Freedom Forum CEO James Duff says the struggling foundation is making headway in shoring up its finances after a fourth round of layoffs earlier this year.
“We’ve certainly worked on tightening up on expenditures. We certainly are going to be working on additional fundraising initiatives,” Duff told the Associated Press in an interview. “I think we’re making good progress. And certainly our numbers are very, very encouraging.
But Duff and other officials at the non-profit -- which is the original Gannett Foundation -- declined to give details of Freedom Forum's current financial status, referring the AP to its most recent IRS tax return, which only covers 2011.
That return shows Freedom Forum continues to eat into its income-producing endowment to prop up its major beneficiary: the Newseum, a museum about news history in Washington that reopened in new $450 million quarters in 2008, years late and at nearly double its original cost estimate.
“That I would consider a red flag because they are basically using the principal of the endowment, to some degree, to pay for operations,” consultant David Ellis told the AP. Ellis is a past president of the Museum of Science in Boston and of Lafayette College. “To be sustainable, it’s crucial that the draw on the endowment, the amount that is spent . . . needs to be realistic in terms of the endowment maintaining its purchasing power.”
The value of the endowment's portfolio of stocks and other investment plunged to $368 million by the end of 2011 vs. $706 million in 2006, when Freedom Forum started spending more than it earned.
Duff was named chief executive in 2011 to replace longtime chief Charles Overby. As I reported in January, during his first four months on the job, Duff was paid $1.6 million -- extending a pattern of very generous compensation to the foundation's top brass.
Earlier: In death, foundation founder Neuharth really did have it his way.
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But Duff and other officials at the non-profit -- which is the original Gannett Foundation -- declined to give details of Freedom Forum's current financial status, referring the AP to its most recent IRS tax return, which only covers 2011.
That return shows Freedom Forum continues to eat into its income-producing endowment to prop up its major beneficiary: the Newseum, a museum about news history in Washington that reopened in new $450 million quarters in 2008, years late and at nearly double its original cost estimate.
“That I would consider a red flag because they are basically using the principal of the endowment, to some degree, to pay for operations,” consultant David Ellis told the AP. Ellis is a past president of the Museum of Science in Boston and of Lafayette College. “To be sustainable, it’s crucial that the draw on the endowment, the amount that is spent . . . needs to be realistic in terms of the endowment maintaining its purchasing power.”
The value of the endowment's portfolio of stocks and other investment plunged to $368 million by the end of 2011 vs. $706 million in 2006, when Freedom Forum started spending more than it earned.
Duff was named chief executive in 2011 to replace longtime chief Charles Overby. As I reported in January, during his first four months on the job, Duff was paid $1.6 million -- extending a pattern of very generous compensation to the foundation's top brass.
Earlier: In death, foundation founder Neuharth really did have it his way.
Cushy landing spot for longtime Gannett execs. Wonder if Frank Gannett would've approved of using the Foundation's money that way?
ReplyDeleteThis is a better article. Maybe it's just the way I read it but paying operating expenses from the endowment spells potential financial disaster.
ReplyDeleteOops! Forgot the link:
Deletehttp://news.yahoo.com/newseum-dc-makes-changes-funding-falls-short-081826683.html
If they have a decent portfolio manager, the value of the foundation's holdings should be up substantially over the past 15 months. Market is way up over that time. No?
ReplyDelete