nonprofit organizations, has been facing over the past few years. However, there are a number of amplifications and clarifications that we wanted to make regarding points raised in it.

In brief, 2011 was one of our best artistic and well attended seasons ever. Unfortunately, we anticipate incurring an operating deficit for the year as we did in 2010. These back to back operating deficits have been diminishing our “rainy day” and capital investment reserve funds and ultimately present a threat to the organization’s long term sustainability. While we have experienced consecutive annual operating deficits, WaterFire Providence has no debt or outstanding liabilities and we are working hard and thoughtfully on developing long term sustainable strategies that include developing new, and diversifying existing, revenue streams. We are committed to continuing to creatively transform our city and making Providence our permanent home but we need to reverse the recent trend in annual deficits and secure more support from the wide and diverse stakeholders who benefit from the event. (State of Rhode Island, City of Providence, local businesses, visitors, etc.)

• In 2011, we presented our most imaginative and diverse season in years with attendance stronger than ever. Nearly 1 million visitors came to Providence this summer to experience WaterFire, the artwork, and enjoy spectacular evenings celebrating Chinese culture, saluting RI educators, presenting live classical music, dancing to swing, zydeco and cajun bands, and much more.
• In 2014 WaterFire will be celebrating our 20th anniversary; we have always been and will continue to be fully committed to calling Providence and RI “home”. More on that later.
• WaterFire Providence has no outstanding debts, liabilities or bills from 2010 or 2011 or any other prior period. All of our payables are and have been current through these challenging 2 years.
• WaterFire Providence incurred an annual operating deficit in 2010 and we anticipate another in 2011. These deficits have reduced financial reserves generated from prior year surpluses that were intended for future capital investments to advance the organization’s mission of creatively transforming the city. These intended capital expenditures included replacement of trucks and boats as well as equipment on the river. It was also intended to be used to purchase a building to consolidate multiple locations and staff, realizing significant economic and efficiency benefits in the process. Simply put, back to back annual operating deficits have eroded WaterFire Providence’s capital reserves and challenged the long-term sustainability of the organization.
• In 2004 the RI Economic Development Corporation produced a study for the RI General Assembly that reported that the total economic impact of WaterFire was $55 million with $44 million of that total generated by out-of-state visitors. The report also stated that out-of-state visitor “expenditures will generate an estimated $3.8 million in sales and room tax revenue. Using national figures from the U.S. Bureau of Economic Analysis (BEA) we can estimate the impact of these expenditures on Gross State Product (GSP) as $26 million, $10.5 million in wages and salaries, and 531 jobs.”
• Recognizing that the WaterFire season generated significant economic impact and tax revenues from out of state visitors, from FY2001 through FY2010 the RI General Assembly invested an average of $308,980 for general operating support of WaterFire Providence. This funding came from a combination of community service grants, legislative grants, the Governor’s office and RI EDC. Unfortunately, in FY2011 the General Assembly’s funding for WaterFire Providence general operating support was cut 50% to $150,000 and in FY2012 that amount was *further reduced to $135,000.+
• In FY2011, the RI General Assembly issued a special legislative grant of $100,000 to help cover some of the additional expenses of a very successful single evening event with WaterFire Providence, the RI Philharmonic and Festival Ballet. In FY 2012, this grant was reduced to $90,000. The National Endowment for the Arts joined a number of other local funders and sponsors in providing additional support for this unique cultural event in it’s second year.
• Scores of articles in national and 8international publications spotlighting WaterFire have contributed to Providence’s reputation as a top international arts and culture tourism destination8. The 2004 RI EDC economic impact report estimated that the equivalent value of major media about Providence and Rhode Island generated by WaterFire was nearly $1 million.
• All this media attention has generated considerable interest from other cities around the world who want to host WaterFire. All national and international installations are completely self-funded by the host communities and no funds contributed or paid to WaterFire Providence are used in their development or execution. Again, all funds donated and paid to WaterFire Providence are used exclusively in Rhode Island. Also, despite this national and international interest and activity, WaterFire Providence is committed to continuing to make it’s home in Providence unless there becomes a lack of community interest or support in keeping the organization here.
• WaterFire Providence is a large complex enterprise that is designed, organized and managed by a very talented staff of 20. These full time staff members are supported by hundreds of dedicated and talented volunteers who make it possible to produce an evening event that hosts up to 100,000 visitors along and around 1/2 mile of riverfront park that runs through downtown Providence.
• WaterFire Providence owns and maintains fleets of vehicles and vessels. We also have significant investment in audio equipment, lighting, stages, large tents, props and much more. We work hard at integrating the artwork into the city so that it is a seamless, magical experience for all visitors. This “Disney effect” hides the complexity of the event as well as all of the time, effort and resources that get consumed in producing it.
• The City of Providence is a very valuable partner and significant contributor of in-kind services for the event. The city is not a direct funder of WaterFire, but they do request that the Providence Tourism Council provide support in the form of a $75,000 grant. WaterFire Providence reimburses the first $25,000 of police expenses to the city, as well as other expenses such as fire marshal expenses and fees.
• While WaterFire Providence is not interested in purchasing “a series of buildings in Providence” as stated in the article, we are developing a plan to purchase a single building where we would consolidate personnel and operations under one roof to realize meaningful cost savings and enhanced productivity. We would like to have all of our equipment, including our fleets of trucks and boats, stored inside a locked and alarmed facility in order to mitigate the risks of weather and theft which has been a significant problem for the organization over the years.
• WaterFire is an admission-free, family friendly event that attracts visitors from all over the world and delivers extraordinary benefits to the City of Providence, State of Rhode Island, local businesses and other community interests. It offers art and entertainment to residents and visitors which in these challenging economic times is more important as ever. However, without broad community support, investment and partnership from all of the various stakeholders who benefit from it, WaterFire Providence will have difficulty sustaining itself for the long term.

What can you do to help?

1. If you enjoy WaterFire, please make a donation today. Your gift will help us balance our budget and more importantly is your vote of support for our longer term sustainability in Providence.
2. Ask at least one other person to make a donation to WaterFire. We have a lot of fans out there and many of them are your neighbors, coworkers, friends and family. Enthusiasm and passion for a cause is contagious; help us spread it!
3. If you run a business please consider becoming a WaterFire sponsor or Brazier Society member. We have a wide variety of packages that will suit your needs and meet your budget.
4. Call, write and/or visit your legislators and tell them how important WaterFire is to you personally and how it’s a major contributor to the State’s and the Creative Capital’s economy and brand.

Again we thank PBN for telling our story on the cover of their November 7 – 13 issue. We also thank you for all of your interest and support in keeping WaterFire Providence a vibrant organization.