A leap of faith.

• Author: Heisler, Kevin
• Position: Financial problems of North Carolina Arts Council since moving to Winston-Salem - Special Report: Charlotte

Sitting down for lunch at a Manhattan restaurant with an executive of McCann-Erickson, the world's third-largest ad agency, Ray Williams realized that raising money for the North Carolina Dance Theatre wasn't what he had expected.

"I couldn't believe how easy it was," says Williams, recalling that day in late 1988, not long after he had left the North Carolina Arts Council to become the dance group's general manager. "We were having steaks the size of my thighs and talking ACC basketball. The next thing I know, he's signing a check for $5,000. 1 was blown away."

On the same trip, he met with Stanley Katz, owner of FCB Leber-Katz, another large Madison Avenue agency, who pledged $5,000 a year for five years. "I thought, This is it,' Williams says, " 'I'm with the big boys.'

And the big boys came across with big bucks: paper and packaging giants Ecusta and Westvaco; Scripto-Tokai, the world's largest manufacturer of cigarette lighters; Georgia-based Golden Peanut Co. - more than a dozen companies kicked in $5,000 or more apiece.

What did admen, peanuts, papers, packaging and lighters have in common? It was simple: All did or wanted to do business with RJR Nabisco. Dolph von Arx, then CEO of R.J. Reynolds Tobacco USA, sat on the dance theater's board. Insiders say he had simply asked his purchasing agents to tap suppliers for donations.

"What can I say?" says Williams, who now owns a computer store in WinstonSalem. "Dolph knows dance."

Unfortunately, the dance theater's administrators don't know business. Or at least they forgot a rule even more basic than those that rule commerce: You don't bite the hand that feeds you. As long as it remained in Winston-Salem, the 21-year-old dance company could count on von Arx, Philip Hanes and other big contributors to stave off financial crises.

But Dance Theatre considered itself a hot property - so hot it decided to let Charlotte, Durham, Raleigh and Winston-Salem compete for it, just as they do for manufacturing plants, trade marts or sports teams. In june 1990, it bolted for the Queen City, even though the $500,000 dowry the dance theater demanded never materialized. In fact, business leaders and the local Arts & Science Council told it not to come and promised no money once it arrived.

Now, a year later, the group's finances seem in shambles. Though administrators are tight-lipped about numbers, it appears to be more than $300,000 in the hole. The company owes the Internal Revenue Service $53,000, contributions have dwindled, it can't fill its board, performances have been canceled, and layoffs and defections have slashed the company to a dozen dancers.

Artistic Director Salvatore Aiello blames the financial problems on patrons reneging on their pledges, the recession and a diminishing interest in the arts. Accountants from Deloitte & Touche are trying to iron things out, says Betty Lou Carter, the group's fourth general manager in five years. Despite the dearth of donations, the troupe claims in grant applications that it will break even on its $1 million budget this year.

"Dance...