The role of Williamsburg in America’s founding is nothing short of extraordinary. In the years leading up to the Revolution, this colonial capital city was a thriving center of culture, enterprise, education — and revolutionary ideas. It was here — in these homes, government halls and taverns — that Thomas Jefferson, James Madison and so many other Founders of our future United States wrestled with critical questions of independence, liberty, self-governance, and citizenship. Together with their fellow patriots across the colonies, they defied the odds to establish what had yet to be achieved anywhere: a functional, sustainable democracy.
Today, the complex and courageous stories of our founders offer inspiration to all Americans – and indeed, all those who seek freedom and a better way of life. Now more than ever, it is critical that we ensure the future of Colonial Williamsburg, a unique national treasure that exists to preserve and to share America’s history with the world.
Our goal is to find a way for Colonial Williamsburg to continue to tell America’s enduring story. This means, first and foremost, that we need to focus on our core educational mission – Historic Area preservation, the Museums, and educational programs. These are the reasons why people come visit us. It is why they care about us. It is why they support us.
But to be able to continue to tell our story requires us to be financially stable and, sadly, that stability is threatened unless we take decisive action. Only financial stability will allow us once more to focus on what we do better than anyone else in the world – share America’s history and deliver outstanding guest experiences.
For a variety of reasons – business decisions made in years past, less American history being taught in schools, changing times and tastes that cause us to attract half the visitors we did 30 years ago – the Foundation loses significant amounts of money every year. In fact, in 2014, we lost a total of $62 million, or $176,000 every day. This is not acceptable, and it is not sustainable.
We compounded these large annual losses by borrowing heavily to improve our Hospitality facilities and Visitor Center in the years leading up to Jamestown’s 400th anniversary in 2007. For a variety of reasons, the Foundation did not realize adequate financial returns on these investments. By the end of 2016, our debt burden stood at more than $300 million, with due dates for repayment coming very soon.
All of this has placed significant pressure on our endowment, which acts as a type of savings account that has in the past covered our yearly losses and allowed us to stay in business. While most non-profit organizations withdraw 5% annually from their endowment, in 2001 we began to withdraw more than 5%, at times reaching as high as 12%. If we continue at this rate, we could exhaust the endowment available to support our operations, including many related to our core educational mission, in just eight years, and perhaps sooner. That outcome would lead to mission failure.
When I started at the Foundation two-and-a-half years ago, we tried new programs and events to cut costs and generate revenue, but without making fundamental changes in the way the Foundation did business. While this approach has helped, to the tune of more than $10.4 million in financial improvements over the past two years, it is not enough. Instead, it is clear that we need a plan that’s bigger, bolder, and gets us back to basics by reinvesting in, and focusing us on, our core educational mission.
If we are going to rededicate ourselves to our core educational mission, we can no longer do everything the way we did it in 1976, or 1986 or even 2006. So over the past six months we have examined every single unit across the Foundation to see where we could save money or grow revenue. No department or program has been immune.
After much deliberation and consultation with leading experts in financial and non-profit management, we believe that outsourcing offers the Foundation a way to run some of our commercial businesses more profitably. So I am announcing today that the Foundation will be outsourcing our golf operations, our retail stores, much of our maintenance and facilities operations, and our commercial real estate management.
As we’ve entered into these outsourcing agreements, our primary consideration was that our employees be treated fairly and respectfully. After a series of tough negotiations, we have required each vendor to retain every employee in these four areas for at least one year. If employees in these four areas decide to join their new employer or if they decline to do so, they will receive a generous severance payment from the Foundation.
Regrettably, some employees in other departments will be asked to leave the Foundation. No one likes to see a colleague or a neighbor lose his or her job. It’s upsetting. It’s painful. We will help to make this transition less difficult for those who are leaving with generous severance, and unprecedented transition services including career counseling, skills workshops, and interview training with the assistance of Lee Hecht Harrison, a leader in the HR industry.
As difficult as these decisions are, for as much as they impact our Colonial Williamsburg colleagues today, it would be far worse for the large majority of our employees and the future of the Foundation if we did nothing and just hoped that our financial fortunes would somehow change next year, or the year after. Ultimately, doing nothing would mean the end of this national treasure, and that would harm every single person who works here, their families, and our community. It would mean the end of our mission. No one wants that future. No one is willing to accept it. And so we choose to act now.
Even though I am confident that these actions will return the Foundation to financial stability and allow us to continue to share America’s enduring story, there is no denying that this is a very tough day. If there was any other way to save the Foundation, I would eagerly have taken it. But there isn’t. For the first time in years, we now have a detailed, comprehensive plan – and an opportunity – to return the Foundation to stable financial health. But time is not on our side. We must take these difficult decisions today.
As essential as these actions are to the future of the Foundation, this is about much more than one organization. The fate of Colonial Williamsburg will have a massive impact on the surrounding community – economically, culturally, and otherwise. And as important as Colonial Williamsburg is for the local and regional communities, our mission has an even larger impact on our Nation.
What we do here – bringing our history alive and telling America’s story – is what grounds us, what connects us, and what helps us to understand one another. This is the role that Colonial Williamsburg has played in the past. It is the role we play today. It is the role we will play far into the future, provided we take action now.