Friday, August 19, 2022

One year later, is Colonial Williamsburg’s restructuring paying off?

Colonial Williamsburg President and CEO Mitchell B. Reiss said the foundation’s “aggressive” restructuring plan “is working.” (WYDaily/File)
Colonial Williamsburg President and CEO Mitchell B. Reiss said the foundation’s “aggressive” restructuring plan “is working.” (WYDaily/File)

One year after announcing a plan to restructure the Colonial Williamsburg Foundation, lay off employees and outsource operations, foundation officials are saying the nonprofit’s finances are on the upswing.

In a presentation to staff Wednesday, Colonial Williamsburg President and CEO Mitchell B. Reiss said the foundation’s “aggressive” restructuring plan “is working.”

The CEO reported increased visitation in both 2016 and 2017, as well as the first quarter of 2018. Wedding and conference bookings are also up, he said. A slide from Wednesday’s presentation shows a slight increase in visitation since 2016, nearing, but not exceeding, 600,000 visitors in 2017.

And, unlike last year, there are no plans for additional layoffs or reductions in force.

“I said this time last year that we intended to restructure the foundation one time, and one time only,” Reiss said in prepared remarks, which were released after the meeting.

Williamsburg City Council members, foundation volunteers and donors, and Joe Montgomery, a member of the Board of Trustees, also attended the presentation.

“We are on the way to saving this foundation,” Reiss said.

While the foundation is on the road to improvement, Reiss added that the foundation still has work to do as it strives for financial stability.

Finances

Reiss said paying down “hundreds of millions of dollars” in debt is still the largest financial hurdle the 90-year-old foundation faces.

On June 29, 2017, Reiss announced the foundation would outsource management of its commercial operations — including its real estate holdings, 19 retail stores and three golf courses.

The change included laying off 71 employees and transitioning 262 to other employers — a total of 333 employees, or roughly 16 percent of the foundation’s workforce.

The foundation also closed the doors of the Kimball Theatre in Merchants Square, although William & Mary later took over operations.

The foundation also changed its leadership team, hiring Ghislain d’Humières as executive director and senior vice president for core operations and Paul Scott as president of hospitality.

Board of Trustees members have been working to renegotiate the terms of the debt to reduce the burden on the foundation. If the terms are changed, Colonial Williamsburg’s annual payments will be much lower, Reiss said.

In an analysis of the past 11 years of foundation tax returns, WYDaily found the organization suffered significant financial shortfalls leading up to 2017, prompting Colonial Williamsburg to transfer funds from its endowment to cover operations and debt repayments.

After using its endowment to pay down debt, the foundation is also working to “regrow” the fund. In 2014, the foundation took $94 million to pay down debt, which amounted to 12 percent of the endowment, and was more than double what “healthy” nonprofits would annually take.

In 2017 and 2018, Colonial Williamsburg withdrew $68 million and $58 million, respectively — about 8 percent of the endowment.

Reiss also reported an increased in funding from donors, netting $48.7 million in campaign gifts and pledges in 2017, which was $4 million more than 2016.

Local impact

Colonial Williamsburg employs 2,000 full- and part-time employees and says its operations contributed millions to the local and state economy in 2017.

According to an information sheet released by Colonial Williamsburg on Wednesday, spending in Colonial Williamsburg generated over $4.4 million in sales taxes in Virginia in 2017, and over $3.5 million in room, meal and sales taxes to the City of Williamsburg.

Colonial Williamsburg also paid about $2.2 million in real estate and property taxes to the city in 2017.

The foundation also said spending by visitors generated an additional $167 million in economic output, and 1,700 local jobs in Greater Williamsburg.

The foundation also donated $50,000 to the United Way of Greater Williamsburg, spent about $100,000 to sponsor daylong activities in the Historic Area on the Fourth of July and more, the foundation said.

Foundation values

During the meeting, Reiss listed four values of the foundation: courage, inclusion, relevance and craftsmanship.

“Change is always difficult — especially for a 90-year-old organization that exists to promote history and preserve an important legacy,” Reiss said. “But we had the courage to admit that we needed to make significant changes, and then to implement those changes. Without courage, none of what we’ve accomplished this past year would have been possible.”

In the presentation Wednesday, Reiss explained the foundation’s goals and progress pertaining to each.

Under courage, Reiss commended the foundation, its members, donors and employees, for being willing to change and pursue new projects, such as the expansion of the Art Museums of Colonial Williamsburg.

Inclusion covers the foundation’s growing diversity, including people of all ages, genders and races, Reiss said. The foundation has also worked to add diverse programming, such as the Century of African American Quilts and Navajo Weaving exhibits.

Relevance covers visitation to Colonial Williamsburg and the foundation’s pursuit of “doing” more rather than “just talking.”

Colonial Williamsburg added ax-throwing, a musket range and children’s summer camps last year.

Last, the foundation has worked to train its 2,000-employee staff and arm them with certifications for their positions, from carriage driving to animal breeding to interpretation.

“For an organization this complex — culturally, financially, and otherwise — there isn’t an easy fix,” Reiss said. “But we’re starting to make it work. And people are coming. The word is getting out. You are making a real difference.”


Fearing can be reached at sarah.f@localvoicemedia.com.

Sarah Fearing
Sarah Fearing is the Assistant Editor at WYDaily. Sarah was born in the state of Maine, grew up along the coast, and attended college at the University of Maine at Orono. Sarah left Maine in October 2015 when she was offered a job at a newspaper in West Point, Va. Courts, crime, public safety and civil rights are among Sarah’s favorite topics to cover. She currently covers those topics in Williamsburg, James City County and York County. Sarah has been recognized by other news organizations, state agencies and civic groups for her coverage of a failing fire-rescue system, an aging agriculture industry and lack of oversight in horse rescue groups. In her free time, Sarah enjoys lazing around with her two cats, Salazar and Ruth, drinking copious amounts of coffee and driving places in her white truck.

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