Colonial Williamsburg’s past financial struggles continue to come to light nearly half a year after it ‘fundamentally restructured’ and laid off 71 employees.
The Colonial Williamsburg Foundation has released its 2016 tax returns, indicating the organization’s endowment shrank by nearly $49.4 million. The returns also show a slight increase in the total amount of admission ticket revenue, according to the tax documents.
About $25 million of the endowment was spent in 2016 to cover the operating cost of the organization, according to information provided by the Colonial Williamsburg Foundation.
Just over half of the foundation’s program service revenue, money it makes from taverns, admission tickets and products, came from the sale of admission tickets alone in 2016.
Admission ticket sales increased by nearly 1.8 percent in 2016 compared to the prior year, according to data provided by Colonial Williamsburg.
In 2016, the foundation brought in about $19.2 million in admissions, according to tax documents.
In 2015, the foundation brought in slightly more than $19 million in admissions, according to tax documents.
While admission tickets are a piece of the puzzle the Foundation uses to pay its expenses, a greater amount of money comes from contributions and grants to the organization.
Donors gave $41.1 million to the organization in 2016: the largest amount since 2007, according to tax documents.
The organization raised a total of $42.4 million in 2016 between the donations and grants.
Foundation spokesman Joseph Straw said the tax documents offer a “limited picture” of the nonprofit’s finances.
“The Foundation’s financial health is now dramatically enhanced due to improved business practices and operational changes including those undertaken in the June 2017 reorganization,” Straw said in a statement. “This year we expect substantial savings and cash-flow benefits resulting from changes undertaken in the restructuring. We will continue in 2018 to invest in facilities and information technology to drive revenue, guest satisfaction and operational efficiencies.”
While 2016 marks the year before the organization restructured itself, it marked a continued three-year decline in the net assets of the organization, according to tax documents.
2017 however, signaled a change in how the organization is operated.
On June 29, 2017, the organization officially announced it was outsourcing some of its operations and laying off 71 employees to better focus on its core mission.
At the time, foundation President Mitchell Reiss called the cuts “painful.”
Six months later, the foundation is starting to see upside from the changes made in the past three years, according to Reiss.
“Some of the changes we made in 2015 and 2016 are starting to kick in,” Reiss said in a November interview. “You can’t cut your way to prosperity. There were some things that clearly needed to be done in terms of restructuring the foundation, but we have to grow revenue.”
According to information provided by the foundation, the organization’s projected supplemental withdrawals from its endowment decreased by $5 million in 2017 to $20 million.
Supplemental withdrawals are used to pay for certain costs of running the nonprofit.
Donors have nearly all responded positively, according to Reiss.
“I was a little nervous before making that announcement in June, I have been overwhelmed by the response by donors,” Reiss said. “It’s run about 25- or 30-1 in favor.”
In 2017, the organization broke ground on an expansion of the Art Museums of Colonial Williamsburg to the tune of more than $40 million, completely paid for by donors, according to information provided by the foundation.
The organizations net assets increased in 2017 by nearly 11 percent, according to the foundation’s projections.
If the projections hold true, the increase would denote the first time organization’s net assets have increased since 2013.
“We are working hard to restore the financial health to the institution, but it’s a simply a mean to a larger end to tell our enduring story,” Reiss said. “We have more work to do, but we want everybody to come and visit us and enjoy themselves.”
While things are looking up for the foundation, Reiss said he “can’t guarantee the future” when asked if 2017s restructuring would be the last.
“If there’s a national recession or should we have a tragic incident in the Historic Area, that would change the business projections,” Reiss said. “There’s no plans to do so, there’s no contingency plans, there’s no expectation. We went into the restructuring this spring, looking to do this one time only and then building, selectively, as we get healthier financially.”
As 2018 winds on, the foundation has said it will make millions of dollars of investments in facilities and information technology to create more revenue and keep visitors happy.
“It’s been an incredibly consequential year for the foundation,” Reiss said of 2017. “I want to thank all of the employees who have kept the faith with us. I want to thank the members of the local community and the donors who continue to support us.
Correction 11:50 a.m., Jan. 24: A previous version of this article included an incorrect figure for the total decrease of the Foundation’s endowment as well as an incorrect figure on the total amount of donations from donors. This article has also been updated to reflect comment from the Colonial Williamsburg Foundation.
To contact the reporter, email steve@localvoicemedia.com
