2012 Treasurer's Report

Synopsis

The income that supports the activities of the Academy comes from two major sources: program revenue received from sponsors to pay for the myriad studies and other activities undertaken each year by the National Research Council (NRC), and a much smaller sum that we obtain from our own endowment under the endowment spending policies adopted by the Council. Regarding the first of these, the 2012 results are not as strong as the 2011 results. Our total program revenue for 2012 ($298 million) experienced a decline of approximately 8% below 2011 revenue. This decline was anticipated based on the ongoing federal budget constraints and we anticipate for 2013 a continuation of this moderate downward trend.

To partially compensate for the downward trend in the NRC program level, the federal government announced toward the end of 2012, two settlements concerning the 2010 Deepwater Horizon disaster, one with BP Exploration and Production, Inc. and one with Transocean Deepwater, Inc. As part of these legal settlements, the NAS has been asked to establish a new $500 million, 30-year program on human health and environmental protection in the Gulf of Mexico. The NAS program will be for studies conducted based on scientific merit and integrity with emphasis on freedom of inquiry and independent, nonpartisan advice and recommendations. Among its activities, the program will fund projects in the public interest and not otherwise supported by private industry or government agencies. Building on existing Academy work and remaining mindful of the tragic loss of life and other human and environmental consequences of the Deepwater Horizon disaster, the NAS is starting a careful plan to guide the work of this long term program.

With respect to the second source of revenue, it has for many years been the formal policy of the Council to limit annual endowment spending to 5% of the average value of endowment for the twelve quarters ending in June of the previous year. When the endowment declined significantly in 2008, the Council made the prudent decision to hold spending to only 4% and to avoid spending whenever possible from endowments with value below the original gift amount, starting in 2009. This 4% draw produced $14.3 million of funding in 2009. These practices will continue for endowment spending in 2013. The return on the endowment in 2012 was positive at approximately 10.2% and roughly in line with the major stock indices.

Copyright:

2013

Book Details

Book Quality:

Publisher Quality

Publisher:

The National Academies Press

Date of Addition:

07/24/15

Copyrighted By:

the National Academy of Sciences

Adult content:

No

Language:

English

Has Image Descriptions:

No

Categories:

Nonfiction, Science, Politics and Government

Submitted By:

Bookshare Staff

Usage Restrictions:

This is a copyrighted book.