It is a pleasure to give my first report as Treasurer of the Museum of Fine Arts, Boston. I am especially pleased to report to you strong financial performance of the Museum for the year ended June 30, 2014.
I’ll begin with the value of the endowment, which provides significant funding for both the Museum and the School of the Museum of Fine Arts. The endowment had a value of $624 million and achieved a performance return of 15.8% by the end of the fiscal year. The performance return significantly surpassed our long-term planning assumption of 8.5%. We have a well-diversified portfolio and have always focused on the liquidity needs of the MFA as part of our asset allocation process.
In terms of operating performance, this year’s attendance reached 1,132,000 visitors to the Museum, versus a budget of 1,006,000. This strong attendance against our budget caused all of the audience-driven revenue lines to exceed their individual goals, thus allowing us to have a better than budgeted operating surplus. The MFA has a long history of operating surpluses not achieved by many of our peers. The corporation overall achieved a surplus of approximately $4.9 million versus the budgeted surplus of approximately $909,000. Each of the business segments achieved a surplus as well, with the Museum reporting a surplus of $3.9 million, Retail a surplus of $373,000, and the School a surplus of $687,000.
I am also pleased to report that we reduced our long-term debt by $19 million during the year. As a result of this debt reduction and the endowment growth, our net assets—or wealth—increased by $89 million as of June 30.
The Board of Trustees, upon the recommendation of the Budget and Finance Committee, adopted a budget for FY15 that helps further the mission of both the MFA and SMFA with a total surplus of $765,000 for the institution.
Fiscal Year 2014 was a year that saw the Museum’s bond ratings of Aa2 and AA reaffirmed by Moody’s and Standard and Poor’s, respectively. Both agencies reaffirmed these strong ratings with a stable financial outlook.
In order to further strengthen our overall financial position, the Museum launched a capital campaign more than a year ago. We have made strong progress on this campaign thus far. We look forward to your support for this important endeavor as it will enhance the Museum’s overall financial well-being upon its successful completion.
Finally, I would like to thank the outstanding Finance team, as well as the overall Museum staff for the tremendously positive results for the fiscal year.
Respectfully submitted,
Kevin T. Callaghan
Treasurer and Chairman of the Budget and Finance Committee