Consolidated Income Statement and Statement of Changes in Net Assets for the twelve months ending December 31, 2009 and 2008 (dollars in millions)
A Summary of the Foundation’s 2009 Financial Results
The Colonial Williamsburg Foundation, responding to the global economic decline of late 2008 and early 2009, worked to reduce the impact on the institution’s financial performance. Expense reductions, which saved approximately $33 million, were undertaken with deliberation and care to ensure the foundation can sustain its mission and respond to significant revenue pressure.
For 2009, total revenues, including budgeted endowment support, were $192 million, a decrease of $18 million from 2008, and expenses were $216 million, a decrease of $33 million from 2008. The result was an operating loss of $24 million, a $15 million improvement over the year before.
All sources of operating revenue, exclusive of endowment support, declined in 2009. Gifts to the Colonial Williamsburg Fund, which supports the operating budget, were $14 million for calendar 2009, a slight decrease compared with 2008. Nevertheless, the number of donors surpassed the 100,000 mark for the eighth consecutive year. Endowment support increased by $2 million because the foundation’s endowment spending rule is based on a trailing twelve-quarter average market value. Thus, the downturn in the financial markets did not impact significantly the annual endowment withdrawal for operations for calendar 2009 but will in subsequent years. There were reductions in all expense categories achieved through cost containment, staffing adjustments and reductions, and lower costs associated with lower business volume.
During 2009, the foundation’s net assets increased by $115 million, largely as a result of the performance of endowment assets, which returned 20 percent, reflecting improvements in financial markets in the last nine months of 2009 and continued outstanding performance by Investure.
Colonial Williamsburg monitors and reports internally on the regularly recurring, or operating, revenues and expenses of routine activities to assess the financial performance of educational and for-profit activities. It reports in the audited financial statements all revenues and expenses in accordance with generally accepted accounting principles to reflect the consolidated financial impact of all foundation and subsidiary activities. A third reporting format is required by the Internal Revenue Service on Form 990, an annual information return for The Colonial Williamsburg Foundation, the 501(c )(3) entity that is exempt from federal income taxes on most of its activities. The financial results on Form 990 represent the unconsolidated financial results of only this organization; the foundation’s taxable subsidiaries—for example, Colonial Williamsburg Company—report their financial results separately on corporate income tax returns.
The operating results reported in the internal report and reflected in the top half of the consolidated income statement and statement of changes in net assets shown in this report incorporate ticket sales, revenues generated by hospitality and products, unrestricted operating gifts and restricted gifts for operations spent for their intended purpose during the year, the budgeted amount of endowment support provided by our endowment spending policy, and all operating expenses of the foundation and its subsidiaries.
Below the operating deficit line in the report we include nonoperating items, such as the difference between the total return produced by the endowment and the budgeted endowment support; all other gifts and grants, that is to say, pledges; restricted gifts received but not spent; gifts for endowment and capital projects, and gifts of objects; gains on sale of real estate; and the financial statement impact of changes in generally accepted accounting principles. The combination of the operating and nonoperating items is reflected as the change in net assets, which is consistent with the audited financial statements.