2011 Financial Results
2011 Contributors Give Foundation Strong Support
Colonial Williamsburg celebrated its thirty-fifth anniversary of a formal development program in 2011, a year marked by strength in annual, major, and planned giving support and the beginning of the "quiet phase" of Colonial Williamsburg's second comprehensive campaig
The Colonial Williamsburg Fund
The Colonial Williamsburg Fund benefited from growth in both donors and contributions in 2011. The number of contributors increased to nearly 109,000 households with donors from all 50 states. Gifts to the fund totaled $14.5 million, compared with $14.3 million in 2010. The number of friends making a contribution for the first time increased by 8% to 19,000, an encouraging affirmation of sustained appreciation for the foundation's mission.
Members of the Colonial Williamsburg Burgesses, Colonial Williamsburg Associates, and Raleigh Tavern Society contributed $5.8 million to the Colonial Williamsburg Fund and a total of $13.7 million to the foundation. Membership in these societies grew again this year with more than 300 new households choosing to join in 2011. Those who attended an annual meeting enjoyed behind-the-scenes experiences with curators, conservators, members of the Historic Trades, and interpretive staff—along with the pleasure of meeting other foundation friends from across the nation.
Gift commitments increased by 25% in 2011 to $40 million from $32 million. The largest outright gift came from President's Council members and Raleigh Tavern Society Life Members Peter and Patricia Frechette of Minneapolis, Minnesota. Their $2.5 million gift endowed the Peter I. and Patricia O. Frechette Director of Teacher Development, a position currently held by Colonial Williamsburg's Tab Broyles; the gift also supports other educational outreach initiatives.
Colonial Williamsburg trustee Steven L. Miller and his wife, Sheila, of Houston, Texas, made a $1 million gift as an early indication of their support for the campaign. Trustee Forrest E. Mars Jr. of Big Horn, Wyoming, made two $500,000 gifts, one for Historic Jamestowne operations and programming and a second to reconstruct the tin shop at the James Anderson Blacksmith Shop and Public Armoury site. Senior trustee Robert S. Wilson and his wife, Marion, of Rancho Santa Fe, California, made a $1 million gift to help endow Colonial Williamsburg's California Teacher Institute.
Foundation grants included $200,000 from the Andrew W. Mellon Foundation of New York for curatorial interns; $200,000 from a private foundation for new development computer software; $150,000 from the Kern Family Foundation of Waukesha, Wisconsin, for religious programming; and a $150,000 challenge grant from the Mary Morton Parsons Foundation of Richmond, Virginia, for masonry preservation. Dominion Foundation, the philanthropic arm of Dominion Resources, Inc., made a $150,000 grant in support of African American programming.
The largest estate commitment Colonial Williamsburg received came from President's Council co-chair and Raleigh Tavern Society Life Member Edward C. Lynch of Vancouver, Washington. On behalf of himself and his late wife, Virginialee (Dollie), Mr. Lynch added $5 million to their previous estate commitment. The bequest will eventually support their Raleigh Tavern planned preservation endowment and create the Ed and Dollie Lynch Citizenship Fund.
Gifts of coins, currency, medals, and other objects valued at $1.2 million, previously on long-term loan, came permanently to Colonial Williamsburg from the late Joseph R. Lasser's estate. A bequest from Phyllis Ciez of Cedar Lake, Indiana, provided $785,000. Mrs. Ciez had been a supporter for years, but her legacy, made in memory of her daughter Margaret A. Ciez, was not known before her December 2010 death.
A Summary of the Foundation's 2011 Financial Results
Consolidated Income Statement and Statement of Changes in Net Assets for the twelve months ending December 31, 2011 and 2010 (dollars in millions)
Consumer confidence in the United States was negatively affected during the 2011 peak summer travel period by pressures in the domestic and international economies and financial markets and, in particular, by the rancorous debt ceiling debate in Washington and subsequent downgrade of the United States' credit rating. This trend was exacerbated in the Williamsburg area by an extraordinarily wet summer that culminated with Hurricane Irene in late August.
During the period from July 1 through September 30, combined on-site revenues from ticket sales, hospitality, and products were $1.7 million (5%) lower than in the prior year. During the remaining nine months of the year, those on-site revenue sources increased by $1.3 million (1%) relative to the prior year. Gifts to the Colonial Williamsburg Fund increased by $200,000 (2%) to $14.5 million, reflecting strong donor support in a challenging economic environment. Total revenues for the calendar year, including budgeted endowment support, were $179 million, a decrease of $6 million, which includes a decline of $4.5 million in catalog revenues that resulted from the discontinuation of the catalog in the summer of 2010.
Expenses for 2011 were $211 million, a decrease of $1 million compared with 2010. Excluding a $5 million decline in catalog expenses, all other expenses increased by $4 million primarily as a result of increases in employee compensation and advertising expenses. The combination of increased expenditures and reduced revenues resulted in an operating deficit for 2011 of $32 million.
The market value of Colonial Williamsburg's endowment was $709 million as of December 31, 2011, a decrease of $45 million over the 2010 year-end value, after $53 million of planned endowment withdrawals were made during the year to support operations and routine capital expenditures and $8 million of endowment gifts were added. The endowment investment return was zero for the twelve months ended December 31, 2011. This compares favorably with the performance of the global equity markets, which were volatile during 2011 and produced negative investment return as reflected in the MSCI All Country World Index that produced a return of negative 6.9% for the twelve months ended December 31, 2011.
The foundation's net assets decreased by $110 million to a total of $798 million at year end, which resulted primarily from the net withdrawals from endowment noted above and an increase in projected pension liabilities as a result of actuarial adjustments that were made to reflect a significant decline in interest rates during the year.
Colonial Williamsburg monitors and reports internally on the regularly recurring, or operating, revenues and expenses resulting from routine activities in order to assess the financial performance of educational and forprofit activities. It reports in the audited financial statements all revenues and expense in accordance with generally accepted accounting principles to reflect the consolidated financial impact of all activities of the foundation and its subsidiaries. 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 501(c)(3) 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 top half of the consolidated income statement and statement of changes in net assets shown in this annual report incorporate: ticket sales; all 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 non-operating 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 non-operating items is reflected as the change in net assets, which is consistent with the audited financial statements.