Colonial Williamsburg Cuts Jobs as Financial Struggles MountBy and
Virginia nonprofit lost $54 million from operations in 2016
Foundation CEO blames less history being taught in schools
The Colonial Williamsburg Foundation, the nonprofit that manages a historic district where actors in 18th century garb depict life in that era, is dismissing 71 employees and uprooting hundreds more as it grapples with debt and overspending from its endowment.
The foundation will outsource management of its golf courses, retail stores, maintenance and facilities, and real estate, according to a statement Thursday. The restructuring affects 333 employees, as most of them are being moved to jobs with different employers.
“Business decisions made in years past, less American history being taught in schools” and changing tastes contributed to the financial struggles, Mitchell Reiss, the foundation’s chief executive officer, said in a letter to the community.
By the end of 2016, debt was more than $300 million, with due dates for repayment coming “very soon,” Reiss said. Financial difficulties have placed “significant pressure” on the endowment, which is managed by Charlottesville, Virginia-based Investure. Former University of Virginia investing chief Alice Handy runs the money manager, which caters to a select group of endowments and foundations.
Handy declined to comment.
The value of the foundation’s endowment declined 6.9 percent last year to $664 million. The fund “has in the past covered our yearly losses and allowed us to stay in business,” Reiss said in the letter. “While most nonprofit organizations withdraw 5 percent annually from their endowment, in 2001 we began to withdraw more than 5 percent, at times reaching as high as 12 percent.
“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,” he said. “That outcome would lead to mission failure.”
The foundation, which lost $54 million from operations in 2016, declined to comment on the endowment’s fiscal 2016 performance.
Investure has built a reputation for exclusivity and top performance yet produced some of the worst returns in fiscal 2016. One client, Smith College, lost 5.9 percent while the average university endowment declined about 2 percent.
Investure has lost at least two clients in the past four years, including the Rockefeller Brothers Fund in 2014 and the Commonwealth Fund in January. Earlier this year, Barnard College said it was reviewing its relationship with Investure after voting to divest from energy companies that deny climate change.
Dickinson College, another Investure client, said in September that it teamed up with the Colonial Williamsburg Foundation and the University of Tulsa to evaluate Investure’s performance. That review is continuing, Dickinson spokeswoman Christine Baksi said in an email, adding that the college is no longer partnering with Tulsa or the foundation. Reiss declined to comment on the review.
The Colonial Williamsburg Foundation’s investment committee oversees management of the endowment and no changes are planned, according to a person familiar with the matter, who asked not to be identified discussing private matters.
Kemper Sports Inc.. food service company Aramark, Brightview Landscapes and WFF Facility Services Inc. are in final negotiations to operate the golf courses, retail services, landscaping and facilities, respectively.
The foundation said it “required each vendor to retain every employee in these four areas for at least one year,” Reiss said. The senior team’s pay has been frozen for the past three years. Reiss’s 2015 compensation totaled $682,922, according to a tax filing.
“Ultimately, doing nothing would mean the end of this national treasure,” Reiss wrote. “It would mean the end of our mission.”