Colonial Williamsburg grew its endowment by about $30 million in 2017. And while the foundation managed to take a nibble out of its debt, admission revenue fell last year, according to a recently released audit.
The audit covers two years — 2016 and 2017— of Colonial Williamsburg’s financial activity through Dec. 31, 2017. Though the audit period ends about six months after Colonial Williamsburg embarked on a substantial restructuring that involved layoffs and outsourcing in June 2017, it provides a glimpse into the foundation’s finances during a transitional period. The audit is conducted routinely.
Greater clarity on those efforts is elusive — a Colonial Williamsburg spokesman declined to comment for this story. He did not elaborate on why.
The foundation had an endowment of $693.7 million in 2017, an increase from its value of $663.6 million at the end of the previous year, according to the audit. That’s a welcome change of pace for the foundation, which for years had to overdraw from the endowment to keep operating.
Since 2001, the foundation has withdrawn more than 5 percent of its endowment every year — some years taking as much as 12 percent. The foundation aims to keep its endowment withdrawal at 6 percent in 2018 and 2019. The goal is to reach a withdrawal of 5 percent in 2020, Colonial Williamsburg President and CEO Mitchell Reiss said when he spoke at a Williamsburg Economic Development Authority business roundtable luncheon in September.
In 2017, the foundation withdrew $65.4 million, or 9.8 percent, from its endowment. The previous year, it used $70.9 million, or 9.9 percent, of its endowment for operations.
“To be able to continue to tell our story … requires us to be financially stable. The sad truth is that stability has been threatened in recent years,” he said. “It’s almost beyond our imagination to think about Williamsburg without the Colonial Williamsburg Foundation, but that is certainly a possibility.”
Five percent is the benchmark for endowment foundations such as Colonial Williamsburg to withdraw from their endowments.
While the endowment grew last year, it’s still well removed from the heady days of a decade ago, when the endowment peaked at $819.5 million in 2007, just before the Great Recession, based on The Virginia Gazette’s database of information on the foundation’s endowment dating to the 1980s.
The foundation also eliminated about $9 million of its debt in 2017, ending the year with $302.4 million in debt. In 2016, its debt was $311.3 million, according to the audit.
Revenue from paid admissions dipped in 2017 compared to 2016. Exhibitions and Historic Area admissions brought in $20.5 million in revenue in 2017. The previous year, it was $21.8 million. According to The Virginia Gazette’s database, the best years for admission revenue were 1999 and 2000, when the foundation brought in $31 million each year.
Admission revenue hovered around $18-$19 million annually since 2010. In recent years, Colonial Williamsburg launched new efforts, such as the musket and ax ranges, Haunting on DoG Street and an ice-skating rink, in a bid to attract more visitors to the Historic Area.
The audit wrapped up half a year after the start of restructuring at Colonial Williamsburg. In June 2017, the foundation announced layoffs for 71 employees and outsourcing of golf operations, product and retail management, facilities management and landscaping, which heralded the departure of another 262 employees. It shuttered the Kimball Theatre, which the College of William and Mary later took over, and made an appeal for tax relief to Williamsburg, James City and York -- which didn’t materialize -- on foundation properties in those localities.
Total operating expenses dipped to $223.2 million in 2017 from $227.2 million the previous year.
The restructuring was cast as an exercise in trimming the foundation’s fat and refocusing on its mission as a living-history museum.
“We have to focus on our core educational mission. The historic area, the museums and our educational programs. These are why people come,” Reiss said in September.
Jack Jacobs, 757-298-6007, firstname.lastname@example.org, @jajacobs_