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The Philadelphia Orchestra could return to the Academy of Music to perform fully staged opera, add family concerts on Sundays — when the orchestra normally does not work — and develop interdisciplinary festivals with other arts groups under an agreement with the Annenberg Foundation for a $50 million pledge from Leonore Annenberg.

The details are part of a contract between Annenberg and the orchestra announced in September, though neither party revealed these and other details at the time.

The full agreement, recently obtained by The Inquirer, also states that the orchestra must balance its budget to within 1.5 percent starting with the fiscal year beginning Sept. 1, 2005, in order to receive the grant, which is the largest in the orchestra's history.

The orchestra has run deficits for most fiscal years during the past decade, but leaders say it is time for them to stop.

"The creation of a major endowment campaign, which was done with some research we did with the potential donors, made it very clear to us that the donors were not going to give us the money unless we accomplished a number of things, one of which was achieving financial stability," said orchestra president Joseph H. Kluger.

The orchestra is in the midst of a cost-cutting program to help control an expected $4 million (about 10 percent) deficit this season. It has recently fired seven employees, asked music director Christoph Eschenbach to take a 10 percent pay cut, and is urging board members to increase their pledges.

Annenberg also requires that the orchestra "make a strong good faith effort" to raise an additional $50 million toward its endowment by June 30, 2008.

Taken as a whole, the 12-page agreement, which is signed by Annenberg and orchestra leaders, outlines a broad set of institutional ambitions for the world-famous ensemble — some new, others tried but hobbled in the past by a lack of money.

Gail C. Levin, executive director of the St. Davids-based Annenberg Foundation, did not return phone calls.

In an otherwise prosaic agreement, one paragraph in particular is both poetic and direct on the point of the orchestra's level of ambition:

As a cornerstone in the cultural life of the region, the Orchestra represents that it shall not be content to merely maintain its existing strengths and the quality of its performances, but shall focus on striving to attain the highest standards of excellence in every indicia of achievement. The Orchestra shall broaden its artistic view and exhibit the regional, national and international leadership necessary to encompass a cosmopolitan perspective that embraces growth, innovation and adaptation to the needs of both social institutions and the needs of the populace.

The agreement is in response to a proposal made by the orchestra to the foundation that came out of conversations between Annenberg, Eschenbach and Kluger.

"It was those discussions that motivated Mrs. Annenberg to respond positively to our request," Kluger said. "The language is intended to communicate to us and to future generations that they want us to continue to be doing creative and innovative things."

The Annenberg grant is the biggest in the ensemble's history and is believed by orchestra leaders to be the second-largest gift ever made to an American orchestra. Still, all of the programs outlined in the 12-page agreement cannot be paid for with the interest and other income eventually generated by the $50 million nest egg, according to orchestra chairman Richard L. Smoot.

In fact, not all of the new programs called for in the agreement must be instituted, according to experts familiar with grant agreements. The phrase including, but not limited to, used liberally throughout the contract, gives the orchestra the freedom to use some ideas and not others.

"It's terrific for the orchestra," said Eileen R. Heisman, president of the National Philanthropic Trust. "It's really important to have language like that, because 100 years from now, who knows what the world is going to be like? If you don't include language like that, the donation is so rigid that when things become obsolete it becomes impossible to change them. It's that 'dead hand of the past' phenomenon, like the Barnes Foundation."

The orchestra is still investigating which of the contract's bullet points will be implemented. "There isn't anything on the list that isn't a really interesting idea that we're looking at," Kluger said.

The idea for the orchestra to perform opera came from Eschenbach, Kluger said. Eschenbach has a successful history with opera and led opera from the pit when he was music director of the Houston Symphony. Such an arrangement would be highly unusual for a major American orchestra.

Other aspects of the contract are not negotiable, such as the clause requiring the orchestra to balance its budget.

When it is fully paid, the $50 million will make available to the orchestra $2.75 million a year for programs developed in response to the Annenberg agreement. But since the promise is to be paid in $10 million installments each October though 2007 (the first installment was paid last fall), the money will, in the next few years, provide considerably less than the $2.75 million a year it will eventually generate.

The Annenberg money is to be kept in four funds within the orchestra endowment: $15 million for the Annenberg Fund for Education, $15 million for the Annenberg Fund for Touring, $10 million for the Annenberg Fund for Artistic Endeavors, and $10 million for the Annenberg Fund for Media and Technology.

Each area comes with specific stipulations.

In education, the agreement calls for education concerts at the Kimmel Center and a week of free education concerts for students in the Academy of Music to be held each year prior to the annual Academy Anniversary Concert and Ball; "more" free neighborhood concerts; dividing family concert programs into two groups (one for 4- to 7-year-olds, another for 8- to 11-year-olds); making student concerts available free of charge; and creating an orchestral training program with the Curtis Institute of Music for student players.

The touring fund is meant to help pay for performances in New York, Washington, other Pennsylvania cities, domestic, and international touring.

The artistic-endeavors fund is meant to pay for "the music director's special artistic initiatives," including commissioning new works, performing opera "both in concert form in the Kimmel Center and fully staged in the Academy of Music, with the orchestra in the pit," and attracting and retaining "the finest conductors, soloists and musicians."

The artistic-endeavors fund also is meant to pay for "taking artistic risks, experimenting with new programs and offerings."

Audio recordings, radio and TV broadcasts, Internet streaming and downloading, and new technologies would be paid for with the fund for media and technology.

As for the statement at the end of the agreement that characterizes the ambition of the grant's intent, Heisman said, "It's quite eloquent, it's not legalese.

"[Annenberg] is giving them guidance, but she is not being so controlling that she doesn't give them flexibility. Those are really noble wishes for any donor to have for an organization. I think that's the donor saying to the organization, 'Don't be ordinary.' "