Annual Report 2007
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 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 activities of the foundation and its subsidiaries. A third reporting format is required by the Internal Revenue Service on Form 990, the 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 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 annual 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 sales 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.
For 2007, total revenues, including budgeted endowment support, increased $33 million to $225 million, and expenses $24 million to $262 million. The operating loss was $37 million, a $9 million improvement from 2006. Net assets increased $99 million to $1.05 billion, a record. This result reflects non-operating items, including all gifts and pledges for endowment, capital projects, and objects; the difference between the budgeted endowment support and the net total return of the endowment; the gain on the Carter’s Grove sale; changes in the value of pension assets and interest rate hedges; and other non-operating items.
The foundation’s endowment market value increased to $820 million as of year’s end—reflecting a net return of $132 million, or 17.7 percent—which supported operating and routine capital expenses ($58 million), repaid a portion of debt ($40 million), and was reinvested ($34 million) to support the foundation’s future activities.
Gifts received, excluding pledges, totaled $41 million, which included $15 million of unrestricted annual support contributed to the Colonial Williamsburg Fund by more than 119,000 donors.
The Colonial Williamsburg Foundation is the corporate name of the not-for-profit, tax-exempt, educational organization begun in 1926 to preserve and restore eighteenth-century Williamsburg, Virginia’s capital from 1699 to 1780.
The foundation’s activities include historical research, preservation of artifacts and buildings, interpretation of exhibition buildings and historic trades, re-creation of historic events, publication of scholarly and popular works, production of educational DVDs and compact disc recordings, educational outreach—including teacher training, distance-learning programs, curriculum development, and Web sites—and conservation and exhibition of art and antiques.
Support for Colonial Williamsburg’s operations comes from such sources as admission fees, contributions, sales of trade products and licensed reproductions, taverns and restaurants, publications, DVDs and compact discs, property rentals, and hospitality and convention services. In accordance with board of trustees policies, support is provided annually from the foundation’s endowment for educational and museum programs, as well as Historic Area preservation and restoration.