Report of the Treasurer and Chair, Budget and Finance Committee

The last three fiscal years presented a broad range of challenges to the Museum. The most recently completed year, FY22, was a year of important transitions. We saw increased comfort from our audiences in visiting public spaces as well as the lifting of capacity limitations. The Museum was able to expand operations, increasing in public hours, bringing back public programming, expanding educational offerings, and reopening more visitor amenities including most retail and food service outlets.

Our attendance of 632,000 gently exceeded the budget, and this strong attendance caused most audience-driven revenues to exceed budget. Membership substantially surpassed its goal, as did overall operating philanthropy. Securing an additional touring exhibition and strong results in intellectual property revenues also contributed to revenue growth. Revenues exceeded our total budgeted goals by more than $7 million. Expenses were $4 million short of budget, primarily in salary and benefits due to a challenging job market. The combination of increased revenue and reduced expenses led to an overall deficit of $2 million at year’s end, lower by $11 million from our budgeted deficit of $13 million. This better-than-expected deficit was reduced to breakeven by using Bridge, Landing, and Road funds, which have been utilized over the past three fiscal years to eliminate pandemic-related deficits. Funds remain to address the FY23 planned deficit as well those foreseen in our preliminary modeling for the two years that follow.

Financial markets experienced turbulence with rising interest rates and inflation, particularly in the second half of the fiscal year. A preliminary endowment value of $653 million resulted in a decrease of $93 million since last year with a preliminary performance return of negative 13.7 percent. We hope to do somewhat better when all private equity managers have reported final results in the coming months. The rising interest rate environment has caused a decline in the liability to unwind the Museum’s $100 million interest rate swap debt by approximately half. We continue to watch this carefully.

During the year, our Board of Trustees Restricted Endowment increased by approximately $20 million as a result of the transfers of $10 million of excess Bridge, Landing, and Road funds and $10 million of proceeds from the sale of the Mission Hill property.

Additionally, at the end of June, the Museum and the MFA Union Local 2110 of United Auto Workers finalized its first contract for a three-year term.

In May, the budget for FY23 was adopted by the full board. The Leadership team focused on key areas to balance a continued focus on financial responsibility with the need to invest in our staff and programs, and to support the MFA’s mission in the upcoming year. Key goals of the budget include attendance at 900,000, increased membership and levels of staffing. The budget has a planned deficit of $6.8 million.

I wish to thank the Budget and Finance Committee for their continued commitment to work toward financial sustainability, as well as the Leadership Team and the Financial Team as we navigated through the past year. I also wish to extend a warm welcome our new Chief Financial Officer, Katie Vandenabeele.

Respectfully submitted,

Susan Weatherbie
Treasurer and Chair of the Budget