I am pleased to report strong financial performance for the fiscal year ended June 30, 2017, maintaining a string of many years of favorable financial results.

It was a year that saw the adoption this spring of our exciting new Strategic Plan, MFA 2020, and the Financial Plan that underpins it. The Museum had a substantially better than budget operating surplus, made significant strides in our goals of reducing our debt, and successfully completed our capital campaign.

In terms of operating performance, last year we attracted 1,192,000 visitors to the Museum, besting both the prior year and the 2017 budget. The MFA achieved a surplus of approximately $1.1 million, which exceeded our budgeted operating surplus of $50,000, and continues a long record of positive operating surpluses. Our total net worth increased by $67 million during the year, driven substantially by the return on the endowment.

Speaking of the endowment, its value was $585 million at June 30, recording a positive performance return of 12.5 percent for the fiscal year. We believe that our return will benchmark well against those of other institutions as final returns become available in the coming weeks. The endowment is managed by the MFA’s Investment Committee, which is advised capably by Cambridge Associates. While we are all glad to see such strong returns over the past few years, we are not assuming that markets will be this favorable forever. To that end, we have reduced our long-term return planning assumption and the related assumed spend rate of the endowment to insure the long-term purchasing power of our endowment into the future.

I mentioned at last year’s annual meeting that we had just completed our capital campaign in the first few months of fiscal 2017. The success of this campaign allowed the Museum to reduce our long term debt by $20 million during the year and as a result we had $115 million in debt at fiscal year end. We have plans to further reduce our debt in the coming years as we continue to receive payments on pledges. We thank all of you here, the MFA’s most stellar supporters, for your continued generosity to this special institution and specifically for your help in achieving the successful capital campaign.

As a result of this debt repayment, positive operating results, the success of the capital campaign, and other factors, in late August, Standard & Poor’s affirmed the Museum’s favorable AA bond rating with a stable outlook.

The Board of Trustees, upon the recommendation of the Budget and Finance Committee, adopted a budget for FY18 with a budget surplus of $100,000 for the Museum.

We are fond of saying at the MFA, that in spite of our generally good results, accounting standards do not permit us to tout our two most important assets: our collection, whose breadth and depth and condition is truly remarkable; and our people, whose dedication and commitment to excellence in all they do is equally noteworthy. These assets are what propel us forward and help us achieve the MFA’s mission.

Finally, as I look forward to my new role as your Chairman of the Board of Trustees I want to thank the dedicated members of the Budget and Finance Committee who work tirelessly to ask the right questions about our present and future state. Together, we thank the Finance Team led by CFO Mark Kerwin, and the entire MFA Leadership Team for their careful attention to both the myriad details which help create our annual surplus, and their big picture perspective on the financial challenges and opportunities embedded in the multi-year Strategic Plan. 2017 was a year of hard work, forward thinking, and tough choices by our professional and volunteer teams. Now the implementation of the plan begins, as we move the MFA forward to its 150th birthday.

Respectfully submitted,

Kevin T. Callaghan
Treasurer and Chairman of the Budget and Finance Committee

Financial Reports

Notes to the financial statements are available upon request to the Museum’s Financial Department.