<aue 


Se ae 
= A 


Fe uiuitduntast 


+ 7 
en 


SMITHSONIAN YEAR - 1979 


Statement by the 


S ecretary 


ithsonian Year . 1979 


A ees 


\TEMENT BY THE SECRETARY 


- 
-— 
— 
_— 
— 
| 
— 
~. 


ANACOSTIA NEIGHBORHOOD MUSEUM 
XHIBITS EXHIBITS 


SMITHSONIAN YEAR - 1979 


In the Nation's Service 


STATEMENT BY THE SECRETARY 
S. DILLON RIPLEY 


The Smithsonian Institution - 1980 


FRONTISPIECE: The programs and facilities of the Smithsonian Institution are located 
in many different parts of this country and the world. Shown here are Smithsonian 
buildings situated on or near the Mall in Washington, D.C. From the top: the 
Smithsonian Institution “Castle” Building; the National Air and Space Museum; 
the Hirshhorn Museum and Sculpture Garden; the National Museum of Natural 
History; the National Museum of History and Technology; the Arts and Industries 
Building; the Freer Gallery of Art; the Renwick Gallery; the Fine Arts and Portrait 
Gallery Building; the Museum of African Art; and the Anacostia Neighborhood 
Museum. 


The Smithsonian Institution 


The Smithsonian Institution was created by act of Congress in 1846 
in accordance with the terms of the will of James Smithson of Eng- 
land, who in 1826 bequeathed his property to the United States of 
America “to found at Washington, under the name of the Smith- 
sonian Institution, an establishment for the increase and diffusion 
of knowledge among men.” After receiving the property and ac- 
cepting the trust, Congress incorporated the Institution in an “‘es- 
tablishment,” whose statutory members are the President, the Vice 
President, the Chief Justice, and the heads of the executive depart- 
ments, and vested responsibility for administering the trust in the 
Smithsonian Board of Regents. 


THE ESTABLISHMENT 


Jimmy Carter, President of the United States 
Walter F. Mondale, Vice President of the United States 
Warren E. Burger, Chief Justice of the United States 
Cyrus R. Vance, Secretary of State 
G. William Miller, Secretary of the Treasury 
Harold Brown, Secretary of Defense 
Benjamin R. Civiletti, Attorney General 
Cecil D. Andrus, Secretary of the Interior 
Bob S. Bergland, Secretary of Agriculture 
Juanita M. Kreps, Secretary of Commerce 
F. Ray Marshall, Secretary of Labor 
Patricia Roberts Harris, Secretary of Health, Education, and Welfare 
Moon Landrieu, Secretary of Housing and Urban Development 
Neil Goldschmidt, Secretary of Transportation 
Charles W. Duncan, Secretary of Energy 


Board of Regents and Secretary - September 30, 1979 


REGENTS OF THE Warren E. Burger, Chief Justice of the United States, Chancellor 


INSTITUTION 


EXECUTIVE 
COMMITTEE 


THE SECRETARY 


Walter F. Mondale, Vice President of the United States 
Henry M. Jackson, Member of the Senate 

Barry Goldwater, Member of the Senate 

Robert B. Morgan, Member of the Senate 

Norman Y. Mineta, Member of the House of Representatives 
Silvio O. Conte, Member of the House of Representatives 
Frank Thompson, Jr., Member of the House of Representatives 
Anne Armstrong, citizen of Texas 

J. Paul Austin, citizen of Georgia 

John Nicholas Brown, citizen of Rhode Island 

William A. M. Burden, citizen of New York 

Murray Gell-Mann, citizen of California 

Caryl P. Haskins, citizen of the District of Columbia 

A. Leon Higginbotham, Jr., citizen of Pennsylvania 
Thomas J. Watson, Jr., citizen of Connecticut 

James E. Webb, citizen of the District of Columbia 


Warren E. Burger, Chancellor 
William A. M. Burden 

Caryl P. Haskins 

James E. Webb (Chairman) 


S. Dillon Ripley 


Dorothy Rosenberg, Executive Assistant to the Secretary 
Michael Collins, Under Secretary 

John F. Jameson, Assistant Secretary for Administration 
Charles Blitzer, Assistant Secretary for History and Art 
David Challinor, Assistant Secretary for Science 

Paul N. Perrot, Assistant Secretary for Museum Programs 
Julian T. Euell, Assistant Secretary for Public Service 
Christian C. Hohenlohe, Treasurer 

Peter G. Powers, General Counsel 

James McK. Symington, Director, Membership and Development 
Lawrence E. Taylor, Coordinator, Public Information 


Vi 


Smithsonian Year . 1979 


STATEMENT BY THE SECRETARY 


~ 


“Ei ae ae 
< 


Flying plastic discs of all sizes and colors filled the sky at the third annual 
Smithsonian Frisbee Disc Festival. The September 2 festival, which was sponsored by 
the National Air and Space Museum, attracted over 11,000 spectators. Below. 
Students from the James Ryder Randall Elementary School’s summer program 
toured the Silver Hill Museum in July 1979. To the left is the Curtiss P-40 E War- 
hawk, one of the best-known fighters of World War II. 


In the Nation's Service 


S. DILLON RIPLEY 


BEING HISTORY-MINDED, I tend to believe that time is the only true 
touchstone of merit. What merit lay in the enigmatic bequest of 
money by James Smithson to the nation in 1826? No one could be 
sure. The resulting hubbub in the Congress over whether to accept 
the “tainted” British money has long since become part of the 
dust of yesteryear. But my own feeling is that the creation of the 
Smithsonian started a chain reaction which has since touched every 
American. 

It would be better to characterize the “diffusion of knowledge 
among men,” to quote Smithson’s words describing the purpose of 
his bequest, as being in the service of the people rather than in the 
nation’s service. “In the nation’s service” bespeaks the many na- 
tional service organizations of our government—the Postal Service, 
the Health Service, the services for veterans, for unemployment 
compensation, Social Security, the Internal Revenue Service, the 
Forest Service, the Fish and Wildlife Service. “In the service of the 
nation” calls to mind the tremendous body of men and women in 
the federal government employed to perform services for us all. 
These servants of the people, often maligned by the public and 
politicians alike, are devoted, zealous, and conscious of a calling, a 
calling of service. 

‘Most of them find a career reward of a genuine and compelling 
nature in working for the benefit of us all. We rub elbows with them 
every day at the Smithsonian. They are our best audience, for they 
live for the most part near Washington. Thousands of them are 
Associates of the Institution, and many thousands are our friends, 
for they find a host of rewards in the experiences that we have to 
offer. We can speak with conviction of those who dedicate their 


[3] 


careers to the civil, military, and kindred services, such as our 
great Foreign Service, for these are people, devoted to the cause 
of national service, of whom we can all feel proud. 

Yet few people realize what the Smithsonian is all about. A 
collection of large buildings on or about the Mall in Washington— 
it is easy to assume that we are “government” in some way. Our 
buildings seem for the most part large, impressive monuments to 
the expenditure of taxpayers’ money. (The majority of people may 
not realize the amount of nontaxpayer money that has gone into a 
number of these buildings and will continue to do so in the future. 
The names Smithson, Freer, Mellon, and Hirshhorn all spell dona- 
tions for construction, just as more grants in the future will help 
defray the costs of new galleries to be built.) Our museums, some 
large, some small, consort in procession with the majestic, mono- 
lithic array of huge government bureaux on the opposite sides of 
Constitution and Independence Avenues. These government build- 
ings brood over the scene in the sunlight, like a pride of lions 
stretched out, panting in the heat, while their single lordly leader 
rears his heavily maned head on Capitol Hill. It is a setting of 
sedate splendor, awe-inspiring to some, crushing with monotonous 
repetition to others. But within there is a continuing sense of 
vitality. 

No, we of the Smithsonian are not “feds.’”” We never “regulate” 
anybody. We don’t publish mysterious orders in the Federal 
Register. To be sure, we receive appropriated funds each year, but 
even though they may represent two-thirds of our annual budget, 
the sums keep our buildings and our technical and service staffs in 
operation so that we can perform our services for all. 

Nor are we an island. People in the government often fancy 
themselves isolated, being in Washington. “Oh, it’s so valuable to 
get out, to get out into the country,” they say, as if life in Wash- 
ington were unreal, perhaps almost un-American. (People in New 
York are sometimes thought of as foreigners in a strange way, “not 
real Americans,” at any rate.) So people in Washington, in govern- 
ment anyway, are always paying lip service to the concept that life 
in Washington is different. It is not real America. This is especially 
true, perhaps, among politicians, who after all have to pretend at 
least not to be dismayed to be “home” with their constituents. From 
there the mood is catching. Government servants often complain 


[4] 


about being immured in Washington and not getting to sense the 
needs of the people. 

In fact, Washington is an immensely popular place to visit, per- 
haps ahead of New York these days. Those who live here in service 
of one kind or another should take comfort from this. It cannot be 
so strange, so un-American, such an island. It is the hub, packed 
with bits and pieces and stuff of everyman’s America. 

In the Annual Report of the Institution for 1852, six years after 
the commencement of operations in 1846, Joseph Henry, the first 
Secretary, summed it up: 


The prominent idea embraced in the Smithsonian organization, 
is that of cooperation and concerted action with all institutions 
and individuals engaged in the promotion of knowledge. Its 
design is not to monopolize any part of the wide fields of 
nature or of art, but to invite all to partake in the pleasure and 
honor of their cultivation. It seeks not to encroach upon 
ground occupied by other institutions, but to expend the funds 
[i.e., the Smithsonian endowment income] in doing that which 
cannot be as well done by other means. It gives to the words 
of Smithson their most liberal interpretation, and “increases 
and diffuses knowledge among men” by promoting the dis- 
covery of new truths, and by disseminating these in every part 
of the civilized world. 


Thus Joseph Henry enunciated the concept of service toward 
all people in “every part of the civilized world,” in words which 
he constantly strove to impress on the minds of the Congress and 
Executive alike: the Smithsonian had a task, a task of original 
study and research to promote the dissemination of knowledge for 
all mankind. Thinking back over the years, we have seen the 
Institution grow to include numerous museums with museum col- 
lections, a growth which to many minds tends to obscure the mean- 
ing of Henry’s words. 

How can one “discover new truths” as the proprietor of a dozen 
or more museums? Fortunately, these times have seen a new realiza- 
tion of what museums are all about, powerhouses of the mind, not 
old dustbins into which is cast the detritus of history. Museums 
serve today as educational centers, headquarters from which are 
sent out messages, communications of all kinds. As Lewis Thomas 


[5] 


says in his Lives of a Cell (1974), present genetic theory assumes 
that 


human beings are all born with a genetic endowment for 
recognizing and formulating language. ... As human behavior 
derives from the central mechanism of language, the same sets 
of genes are, at least indirectly, responsible for governing such 
astonishing behavior as in the concert hall, where hundreds of 
people crowd together, silent, head-tilted, meditating, listening 
to music as though receiving instructions, or in a gallery, mov- 
ing along slowly, peering, never looking at each other, con- 
centrating as though reading directions. . . . If language is at 
the core of our social existence, holding us together, housing 
us in meaning, it may also be safe to say that art and music 
are functions of the same universal, genetically determined 
mechanism. 


Beyond these everyday experiences, so concisely delineated by 
Thomas, there are all the other outward-flowing connections. Day 
by day we communicate without the awareness of it. Often the 
question is asked ‘““Why doesn’t the Smithsonian move out into the 
country at large? Why is everything all confined here in Washing- 
ton?” Almost every year some one of our congressional committees 
asks the question during a hearing. This is usually coupled with 
two other questions: “Why don’t we get our products out into the 
country at large, show our riches to the world?” and “Why do we 
have all these museums?” Is there no way to stop this inexorable, 
octopus-like growth? 

It is frustrating to realize how general this impression is, how 
it persists in spite of all our efforts. We do spread our message 
across the country. We do get our message out. Our “riches” tend 
to be more in ideas than in things. But we show both to the world. 
What are our riches? We have only one of George Washington’s 
uniforms, only one desk on which the Declaration of Independence 
was drafted, only one flag that flew over Fort McHenry. We do 
not have a single Philadelphia Chippendale camelback sofa, or a 
Newport Townsend-Goddard lowboy with cabriole legs and relief 
scrollwork carving. We do not have ten Remington sculptures or 
even Gilbert Stuart portraits of the Founding Fathers! So what are 
the riches? They exist in the mind, not in dozens of examples of 


[6 ] 


Richard Fiske (NMNH) explains concepts of plate tectonics to Associates at the 
Denver Museum of Natural History during the Regional Events series in Denver, 
March 1979. The geology exhibition was produced by the Regional Events Program 
to complement Dr. Fiske’s lectures on geological processes. 


. 
‘7 
a 


. 
. 


ab e+ he Le 4 


4 CENTENARY EXHIBITION 


As always, larger than life, Albert Einstein welcomes a group of visitors to his 
exhibit at the National Museum of History and Technology. Below. A young visitor 
enjoying the “Play and Inventiveness” celebration, sponsored by the Office of 
Smithsonian Symposia and Seminars. The celebration, which explored the links 
between play and creativity, was the Institution’s major contribution to the ob- 
servance of the International Year of the Child in 1979. 


PE ETE Ps 


decorative arts or sculptural objects, except for a few symbolic 
collections that have been given us, because our charter calls us, 
among other things, the national museum of the United States. 

I spend hours explaining to those interested enough to have any 
attention span that our seventy-five or eighty million objects have, 
to a large extent, intangible value. In this money-oriented culture 
of ours, it is harder to understand that a collection of insects, or 
fossils, or potsherds, or even portraits of famous people, may be of 
great intangible value to us, the keepers of the nation’s collections, 
and should be preserved rather than be thrown away or allowed 
to deteriorate. But most of these invaluable (without a dollar sign 
attached to them) collections of ours could not justify being 
“tiches” to be shown across the world. As exhibits “to furnish 
dozens of museums” (another stock phrase) they would lay an egg. 

No, our service is of a different kind. If we put on an exhibit, we 
may draw from the collections, but the very process is an idio- 
syncratic one, illustrating some theme, some historical sequence of 
events, or some set of ideas which must be thought through sub- 
jectively, with an aim to broad public education. 

In such service there is fulfillment, just as in the profession of 
teaching. There is little money in it, and the objects involved may 
have no monetary value in the marketplace, but they become price- 
less when placed in juxtaposition because they convey ideas. Emer- 
son said in his Lectures: ‘This time, like all other times, is a very 
good one, if we but know what to do with it.’ So an exhibit 
represents time used in putting thoughts together, thoughts de- 
lineated by objects, which in sum convey a message. Such time is 
of great value, for we are programmed to receive messages in this 
form, and messages may finally teach. 

How then do we serve the country? It is relevant to say, first of 
all, that enormous numbers of our citizens come to Washington 
each year, aside from local residents, and that the combined 
museums and exhibits of the Institution attract perhaps a tenth of 
our population each year, over twenty-five million annually at last 
approximation. Beyond that we do have attractions in other states: 
a museum in New York; laboratories in Massachusetts, Florida, 
and Arizona; and an environmental study center and a colloquium 
center in Maryland. We have laboratories abroad in several 
countries, among which the most famous is the biological station 


in Panama. But there are others besides, and the respect engendered 
by the Smithsonian tradition of service in the search for knowledge 
is worldwide, crossing without stress into the Second and Third 
Worlds. 

We are also mobile. Years ago, in 1951, we started the Smith- 
sonian Institution Traveling Exhibition Service (siTEs), with a ven- 
ture capital outlay of $100,000. Partially self-liquidating through 
the imposition of small transport and rental fees, sires now has 
some 175 exhibitions on the road or being planned or refurbished, 
reaching a public of another four to five million viewers a year in 
an average of 366 cities in 48 states. A few shows travel abroad 
and some come here from overseas, but this part of our outreach, 
which should be more actively developed, is much more expensive, 
although we could and should coordinate with many more of the 
nation’s major art galleries. We do help on occasion, willingly when 
asked to do so by a foreign nation, especially when the exhibit 
involves a clarification of history rather than a trumpery of 
Barnumism. (There is a tendency today to finance “blockbuster” 
exhibitions, often from abroad, requiring large expenditures of 
money which attract huge crowds, provide immense temporary 
occupancy of the museum involved, and which often produce huge 
coffee-table catalogues, later advertising the prescience of the owner 
in having visited the show, which, in the end, may serve as a status 
symbol rather than a lasting residuum in the mind. Often such 
exhibitions may be of mixed quality, may be almost impossible to 
view, and thus may fail to perform the ultimate transmission of 
meaning.) 

Fortunately our Traveling Exhibition Service has simpler goals 
and a mission of reaching smaller, less “show-biz” institutions. 
Low-cost exhibits reaching historical associations, libraries, cultural 
centers, high schools, and local galleries and museums, are in the 
nation’s service. This is a goal never to be underestimated. In 
addition, we have our Associates program, started in 1965, ex- 
panded in 1970, now reaching a reading and radio audience of 
millions through leaflets, scripts, our Smithsonian magazine, books, 
a science service to the news media, and through our folk and per- 
forming-arts festivals. 

Few people, perhaps, realize the seminal influence of the Smith- 
sonian’s Folklife Festival series, begun on the Mall in 1967, now dif- 


[ 10 ] 


As part of the Festival of American Folklife, Maxwell Tyler, a waterman from the 
Chesapeake Bay area, tells visitors in front of the National Museum of Natural 
History how he catches soft-shell crabs. 


Training time for sea lions: a keeper rewards one of her young charges with a piece 
of fish. Such training helps develop a rapport between keeper and animal and pro- 


vides stimulating activity for the sea lion or seal. Below. As part of the Smithsonian 
Resident Associate Program, Associates of all ages enjoy a guided tour of the new 
Beaver Valley installation at the National Zoo with the Zoo’s Kayce Cover, Leader- 


Keeper of Aquatic Animals. 


fusing an enthusiasm for festivals all over the states and even 
abroad. Few realize the enormous influence of our phonographic 
recordings of American folk and popular music, documenting a 
purely American art form, recordings which are available through 
subscription or at our museum shops. This diffusion has been im- 
mensely popular, so much so that if it did not exist it would long 
since have had to be invented. But who could have invented the 
Smithsonian and its services for people? 

We live in what appears to be an uncertain age. Many people 
foresee the gradual decay of our civilization, forced on us by will- 
ful, wasteful ways, and the impression that we are imbued with 
sloth in this country. It is a sense of malaise which has become 
almost a way of thought among our economists and planners. So- 
called liberal thought abounds with it. Conservative thought is 
possessed with it. Philosophers are afflicted with a sense of 
fatalism. Buddhism prepares us for acceptance of this sort, but it is 
a far cry from the exuberance of hope which lies at the heart of 
much of Judaeo-Christian inspiration. It is almost as if we were 
resigning ourselves to a premature sense of death or encroaching 
senility. Can a culture become senile? I am inclined to think not. 
The malaise is more apparent than real. Part of the difficulty is that 
we have lost touch with history, with our time scale, of which I 
have written before. In the pseudo-joyousness of “now” and of 
“me,” we are even affronting the precepts of those other, less- 
familiar religions, made temporarily popular. 

If time is the only true touchstone of merit, then time requires a 
communication of history. To achieve this should be our service 
to the people. Such understanding involves work. In the Bhagavad 
Gita, Krishna explains that work is its own reward. It should thus 
be of virtue. As I have quoted before, ‘From food are all creatures; 
from rain is the production of food; rain is produced from sacrifice; 
and sacrifice is the outcome of work.” Here then lies salvation, and 
any reward, if reward is needed, for service. 

In this past year it is certainly fair to say that our “diffusion” 
has reached a new peak, through visits, the Associates, traveling 
exhibitions, the regional events program to a number of cities, 
foreign and domestic tours, guidelines and programs for school 
teachers, radio and tv services, books of all sorts published by our- 
selves or in conjunction with major publishing houses, reprints of 


[13 ] 


classic texts, the Bicentennial project The Handbook of North 
American Indians (of which the first two volumes have received 
widespread acclaim), phonograph albums—all these offerings 
serve to touch the lives of untold millions of people both now and 
in the future. Our art museums alone lent more than a thousand 
works to museums and galleries throughout the country for special 
exhibitions. 

A curious example of the present effects of Smithsonian diffusion 
was the inclusion of the Smithsonian magazine in a survey of in- 
fluential commercial media by The Wall Street Journal. For some 
reason, unknown to us, the Journal included our Associates’ official 
publication along with a number of prominent newspapers (includ- 
ing the Journal, of course), news magazines, and similar widely 
read, over-the-counter publications. The Smithsonian was the only 
publication included which is available to a membership, in con- 
trast to commercial methods of distribution. So startling were the 
results of the survey that we understand they had to be repeated by 
the researchers. In every area where credibility was a factor (except 
where we hardly qualify, in politics or economics), Smithsonian 
led the “thunderers” of the world of the news media. Thus, our 
kind of diffusion is an intangible, a kind of word-of-mouth dis- 
persal, and is accepted as an unspoken certification of authenticity. 

When we speak of the effect of the diffusion of information by 
the Smithsonian to millions in the future, we can think of two 
highly significant events of this past year: the completion and 
operation of two new astronomical instruments, the Multiple 
Mirror Telescope and the HEAo-2 (Einstein) satellite. Both open 
windows on new realms of knowledge of the universe, stages in 
Smithsonian research in astronomy and astrophysics which began 
over one hundred years ago with the personal research of one of 
my predecessors, Samuel P. Langley, and which has been sponsored 
by the Institution ever since. 

The Multiple Mirror Telescope, first of its kind, developed in 
conjunction with the University of Arizona, is the prototype for 
optical telescopes of multiple-mirror construction perhaps as large 
as 1,000 inches in diameter. The Einstein, developed with nasa, led 
by the Center for Astrophysics in conjunction with the Massachu- 
setts Institute of Technology, Columbia University, and the God- 
dard Space Flight Center, is the first true focusing telescope for 


[14 ] 


The Multiple Mirror Telescope, a joint facility of the Smithsonian Astrophysical 
Observatory and the University of Arizona, located on the summit of Mt. Hopkins, 
Arizona, was Officially dedicated on May 9, 1979. Below. One of the stops on the 
twice-weekly guided tours of sao’s Mt. Hopkins Observatory is the ten-meter 


gamma-ray reflector. The bus tours are provided free to the public by the 
observatory. 


i 


ha 


age 


x-rays to be flown as a satellite. While already increasing sensitivity 
by a factor of ten over the best earlier detectors, this satellite sug- 
gests that an instrument even ten times more sensitive is feasible. 
The successful completion of both instruments this year marks the 
culmination of many years of design, testing, and planning by 
teams of Smithsonian scientists working in cooperation with other 
scientists around the world. Thus it can be said that new eras have 
begun in both optical and x-ray astronomy as a result of these new 
inventions. In this way, more millions of people in the future will 
receive information diffused through Institution efforts. 

Another method of expressing the inexpressible, making the con- 
nections and the harmony out of what we do, is indeed solving the 
problem of what we collect. As some of our scientists invent 
strategies for sensing the phenomena of the universe, others develop 
plans for documenting and cataloguing the immense data banks 
represented by our collections in the natural sciences. For many 
years, I have been at pains to talk and write about the importance 
of this service of ours to Americans and to all people. To preserve 
fragments at least of the stuff of our world, the materia mundi as 
we can know and identify it, is of inestimable importance to our 
future and to the future of mankind. At last, after more than ten 
years of planning for this need, the Smithsonian has been granted 
the right and the funds by the Congress to construct a Museum 
Support Center in nearby Maryland, fifteen minutes away from 
the Mall. This building, to cost between $20 and $21 million, will 
be of the most modern design, incorporating energy-saving and 
solar-heating devices appropriate to the Institution’s pioneering 
efforts in such matters. (Dr. C. G. Abbot, my predecessor, did not 
preoccupy himself with solar-energy research in the 1940s to no 
purpose.) We hope it will provide a safe haven for millions of our 
objects now stored in increasingly crowded and hence inefficient 
spaces on the Mall, free up ample new exhibit space in the National 
Museums of Natural History and of Man, and provide a center 
for conservation, study, and research that should be exemplary, 
a model for our peers. Here, too, is a paradigm of service to 
people. 

The dimensions of what people are finally able to do to trans- 
form our natural environment from one state—a state of nature— 
to another—a state of man’s creation—are incalculable. As best we 


[ 16 ] 


can, while we chart this untraveled course, we should preserve frag- 
ments of testimony of what the state of nature was like, so that 
we can measure our path into change. As mankind moves along 
this path of manipulation of the environment, it is better, as if 
descending into the darkness of an abandoned mineshaft, to leave 
a silken cord behind, with markers at intervals. Just as we keep 
specimens of fossils to tell us of the world of aeons past, we should 
keep the evidence of what tropical forests were like, what birds 
were like, and reptiles, and sea creatures. 

Perhaps we could even develop an early-warning system, as if 
carrying a caged canary with us into the abandoned mineshaft, to 
warn us of the unknown presence of carbon-monoxide gas. We 
might develop a system in our markers. When half the bird species 
of the tropical habitats have become extinct, should we pause to 
look backward or should we measure the consequences of forging 
ahead? Perhaps in such a way some measure of rational, disciplined 
thought about where we are going might intervene. “Jiminy- 
crickets,” we might say to ourselves, “look out, there’s a sheer 
drop ahead. I see the crack in the wall of the House of Usher. I 
see the stone legs of Ozymandias protruding from the sand.” 

And what of the anthropological collections of our National Mu- 
seum of Man? I know that in the future, people everywhere will be 
grateful that we have preserved the evidence of how different we all 
are, for in this recaptured sense of diversity there is pride and iden- 
tity. These two words also speak eloquently to the collections of the 
Museum of African Art, which in August became a member of the 
Smithsonian family by an Act of Congress, inspired by our former 
Regent Hubert H. Humphrey. The art objects in this newest of 
the Smithsonian’s museums capture with striking force and beauty 
the symbolic richness and cohesiveness of the societies which 
created them, and form today a substantial part of the cultural 
heritage of millions of our citizens. Whether through objects or 
films, documents or symbols, we will always hunger to know who 
we are and were so that we may take comfort in being ourselves 
and not anyone else. 

All these things and many more embody our perceptions of 
service to people. They are diffused outwards in a continual stream, 
helping to evoke our past, preserve our present, and lend convic- 
tion to our future. 


[et7)) 


There have been a number of changes in senior staff positions at 
the Institution this year. Our accomplished treasurer for a decade, 
T. Ames Wheeler, retired June 30, though he will continue to serve 
as a member of the Regents’ Investment Policy Committee. Mr. 
Wheeler has been succeeded as treasurer by Christian C. Hohen- 
lohe, the former assistant treasurer and former executive assistant 
to the Secretary. Mr. Richard Ault, our energetic director of Support 
Activities, retired to Arizona in July to pursue his lifelong interest 
in aviation. His former responsibilities have been assumed in large 
measure by the very able Tom L. Peyton, our director of the Office 
of Facilities Services, who came to the Institution this year from the 
General Services Administration. The very resourceful Porter Kier 
resigned in June as director of the National Museum of Natural 
History to resume his research activities and has been succeeded 
temporarily by James F. Mello as acting director, while the search 
for a permanent director continues. Off for other vineyards went 
Dennis Gould of our Traveling Exhibition Service, Carl Larsen, our 
director of Public Affairs (succeeded by Alvin Rosenfeld), and 
Edward Kohn, the assistant director of the National Zoo. The skill- 
ful and diplomatic Dean Francis B. Sayre retired this year from the 
Woodrow Wilson International Center for Scholars, and his col- 
league George Packard, the center’s assistant director, has left to 
become the dean of the Johns Hopkins School of Advanced Inter- 
national Studies. As always, we are sorry to have lost these and 
other industrious co-workers at the Institution, but we rejoice in 
having them as colleagues in the vital cultural pursuits of America. 

We have been fortunate in welcoming some fine new senior staff 
to the Smithsonian this year. Two new museum directors, Noel 
Hinners from nasa and Roger Kennedy from the Ford Foundation, 
have been selected and promise to give fresh new leadership to their 
very popular museums, the National Air and Space Museum and 
the National Museum of History and Technology, respectively. Dr. 
Robert Maloy has come to head the Smithsonian Libraries unit, 
and Glen Ruh has joined us in the new position of Coordinator of 
Publications. With the help of these exceptional personalities, the 
Smithsonian will move positively and smoothly into the future. 

On December 7th, the Institution suffered an immeasurable loss 
in the death of its sixth Secretary (1945-52) and long-time asso- 
ciate, Alexander Wetmore. I will always remember Alex as a friend 


[ 18 ] 


and inspiration in ornithology and as an able, practical administra- 
tor as Secretary. Having assumed the Secretaryship amidst the 
trying times of the war, he went on to lay the groundwork for two 
additional Smithsonian museums, the National Museum of History 
and Technology and the National Air and Space Museum. During 
his tenure, the Institution also assumed control of the biological 
research station in Panama (now part of the Smithsonian Tropical 
Research Institute), celebrated its own centennial in 1946, and 
undertook significant construction of the National Zoo. 

Dr. Wetmore’s career at the Smithsonian began in 1924, when he 
joined the Institution as superintendent of the National Zoo, and 
then, less than a year later, he became assistant secretary for 
science and director of the National Museum of Natural History. 
A museum man, he was also a man of the world of birds, and he 
served both with remarkable devotion. He was a scholar of inspired 
intensity and a proud man with a gift of humility and understand- 
ing. He enriched this Institution and the lives of those who knew 
him; his pursuit of his life’s work somehow never interfered with 
his capacity for compassion and friendship. 

The Smithsonian is one of those rare places in the world that still 
clings to its memories of the wonderful people who helped to build 
and shape it—none more so than Alex Wetmore, who shared his 
genius with the past and the future, and who will always be re- 
spected for his scientific contributions and loved for himself. In 
Coventry Patmore’s phrase, he lived in the “traditions of civility.” 
He shall not be forgotten. 


[19 ] 


Board of Regents 


The Board of Regents held three formal meetings during the last 
year, as well as a number of additional executive committee meet- 
ings. The JANUARY 22, 1979, meeting of the Board of Regents was 
designated The Alexander Wetmore Memorial Meeting in honor 
and in memory of the late sixth Secretary of the Smithsonian In- 
stitution, who died on December 7, 1978. The Regents noted that 
“This gentle and affectionate man, loved by all who knew him, 
made invaluable contributions to the Smithsonian and to biological 
science.” 

The Regents recognized both the distinguished services of Repre- 
sentative Elford A. Cederberg as a Regent of the Institution and 
his profound effect on our nation through his twenty-six years in 
the Congress of the United States. This recognition was bestowed 
at the conclusion of Representative Cederberg’s term in Congress. 

The board memorialized the untimely death of Representative 
Leo J. Ryan, who, although a Regent for only a short period, had 
expressed an intense interest in the affairs of the Institution. 

The Board of Regents welcomed newly appointed Regents from 
the House of Representatives, Messrs. Silvio O. Conte of Massa- 
chusetts, Norman Y. Mineta of California, and Frank Thompson, 
Jr., of New Jersey. 

The financial report was reviewed in detail and a special oral 
presentation was made concerning past, present, and future projec- 
tions of all Institution funds. The board approved the revised 
statement of investment objectives recommended by the Invest- 
ment Policy Committee for the guidance of the investment man- 
agers. 

The Regents approved the Five-Year Perspective (later known as 
the Five-Year Prospectus) covering fiscal years 1980-84. The 
planning process continues in tandem with the annual budget 
cycles, and the five-year plan will be updated annually. 

The Regents approved continued study of the proposed develop- 
ment of the quadrangle in the south garden area and authorized 


[ 20 ] 


the use of $100,000 of nonappropriated funds for continuing the 
development of preliminary plans and program details leading to 
the presentation of an appropriate legislative proposal. 

The Regents considered proposed bylaws that they plan to adopt 
in the near future. 

The Secretary was authorized to continue negotiations with the 
Boston Athenaeum for acquisition of the Gilbert Stuart portraits of 
George and Martha Washington. 

The Regents approved a Program of Regents’ Fellowships. These 
fellows, perhaps two or three scholars of great distinction, would 
enrich the intellectual atmosphere of the Institution and would 
explore areas of scholarship not already intensively studied here. 
The program would be evaluated periodically. 

The board expressed its support of legislation to raise the statu- 
tory budget ceiling for programs at Barro Colorado Island, part of 
the Smithsonian Tropical Research Institute in Panama. 

The Regents approved reports concerning the membership and 
acquisitions of the National Collection of Fine Arts Commission 
and the National Portrait Gallery Commission. The Regents also 
received the report of the Hirshhorn Museum and Sculpture 
Garden. 

The chairman of the National Armed Forces Museum Advisory 
Board (NAFMAB) recommended a change in the status of the board 
to reflect its current advisory role with the Eisenhower Institute for 
Historical Research in the National Museum of History and 
Technology. The matter was to be considered by NAFMAB. 

The Institution’s continuing attention to the recommendations of 
the General Accounting Office report, the report of the Regents’ 
Audit and Review Committee, and the report of the Surveys and 
Investigations Staff of the House of Representatives, has resulted 
in implementation of virtually all of the recommendations. 

Progress reports on continuing projects of the Institution included 
the Museum Support Center status of planning; Smithsonian 
Exposition Books plans; Mall Parking Study, Phase II; a description 
of approved projects under the special program for collections 
acquisitions and scholarly and educational outreach projects; trans- 
fer of the Trade (Tariff) Commission Building; Equal Opportunity 
Program describing Affirmative Action Plans; the status of major 
renovation and repair projects of various Smithsonian buildings; the 


[ 21 ] 


status of the collections inventory project; participation by the 
Institution in the celebration of the Einstein Centennial and the 
International Year of the Child; Smithsonian Television Programs; 
and the National Associates Program. 

The Board of Regents voted to confer the title of Regent Emeritus 
upon George H. Mahon for his long and faithful service to the 
Institution. Mr. Mahon retired from the Congress of the United 
States and had been a Regent since 1964. 


MAY 7, 1979, MEETING: The spring meeting of the Board of Regents 
was held in the Regents Room and was called to order by the 
chancellor, and notice of the Executive Committee meeting held on 
April 18, 1979, was taken. 

The board considered a draft of bylaws which will be acted on 
at the next meeting. It was noted that the enabling statute for the 
Smithsonian Institution, codified as subchapter 1 of Chapter 3, 
Title 20, U.S. Code, defines with considerable specificity many of 
the procedures and policies usually set forth in an organization’s 
bylaws, and the bylaws of the Board of Regents will convey the 
methods and rules by which the board intends to conduct its super- 
visory and fiduciary activities. 

The financial reports indicated that preliminary hearings on the 
federal budget for fiscal year 1980 were favorable. The nonappro- 
priated trust-funds budget, when initially presented, proved to be 
somewhat conservative, and projections for the future showed a 
higher return on investment income, as well as results of auxiliary 
activities. As a result of an earlier recommendation to select a new 
certified public-accounting firm to conduct the annual audit of the 
nonappropriated trust funds, the selection of Coopers and Lybrand, 
made by the Executive Committee, was ratified by the Board of 
Regents to begin with fiscal year 1979. It was pointed out that the 
change in the auditing firm, a common practice in financial busi- 
ness, was not in any way a criticism of the present auditors, but 
rather a desire to have a new look at the accounting and financial 
operations of the Institution. 

The Secretary submitted a written report on progress to date 
concerning the South Quadrangle development, detailing par- 
ticularly the recent pledge of $1 million from the Japanese govern- 
ment toward the cost of the project. The revised architectural con- 


[ 22 ] 


cept was described and the new model was shown, and the review 
of legislative action to authorize and fund further action revealed 
that favorable action by the Congress was anticipated. The Secre- 
tary advised the Regents of the creation of an ad hoc committee to 
assist in raising funds for the project. 

With the Regents’ consent, the Smithsonian and the Boston 
Athenaeum decided to postpone a final agreement concerning 
acquisition of the Gilbert Stuart portraits of George and Martha 
Washington, pending the result of a Boston-based fundraising 
campaign. 

The Board of Regents approved publication of the Smithsonian 
Exposition books entitled Animals Alive and The American Land, 
contingent on confirmation by the Executive Committee that 
satisfactory test-mailing results have been received. Three other 
projects, selected for preliminary development based on reader 
surveys, include a book on the sun and a series of children’s books. 

The research at the Chesapeake Bay Center for Environmental 
Studies is presently being conducted on land holdings sufficient to 
enable the Institution to control and monitor the Rhode River 
estuary and enable the center to pursue its research in upland 
ecology, watershed studies, and estuarine ecology. It was reported 
that scientific integrity of the area could be protected by acquisition 
of additional land, and the Secretary was authorized to pursue the 
matter. 

The board approved the acquisition and operation of aircraft for 
research purposes in connection with a coral-reef project, to be 
conducted by the National Museum of Natural History in the 
Pacific and Indian oceans. 

The board expressed its approval of the introduction of legisla- 
tion to extend the existing appropriations authority of the National 
Museum Act. Also, the Regents are supporting pending legislation 
to raise the ceiling on appropriations for Barro Colorado Island at 
the Smithsonian Tropical Research Institute. 

The Regents approved the award of the Henry Medal to Dr. 
Porter M. Kier in recognition of his important contributions to the 
Smithsonian Institution and his successful stewardship of the Na- 
tional Museum of Natural History. 

The Secretary reported to the Regents on various programs. 
The Museum Support Center project is progressing and an appro- 


[ 23 ] 


priations request for construction funds is pending in the 1980 
federal budget; the National Armed Forces Museum Advisory 
Board generally agreed that the board should continue in its present 
form and meet at more frequent periodic intervals to offer advice 
and assistance to Smithsonian programs concerned with armed- 
forces history; the transfer to the Smithsonian of the Museum of 
African Art was proceeding and the necessary transfer arrange- 
ments were being worked out. Status reports were presented on 
major plant-improvement projects: the National Museum of the 
Building Arts, the Trade (Tariff) Commission Building, the Mall 
Parking Study, television programs, the Smithsonian Science In- 
formation Exchange, and the National Associates Program. 

On the evening preceding the Regents meeting, at the Regents 
dinner, the Secretary, on behalf of the Board of Regents, presented 
to T. Ames Wheeler, retiring treasurer, the Secretary’s Gold Medal 
for Exceptional Service. The Regents wished to record their special 
appreciation to Mr. Wheeler in recognition of the substantial con- 
tributions he made to strengthening the Institution’s financial- 
management systems and controls, in guiding and directing its 
increasingly significant auxiliary activities, and in providing con- 
stant wise counsel to the Secretary and the board on financial and 
administrative matters. The Regents approved the appointment of 
Mr. Christian C. Hohenlohe to succeed Mr. Wheeler as treasurer 
of the Institution. 


SEPTEMBER 17, 1979, MEETING: The autumn meeting of the Board of 
Regents took place in the Regents Room and was called to order 
by the chancellor. It was noted that the Executive Committee met 
on August 20, 1979. 

The board had previously considered a draft of bylaws by which 
the Regents would administer the Institution. The board adopted 
the bylaws and authorized their printing and distribution. Appoint- 
ments to the Regents’ Audit and Review Committee, established in 
the bylaws, and to the Regents’ Personnel Committee, were 
affirmed. 

A detailed report on the financial affairs of the Institution dis- 
closed the status of the fiscal year 1980 and 1981 federal appropria- 
tion requests, the supplemental request for 1979, and the non- 
appropriated funds budget. The proposed federal budget for fiscal 


[ 24 ] 


i 


et 


., ye 
oe 


i 


This row of nine Capitol Hill townhouses, including the one-time residence of 
Frederick Douglass, comprises the Museum of African Art. Below. A young visitor 
to the museum admires a sculpture of the Luba people of Zaire. (Photo credit for 
both pictures: Eliot Elisofon Photo Archives, Museum of African Art.) 


year 1981 was reviewed and approved for submission to the Office 
of Management and Budget, together with a preliminary budget of 
the nonappropriated funds for fiscal year 1981. The board voted 
to confirm the authority of the Secretary to establish on behalf of 
the Institution and any of its bureaus such commercial bank ac- 
counts as are necessary for the conduct of its business. 

A draft update of the Five-Year Prospectus of the Institution for 
fiscal years 1981-85 was circulated for review and consideration 
by the Regents, and a report by the Investment Policy Committee 
was received. 

P.L. 96-36 was signed by the President on July 20, 1979, author- 
izing planning and up to $500,000 to be appropriated for the South 
Quadrangle Project. The Secretary reviewed the status of the In- 
stitution’s budget request for the planning in the current appropria- 
tion bill and reviewed plans for fundraising in the private sector. 
The Institution expects to seek authorization to complete planning 
and to construct the project in the Second Session of the Ninety- 
sixth Congress. 

The Museum of African Art officially became a bureau of the 
Smithsonian on August 13, 1979. In accordance with P.L. 95-414, 
the Regents appointed ten members to the Commission for the 
Museum from its former board, and the Regents will appoint five 
remaining commission members at the January meeting. 

Publication of The Smithsonian Book of the American Land was 
approved. 

A draft of an updated survey of Smithsonian property was 
presented for the Regents’ review. For each Smithsonian facility, 
the survey provides identification and purpose; location; size; date, 
type, and cost of acquisition; and details of major repairs, renova- 
tions, or improvements. Revised and updated as required, the survey 
will supplement the Five-Year Prospectus and the Programs and 
Activities book and will provide a useful cross-reference to the 
Institution’s annual budget request. 

The Regents voted to approve the naming of the Silver Hill 
facility of the National Air and Space Museum “The Paul E. 
Garber Preservation, Restoration, and Storage Facility” in honor of 
Mr. Garber’s sixty years of service at the Smithsonian. 

The Secretary reported on the status of: 

—the Museum Support Center, on which construction may soon 
begin; 


[ 26 ] 


—transfer of the Smithsonian Science Information Exchange to the 
Department of Commerce; 

—special programs for collections acquisition, scholarly studies, 
and educational outreach. 

The board approved presentation of the James Smithson Medal 
to Pope John Paul II on his visit to the United States in October 
1979. 

The Regents noted the award of the Secretary’s Medal for Ex- 
ceptional Service to Dorothy Rosenberg and approved their own 
resolution recognizing her effective work for over two decades. 


[ 27 ] 


SMITHSONIAN INSTITUTION OPERATING FUNDS 


Fiscal Years 1970 and 1975-1979 


(In $1,000,000’s) 


200 


FUNDS PROVIDED 


175 


Auxiliary 
and 


a: 
v 
~ 
S 
u 
Qo. 
° 
M 
a. 
ou. 
oO 
S 
cS} 

Zz 


Bureau 


Trust Funds 


(Gross Revenues) 


Activities 


150 


Expenses 


125 


Federal Grants 
and Contracts 


Appropriations 


Federal 


“hmm 


: ‘i 
. AN 


Od 


B55 
SSE 


OX 


25 


oO 
“aren 
<x 


seen 


BAAS 


on 
sees | 
ee 
050-0 | 
0,0,0.8 
settee 
Sete 
oe 
oretete® 


100 


75 
50 
25 

0 


1976 1977 1978 1979 


1975 


1970 


200 


FUNDS APPLIED 


To Plant and Endowment 


Administration and Facilities Services 


175 


150 


125 


Auxiliary and Bureau Activities Expenses 


100 


History and Art 


_ Special Programs 
~Public Service 


Rell Z —Museum Programs 


fw 
\ 


IN 


TL 


ys, 
50 


- 
Ll 
iN 


Science 


= \ 


wy 
N 


i 


\ 


> — 


1976 1977 1978 1979 


1975 


1970 


Smithsonian Institution - 1979 
FINANCIAL REPORT 


CHRISTIAN C. HOHENLOHE, TREASURER 


Summary: Fiscal year 1979 was a generally favorable year for the 
Smithsonian, with substantial financial support from all sources and 
better-than-balanced budgets. As demonstrated by the chart on the 
facing page, there was again overall growth in the Institution’s 
funds, sufficient primarily to continue existing programs but also, 
in a few cases, to pursue new initiatives. A welcome newcomer to 
the Smithsonian family during the year was the Museum of African 
Art. A federal appropriation to the Institution for the museum’s 
operating support permitted the acquisition to take place on August 
13, 1979, and the financial activities of the museum since that date 
are incorporated in this report. 

Generous congressional support of the Institution continued in 
fiscal year 1979, with overall appropriations totaling over $110.5 
million, an increase of more than $6 million over the previous year. 
These federal appropriations provide core support for the Institu- 
tion’s basic research, exhibition, and education programs; for ac- 
quisition, care, documentation, and study of the national collections; 
and for construction, maintenance, restoration, and protection of all 
Smithsonian facilities. While much of the increase over the prior 
year was necessary to cover the inflationary costs felt throughout 
Smithsonian operations, additional funds were provided for high- 
priority needs, such as collection inventories and the multiple- 
mirror telescope. Appropriations also permitted substantial progress 
on the National Zoo Master Plan construction and on planning for 
the Museum Support Center in Suitland, Maryland. Congressional 
understanding and backing of the Institution’s research and educa- 
tion programs are deeply appreciated. 

In recent years, as these financial reports have indicated, the 
enthusiastic public acceptance of the Smithsonian Associates Pro- 


[ 29 ] 


gram and other educational auxiliary activities, as well as gifts and 
grants from individuals and foundations, have enabled the Institu- 
tion to support a significant portion of its programs from nonappro- 
priated funds. Net revenues from these sources declined in fiscal 
year 1979 but were sufficient to continue the $2-million-per-year 
program established last year for major collections acquisition, 
scholarly studies, and educational outreach, as well as numerous 
operating allotments to Smithsonian bureaus and programs, and 
reserves for construction and land acquisition. But for the success 
of auxiliary activities, appropriations would have been sought for 
many of these projects. Because of favorable projections for unre- 
stricted fund activities and as a measure to reduce directly the 
Smithsonian’s costs to taxpayers, the Board of Regents approved 
the application this year of $1 million of nonappropriated funds to 
support expenses for the Smithsonian fellowship program and costs 
of certain leased space that previously had been covered by appro- 
priated funds. In recognition, however, that current financial suc- 
cesses are not guaranteed in the future, a transfer of the unrestricted 
fund surplus of over $2.5 million to endowment was also author- 
ized, in order to ensure the Institution’s continued ability to provide 
nonappropriated funds for research and educational programs. 

This combination of congressional and private financial support, 
of grant funds and earned revenues, has been a source of strength 
to the Institution in meeting its goals and seizing new opportunities. 
A major new priority of the Institution, the South Quadrangle, will 
seek to draw further on this dual public/private partnership. The 
anticipated financial plan for this project, which will include con- 
struction of an Oriental Gallery and a new building for the Museum 
of African Art in the area south of the Smithsonian “Castle,” will 
rely on contributions, self-generated funds from auxiliary activities, 
and appropriated funds. As an initial commitment to the project, 
the Board of Regents authorized a transfer of $1,385,000 to plant 
funds from unrestricted nonappropriated trust funds for ongoing 
and future planning and design effort. The government of Japan 
informed the Institution during the year that it will provide $1 
million towards construction of the Oriental Gallery. 

In an ongoing effort to provide full financial information on 
Smithsonian activities in this report, minor changes have again been 
made in Table 1 and the supporting tables that follow. 


[ 30 ] 


TABLE 1. Financial Summary 


(In $1,000’s) 


INSTITUTIONAL OPERATING FUNDS 


FUNDS PROVIDED 
Federal Appropriations—Salaries & Expenses ..... 
Federal Agency Grants & Contracts .............. 
Nonappropriated Trust Funds: 
BEINACICC FUTPOSES .........600sessececes 
For Unrestricted & Special Purposes: 
Auxiliary & Bureau Activities Revenues—Gross 
—Less Related Expenses ..................4.. 


Auxiliary & Bureau Activities Net Revenue .. 
Investment, Gift, and Other Income ......... 


Total Net Unrest. & Special Purpose Revenue. . 
Total Nonappropriated Trust Funds*—Gross ... 


—Net..... 
Total Operating Funds Provided—Gross ......... 
Oe ai eed oe ey els 

FUNDS APPLIED 
SR a ae cle wee a wis selene ee 


—Less SAO Overhead Recovery ............... 
SS a ee 
MEE Se ic a eds wc nwa ek eens oes 
IPE ae ress bP elec S's oy eine sb Wa es 
Ey 2 oe. geen winin a 4; diel wei epee 
Associates and Business Management ............ 
Administration—Federal** 

—Nonappropriated Trust Funds 

—Less Smithsonian Overhead Recovery ..... 
Facilities Services 


eee ep oe aye (eh) oe eee ee eo ee 


ae ele Mie 6 8 & Pit V8. ele 10s Vi eas wie ex © w le 


Total Operating Funds Applied ................. 
Transfers (Nonappropriated Trust Funds) 

Unrestricted Funds—To Plant ................. 

—To Endowments .......... 

Restricted Funds—To Endowments ............ 


Total Operating Funds Applied & Transferred Out 


CHANGES IN NONAPPROPRIATED TRUST 

FUND BALANCES 
Restricted Purpose (Incl. Fed. Agency Grants & 
Contracts) 
Unrestricted—General Purpose .................. 
poeOCIAL PMTQOSE .... <2 cece sneer nes 


iit Mtns eee aS CS edi She eeaese eee ease evasuaee 


YEAR-END BALANCES— 

NONAPPROPRIATED TRUST FUNDS 
ES 
Unrestricted—General Purpose 

PCR IE ETEIOSE «co olsen do xin wwe 


es ek ee 


ie ween ans a Se e's @ = Sas 6 6 6 0.6 €@ © bis 6.0 6 & 6 Hie exe S 


OTHER FEDERAL APPROPRIATIONS 


Smithsonian Science Information Exchange 
EC STCMICY PYOCTAM 6005 es oe ev in sense ees 
Construction 


Total Federal Appropriations (Incl. S&E above).. 


Seka ae © OS SOCKS O16 Be Sse 8 Oe Y © 


$100,219 


FY 1977 


$ 85,236 
10,515 


4,407 


41,884 


(32,485) 


9,399 


1,676 


11,075 
47,967 
15,482 


143,718 


$111,233 


103,293 


909 
9,921 
17k 


$109,544 


FY 1978 


$ 93,393 
Do? 


6,538 


55,189 
(43,070) 


12,119 


2,241 


14,360 
63,968 
20,898 


168,518 
$125,448 


$ 50,396 
(1,841) 
19,105 

2,799 
7,454 
1,981 
244 
6,346 
3,795 
(3,359) 
25,985 


112,905 
869 


3,271 
1,261 


$118,306 


$ 980 
850 
5,312 


$ 7,142 


$ 4,540 
4,932 
9,604 


$ 19,076 


$ 1,857 
4,000 
5,250 


$104,500 


FY 1979 


$ 98,202 
11,412 


4,577 


67,360 
(57,557) 


9,803 
3,394 


13,197 
75,331 
17,774 


184,945 
$127,388 


$ 53,002 
(1,850) 
20,245 

2,927 
8,003 
2,692 
304 
7,071 
4,134 
(4,038) 
27,790 


120,280 
1,857 


2,671 
413 


$125,221 


$ 171 
33 
1,963 


$ 2,167 


$ 4,900*** 


4,965 
11,567 


$ 21,432 


$ 2,063 
3,700 
6,575 


$110,540 


* Figures do not include gifts and other income directly to Plant and Endowment Funds: 
FY 1977 - $239,000; FY 1978 - $185,000; FY 1979 - $96,000. 


** Includes unobligated funds returned to Treasury: FY 1977 - $150,000; FY 1978 - $112,000; 


FY 1979 - $47,000. 


*** Includes addition to fund balance to reflect acquisition of Museum of African Art restricted 


purpose fund balance of $189,000. 


Operating Funds—Sources and Application 


As indicated in Table 1, as well as the chart on page 28, there has 
been substantial and sustained growth in gross operating revenues 
to the Institution in recent years. Total gross operating funds in- 
creased over $16,000,000, or 10 percent, from $168,518,000 in fiscal 
year 1978 to $184,945,000 in fiscal year 1979. Federal appropria- 
tions constitute 53 percent of total gross operating funds provided, 
federal agency grants and contracts 6 percent, and nonappropriated 
funds 41 percent. 

The growth in net operating funds, after deducting the necessary 
expenses of the nonappropriated fund auxiliary activities, was a 
more moderate 2 percent. These funds, available to support the 
wide range of Smithsonian programs, are 77 percent from federal 
appropriations, 9 percent from federal agency grants and contracts, 
and 14 percent from nonappropriated sources. Application of these 
monies by all Smithsonian bureaus is displayed in Table 2, with 
further supporting detail contained in other tables. 


FEDERAL APPROPRIATION 


Federal appropriations provided $98,202,000 toward the Institu- 
tion’s operating needs in fiscal year 1979, an increase of $4.8 million 
over the previous fiscal year. As in the past, much of this increase 
($3,300,000) was required to fund legislated salary increases; sev- 
eral program areas, however, received significant new funding, 
including an Institution-wide collections inventory program, the 
newly acquired Museum of African Art, the multiple-mirror tele- 
scope project of the Smithsonian Astrophysical Observatory, and 
the Research Awards Program. In addition, some $160,000 was 
appropriated directly to the Smithsonian for programs previously 
supported through grants awarded by the National Endowments 
for the Arts and Humanities. As referred to above, $1,000,000 of 
nonappropriated funds was applied in fiscal year 1979 to reduce the 
cost to the federal appropriation of leased space ($400,000) and the 
Institution’s fellowship program ($600,000). 


FEDERAL AGENCY GRANTS AND CONTRACTS 


Grants and contracts from federal agencies totaled $11,412,000 for 
fiscal year 1979, a slight increase over the previous year. These 


[ 32 ] 


funds, representing 9 percent of net operating revenue, continue 
to constitute a very important source of support for the Institution’s 
research. As in previous years (see Table 3: Grants and Contracts— 
Expenditures), the National Aeronautics and Space Administration 
provided the majority of the awards (about 73 percent of the total), 
primarily for research and experimentation at the Smithsonian 
Astrophysical Observatory. Some examples of the projects supported 
by federal agency grants are: studies of biological systems in the 
Antarctic, research in medical entomology and establishment of a 
lower mammal tumor registry directed by the National Museum of 
Natural History, analysis of lunar geological features by the Na- 
tional Air and Space Museum, experiments in high-energy astron- 
omy by the Smithsonian Astrophysical Observatory, and investiga- 
tions of the chemical components of marsh water at the Chesapeake 
Bay Center for Environmental Studies. 


NONAPPROPRIATED TRUST FUNDS 


Nonappropriated trust funds continue to be the second-largest 
source of operating support for the Smithsonian. During fiscal year 
1979, gross trust funds provided rose by 18 percent over fiscal year 
1978; however, net funds provided, after deduction of costs incurred 
by central auxiliary and bureau activities, decreased 15 percent to a 
level of $17,774,000, compared to $20,898,000 in fiscal year 1978. 
This decrease was due to reduced gifts and grants for restricted pur- 
poses, as well as a decreased net revenue from auxiliary activities. 
The net revenue, for both restricted and unrestricted purposes, con- 
stitutes 14 percent of total net operating funds provided to the 
Institution. 

Revenue for Restricted purposes totaled $4,577,000 this past 
year (see Table 4) and was derived from gifts ($1,775,000), invest- 
ment income ($2,075,000), and other sources ($727,000), including 
fundraising activities of the Archives of American Art and the 
museum shop of the Freer Gallery of Art. Endowment investment 
income, as discussed below, provides major support for the Freer 
Gallery of Art and oceanographic research at the Fort Pierce 
Bureau, as well as funding a large number of specific research and 
educational projects annually. Major gift support was received dur- 
ing the year for important collection acquisitions at the Hirshhorn 
Museum and Sculpture Garden, National Collection of Fine Arts, 


[ 33 ] 


TaBLe 2. Source and Application of Operating Funds 
Year Ended September 30, 1979 


(Excludes ss1e, Special Foreign Currency Funds, Plant Funds and Endowments) 


Funds 


FUND BALANCES— 
1 October 1978 


FUNDS PROVIDED 
Federal Appropriations 
Investment Income 
Grants and Contracts 
Gifts 
Sales and Revenue 
Other 


ee ee 
SP ce OO 

a» @ = «a Ss 
» p66 Sie © eee cele) a ences) ae 
er Om, (ate ee ele 


o's we ee ee BR 8 8 eee) Ss Se elce 
= os ape @ © 


FUNDS APPLIED 
Science: 
Assistant Secretary 
Natl. Mus. of Nat. History .. 
Astrophysical Observatory . 
Less Overhead Recovery .. 
Tropical Research Inst. ...... 
Radiation Biology Lab. 
Natl. Air & Space Museum .. 
Chesapeake Bay Center 
Natl. Zoological Park 
Center for Study of Man . 
Fort Pierce Bureau 


ow alin 


Total Science 


History and Art: 

Assistant Secretary 
Natl. Mus. of Hist. & Tech. . 
Natl. Collect. of Fine Arts .. 
Natl. Portrait Gallery 
Hirshhorn Museum 
Freer Gallery of Art 
Archives of American Art .. 
Cooper-Hewitt Museum 
Museum of African Art 


Total History and Art 


a a C.e e « ete a 


eee ewe 
a6 (eo) we le) Se, 


Ss oie ale a. wlio 


Public Service: 
Assistant Secretary 
Reception Center’ ys... 23. 
Anacostia Museum ......... 
Intl. Exchange Service 
Performing Arts<./:...0.¢ J0544 
Smithsonian Press 
Exposition Books 


he ef eto) an et 


ee ee 


Total Public Service .. 


Fed- 


eral 


funds 


98,202 


294 
13,248 
4,803 
2,025 
1,714 
5,363 
672 
7,854 
550 


36,523 


290 
6,421 
3,069 
2,265 
2,080 
554 
459 
467 
100 


15,705 


(In $1,000’s) 


Nonfederal Funds 

Unrestricted Restricted 
Total Aux- Spe- Grants 

non- iliary cial and 
federal Gen- activ- pur-  Gen-  con- 
funds eral ities pose eral tracts 
$ 19,076 $ 4,932 $ -O- $ 9,604 $ 4,428 $ 112 
4,605 2,276 — 254 2,075 — 
11,412 —_— —_— —_— — 11,412 
2,457 163 475 44 L775 _— 
66,885 — 64,846 2,039 —_ — 
1,384 40 — 617 FeV 5 — 
86,743 BATS. (65,324 2,954 4577 Fiat 
$105,809 $ 7,411 $65,321 $12,558 $ 9,005 $11,524 
$ 237 $ 46 $ — $ 4 $ 21 5 166 
2,319 116 —_— 703 519 981 
11,663 1,883 — 180 65 9,535 
(1,850) (1,850) nm ae = = 
215 55 — ieis 26 1 
158 — — 36 18 104 
1,481 40 — 1,192 167 82 
529 259 — 114 4 fod 
297 48 —_— 92. 54 103 
89 1 — — 62 26 
504 —_ — — 504 —_— 
15,642 598 — 2,454 1,440 11,150 
79 61 —_ 1 — jr 
585 26 — aS 251 (5) 
611 49 —_— 290 PAT — 
292 122 — 18 147 5 
459 62 —_— 387 10 _ 
1,072 L7. — — 1,055 —_ 
341 —_ — 40 301 —_ 
1,434 302 — 690 346 96 
20) — — 12, LS —_ 
4,898 639 —_— L75i 2,395 113 
313 284 — 27 2 — 
238 238 — — _ _— 
28 21 —_— 6 1 — 
37139 140 2,903 24 —_ 72 
1,690 — 1,690 —_ _— _— 
2,841 — 2,841 — —_ _ 
8,249 683 7 A34 oF = 72 


TasLe 2. Source and Application of Operating Funds—continued 
Year Ended September 30, 1979 


(Excludes ss1e, Special Foreign Currency Funds, Plant Funds and Endowments) 
(In $1,000’s) 


Nonfederal Funds 
Unrestricted Restricted 
Total Aux- Spe- Grants 
Fed- non- iliary _ cial and 
eral federal Gen- activ- pur-  Gen-  con- 
Funds funds funds _ eral ities pose eral __ tracts 
Museum Programs: 
Assistant Secretary ......... 2,095 127 22 — 85 20 — 
EI clniniieys «= <= + so ais-0 6m 107 — — — — — aa 
Conserv. Analytical Lab. .... 627 — — — — — — 
hyip ae 2,397 i52, 152 — — — — 
eee 1,167 26 — _ 19 7 — 
Traveling Exhib. Service .... 145 881 1 820 24 4 32 
rr 324 30 29 — 1 — — 
National Museum Act ...... 792 — — — — — — 
Total Museum 
oo 7,654 1,216 204 820 129 roi § 32 
Special Programs: 
Am. Studies & Folklife Pgm. 346 358 212 — 67 13 66 
Intl. Environmental Pgm. ... 382 — — — — — — 
Academic & Educational Pgm. 451 294 92 — 176 26 a 
Mesearcn AWards ........... 386 a“ — — — — — 
Collection Mgt./Inventory ... 482 — — — — — — 
Total Special Programs 2,047 652 304 == 243 39 66 
Associates Program ......... — 34,554 245 34,249 1 4 55 
Business Management ...... — 13,199 — 13,199 — — — 
SMGMMRISEEAtION ............- 7,024. 4,569 4,007 419 70 71 2 
Less Overhead Recovery .. — (4,038) (4,038) — — — — 
Facilities Services .......... 27,090 694 701 — (7) — — 
Transfers Out/(In): 
oS 47* — a — — — a 
Coll. Acq., Schol. St., Outrch. — — 2,000 — (2,000) — — 
Liability Reserves .......... — — 500 — (500) — — 
Net Auxiliary Activities .... — — (8,803) 8,803 — — — 
Other Designated Purposes .. — — 982 397 (1,311) (68) — 
a re — 1,857 1,853 —_— 4 ae — 
BGOWMENE ..........0.000- — 3,084 2,571 — 100 = 413 —— 
otal Transfers ...... 47 4,941 (897) 9,200 (3,707) 345 — 


Total Funds Applied .. $98,202 $ 84,576 $ 2,446 $65,321 $ 991 $4,328 $11,490 


Adjustment to Opening Bal.**$ —$ 189$ — $ —$ — $ 187 $ 2 


FUND BALANCES 9/30/79.. $ -O- $ 21,432 $ 4,965 $ — $11,567 $4,864 $ 36 


* Unobligated funds returned to Treasury. 
** Addition to fund balance to reflect acquisition of Museum of African Art fund balance of 
$189,000. 


TaBLe 3. Grants and Contracts—Expenditures 
(In $1,000’s) 


Federal Agencies FY 1977 FY 1978 FY 1979 
Department Of DGRense ay o5.05 im en inn es $ 998 $ 968 $ 1,079 
Departmentof Enerey: 1. wisccis erred cc dea 157 266 304 
Department of Health, Education, 
and Veiare. oo: siceunce < shlemete «bh Seas 282 311 288 
Department: of Interior...) <4 opisae nse 155 4 65 
Bepartment. Of, State ho... scuslagks sss sae 282 15 -- 
Environmental Protection Agency ......... 452 422 31 
National Aeronautics and Space 
FGininistratiOn 2 oct in nigh and Be Ge ee 6,346 7,324 8,336 
National Endowments for the Arts and 
PIMA NeS. es Se ne ete re ne mes aes 356 226 105 
National Science Foundation .............. 315 400 385 
8 oo ee ond ee PRONE NIE Sam RP Rae 1,228 1,151 897 
i fc) | cP neee rare ben $10,571 $11,087 $11,490 


and the National Museum of Natural History; for documentation 
of the Catalogue of American Portraits at the National Portrait 
Gallery; for exhibits at the Cooper-Hewitt Museum and the Na- 
tional Museum of History and Technology; and for a range of 
research and other projects supporting virtually every aspect of 
Smithsonian interests. 

The Special Purpose fund category of Unrestricted Nonappro- 
priated Funds includes moneys generated by various bureau activ- 
ities, and allotments to bureaus as shares of income from shops and 
concession activities. Table 5 details the source and application of 
these funds by bureaus. The major sources of revenues are the 
National Air and Space Museum, with a new film, Living Planet, 
drawing large attendance at its theater, and the Cooper-Hewitt 
Museum in New York, which enjoys continued success with its 
membership and educational programs, fundraising auction, and 
museum shop sales. Also accounted for as transfers to special pur- 
pose funds are the allocations authorized for Collections Acquisi- 
tion, Scholarly Studies, and Educational Outreach ($2,000,000); the 
fellowship program, previously funded from federal appropriations 
($600,000); a reserve for potential magazine liabilities; and support 


[ 36 ] 


TaBLe 4. Restricted Operating Trust Funds* Fiscal Years 1977-1979 


Item 
te 77—lotal ........ 
mene 7e— Total ........ 


FY 1979: 


Museum of 

Natural History ..... 
Astrophysical 

SesetvatOry ........ 
National Air and 

Space Museum ...... 
Fort Pierce Bureau .... 
miner Science ......... 
Museum of History 

and Technology ..... 
National Collection 

oe tame Arts ........ 
National Portrait Gallery 
Hirshhorn Museum .... 
Freer Gallery of Art .... 
Archives of 

mamerican Art ....... 
Cooper-Hewitt Museum. 
Museum of African Art. 
a 


Total FY 1979 ... 


(In $1,000’s) 


Revenue Net Fund 

Trans- in- bal- 

Total fers crease ance 
Invest- rev- Deduc- in (de- endof 


ment Gifts Misc. enue’ tions (out) crease) year 


$1,690 $1,724 $ 993 $4,407 $4,901 $ 354 $ (140) $3,518 


2 16 1 19 65 150 104 36 
101 10 = 111 167 (10) (66) 946 
610 == a 610 504 (340) (234) 142 
243 109 1 353 185. (350)  (is2y 295 
35 217 (tO). 4242 251 7 (2) 365 
37 227 (11) 253 272 54 35 179 
23 99 2 124 147 14 (9) 332 
32 237 = 269 10 ae 259 512 
756 57 334 1,147 1,055 a 92 352 
14 96 356 466 301 = 165 340 
41 290 10 341 346 me (5): 322 
= = an! a 13 = (13) 174 
15 102 37 154 148 (10) (4) <* 322 


* Does not include Federal Agency Grants and Contracts. 


** Includes addition to fund balance to reflect acquisition of Museum of African Art 
fund balance of $187,000. 


for a number of other Institutional endeavors. Due to the success of 
its bureau activities, the National Air and Space Museum was able 
during the year to make a further transfer of $100,000 to the 
Lindbergh Chair of Aerospace History Endowment Fund, for a 
total amount transferred of $350,000 to date toward a goal of 


$900,000. 


[ 37 ] 


TaBLe 5. Unrestricted Special Purpose Funds 
Fiscal Years 1977-1979 
(In $1,000’s) 


Deductions 


Net Fund 

in- bal- 
crease ance 

(de- end of 


crease) year 


$1,875 $4,292 


951 


$ (95) $ 345 


148 321 
14 90 
14 me Be 
195 813 
24 145 
8 456 
(95) 108 
20 141 
=a 3 
1 1 
(11) 36 
500 2,400 
345 1,386 
— , 2008 
658 1,141 


Revenue 
Gifts 
Bu- and Pro- 
reau other Total Trans- gram 
Invest- activ- reve- reve- fers ex- 
Item ment ities nue nue in/(out) pense 
EY 2077 eters: S 3 $1,721 $387 $2,111 $ 828 $ 447 
FY 1978 .c.AGiver: $175 $1,327 $506 $2,008 $5,450 $1,284 
FY 1979: 
Museum of 
Natural History... $11 $ 2 $53 $ 66 $ 542 $ 696 
Astrophysical 
Observatory ..... 1 = 29 30 298 180 
Tropical Research 
Institute 6... — 40 — 40 107 87 
National Air and 
Space Museum .. 130 1,284 13° “LD Aay 16 241 
National Zoological 
Pale he tte 44 — 139 183 104 92 
Other Science ..... 1 7 20 28 150 145 
Museum of History 
and Technology .. 24 4 61 89 232 299 
National Collection 
of Fine Arts ..... be 2 79 92 103 290 
Hirshhorn Museum. 7 a 6 13 394 387 
Cooper-Hewitt 
Museum . «2/222. Pa 542 145 689 1 355 
Museum of 
African Art ..... — i a 17 (4) _— 
Exhibits Central ... 2 1 5 8 — 34 
Liability Reserves .. — — — os 500 _ 
Unallocated Acqui- 
sition, Schol. St., 
and Outreach .... — — — — 345 — 
Collections Acq. 
ESEIVE oe ons = os os — — — 
Support Activities 
and Other... 2% 4 Zit. 140 eit 272 919 456 
FY 1979 Total $254 $2,039 $661 $2,954 $3,707 $3,262 


[ 38 ] 


General Unrestricted Purpose funds include all unrestricted 
moneys provided ‘for general Institutional purposes, including 
auxiliary activity revenues (Tables 6 and 7). Net General Unre- 
stricted Purpose funds provided were lower in fiscal year 1979 than 
the prior year by approximately $1,500,000 (see Table 6). While 
investment income was substantially higher, due both to rising 
short-term interest rates as well as to prior-year additions to unre- 
stricted endowment, the net gains from auxiliary activities declined 
by almost $2,500,000. Contributing to this decrease were the appli- 
cation, for the first time, of rental charges to auxiliary activities 
occupying space in Smithsonian buildings, higher central admin- 
istrative overhead fees, and severe inflationary cost pressures. As 
shown in Table 7, the majority of auxiliary activity revenue comes 
from the Associates Program, primarily through the Smithsonian 
magazine, which continues to enjoy a widespread and enthusiastic 
reception. Also important in generating net revenue for other In- 
stitutional needs are Smithsonian Exposition Books, which bene- 
fitted this past year from the newly published Smithsonian Book 
of Invention as well as continued sales of earlier publications, and 
the Division of Performing Arts, which released nine recordings 
for sale to the public. The decline in net revenue from the Museum 
Shops, due to continued start-up costs of the Mail Order Divi- 
sion, was offset by the gain of the Smithsonian Institution Press, 
primarily from its mail sales of the new book The National Air and 
Space Museum. Significant financial support was also received from 
public concessions in various Smithsonian buildings. 

Notwithstanding this decline in unrestricted funds provided, the 
Institution was able to continue the support of numerous programs 
and central administrative units with these funds. Major operating 
support was provided to the Cooper-Hewitt Museum, the Office of 
American and Folklife Studies, the Office of Fellowships and 
Grants, the Visitor Information and Associates Reception Center, 
and the Office of Telecommunications, in addition to a large num- 
ber of small allocations to other bureaus of the Institution. Awards 
for program support, including collections acquisitions, were made 
to the Freer Gallery of Art, the National Air and Space Museum, 
the Smithsonian Tropical Research Institute, the Reception Center, 
the National Museum of History and Technology, and the Na- 
tional Portrait Gallery from funds raised by the Smithson Society 


[ 39 ] 


TaBLe 6. Unrestricted Trust Funds—General and 
Auxiliary Activities Fiscal Years 1977-1979 
(In $1,000’s) 


Item FY 1977 FY 1978 FY 1979 


FUNDS PROVIDED 


General Income: 


Pnventinente  eocos tytn siete tiers encore $1,154 $ 1,400 $ 2,276 
CSIES os oan a we PehgtOeee Mein EAT Shere ote cee 48 Tre 163 
Miscellaneotisins sscccaw pats. weet gated 84 48 40 
Total ‘General Income?<:.4 4% sk4n%k% 1,286 1,560 2,479 
Auxiliary Activities (net): 
PASSORIBERG iis Ug tidy al ate ten ene ens iia 6,580 7,656 6,429 
Business Management 
Museum: Shops 2.22.2 entire ee 828 738 287 
ASO OMCESSIONG! Fo. 50 opine sober da tens orn eo 1,651 1,567 1,641 
aa 62 REND ree PR rN AMON ae Fo (112) (169) (245) 
FPertornune Arts” 0207 2285 ees ee oe eats (343) 253 177 
Smithsonian IP EESS: sayh's sours «SOY Aer (108) (199) 292 
EXDIOSIEIN p BOOKS: asic sve aca ees = hoe ae (131) 2,105 1,036 
Traveling Exhibitions. {7.22.2 ence ee (79) (112) (142) 
Photo iServiees f'n os seer ene 9 (185) (275) 
Total Auxiliary Activities .......... 8,295 11,654 9,200 
Total Funds Provided (Net) ........ 9,581 13,214 11,679 


EXPENDITURES AND TRANSFERS 


Administrative and Program Expense ..... 6,735 7,974 9,231 
Less Administrative Recovery ............ 4,592 5,200 5,888 
Net Expense’ >. a. dacs eee oe 2,143 2,774 3,343 


Less Transfers: 
To Special Purpose and Restricted Funds 


for Program Purposes... 2)... 266 04% 1,350 5,700 3,879 
TortPlant Fands’. 2o6 2.0 ces. + eee 559 869 1,853 
Fo! Endowment: Funds: \)).6 % .(getiek Geet one 5524 3,021 2,571 

NET ADDITION TO FUND BALANCE ... 8 850 33 
ENDING EUND: BALANGE! >. 236:: sates $4,082 $ 4,932 $ 4,965 


[ 40 ] 


Tas.eE 7. Auxiliary Activities Fiscal Years 1977-1979 
(In $1,000’s) 


Sales Less 
and cost 
other of Gross Ex- 
Activity revenue Gifts sales revenue _penses 
ic a xe cee eens $39,786 $377 $18,129 $22,034 $13,739 
PR re) 5 dicivin tes c aiels'e ee eoa $53,420 $442 $23,536 $30,326 $18,672 
FY 1979: 
Ie ge a wwe $40,203 $475 $22,395 $18,283 $11,854 
Business Management: 
—Museum Shops* Sasol s tie daw 12,879 — 6,477 6,402 6,115 
E=QPCESSIONS ............. 1,748 — — 1,748 107 
0 ES 255 — — 255 500 
Performing SoS eee oe 3,080 — 875 2,205 2,028 
Smithsonian Press ........... 1,982 — 751 1,231 939 
eposition BOOKS ............. 3,877 — 1,364 2,513 1,477 
Traveling Exhibitions ........ 678 = — 678 820 
Photo Services (Administration) 144 — yy) 122 397 
MeuaeyY 1979 ......... $64,846 $475 $31,884 $33,437 $24,237 


* Includes Museum Shops, Product Development, Mail Order. 
** Includes Business Management Office, Belmont. 


*** Before revenue-sharing transfers to participating Smithsonian bureaus of 
$438,000 (FY 1977); $390,000 (FY 1978); and $397,000 (FY 1979). 


of the Associates. Other allotments this year provided for the full 
equipping of the new Laboratory Wing at the Chesapeake Bay 
Center for Environmental Studies and the renovation of the Dis- 
covery Theatre in the Arts and Industries Building, at which puppet 
shows are held, primarily for younger visitors. As referred to above, 
the Regents authorized continuation of the $2,000,000 annual pro- 
gram for major collections acquisitions ($1,000,000), scholarly 
studies ($500,000), and educational outreach ($500,000). These 
moneys are reserved in the Special Purpose Funds until expended 
by the recipient Smithsonian bureaus. 

Other major applications of unrestricted funds were transfers of 
over $1,800,000 to Plant Funds (discussed below) and the addition 
of over $2,500,000 to unrestricted endowment funds. 


[ 41 ] 


Net 
reve- 
nue*** 


(loss) 


$ 8,295 


$11,654 


$ 6,429 


287 
1,641 
(245) 
177 
292 
1,036 
(142) 
(275) 


$ 9,200 


Other Operating Programs 


Separate federal appropriations are also received for the Smithsonian 
Special Foreign Currency Program, which provides grants to United 
States institutions for field research in other countries in which 
“excess” foreign currencies are available, and the Smithsonian 
Science Information Exchange, which serves as a national source 
for the exchange of information on research in progress. The fiscal 
year 1979 appropriation for the Special Foreign Currency Program 
totaled $3,700,000, or $300,000 less than provided in fiscal year 
1978. This amount reflected an increase of $700,000 for grant 
awards and a reduction of $1,000,000 for the United States’ con- 
tribution to the campaign to save the Egyptian monuments at 
Nubia, the fourth and final payment of which was made in fiscal 
year 1978. The general areas of research and geographical activities 
of this program are contained in Table 8. 

The Smithsonian received an appropriation for the Smithsonian 
Science Information Exchange of $2,063,000 in fiscal year 1979, an 
increase of some $200,000 over the previous fiscal year. This in- 
crease covered essentially the cost of inflation experienced over the 
past few years. 


Construction 


The Institution received a federal planning and construction appro- 
priation of $6,575,000 in fiscal year 1979, somewhat higher than 
that provided in the previous year. As shown in Table 9, the 
greater part of this appropriation was for the National Zoological 
Park, $3,000,000 for construction of the Great Ape House, an im- 
portant part of the National Zoo’s continuing Master Plan, and 
$900,000 for restoration and renovation of existing structures at 
Rock Creek Park and Front Royal. A further $2,100,000 was appro- 
priated for ongoing repair to all other Smithsonian facilities, includ- 
ing phased projects to improve access for handicapped visitors, to 
correct existing hazardous conditions, to continue facade and roof 
repairs, and to improve fire-detection and -suppression systems. 
Finally, $575,000 was appropriated for use in association with fiscal 


[ 42 ] 


TaBLe 8. Special Foreign Currency Program 
Fiscal Year 1979—Obligations 


System- 

atic and 
environ- 

Archae- mental 

Country ology biology 
Sh $ — $ 4,157 
0 1,173,568 28,490 
Sy 1,536,674 134,536 
Sf oS ee 4,406 237,617 
NIA ee a —_ = 
5 $2,714,648 $404,800 


Astro- 
physics Grant 
and Museum admin- 
earth pro- istra- 
sciences grams tion 
$ — $¢ — $¢ — 
130,588 15,517 50,000 
50,167 80,803 16,702 
— 1,145 266 
— 1,104 — 
$180,755 $98,369 $66,968 


Total 


$ 4,157 
1,397,963 
1,818,882 

243,434 
1,104 


$3,465,540* 


* An additional amount of $182,000 was obligated by the National Science Foundation, 
Science Information Program, for translations and printing of scientific publications 


requested by the Smithsonian Institution. 


TABLE 9. Construction and Plant Funds Fiscal Years 1977-1979 
(In $1,000’s) 


Sources 


FUNDS PROVIDED 


Federal Appropriations 
National Zoological Park 
Museum Support Center .............. 
Restoration & Renovation of Buildings. . 


ey) .6 mt 6 we 


Total Federal Appropriations 


Nonappropriated Trust Funds 
Income—Gift and Other 
Cooper-Hewitt Museum 
Chesapeake Bay Center 
South Quadrangle 


Total Income 


see & 6.6 & ss a ne 
Se Be 6 we Bee ee ee 


Transfers from Current Funds: 
EN ee ae eee 
Chesapeake Bay Center 
Cooper-Hewitt Museum 
Museum of African Art ............ 
NMNH—West Court & Shops 
National Zoological Park ........... 
Renwick Gates (Victorian Garden) ... 
Sensory and East Gardens 
0 ES SO 
Tropical Research Institute 


va ee Sb eC ote Beh 


iy re a Sw Tee eh ae eh 


ee os ee 


Total Transfers 


Total Funds Provided 


Ciete. ee 6 O46 ee ee ee 2 ee 


559 
$10,094 


FY 1978 


$2,500 
325 
2,425 


5,250 


FY 1977 


FY 1979 


a 


year 1978 funds for architectural and engineering planning for 
the Museum Support Center. Construction of this facility, which 
will provide 302,000 gross square feet of storage, office, laboratory, 
and conservation space, is scheduled to begin in fiscal year 1980. 
The Institution is being assisted by the General Services Admin- 
istration in the management of the design and construction of this 
project. 

A total of $1,857,000 was allocated to construction and land 
purchase from nonappropriated trust funds during the year, the 
majority of which ($1,385,000) was for development of the South 
Quadrangle, described more fully above. A total of $135,000 was 
transferred to this project for development of a conceptual study 
and preliminary engineering surveys, and the remaining $1,250,000 
will fund architectural plans in fiscal year 1981. The South Quad- 
rangle will be a major funding priority, for both appropriated and 
nonappropriated funds, in the future. 

Additional support ($411,000) was provided for continued land 
acquisition at the Chesapeake Bay Center for Environmental 
Studies, and minor transfers to plant funds were also made for 
other construction projects. 


Endowment and Similar Funds 


The total market value of the Smithsonian Endowment Funds was 
$66,619,000 on September 30, 1979, as compared to $58,097,000 on 
September 30, 1978. These funds include $65,556,000 invested in 
the Pooled Consolidated Endowment Fund, $1,000,000 on per- 
manent deposit in the United States Treasury, and $63,000 of mis- 
cellaneous securities. Of this total, $44,097,000 (66 percent) are 
Restricted Endowment Funds, with income to be used only for the 
purposes specified by the donor, and $22,522,000 (34 percent) are 
Unrestricted Funds for the general support of the Institution (see 
Table 10). Table 13 is a listing of the Institution’s Endowment 
Funds, the largest of which are the Freer Fund, supporting the 
operations of the Freer Gallery of Art, and Endowment Fund No. 3, 


[ 44 ] 


Taste 10. Endowment and Similar Funds September 30, 1979 


Book value Market value 


ASSETS 
Pooled Consolidated Endowment Funds: 
eran nt Echiivalents. if.) 026. ee es nese $ 504,075 $ 504,075 
ge RA I a 18,142,328 17,609,648 
MNES CPMSINEES ay a civin eire ee voc ese wees 1,579,425 2,057,125 
GES es ea ee 37,200,331 45,384,900 
iene Pooled Funds ..6..0..66. 000.005. 57,426,159 65,555,748 
Nonpooled Endowment Funds: 
DSI) 40,308 40,308 
Loan to U.S. Treasury in Perpetuity ........ 1,000,000 1,000,000 
EEE, ce Lice Seu cwcwa wns tvcbece 9,769 9,100 
S| ne 3,572 14,307 
Metal Wonpooled Funds ....:.......... 1,053,649 1,063,715 
Total Endowment and Similar Fund Balances .. $58,479,808 $66,619,463 
FUND BALANCES 
Unrestricted Purpose: True Endowment ....... $ 953,185 $ 1,417,063 
Quasi Endowment ...... 19,579,590 21,105,273 
Gene Unrestricted Parpose ............ 20,532,775 22,522,336 
Restricted Purpose: True Endowment ......... 34,349,831 40,277,533 
Quasi Endowment ....... 3,597,202 3,819,594 
Waar mestricted Purpose .............% 37,947,033 44,097,127 


Total Endowment and Similar Fund Balances .. $58,479,808 $66,619,463 


used for oceanographic research. The remainder of the Restricted 
and Unrestricted Funds support a wide variety of Institutional 
research and museum projects. 

The Pooled Consolidated Endowment Fund is invested under the 
management of four professional advisory firms under the close 
supervision of the Investment Policy Committee and the Treasurer, 
subject to policy guidelines set by the Smithsonian’s Board of 
Regents. These firms (with the portion of the Fund under their 
management) are BEA, Incorporated (23 percent), Batterymarch 
Financial Management Corp. (25 percent), Fiduciary Trust Co. of 
New York (43 percent), and Torray Clark & Company, Inc. (9 per- 
cent). During fiscal year 1979, the total rate of return of these 


[ 45 ] 


funds, as calculated by an independent investment measurement 
service, was +14.3 percent (including interest and dividend yield 
as well as market value appreciation), compared to +12.5 percent 
for the Standard & Poor’s 500 average and +7.8 percent for the 
Dow Jones Industrial Average. 

As outlined in prior reports, the Institution follows the Total 
Return policy, under which the total investment return of the 
Endowments is defined as yield (interest and dividends) plus 
appreciation (realized and unrealized gains). A prudent portion of 
this return is paid to each Endowment as income for current ex- 
penditures. Since 1973, this income payout has been at the rate of 
41/2 percent of the running five-year average of endowment market 
values, adjusted for additions or withdrawals of capital. During 
fiscal year 1979, the Board of Regents amended this policy to pro- 
vide that the annual total return income payout set each year would 
be based not solely on the five-year market average but would also 
take into account anticipated dividend and interest yields, support 
needs of the Institution’s bureaus, and inflationary factors. In ac- 
cordance with these principles, and due largely to the increased 
yield of both debt and equity investments, the total return income 
payout approved by the Board of Regents for fiscal year 1979 was 
equivalent to 4.7 percent of the five-year market average. Even at 
this level, the payout was $989,000 less than interest and dividends, 
and this difference was therefore reinvested into Endowment prin- 
cipal, in contrast to prior years, in which appropriation of capital 
gains was required to meet the required total return payout. 

Included on Table 12 as additions to the Endowments were re- 
stricted gifts of $91,000, primarily for the Harold P. Stern Memorial 
Fund, a transfer to Unrestricted Endowment Funds of $2,650,000 
approved by the Board of Regents, and additional transfers repre- 
senting reinvestment of Endowment income pursuant to the terms 
of individual Endowments. 

A listing of the securities held in the Pooled Consolidated Endow- 
ment Fund as of September 30, 1979, may be obtained upon re- 
guest from the Treasurer of the Institution. 


[ 46 ] 


TaBie 11. Market Values of Pooled Consolidated Endowment Funds 


(In $1,000’s) 


Fund 6/30/75 
Rimrestricted ......5.... $ 5,654 
0 rr 15,744 
Endowment No. 3 ...... 12,321 
ES 7,148 


ED ei oa a ms $40,867 


TABLE 12. Changes in Pooled Consolidated Endowment Funds 


9/30/76 


$ 7,477 
16,035 
12,701 

7,420 


$43,633 


9/30/77 9/30/78 
$11,695 $17,206 
15,410 16,807 
12,343 13,462 
7,431 9,555 
$46,879 $57,030 


for Fiscal Year 1979 


Market 

value 
Fund 9/30/78 
Unrestricted ...... $17,206 
eS ci bien bs 16,807 
Endowment No. 3.. 13,462 
Mestrrtead ....:... 9,555 


os) $57,030 


* Income earned less managers’ fees. 


(In $1,000’s) 


Gifts 
and 
trans- 
fers 


$2,650 


340 
188 


$3,178 


Inter- 
est 
and 
divi- 
dends* 


[ 47 ] 


Income 
paid 
out 


Sub- 
total 


$20,171 
17,090 
14,031 
9,905 


$61,197 


In- 
crease 
in 
market 
value 


$1,454 
1,213 
991 
701 


$4,359 


9/30/79 


$21,625 
18,303 
15,022 
10,606 


$65,556 


Market 
value 
9/30/79 


$21,625 
18,303 
15,022 
10,606 


$65,556 


Tae 13. Endowment Funds September 30, 1979 


Funds 


UNRESTRICTED PURPOSE—TRUE 


Avery, Robert S. and Lydia* 
Habel, Dr. S.* 
Hamilton, James* 
Higbee, Harry* 

Morrow, Dwight W. 
Mussinan, Alfred 
Olmsted) Fieteni A. 6:6. oc es ele eas 
Poore, George W. and Lucy T.* 
Porter, Henry Kirke 
Sanford, George H.* 


Subtotal 


5 9: 9)\5 ee aS 2 ee 26 S wee eRe 
Seis Bee Cae @ Oe Re ee ee 
ee ee ee ee 


UNRESTRICTED PURPOSE—QUASI 


Abbot. Williaa Be Ssi525 7 aac th a 
Forrest, Robert Lee 
General Endowment* 
Goddard, Robert H. 
Hackenberg, George P. and Caroline 
Part (stoi: Bea ees <n dno 
Henry, Caroline 
Henry, Joseph and Harriet A. ...... 
G6 Ee Re ti pela at a ase 
Hinton, Carrie Susan 
Hodgkins, Thomas G.* 
Benberts Fata Ge oe ne es ee 
Lindbergh Chair of Aerospace 

History (Dedicated) 
Medinits Grace jhe cd ers 
Rhees, William Jones* 
Sattord, cores Ee. aoa 2 css Was ses 
Taggert, Gansen 
Witherspoon, Thomas A. ........... 


Subtotal 


Sete nae Bh ease Cmte at 


Sinko. 640 Bie, Stk Sa 6s Om ane e 


Mites MY es Br Ney et le: ee wie. iw 


a ee! the) m pe oelann) e 


Total Unrestricted Purpose 


RESTRICTED PURPOSE—TRUE 


Arthur, James 
Baird, Spencer Fullerton 
Basniey, IGE PIRE vie ca adces eli enet 
Beauregard, Catherine, Memorial 

Pete Chae ie Secon betes 
Brows: Botan Wed... 3's eee 
Canfield: Frederick A. sis )< o's sno bee 
Chamberlain, Frances Lea .......... 
Cooper, G. Arthur, Curator’s Fund .. 
Div. of Mammals Curator Fund 
Div. of Reptiles Curator Fund 
Drake, Carl J.* 
Eickenmeyer, Florence Brevoort 
Endowment No. 3 
BXCOT 8 Ponies ckt ROG So Seog ee he eee 
Guggenheim, David and Florence ... 
Henderson, Edward P., 

Meteirite Pando bwackeccdi eee 
FAP GHEE Ect tere eniadn on oa eee 
PIPWNE: SAO ho 3 croatia ey cneton ee eee 
Ptrhcace; Assert So Sooty. seca e ee 
Hodekins, Thomas GF 5.645 see tec 
Hrdlicka, Ales and Marie 
Hughes, Bruce 
Kramar, Nada 


PR IS wie Sie ww «oe SS a eke ew Ke 


Aim (ew! Lea eh aw ek 


Principal Income 
Unex- 
Book Market Net pended 
value value income balance 
$ 73,006 $ 103,395 $ 4,370 $ -0O- 
500 500 30 —0- 
3,098 3,480 189 —0- 
20,696 30,995 1,184 —0- 
TiS 505 L755 2oe 6,920 —0- 
39,375 51,246 2,024 —0- 
1,247 1,789 Fi —0- 
269,469 400,227 16,351 —0- 
427,858 647,085 25,052, —0- 
2,431 3,109 145 —0- 
953,185 1,417,063 56,836 —0- 
29,331 35,143 1,388 —0- 
2,152,881 1,950,046 77,004 —0- 
16,045,105 17,679,494 656,849 —0- 
17,029 15,443 610 —0- 
7,903 9,906 391 —0- 
959 55 46 —0- 
2,381 2,850 113 —0- 
96,283 114,003 4,502 —O- 
204,487 189,750 7 ,A93 —O- 
51,162 55,440 1,642 —0- 
75 APL 186,260 9,734 —0- 
90,813 101,837 4,021 —0- 
356,370 371,971 10,740 —0- 
2,017 1,887 74 —0- 
1,520 1,695 79 —0- 
91,872 88,632 3,500 —O- 
735 1,080 43 —0- 
25S BAY 298,681 11,794 —0- 
19,579,590 ZA LODZ SS 790,023 —0- 
$20,532,775 $22,522,336 $ 846,850 $ —0- 
$§ 59,743 $ 90/534 $ 3575) eee 
54,903 80,928 3,196 170 
42,848 64,878 2,562 9,201 
76,883 90,661 3,580 10,439 
50,988 62,221 2,457 10,605 
56,289 99,748 3,939 3,131 
42,070 63,701 2,515 8,266 
13,918 S57 530 4 
3,405 3,815 151 2,820 
2,359 2,650 102 286 
oL3675 336,679 Be 5 by gc 28,704 
16,239 24,579 971 7,895 
13,010,009 15,022,092 588,334 142,257 
15,561,540 18,302,629 722,825 295,569 
ZO1.7 ko 233,601 P2225 —0- 
606 805 ae 180 
13,838 14,687 580 —0- 
81,925 86,691 3,423 —O- 
2,354 3,627 143 631 
100,000 100,000 6,000 aia PAL 
92,352 IE TAZ. 4,451 6,651 
28,592 43,350 5 Dig 13,410 
5,292 5,925 234 805 


TaseE 13. Endowment Funds September 30, 1979—Continued 


Funds 


BEE, JESSIE AL od ecu ee sein ns 
Long, Annette E. and Edith C. ....... 


Maxwell, Mary E. 
Milliken, Oothout H. 
Mineral Endowment 


Petrocelli, Joseph, Memorial 


Rollins, Miriam and William 


Subtotal 


RESTRICTED PURPOSE—QUASI 
Abbott, William L. 


Au Panier Fleuri 


Barstow, Frederic D. 


Casey, Thomas Lincoln 


Mees Pa EL. ee ek ce ee 
2s.) 0 


Hanson, Martin Gustav and 


Meme RMNICE 6.6). ee oe ws 
oe rs 
Jonnson, E. R. Fenimore ............ 
Kellogg, Remington, Memorial ...... 
Pemered, Charles A, .............+ 
MERI Te A lei b ehicle av wicls bleu 2 


Lyons, Marcus Ward 


Myer, Catherine Walden ........... 
SS 
MME AIUNG oi ois is nic ne eee ae cess 


Pell, Cornelia Livingston 
Ramsey, Admiral and Mrs. Dewitt 

Clinton* 
Rathbun, Richard, Memorial 
Reid, Addison T.* 
Roebling Solar Research 


Te ine clic bw ashomce b dipLvl ei 
Pee, EONATA FP. ... scene ec veues 


Seidell, Atherton 


Smithsonian Agency Account ....... 
MCMTMMREEE OPT. eho) ois viace nw Male wa 4 we oe 


Subtotal 
Total Restricted Purpose 


TOTAL ENDOWMENT FUNDS .... 


2006 mee eR aie ee € S 
oC tse Pe aie eas et 


Damen, William A. ............0s 
Natural History and Conservation ... 
Nelson, Edward William ............ 
Meeeunce Collection ......:/..+-.+.. 
Sprague, Joseph White ............. 
SS i 
Stern, Harold P., Memorial ......... 
Pee ACT A. 2. ans ve his aves od 
Meme onarics DD, 2... esc c esse 
Walcott, Charles D. and Mary Vaux. . 
Walcott Botanical Publications* ..... 
eres, Francis Brinckle ............ 


Armstrong, Edwin James ........... 
Barve Viremua Purdy ./............ 
ereneler, Etimia E................. 
Beeterdeeoree Fo oi. ede eee ess 


Siew e (a) .6. oy enie: (a 


na (ee, Wiha ot Wee 


eae nam oe C. me Kia ele 6 6 @ ee ee 
0 Cie eo O10 wy ie) Se) a) 88 Om 


* Invested all or in part in U.S. Treasury or other nonpooled investments. 


Principal Income 

Unex- 

Book Market Net pended 
value value income balance 
11,107 10,595 789 2,619 
810 1,262 50 205 
29,299 44,416 1,754 9,100 
409 432 L7 —-0- 
184,504 199,472 7,877 3,796 
25,061 27,288 1,078 1,179 
22,406 24,959 826 2 
35,785 50,297 1,986 —O- 
11,069 16,847 665 11,352 
180,543 271,701 10,729 12,420 
331,009 434,241 16,962 9,045 
2,404,176 2,597,198 101,454 21,284 
27,068 40,544 1,601 22,220 
218,100 240,672 8,151 11,018 
9,469 11,077 437 529 
213,816 269,867 10,540 2,822 
689,467 1,046,258 41,388 12,093 
86,779 126,190 4,983 7,890 
1,413 PAM SPA 84 2,220 
34,349,831 40,277,534 1,585,081 677,187 
204,601 241,264 9,527 —0- 
5,033 5,266 203 —0- 
41,191 37,516 1,481 —0- 
179,135 188,293 7,435 ZO Ae 
1,961 2,310 91 2,552 
65,377 67,109 2,650 22,417 
307,719 325,901 12,869 57,809 
24,607 29,066 1,148 2,305 
16,898 20,524 793 4 
84,513 99,778 3,940 17,099 
17,452 20,603 814 2,472 
12,903 a Aa 602 3,920 
15,898 gs Ptote: 602 8,841 
48,179 45,529 1,798 6,162 
6,308 7,330 640 1,870 
171,417 204,340 8,069 5,248 
8,528 8,236 325 —0- 
39,663 46,832 1,849 3,179 
1,904 2,360 93 1,929 
19,391 17,678 698 —O- 
14,566 17,289 683 1,879 
568,463 558,902 22,683 10,474 
20,896 24,772 979 13,159 
45,915 52,220 2,288 8,871 
48,546 53,260 2,103 405 
62,000 59,448 2,348 1,912 
15,234 17,920 1,070 9,379 
1,223,827 1,287,577 51,985 57,478 
305,436 324,495 12,505 9,486 
19,641 23,278 919 1,039 
3,597,202 3,819,593 153,190 275,416 
$37,947,033 $44,097,127 $1,738,271 $952,603 
$58,479,808 $66,619,463 $952,603 


$2,585,130** 


** Total Return Income Payout; does not include $84,000 of interest income for investment of 


unexpended income balances. 


Related Organizations 


The Smithsonian Science Information Exchange, Inc., was incor- 
porated by the Smithsonian in 1971 as a separate nonprofit entity. 
Its purpose is to facilitate the planning, management, and coordina- 
tion of the nation’s research efforts through the collection, process- 
ing, and dissemination of information about ongoing research. In 
addition to an annual contract from the Smithsonian, equal to the 
appropriation provided the Smithsonian for this purpose, the ex- 
change also receives substantial revenues from users of its services. 
In fiscal year 1979, these user revenues totaled $1,133,000 and 
accounted for 35 percent of the operating costs of the exchange. As 
a step toward the transfer of the exchange’s operations to the 
Department of Commerce, the appropriation for support of the 
exchange will be made to this department in fiscal year 1980, 
rather than to the Smithsonian. To assist in the transition, the 
Institution will continue to provide administrative and fiscal 
services. 

Reading is Fundamental, Inc. (r1F), associated with the Institution 
since 1968, is an independent, separately incorporated entity dedi- 
cated to the improvement of reading abilities in children. Primary 
support is derived from private contributions and a federal contract 
with the United States Office of Education to operate the Federal 
Inexpensive Book Distribution Program. Administrative services 
are provided by the Institution on a contract basis. 

During the year, action was taken to close out the books of the 
Smithsonian Research Foundation, and this corporation will be 
legally dissolved in the near future. 

The Woodrow Wilson International Center for Scholars, the 
National Gallery of Art, and the John F. Kennedy Center for the 
Performing Arts, were established by Congress within the Institu- 
tion but are administered by separate Boards of Trustees. Inde- 
pendent financial reports are presented by each of these organiza- 
tions. Office space and fiscal and other administrative and support 
services are provided the Woodrow Wilson International Center for 
Scholars on a reimbursement basis. 

The Friends of the National Zoo (FoNz) is an independent, non- 
profit corporation working closely with the National Zoological 
Park. It operates under contract a number of beneficial concessions 


[ 50 ] 


for the National Zoo. Fonz provided concession and rental fees to 
the zoo amounting to more than $164,000 during calendar year 
1978 (FONz’s fiscal year). In addition, Fonz contributed other impor- 
tant financial and volunteer support for zoo programs. Financial 
affairs of this organization are disclosed separately elsewhere in 
Smithsonian Year 1979. 


Accounting and Auditing 


An audit of the nonappropriated trust funds of the Institution is 
conducted annually by independent public accountants, and their 
fiscal year 1979 report is contained in the following pages. For over 
thirty years, this work had been performed in a competent and pro- 
fessional manner by Peat, Marwick, Mitchell & Co. In January 
1979, the Board of Regents authorized its Executive Committee to 
invite audit proposals from other major accounting firms as well. 
After extensive proposal review and interviews with the nation’s 
eight largest firms, Coopers & Lybrand was selected to perform the 
Institution’s audit for 1979 and the succeeding four years. During 
the year, the internal audit staff continued their reviews of various 
operations of the Institution. Additionally, grants and contracts re- 
ceived from federal agencies, as well as their allocated overhead 
costs, were audited by the Defense Contract Audit Agency. 

The Audit and Review Committee of the Regents, under the By- 
laws of the Institution, has the responsibility for reviewing the 
Smithsonian’s accounting systems and internal financial controls; 
of facilitating communication between the Board and internal audi- 
tors, independent auditors, and auditors of the General Accounting 
Office; and of reviewing operations of the Institution for compliance 
with approved programs and policies. 


[ 51 ] 


This collection of eighteenth-century Italian fiddles was a major acquisition of the 
National Museum of History and Technology’s Division of Musical Instruments. 
These rare instruments were acquired for the division through the Major Collections 
Acquisition Program. Below. The instruments are here being played by the Smith- 
sonian Chamber Players. From left to right: Marilyn McDonald, Mary Price, 
Melissa Graybeal, and Kenneth Slowik. 


COOPERS & LYBRAND 


CERTIFIED PUBLIC ACCOUNTANTS 


A MEMBER FIRM OF 
COOPERS & LYBRAND (INTERNATIONAL) 


To the Board of Regents 
Smithsonian Institution 


We have examined the balance sheet of the Trust Funds of Smith- 
sonian Institution as of September 30, 1979 and the related state- 
ment of financial activity for the year then ended. Our examination 
was made in accordance with generally accepted auditing standards 
and, accordingly, included such tests of the accounting records and 
such other auditing procedures as we considered necessary in the 
circumstances. The statements of the Trust Funds of Smithsonian 
Institution for the year ended September 30, 1978, totals of which 
are included in the accompanying financial statements for compara- 
tive purposes, were examined by other auditors whose report dated 
December 15, 1978 expressed an unqualified opinion on those state- 
ments. 

The statements of the Trust Funds of Smithsonian Institution do 
not include the accounts of the National Gallery of Art, the John F. 
Kennedy Center for the Performing Arts or other departments, 
bureaus and programs administered by the Smithsonian Institution 
under federal appropriations as detailed in Note 2 to the financial 
statements. 

In our opinion, the financial statements for the year ended Sep- 
tember 30, 1979, referred to above, present fairly the financial posi- 
tion of the Trust Funds of Smithsonian Institution as of September 
30, 1979, and the results of operations and changes in fund balances 
for the year then ended, in conformity with generally accepted ac- 
counting principles applied on a basis consistent with that of the 


preceding year. 
COOPERS & LYBRAND 


1800 M Street, N.W. 
Washington, D.C. 
November 27, 1979 


[ 53 ] 


SMITHSONIAN INSTITUTION—TRUST FUNDS 
Balance Sheet 
September 30, 1979 
(with comparative totals for September 30, 1978) 


ASSETS: 
CAGH 5 os ob wii da as Skid su Lal's SE ee ee 


Invesiments (Notes 3.arid 5) 2. .; SY f0.55 3-cs ooee. tas See 
Recetvables (Note -4) 0. 5.4.3 Sanee eke re eeas Seema 
Initertund xecetvables « .:...: .-\.% «Ar ..\canmarrey ae wen eee 
Merchandise inventory’ (Note 1)’. 20.2) saa 0s + eo 
Prepaid and deferred expense (Note 1) ...............-.. 
Property and equipment (Notes 1 and 6) ................ 


Current 


funds 


$ 1,067,242 
21,192,559 
9,833,100 
1,863,862 
4,505,523 
6,414,963 
1,283,732 


$46,160,981 


LIABILITIES: 


Accounts payable and accrued expenses ...............4-: 
Deposits held in custody for other organizations (Note 2) .. 
Interfund’ payables: : 0.54430 4~5< 00cm ae sn eee ae eee 
Deferred revenue (Nete: 1) 665.056 3... See 266 hee See 


‘Total: Habilities’ ’. 52.2 US ae oo eee eee 


FUND BALANCES (Note 1): 


Current: 
Unrestricted general ‘purpose 2.3/5. ss fed 2. oe eee 
Spécial purpose ico iews kaw ht ind owas» Lwoltica see 
RESPRICECED, ooo cg on oe fe Oe er tang be Se ee ye 
Endowment and similar funds (Note 5) .................. 
Plant’ funds: (Note 26) 20.5 doo eawaak sos sea ee 


Lotal fund balances J. 2 cc. os nk be eee 


$ 5,427,060 
1,745,609 
4,308,574 


13,247,924 
24,729,167 


4,964,511 
11,567,125 
4,900,178 


21,431,814 


$46,160,981 


The accompanying notes are an integral part of the financial statements. 


[ 54 ] 


Endowment 
and similar 


funds 


$ 62,160 
57,935,425 
40,308 
441,915 


$58,479,808 


58,479,808 


58,479,808 
$58,479,808 


Plant funds 


$ —s 
2,002,797 


11,920,035 


$13,922,832 


$ 229,778 


229,778 


13,693,054 
13,693,054 
$13,922,832 


[55 ] 


Total, all funds 


$ 1,129,402 
79,127,984 
9,873,408 
4,308,574 
4,505,523 
6,414,963 
13,203,767 


$118,563,621 


$ 5,656,838 
1,745,609 
4,308,574 

13,247,924 


24,958,945 


4,964,511 
11,567,125 
4,900,178 
58,479,808 
13,693,054 


93,604,676 
$118,563,621 


Totals, 1978 


$ 2,850,678 
70,986,935 
8,602,476 
2,353,786 
3,950,770 
5,264,020 
11,977,248 


$105,985,913 


$ 3,970,730 
1,183,626 
2,353,786 


14,439,120 
21,947,262 


4,932,516 
9,603,694 
4,539,911 
53,803,473 


11,159,057 


84,038,651 


$105,985,913 


SMITHSONIAN INSTITUTION—TRUST FUNDS 


Statement of Financial Activity 
Year ended September 30, 1979 
(with comparative totals for the year ended September 30, 1978) 


REVENUE AND OTHER ADDITIONS: 


Auxiliary activities revenue 
Federal: grants ‘andl comiracts 0005 Seas co oes ees 
Investment income (net of $278,655 for management 

and custodsan fees) oi 6 54.654 PS es 
Gain (loss) on sale of securities 
Gifts, bequests and foundation grants 
AgddiGons: to: plank. cg: Ge ies «Sac scnlace denote 
Rentals, fees, commissions and other 


ae Re © See le) 6 ie ole te) ole erie ia alle 


a 6 le) et eve) (seis ie we 


Total revenue and other additions 


8| 9, © ‘ee, a id) a) © 


EXPENDITURES AND OTHER DEDUCTIONS: 


Research and educational expenditures 
Administrative. expenditures: 2.2... \ 425.826 ces sean © 
Auxiliary activities expenditures ................. 
Expenditures for acquisition of plant 
Retirement of indebtedness 
Interest on indebtedness 


eee Wear yyy er yak ye 


a are ©. ee) (ae @.e)e @ 6 
€ » @ ee: ee ‘a a © ee & ee we 6 «(ee 0 


a (alle? @) mg. 6) 6) he) wl ues)" @) (ee @ ie) oe fe) een ee 


Excess of revenue and other additions over 
(under) expenditures and other deductions 


TRANSFERS AMONG FUNDS— 
ADDITIONS (DEDUCTIONS): 


Mandatory principal and interest on notes ....... 
Portion of investment yield appropriated (Note 5) .. 
Purchase of property and equipment for plant fund 
Future plant ‘dequisiftions so. ves. eee bee ee 
Income added to endowment principal 
Appropriated as quasi endowment 
Endowmrent released oo dics cvaccass 4a: panto uanelicceanane tines 
For designated putpases: 2.) <i: bs oe 8 nste de le is eR hae 
Net increase in auxiliary activities 


6 id a 8 6 9g ee 8 6 0 \e)\e:'s:'9 


Total transfers among funds 


Pd eee feo pn te) a Yer ar fC) 


Wet increase for the: years 2: i552 sis vie iss tls 
Acquisition of Museum of African Art 
Fund balances at beginning of year 


Pye ae en, he an a ey nt Je yal Ves na ey Yay 


Fund balances at end of year 


Total 
current 


funds 


$66,884,616 
11,411,790 


5,598,435 
(5,765) 
2,457,801 


1,983,617 
88,330,494 


18,375,482 
6,842,542 
55,015,797 


80,233,821 


8,096,673 


(56,070) 
(988,573) 
(348,921) 

(1,451,617) 

(423,331) 
(2,671,217) 
10,000 


(5,929,729) 


2,166,944 
188,749 


19,076,121 
$21,431,814 


The accompanying notes are an integral part of the financial statements. 


[ 56 ] 


Total 


unrestricted 


funds 


$66,884,616 


2,849,787 
(5,765) 
682,979 


1,255,508 
71,667,125 


5,534,719 
4,210,583 
55,015,797 


64,761,099 


6,906,026 


(56,070) 
(314,694) 
(348,921) 

(1,451,617) 
(2,671,217) 
(68,081) 


(4,910,600) 


1,995,426 


14,536,210 
$16,531,636 


Current fund 


Unrestricted 


General 
purpose 


2,591,658 
(5,765) 
163,394 


638,264 


3,387,551 


2,389,110 
1,552,968 


3,942,078 


(554,527) 


(52,535) 
(310,496) 
(348,921) 

(1,451,617) 
(2,571,217) 


(3,481,809) 


8,803,117 
586,522 


31,995 


4,932,516 


$ 4,964,511 


Auxiliary 
activities 


$64,846,017 


475,178 


65,321,195 


Special 
purpose 


$ 2,038,599 


258,129 


44,407 


617,244 


Restricted 


s poe 


11,411,790 


2,748,648 


1,774,822 


728,109 


Endowment 
and similar 


funds 


511,866 
91,348 


Plant 
funds 


5,000 
395,971 


Total, 
all funds 


$66,884,616 
11,411,790 


5,598,435 
506,101 
2,554,149 
395,971 
1,983,617 


Totals, 
1978 


$54,759,388 
11,157,066 


3,429,901 
1,334,983 
4,231,405 

404,605 
2,155,641 


2,369,500 
53,751,742 


56,121,242 


3,145,609 
288,115 
1,264,055 


12,840,763 
2,631,959 


348,921 


18,375,482 
6,842,542 
55,015,797 
348,921 
47,049 


15,759,210 
5,675,636 
41,737,456 
365,992 


(4,020) 


8,695,867 


(396,836) 
(8,803,117) 


(3,535) 
(4,198) 


(100,000) 


3,810,564 


(673,879) 


(423,331) 
10,000 
68,081 


988,573 


423,331 
2,671,217 
(10,000) 


56,070 


348,921 
1,451,617 


eee eee eee eee 


3,702,831 
1,963,431 


9,603,694 


(1,019,129) 


171,518 
188,749 
4,539,911 


4,073,121 


4,676,335 


53,803,473 


1,856,608 


1,852,588 
681,409 
11,159,057 


8,695,867 


870,158 
84,038,651 


13,879,854 


70,158,797 


I | 


—<———— ———— SS —————— a Sa ————— ——$—$—$——$—— 


[ 57 ] 


SMITHSONIAN INSTITUTION—TRUST FUNDS 
Notes to Financial Statements 


1. Summary of Significant Accounting Policies 


Basis of presentation. The financial statements of Smithsonian Institution— 
Trust Funds (Institution) have been prepared on the accrual basis. 


Fund accounting. To ensure observance of limitations and restrictions placed 
on the use of resources available to the Institution, the accounts of the Insti- 
tution are maintained in accordance with the principles of fund accounting. 
This is the procedure by which resources for various purposes are classified 
for accounting and reporting purposes into funds established according to 
their nature and purposes. Separate accounts are maintained for each fund; 
however, in the accompanying financial statements, funds that have similar 
characteristics have been combined into fund groups. Accordingly, all financial 
transactions have been recorded and reported by fund group. 


The assets, liabilities, and fund balances of the Institution are reported in 
self-balancing fund groups as follows: 


Current funds, which include unrestricted and restricted resources, rep- 
resent the portion of expendable funds that is available for support of 
Institution operations. Separate sub-fund groups of current unrestricted 
funds have been reflected in the financial statements for auxiliary activi- 
ties (representing primarily the revenue and expenditures of the Smith- 
sonian Associates Program, including the Smithsonian magazine, and 
museum shop sales) and for special purposes (representing internally 
segregated funds for certain designated purposes). Amounts restricted by 
the donor for specific purposes are also segregated from other current 
funds. 


Endowment and similar funds include funds that are subject to restric- 
tions of gift instruments requiring in perpetuity that the principal be 
invested and the income only be used. Also classified as endowment and 
similar funds are gifts which will allow the expenditure of principal but 
only under certain specified conditions and quasi-endowment funds. 
Quasi-endowment funds are funds established by the governing board 
for the same purposes as endowment funds; however, any portion of such 
funds may be expended. Restricted quasi-endowment funds represent 
gifts for restricted purposes where there is no stipulation that the prin- 
cipal be maintained in perpetuity or for a period of time, but the gov- 
erning board has elected to invest the principal and expend only the 
income for the purpose stipulated by the donor. 


Plant funds represent resources restricted for future plant acquisitions 
and funds expended for plant. 


All gains and losses arising from the sale, collection or other disposition of 
investments are accounted for in the fund in which the related assets are 


[ 58 ] 


recorded. Income from investments is accounted for in a similar manner, 
except for income derived from investments of endowment and similar funds, 
which is accounted for in the fund to which it is restricted, or, if unrestricted, 
as revenue in unrestricted current funds. 


Inventories. Inventories are carried at the lower of average cost, computed on 
a first-in, first-out method, or net realizable value. 


Deferred revenue and expense. Revenue from subscriptions to Smithsonian 
magazine is recorded as income over the period of the related subscription, 
which is one year. Costs related to obtaining subscriptions to Smithsonian 
magazine are charged to income over the period of the subscription. 


The Institution recognizes revenue and charges expenses of other auxiliary 
activities during the period in which the activity is conducted. 


Works of art, living or other specimens. In accordance with the practice gen- 
erally followed by museums, works of art and living or other specimens are 
not reflected in the accompanying financial statements. 


Property and equipment. Capitalized improvements and equipment purchased 
with Trust Funds and utilized in income-producing activities are capitalized 
in the current unrestricted fund at cost and are depreciated on a straight-line 
basis over their estimated useful lives of five to ten years. 


Real estate (land and buildings) are recorded in the plant fund at cost, to the 
extent that restricted or unrestricted funds were expended therefor, or ap- 
praised value at date of gift, except for gifts of certain islands in Chesapeake 
Bay and the Carnegie Mansion, which have been recorded at nominal values. 
In accordance with the practice of many museums, depreciation on buildings 
is not recorded. 


All other land, buildings, fixtures, and equipment which were principally ac- 
quired with federal funds are not reflected in the accompanying financial 
statements. 


Government contracts. The Institution has a number of contracts with the 
U.S. Government, which primarily provide for cost reimbursement to the 
Institution. Contract revenue is recognized when billable or received. 


Contributed services. A substantial number of unpaid volunteers have made 
significant contributions of their time in the furtherance of the Institution’s 
programs. The value of this contributed time is not reflected in these state- 
ments, since it is not susceptible to objective measurement or valuation. 


2. Related Activities 


The Trust Funds reflect the receipt and expenditure of funds obtained from 
private sources, from federal grants and contracts, and from certain business 
activities related to the operations of the Institution. 


Federal appropriations, which are not reflected in the accompanying financial 
statements, provide major support for the operations and administration of 
the educational and research programs of the Institution’s many museums, art 
galleries, and other bureaus, as well as for the maintenance and construction 
of related buildings and facilities. In addition, land, buildings, and other 
assets acquired with federal funds are not reflected in the accompanying 
financial statements. 


[ 59 ] 


The following federal appropriations were received by the Institution for the 
fiscal years ended September 30, 1979 and 1978: 


1979 1978 
Operating fends). bccn vas he oes eee ee $100,265,000 $ 95,250,000 
Special foreign currency program ............ 3,700,000 4,000,000 
Construction funds «i... .. eee a Re 6,575,000 5,250,000 


$110,540,000  $104,500,000 


The Institution provides fiscal and administrative services to several sepa- 
rately incorporated organizations in which certain officials of the Institution 
serve on the governing boards. The amounts paid to the Institution by these 
organizations for the aforementioned services, together with rent for Insti- 
tution facilities occupied, etc., totaled approximately $422,000 for the year 
ended September 30, 1979. The following summarizes the approximate ex- 
penditures of these organizations for the fiscal years ended September 30, 
1979 and 1978, respectively, as reflected in their individual financial statements 
and which are not included in the accompanying financial statements of the 
Institution: 


1979 1978 
Smithsonian Research Foundation ............... 5 — $ 120,000 
Smithsonian Science Information Exchange ...... $3,293,000 $2,355,000 
Reading Is Fundamental, Inc. 1... <2 6. anh onas ceca $4,042,000 $2,260,000 
Woodrow Wilson International Center 
for Scholars— Trust Prods 2 2 i.) oi wut o om ac cine = $2,306,000 $2,079,000 


For the years ended September 30, 1979 and 1978, the Smithsonian Research 
Foundation did not receive federal grants, and the corporate structure will be 
dissolved in fiscal year 1980. The Institution is working with the U.S. Depart- 
ment of Commerce to effect a transfer of the Smithsonian Science Information 
Exchange operations to the U.S. Department of Commerce on October 1, 
1980; until that date the Institution will continue to provide fiscal and admin- 
istrative services. 


3. Investments 


Investments are recorded at cost, if purchased, or fair market value at date 
of acquisition, if acquired by gift. At September 30, 1979, investments are 
composed of the following: 


Carrying Market 
value value 
Current funds: 
Certificates of Deposit: 6.25002. 002.0. See $ 4,000,000 $ 4,000,000 
Ce DICECIAL PARE a nia a ats xo ushien «a seer 1,974,858 2,000,000 
Overnight money market account ........... 1,200,000 1,200,000 
U.S. Government and 

quasi-government obligations ............. 13,789,494 13,932,400 
Carmine shock Ss re ako e es tees o awe 171,860 92,317 
Preterren ste 6s ee ee ee 56,347 45,797 


21,192,559 21,270,514 


[ 60 ] 


Endowment and similar funds: 


eR ER, PREANED o's oe tcl aurticuewsiecsiaes $ 1,000,000 $ 1,000,000 
EN leas iyi wins Weis cain mw vo on 2 4,063,235 4,075,000 
U.S. Government and 

quasi-government obligations ............. 5,469,632 5,364,809 
CS eee 10,202,227 10,226,965 
asin 3 p'n'v oe ek wdllon'w s 36,491,266 44,685,401 
Ey has kak saa pil nim Wim mle mW 6 0.0 709,065 699,500 


57,935,425 66,051,675 
$79,127,984 $87,322,189 


Substantially all of the investments of the endowment and similar funds are 
pooled on a market value basis (consolidated fund) with each individual fund 
subscribing to or disposing of units on the basis of the value per unit at 
market value at the beginning of the month within which the transaction 
takes place. Of the total units, each having a market value of $119.91, 346,315 
units were owned by endowment and 200,396 units by quasi-endowment at 
September 30, 1979. 


The following tabulation summarizes changes in relationships between cost 
and market values of the pooled investments: 


Market 

value 

per 

Market Cost Net gains unit 
Se $65,555,748 $57,426,159 $8,129,589 $119.91 
Beemmne Of year ......... $56,831,475 $52,548,845 4,282,630 110.22 
Semeaased met pains for year .........c ccc cc cee eees 3,846,959 — 
URI AES FOL YEAT .. 2... ce cc en ee neanes 511,866 — 
CS | $4,358,825 $ 9.69 


4. Receivables 


Receivables at September 30, 1979 and 1978, included the following: 


Current funds 1979 1978 


Accounts receivable, auxiliary activities; net of 
allowance for doubtful accounts of $258,000 


eae Art $262,000 in 1978 .....20crccsvcvere $7,881,683 $6,031,875 
Unbilled costs and fees from grants and contracts. . 658,318 1,316,166 
Interest and dividends receivable ................ 949,571 716,048 
EN ene. ha clas dan eb edeh ade wea wees 343,528 496,017 


9,833,100 8,560,106 
Endowment and similar funds 


EE korn da ak Khe k oblate wwe web 40,308 42,370 
a SE aa ey ec $9,873,408 $8,602,476 


[ 61 ] 


5. Endowment and Similar Funds 


Endowment and similar funds at September 30, 1979 are summarized as 
follows: 


Endowment funds, income available for: 


Restricted werposee Ske satan s Sass cd aed Sen cee eee $34,349,830 
Unresttirted Parises os chin Sas oo oa ee ea eee eee ee 953,185 

35,303,015 

Quasi-endowment funds, principal and income available for: 

ReGiricte:  PULDOSES lias ck ss kbc cgue ae wsity ae Censee een 3,597,203 
Unirestricten’ parposee ore a eer oe a en ee eee ae 19,579,590 

23,176,793 

Total endowment and similar funds .................. 


$58,479,808 


The Institution utilizes the “total return” approach to investment manage- 
ment of endowment funds and quasi-endowment funds. Under this approach, 
the total investment return is considered to include realized and unrealized 
gains and losses, in addition to interest and dividends. An amount equal to 
the difference between interest and dividends earned during the year and 
the amount computed under the total return formula is transferred to or from 
the current funds. 


In applying this approach, it is the Institution’s policy to provide, as being 
available for current expenditures, an amount taking into consideration such 
factors as, but not limited to: (1) 442% of the five-year average of the market 
value of each fund (adjusted for gifts and transfers during this period), (2) 
current dividend and interest yield, (3) support needs for bureaus and scien- 
tists, and (4) inflationary factors as measured by the Consumer Price Index; 
however, where the market value of the assets of any endowment fund is less 
than 110% of the historic dollar value (value of gifts at date of donation), 
the amount provided is limited to only interest and dividends received. The 
total return factor for 1979 was $4.74 per unit of fund participation. The total 
return applied for 1979 was $2,516,098. 


6. Property and Equipment 


Property and equipment is comprised of the following: 
September 30, 


Current funds 1979 1978 


Capital improvements... .1.. i. RAAT $ 1,342,277. $ 1,317,036 


EQGipitetie oie ne Si ed ws bacemoeah ee bh hat Ree 602,777 446,086 
Leasehold improvements ...............000005 145,229 98,126 
Less accumulated depreciation 

PEER NOE) FS eld Ecol ee eh oA ROO 806,551 585,349 
1,283,732 1,275,899 

Plant funds 
Baer Bitch DOES. i as be eka me we ee oes 11,920,035 10,701,349 

Ob aU OE Se 2. ccs ehins wae nnd dowee 


[ 62 ] 


$13,203,767 


$11,977,248 


Depreciation and amortization expense reflected in expenditures of the current 
funds for 1979 and 1978 was $221,202, and $181,942, respectively. 


The balance of the plant fund at September 30, 1979 includes $1,997,525 of 
unexpended plant funds. 


7. Pension Plan 


The Institution has a retirement plan in which substantially all Trust Funds’ 
employees are eligible to participate. Under the plan, both the Institution and 
employees contribute stipulated percentages of salary which are used to pur- 
chase individual annuities, the rights to which are immediately vested with 
the employees. The cost of the plan for the year ended September 30, 1979 
was $1,746,293. It is the policy of the Institution to fund plan costs accrued 
currently. There are no unfunded prior service costs under the plan. 


8. Income Taxes 


The Institution is exempt from income taxation under the provisions of Sec- 
tion 501(c)(3) of the Internal Revenue Code. Organizations described in that 
section are taxable only on their unrelated business income. The Internal 
Revenue Service is presently considering a Request for Ruling filed by the 
Institution pertaining to the proper interpretation of the current regulations 
concerning the method of calculating certain unrelated business income. If 
the Institution’s interpretation is approved, no tax would be imposed on this 
income. It is the opinion of the Institution that it is also exempt from taxation 
as an instrumentality of the United States as defined in Section 501(c)(1) of 
the Code. Organizations described in that section are exempt from all income 
taxation. It is the intent of the Institution to seek such dual status. Manage- 
ment believes that any income taxes required as a result of settlement of these 
maters would not have a material effect upon the financial position of the 
Institution. 


[ 63 ] 


eh} sn , 
¢ «| ote, * he