Report to the Board of Regents

Fiscal Year 2006

January 2007

The Great Hall of the spectacularly renovated Donald W. Reynolds Center

for American Art and Portraiture in the historic Patent Office Building, which 

reopened to the public on July 1, 2006

Report to the Regents—Fiscal Year 2006 1

Public Impact

Visits to the Smithsonian 

In fi scal year 2006, the Institution counted 27.5 million visits to its museums, traveling exhibitions, and 

National Zoo:

23.0 million visits to Smithsonian museums in Washington and New York, plus the National Zoo 

and Udvar-Hazy Center (down 5 percent from the previous fi scal year);

4.5 million visits to traveling exhibitions mounted by the Smithsonian Institution Traveling 

Exhibition Service (down 2 percent from the previous fi scal year).

Much of the overall small decline in attendance in comparison with fi scal year 2005 was attributable to 

decreases in visitorship at two destinations: the National Museum of the American Indian (down 

34 percent) and the Udvar-Hazy Center (down 19 percent). In both cases, this refl ects an expected loss of 

the “novelty factor” at these new museums. 

Visitation to the National Zoo was up by 34 percent, thanks to public interest in the panda cub Tai Shan. 

Visitation was also strong at the Smithsonian American Art Museum and National Portrait Gallery in the 

newly renovated Donald W. Reynolds Center for American Art and Portraiture; nearly 275,000 visitors 

fi led into the Reynolds Center in the fi rst three months after it reopened its doors to the public on July 1. 

And Smithsonian art museums had a spectacular year, with major increases in visitorship at the National 

Museum of African Art (23 percent), Renwick Gallery (24 percent), Cooper-Hewitt (30 percent), and 

Freer and Sackler Galleries (37 percent).

Visits to Smithsonian Museums and Traveling Exhibitions

Fiscal Years 2004, 2005, and 2006

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

African Art

Air and Space

American History

American Indian

American Indian-NY

Anacostia

Cooper-Hewitt

Freer/Sackler

Hirshhorn

Natural History

Postal

Renwick

Reynolds Center

Ripley Center

SI Castle

Udvar-Hazy Center

National Zoo

SITES

FY 2004

FY2005

FY2006

Smithsonian Online

Smithsonian websites logged over 140 million visits in fi scal year 2006. Th e public continued to fl ock to 

the National Zoo’s website to see the giant panda cub Tai Shan and to learn about all things panda. 

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•
2 Report to the Regents—Fiscal Year 2006

A major highlight in fi scal year 2006 was the launch of a new website by the Smithsonian Photography 

Initiative to serve as a gateway to the 13 million–plus photographs in the Institution’s collections. 

Among the websites launched and awards received, other highlights included the following:

As part of the Biodiversity Heritage Library (BHL) project, the Smithsonian Institution Libraries 

has created an interface that provides access to all BHL-related digital content in the Libraries’ 

collections—77,000 page images.

Th e Smithsonian American Art Museum’s blog Eye Level won an American Association of Museums’ 

Silver Muse award.

Th e redesigned National Museum of American History website received an Award of Merit from the 

design magazine How and was featured in its April 2006 Interactive Design Awards issue. 

Th e National Museum of Natural History launched the interactive website The Dynamic Planet: 

World Map of Volcanoes, Earthquakes, Impact Craters, and Plate Tectonics.

Th e National Museum of American History’s Legendary Coins and Currency website received a gold 

Summit International Creative Award.

For the second year, the National Museum of African Art’s website was selected as a National 

Endowment for the Humanities’ EDSITEment online resource.

SmithsonianEducation.org was honored by the National Endowment for the Humanities, and 

another Smithsonian Center for Education and Museum Studies website, SmithsonianSource.org, 

was selected as a “site of the day” by Federal Resources for Educational Excellence.

Th e National Postal Museum launched Arago, a website created specifi cally for the study of philately 

and postal history that combines the Museum’s collections database with innovative storytelling tools.

Exhibition Highlights

On December 8, 2005, the public fi nally got a chance to meet Tai Shan, 

the National Zoo’s giant panda cub, when the Zoo opened his exhibit space 

for limited public viewing for the fi rst time since his birth on July 9, 2005.

The 40th annual Smithsonian Folklife Festival began on June 30 on the 

Mall, featuring Alberta at the Smithsonian, Carriers of Culture: Living 

Native Basket Traditions, Nuestra Musica: Latino Chicago, and a series of 

evening concerts of African-American music from New Orleans, Been in 

the Storm So Long. Over 900,000 people attended the 10-day event.

Listening to Our Ancestors: Th e Art of Native Life Along the North Pacifi c 

Coast (February 3, 2006–January 2, 2007) opened at the National Museum 

of the American Indian to warm reviews.

Smithsonian art museums had a memorable year, with many popular and 

critically acclaimed exhibitions:

Th e Sackler Gallery off ered royal Turkish robes in Style and Status: Imperial Costumes from Ottoman 

Turkey (October 29, 2005–January 22, 2006); prints and paintings by the renowned Japanese artist 

Katsushika Hokusai in Hokusai (March 4–May 14); and playful contemporary art from Hiroshi 

Sugimoto in History of History (April 1–July 30).

Cooper-Hewitt’s Fashion in Colors (December 9, 2005–March 26, 2006) explored color as a design 

•

•

•

•

•

•

•

•

•

•
Report to the Regents—Fiscal Year 2006 3

element in Western clothing, while Feeding Desire: Design and the Tools of the Table (May 5–

October 29) examined cutlery dating from 1500 to the present.

Th e National Museum of African Art’s African Art Now: Masterpieces from the Jean Pigozzi 

Collection (November 16, 2005–February 26, 2006) featured a stunning selection of contemporary 

art from around the African continent.

Over 37,000 visitors fi led into the International Gallery between October 21, 2005, and January 8, 

2006, to see the National Portrait Gallery’s Retratos: 2,000 Years of Latin American Portraits. 

William Wegman—Funney/Strange at the Smithsonian American Art Museum (July 1–

September 24) provided a major retrospective of Wegman’s eccentric work.

The Hirshhorn offered two career surveys of major contemporary artists: Hiroshi Sugimoto

(February 16–May 14) and Anselm Kiefer: Heaven and Earth 

(June 20–September 10).

Th e Renwick Gallery’s Grant Wood’s Studio: Birthplace of 

“American Gothic” (March 10–July 11) included the iconic 

painting American Gothic, which is rarely loaned by the Art 

Institute of Chicago. 

Rarity Revealed: The Benjamin K. Miller Collection (May 27, 

2006–October 1, 2007) at the National Postal Museum featured the 

“1-cent Z grill” stamp, one of only two copies known to exist.

Th e Smithsonian Latino Center celebrated Hispanic Heritage Month 

by presenting Myth, Mortals and Immortality: Works from Museo 

Soumaya de México in the International Gallery (September 14–

November 2), showcasing works by Mexican artists.

Collections Highlights

On April 24, in a ceremony held at the Castle, the National Portrait Gallery unveiled the portraits of 

President Bill Clinton and First Lady Hillary Rodham Clinton that will join the Museum’s collections.

On May 23, Steve Fossett donated the Virgin Atlantic Global Flyer, which fl ew around the world in 80 

hours without refueling, to the National Air and Space Museum. And on September 30, the Northrop 

Grumman Corporation sponsored an event at the Udvar-Hazy Center to welcome the Grumman 

F-14D(R) “Tomcat” into the Museum’s collections.

In October 2005, the National Museum of American History announced it had acquired an unparalleled 

collection of fi refi ghting and maritime history artifacts, the Historical Collection of the Insurance 

Company of North America, as a gift from the CIGNA Corporation. 

Th e National Zoo kicked off 2006 with the birth of Balawat, a male sloth bear 

cub. Later in the year, a litter of three Sumatran tiger cubs was born, consisting of 

one male and two females.

Education, Event, and Program Highlights

Th e Smithsonian’s headline event of 2006 was the July 1 reopening to the public 

of the gloriously renovated Donald W. Reynolds Center for American Art and 

Portraiture in the historic Patent Office Building, home to the Smithsonian 

•

•

•

•

•
4 Report to the Regents—Fiscal Year 2006

American Art Museum and National Portrait Gallery. The pre-opening 

dedication ceremony on June 21 was led by Chief Justice John Roberts, and 

the opening day festival attracted over 18,000 people. 

In January, Regents Xavier Becerra, Ralph Regula, Manuel Ibañez, Shirley 

Ann Jackson, Robert Kogod, Roger Sant, and Allen Spoon visited the 

Smithsonian Tropical Research Institute facilities in Panama, along with 

Secretary Lawrence Small, Deputy Secretary Sheila Burke, and Under 

Secretary for Science David Evans. Panamanian President Martín Torrijos 

and U.S. Ambassador William Eaton each hosted events for the visitors.

In February, the Freer Gallery held the fi rst in a yearlong series of special events marking the centennial 

of Charles Lang Freer’s gift to the nation. 

Th e National Air and Space Museum celebrated both the 60th anniversary 

of its founding (as the National Air Museum) and the 30th anniversary of its 

National Mall building, which has welcomed more than 250 million visitors.

On September 6 in the Castle, the Smithsonian Latino Center held its 

inaugural benefi t gala, ¡Con Sabor! Among the guests were Florida governor 

Jeb Bush and his wife Columba, Senator Mel Martinez, Senator Ken Salazar, 

Cheech Marin, and José Feliciano.

On July 9, the National Zoo celebrated the fi rst birthday of panda Tai Shan

with performances by traditional Chinese dancers and musicians, talks by 

Zoo staff , and a custom-made frozen treat for Tai Shan himself.

Th e Cooper-Hewitt exhibition Josef + Anni Albers won the International 

Art Critics Association’s award for Best Architecture or Design Show. Two Hirshhorn shows also were 

honored: Ana Mendieta (Best Monographic Exhibition) and Visual Music (Best Exhibition Featuring 

Video, Film, or Performance Art.)

At the 2006 American Association of Museums Publication Awards, the Smithsonian American Art 

Museum’s America’s Art was awarded the competition’s top award, the Frances Smyth-Ravenel Prize 

for Excellence in Publication Design; the Freer and Sackler’s Asiatica was recognized as the best annual 

report; the National Museum of African Art’s family guide to its exhibition BIG/small won fi rst place 

in the education division; and the companion book to the Smithsonian Traveling Exhibition Services’ 

Wondrous Cold was honored for graphic design.

Th e Hirshhorn’s Visual Music: Synaesthesia in Art and Music Since 1900 won the prestigious 2005 

George Wittenborn Memorial Book Award of the Art Libraries Society of North America.

Th e inaugural Outwin Boochever Portrait Competition at the National Portrait Gallery drew more than 

4000 entries, the best of which were displayed in a special (and very popular) exhibition in the Gallery.

On April 27, Cooper-Hewitt welcomed over 400 guests for the opening of its Target National Design 

Education Center, featuring a keynote address by designer Mark Ecko.

Twenty-four young people were selected out of a nationwide pool of 13,000 applicants for the Latino 

Center’s Young Ambassadors Program for artistically gifted Latino high school seniors.

National Outreach

Smithsonian Affiliations signed agreements with 17 new Affi liates in fi scal year 2006. At the end of the 
Report to the Regents—Fiscal Year 2006 5

year, there were 152 Affi liates in 39 states, the District of Columbia, Puerto Rico, and Panama. Seventythree Affi liates agreements are now fully implemented, with signifi cant collaborations in place.

Th e Smithsonian Institution Traveling Exhibition Service (SITES) presented 53 exhibitions at 201 

locations in 44 states. SITES also put fi ve new shows on the road: Wondrous Cold: An Antarctic Journey;

Documenting China: Contemporary Photography and Social Change; In Focus: National Geographic 

Greatest Portraits; 381 Days: Th e Montgomery Bus Boycott Story; and Covered Bridges.

On November 10, 2005, the Lemelson Center’s educational video on African-American inventor Lewis 

Latimer, Lewis Latimer: Renaissance Man, was broadcast to over 23,000 schools across the nation with a 

combined enrollment of nearly 15 million students. On May 5, a satellite broadcast of Space Day 2006

at the Udvar-Hazy Center was beamed to more than 38,000 schools.

The Smithsonian Associates (TSA) presented 1,500 educational programs that reached more than half a 

million learners of all ages and interests. Of these, 47 programs took place outside the Washington, D.C., 

area, in 16 cities from Naples, Florida, to Seattle, Washington.

Focused, First-Class Scholarship

Science Units

Th e number of publications by Smithsonian researchers in scientifi c journals reached 782 in fi scal year 

2006, exceeding last year’s total by 41 percent. 

Th e National Zoo, the Smithsonian Tropical Research Institute, and the Offi ce of the Under Secretary 

for Science have been forging partnerships within the U.S. government to apply the expertise of the 

Smithsonian to the national eff ort to address avian flu.

National Museum of Natural History (NMNH)

Doug Owsley is coordinating researchers conducting the next phase 

of study on the 9,000-year-old skeletal remains known as Kennewick 

Man—one of the oldest human skeletons to be found in the 

Americas—which promises to off er insight into who fi rst colonized 

the hemisphere. Owsley’s landmark research on Kennewick Man was 

the cover story for the March 13 issue of Time magazine.

A team of scientists led by Scott Wing has found that rapid 

global warming 55 million years ago caused major changes in the 

geographic distribution of plants in North America. Th eir research, 

based on fossil plants, was published as the cover story in Science. 

A sample of comet dust grains brought to Earth by NASA’s Stardust 

spacecraft is now being studied by scientists in the Department of 

Mineral Sciences. It is thought to contain material from some

4.5 billion years ago and to be a treasure trove of information about 

how our solar system formed.

Smithsonian Astrophysical Observatory (SAO)

SAO astronomers are using the Smithsonian’s Submillimeter Array in Hawaii to study complex organic 
6 Report to the Regents—Fiscal Year 2006

molecules in the Orion Nebula, which may resemble 

the material around the young Sun and therefore off er 

insights into the seeds of life on Earth. 

SAO astronomers have discovered a planet unlike any 

other. Orbiting a star 450 light-years away, it is both the 

largest ever found (a radius about 1.38 times Jupiter’s) and 

the least dense (a mass only half of Jupiter’s).

Writing in Nature, SAO astronomers presented 

convincing evidence that the nearby galaxy Andromeda 

suff ered a nearly head-on collision with another galaxy 

about 210 million years ago.

Using the Chandra X-ray Observatory, an SAO team has imaged dark matter and normal matter being 

wrenched apart by the collision of two clusters of galaxies, providing direct evidence for the existence of 

dark matter. 

Smithsonian Tropical Research Institute (STRI)

STRI reported nearly 300 scholarly publications this year. Among them were seven books, including 

Dolores Piperno’s defi nitive Phytoliths: A Comprehensive Guide for Archaeologists and Paleoecologists.

In May, STRI signed an agreement with the United Nations Educational, Scientific and Cultural 

Organization (UNESCO) to coordinate the development of a 

new management plan for Panama’s Coiba National Park and 

Special Marine Conservation Area.

STRI has established an Office of BioInformatics to manage 

the Institute’s scientifi c data on the web. It will serve as a 

clearinghouse for STRI scientifi c data, including links to relevant 

STRI web pages, databases, documents, and images.

An environmental leadership program to promote conservation in tropical forests has been created at Yale 

University, and will be coordinated in partnership with STRI.

National Zoological Park (NZP)

Several NZP reintroduction projects are currently under way in Mongolia, Kazakhstan, and China for 

the endangered Przewalski’s horse, which was once considered extinct in the wild.

In June, the National Zoo launched Elephant Trails: A Campaign to Save Asian Elephants, an initiative 

with four elements: a new habitat for its Asian elephants; a conservation program; a public education 

program; and a new research facility at its Conservation and Research Center in Front Royal, Virginia.

Other Scientifi c Research Centers

Th e Smithsonian Center for Materials Research Education (SCMRE) changed its name to the Museum 

Conservation Institute (MCI) to better convey its mission as the center for specialized conservation 

expertise for Smithsonian collections. In fi scal year 2006, MCI collaborated with 22 Smithsonian units.

Th e Smithsonian Environmental Research Center’s fi eld experiment on how rising atmospheric carbon 

dioxide aff ects natural plant communities marked its 20th year; it is the longest-running project of its 

type in the world.
Report to the Regents—Fiscal Year 2006 7

Scientists on the staff of the National Air and Space Museum’s Center for Earth and Planetary Studies 

continue to serve on science teams for several spacecraft missions, including the Mars Exploration 

Rovers, Mars Reconnaissance Orbiter, Mars Express, and MESSENGER to Mercury.

Art, History, and Culture Units

Th e Smithsonian is currently introducing a new strategic emphasis on research and publications in the 

fi elds of art, history, and culture to complement its globally recognized excellence in scientific fields.

In fiscal year 2006, research staff at the National Museum of American History published over 30 

articles and essays, as well as three books. The Scrapbook in American Life, coedited by the Museum’s 

Katherine Ott, received an Allen Noble Award from the Pioneer Society of America.

Field research for the 2007 Smithsonian Folklife Festival is nearing completion in sites ranging from 

Northern Ireland to the Asian nations along the Mekong River. Notes, videos, photos, and sound 

recordings from these eff orts will become part of the Ralph Rinzler Folklife Archives and Collections.

Th e National Portrait Gallery issued four new publications: Faces of Discord: The Civil War Era; Portrait 

of a Nation; The Outwin Boochever Portrait Competition 2006; and Portraiture Now.

Six titles were added to the publishing program of the National Museum of the American Indian, 

including a co-publication with the National Geographic Society based on the Museum’s exhibition 

Listening to Our Ancestors: The Art of Native Life along the North Pacific Coast.

Among the publications from National Air and Space Museum historians were Critical Issues in the 

History of Spaceflight (edited by Steven Dick and Roger Launius) and Chuck Yeager and the Bell X-1: 

Breaking the Sound Barrier (authored by Dominick Pisano, F. Robert van der Linden, and Frank Winter).

Management Excellence

Leadership Milestones

John G. Roberts, Jr., Chief Justice of the U.S. Supreme Court, was elected chancellor of the Smithsonian 

by the Board of Regents on November 9, 2005. He succeeds the late William Rehnquist.

Camille Giraud Akeju became director of the Anacostia Community Museum in December 2005. She 

previously served as president/CEO of the Harlem School of the Arts in New York City. 

John W. Smith was named director of the Archives of American Art. He previously served as assistant 

director for collections, exhibitions, and research at the Andy Warhol Museum. 

Major Construction, Renovation, and Facilities Projects

National Museum of African American History and Culture

Total project and program cost to be determined

Pre-project planning for the National Museum of African American History and Culture—including 

an environmental impact statement (EIS) and historic preservation research and documentation—was 

kicked off in September. Th e work will be performed by the Smithsonian with a team of a highly 

regarded consultant specialists, as outlined in the National Environmental Policy Act (NEPA) and the 

National Historic Preservation Act (NHPA). Because the Smithsonian is not a “Federal agency” as 

defi ned by NEPA, the National Capital Planning Commission is working with the Institution on the 

EIS as the joint lead and “responsible Federal agency.” Th e EIS and historic preservation documentation 
8 Report to the Regents—Fiscal Year 2006

portions of pre-project planning should be completed by May 2008. Pre-design services are anticipated to 

begin in 2007. A separate competitive process will be undertaken to select a design team.

National Museum of American History, Kenneth E. Behring Center

Central core: $85.1 million total project cost 

Th e National Museum of American History, Kenneth E. Behring Center, was closed on 

September 5 to begin the renovation of its public space. Th e $85.1 million project includes revitalization 

of the Museum’s infrastructure, central core, and the Star-Spangled Banner exhibit. Th e Federal 

contribution is $4 million for design and $41.9 million for public space renewal. Th e fi scal year 2007 

Federal appropriation of $13.5 million will complete Federal funding for the central core project. Ninetyfi ve percent design documents were received shortly after the end of the fi scal year and construction is set 

to start in December. Th e building will reopen in summer 2008 with the Star-Spangled Banner exhibit in 

place. Private funds have been raised for the central core and fund raising continues for the Star-Spangled 

Banner exhibit. 

Donald W. Reynolds Center for American Art and Portraiture

$298 million total estimated project and program cost

Th e Donald W. Reynolds Center for American Art and Portraiture in 

the historic Patent Offi ce Building reopened to the public on July 1, 

2006. Th e privately funded courtyard enclosure is anticipated to open 

in late fall 2007. Th e installation of structural steel framing for the 

roof enclosure was completed in September 2006 and the enclosure 

will be glazed and sealed by February 2007, prior to installation of 

the courtyard fl oor and interior landscaping. Th e revised concept 

design for the exterior landscape, perimeter security, and F Street stair 

reconstruction will be fi nalized in December 2006, prior to submission 

for review by the Commission of Fine Arts and the National Capital 

Planning Commission.

National Zoological Park

$111.7 million total estimated cost for Asia Trail, phases I and II

Th e fi rst phase of the Asia Trail project, which provides a new home to the giant pandas and other Asian 

species, was opened to the public shortly after the end of fi scal year 2006. Th e second phase, currently 

under design, will renovate the historic elephant house and expand the elephants’ facilities and trails; a 

design-build contract (for both design and construction) was awarded in September. Phases I and II will 

upgrade nearly 25 percent of the Zoo’s developed area. Phase I was completed at a cost of $52.7 million 

($45.2 million Federal), and the projected cost for phase II is $59 million ($35.6 million Federal). Th e 

Federal contribution for phase II construction is to be provided in fi scal years 2006 ($8 million), 2007 

($13 million), and 2008 ($9 million); $5.6 million has been appropriated for design.

National Museum of Natural History, Ocean Hall Exhibit

$44.6 million total estimated project and program cost

Th e National Museum of Natural History is in the midst of its largest renovation of public space in 

the last 40 years, involving seven major halls. Installation of the Ocean Hall exhibit will begin upon 

completion of the infrastructure and restoration of the historic interior in March 2007. Th e total 
Report to the Regents—Fiscal Year 2006 9

estimated cost of the Ocean Hall is $44.6 million: $22.4 million from Smithsonian Federal funding for 

fi scal years 2002 through 2006 and $22.2 million from a NOAA grant. Th e construction of the Federally 

funded portion is 77 percent complete. Th e exhibition is targeted to open during the fall of 2008.

Museum Support Center, Pod 5

$42.7 million total estimated project cost

Construction of a fi fth storage pod at the Museum Support Center (MSC) in Suitland, Maryland, began 

in October 2005. Pod 5 will house most of the alcohol collections currently stored at the Natural History 

building and all collections from Pod 3 at MSC. Th is will eliminate a major safety concern by removing 

365,000 gallons of alcohol from the Natural History building. Congress has provided $42.7 million 

through fi scal year 2007. Construction is 73 percent complete and slated to be fi nished in spring 2007.

Arts and Industries Building (AIB) Staff and Programs Relocation and Building Closure

$34 million total project cost

At the end of the fi scal year, most staff previously housed in 

the mothballed AIB had been relocated, and all remaining 

staff were scheduled to be moved out by the end of the 

calendar year. 

Permanent Physical Security Barriers

$55 million total project and program cost

Great progress has been made in securing the perimeters 

of the three most visited museums on the Mall. Perimeter 

security improvements at the National Air and Space Museum will be fi nished in late 2006. Th e 

construction contract for the National Museum of Natural History was awarded in August. Th e design 

contract for the National Museum of American History was awarded in April and construction funding 

will be requested in the fi scal year 2008 facilities capital appropriation. No funding for these programs 

is included in the fi scal year 2007 Federal request; as funding continues to be delayed, the budgets of 

individual projects will rise to refl ect cost increases.

Victor Building Staff Relocation and Consolidation

$13 million total project cost

Th e sale of the Victor Building in late 2005 requires the relocation of approximately 750 staff to leased 

space and the consolidation of remaining staff on lower fl oors of the Building. Approximately 75,000 

square feet have been leased at Capital Gallery for those offi ces whose mission requires proximity to the 

Mall and an additional 50,000 square feet has been leased in Arlington, Virginia. All moves and the 

consolidation of units remaining in the Building are expected to be completed by January 31, 2007. Th e 

projected rent for space in Virginia, near the Mall, and in the Victor Building (for those units remaining 

there) will not exceed the rent currently paid for Victor Building occupants.

Energy Conservation 

Due in part to the eff ects of Hurricanes Katrina and Rita, utility rates increased dramatically in fi scal year 

2006, leading to a projected $6.7 million utility budget shortfall. Th e Offi ce of Facilities Engineering and 

Operations began an emergency conservation campaign to address this shortfall and created an 
10 Report to the Regents—Fiscal Year 2006

Energy Action Team to pursue reductions in energy use. Th ese eff orts were highly successful. More than 

half of tracked facilities achieved double-digit reductions in energy use compared to fi scal year 2005, with 

some saving more than 30 percent. Intensive conservation eff orts will continue in fi scal year 2007.

Flood Response 

Torrential rains and fl ooding in late June forced the closure to the public of several Smithsonian facilities, 

including the Castle, the National Museum of American History, and the National Museum of Natural 

History, and put priceless collections at risk. Th e exemplary response of trained in-house facilities staff 

averted a major crisis for Smithsonian buildings, systems, and collections. 

Financial Strength

Fiscal year 2006 ended as it began, with the Smithsonian engaged in an all-out eff ort to revitalize its 

aging physical infrastructure and wipe out a $2.3 billion facilities capital and maintenance funding 

backlog. In September 2006, a delegation of the Board of Regents met with the President of the United 

States to press for increased Federal funding for facilities and maintenance.

At fi scal year-end, the Endowment was valued at $843 million, a record high and a positive budget 

variance of $87 million. Th e total return on the Endowment over the last fi ve years (9.2 percent) has 

exceeded the market return (8.0 percent).

Smithsonian Institution Year-end Endowment Value ($ in millions)

843

779 756 697

638

552

626

0

300

600

900

FY01 FY02 FY03 FY04 FY05 FY06

Bdgt

FY06

Actual

Financial Performance

In fi nal action on the Smithsonian’s appropriation for fi scal year 2006, Congress approved less funding 

than required to fully fund the Congressionally mandated Federal staff pay raise and to support ongoing 

operations. Th e Institution absorbed this funding shortfall largely by not fi lling newly vacant positions. 

Revenues exceeded the budget by $50 million, largely due to increases in the following areas: funds raised 

by the Institution; interest earned on short-term investments; NASA grant awards to the Smithsonian 

Astrophysical Observatory (SAO); and other miscellaneous income. Th ese increases were partially off set 

by decreases in Smithsonian Business Ventures net gain (due to poor performance against the budget 

of catalog and museum retail operations) and Federal revenues for operations (due to across-the-board 

reductions in appropriations imposed by Congress after the budget was prepared).

Expenses exceeded the budget by $28 million, largely due to the non-cash unfunded actuarial liability 

associated with future workmen’s compensation claims (for which the Institution did not budget); 
Report to the Regents—Fiscal Year 2006 11

higher-than-planned spending of restricted Trust funds; and increased spending associated with increased 

NASA grant awards to SAO. Th ese were partially off set by lower spending of unrestricted Trust funds in 

response to the decrease in SBV’s contribution; a decrease in Federal spending associated with the acrossthe-board reductions in Federal appropriations; and a decrease in Federal spending on lower-priority 

activities pending resolution of an unanticipated utilities budget shortfall. 

Smithsonian Institution Financial Performance for Fiscal Year 2006 ($ in millions)

FY2006 Budget FY2006

Audited Actual

Variance to 

Budget

Revenues 929 979 50

Expenses 852 880 (28)

Endowment Return 

Reinvested

20 38 18

Other 36 9 (27)

Growth in Net Assets 133 146 13

Th e negative budget variance of $27 million in the “Other” category was largely due to an incorrect 

budget assumption that the gain from the sale of the Victor Building would be recognized in its entirety 

in the year of the sale instead of over 15 years, the life of the Smithsonian’s leaseback of approximately 

32 percent of the building. Taken together with a few other minor activities, the Smithsonian forecasts an 

increase in net worth of $146 million—a positive budget variance of $13 million.

Financial Summary

During fi scal year 2006, the revitalization of the Institution’s aging infrastructure continued—albeit with 

less momentum due to a decline of 31 percent in Federal facilities revitalization funding. Nonetheless, 

the Reynolds Center celebrated its grand opening on July 1 to great acclaim, and other major capital 

projects moved ahead on budget and on schedule.

Enacted Funding for Smithsonian Facilities Revitalization ($ in millions)

80 102

118

98

68 83

57

0

20

40

60

80

100

120

140

FY01 FY02 FY03 FY04 FY05 FY06 FY07

Budg

Unfortunately, the Smithsonian’s budget for physical infrastructure remains inadequate, as documented 

by two independent studies. A 2001 Congressionally mandated report by the National Academy 

of Public Administration (NAPA) established an average annual facilities revitalization funding 

requirement of $150 million. An April 2005 report by the Government Accountability Offi ce (GAO) 

expanded on the NAPA report, adding institutional maintenance and construction requirements to an 

updated inventory of required facilities revitalization projects and establishing a more comprehensive 
12 Report to the Regents—Fiscal Year 2006

average annual funding requirement of $255 million. Th is validated the Smithsonian’s overall facilities 

requirement of $2.3 billion for fi scal years 2005–13. 

Without at least $100 million annually more than it is currently receiving for facility revitalization and 

maintenance, the Smithsonian cannot expect to get ahead of the problem of its aged physical plant. 

Further evidence of this was provided in May 2006 when the National Trust for Historic Preservation 

added the Arts and Industries Building to its list of endangered historic communities and landmarks 

nationwide.

Smithsonian leaders remain committed to the revitalization of the Institution’s physical infrastructure, 

but the competition for Federal resources is fi erce given the size of the Federal budget defi cit and the 

current focus on the war and homeland security. Securing adequate Federal funds for the revitalization 

and maintenance of the Institution’s facilities remains the Institution’s most pressing fi nancial challenge. 

External Aff airs

In fi scal year 2006, the Smithsonian recorded $137.1 million in private support from individuals, 

foundations, and corporations. Th is is 37 percent above the $100 million goal for the year. Twentyfi ve gifts of $1 million or more were received, including a $15 million gift from Boeing for phase 

II construction of the Steven F. Udvar-Hazy Center, the largest corporate gift ever presented to the 

Smithsonian. Other leadership gifts have provided support for the Reynolds Center, the National 

Museum of Natural History’s Ocean Science Initiative, the National Museum of African American 

History and Culture, the revitalization of the National Museum of American History, and other 

Institutional fund-raising priorities. Th e number of gifts received in the $500,000 to $999,999 range 

increased signifi cantly over the prior year, and more than half (54 percent) of fi scal year 2006 gifts came 

from individuals. 

Th e Contributing Membership increased its revenues over last year and the James Smithson Society 

continued to record strong growth. In June, the Offi ce of External Aff airs launched a pan-Institutional 

online giving initiative based around a monthly e-newsletter, Smithsonian Focus, and early results for the 

program are very positive. 

Smithsonian Business Ventures

Smithsonian Business Ventures (SBV) encompasses Smithsonian and Air & Space magazines, 25 museum 

stores, 11 restaurants, three IMAX theaters, and the Smithsonian gift catalog. SBV also includes 

consumer product licensing, e-commerce, and commercial media enterprises. All of these generate 

unrestricted income for the Institution.

In fi scal year 2006 total revenues from operations were $164.4 million, representing a 4.2 percent 

decrease over 2005. Th e net gain from operations was $23.9 million, which was $6.1 million (20.3 

percent) below the Institution’s budget. Th is shortfall was due to a decline in museum visitation (a 

decrease from fi scal year 2005 of 2 million visitors at the museums where SBV operates) that aff ected 

retail operations and an unsuccessful catalog off ering in the 2005 holiday season. While museum retail 

operations and the catalog did not achieve 2006 goals, Smithsonian magazine, licensing, and Smithsonian 

Journeys tours all met or exceeded the budget.

SBV established two new businesses in fi scal year 2006 that will generate over $1.5 million of incremental 

revenue in fi scal year 2007 and much more in the long term if these ventures prove successful: 

SBV joined with Showtime Networks to create Smithsonian On Demand, a major media partnership 

to produce and distribute video programming that will be sold to cable and satellite television 

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Report to the Regents—Fiscal Year 2006 13

SBV joined with Showtime Networks to create Smithsonian On Demand, a major media partnership 

to produce and distribute video programming that will be sold to cable and satellite television 

operators and distributed via broadband internet channels. By fall 2006, production was under way 

on more than 50 programs featuring Smithsonian collections, research, and programs. At launch, 

Smithsonian On Demand will bring the Smithsonian to tens of millions of cable television households.

Th anks to a new partnership with EF Travel, SBV expanded its travel business to include student 

tours to destinations throughout the United States, including to the Smithsonian and Washington.

Other highlights of the year included the following: 

A record number of travelers took a trip with Smithsonian Journeys in 2006, with more than 7,000 

members and friends experiencing an educational tour to destinations in the United States and 

around the world. 

Several new visitor services were opened this year, such as a museum gift shop and book store at the 

new Donald W. Reynolds Center and a café to serve visitors at the Smithsonian Castle.

Smithsonian magazine added new departments and made dynamic design changes for its more than 

seven million monthly readers, such as the new “Around Th e Mall” section that features expanded 

coverage of news from the Smithsonian and is set apart with its own cover and table of contents. 

Enhancements to the SmithsonianMagazine.com website include the daily features “Photo of the 

Day,” “Did You Know?,” and “Today in History.”

Smithsonian Books enjoyed its second successful year with upcoming off erings to include 

Smithsonian Treasures of American History, featuring 150 icons from the National Museum of 

American History; After Sputnik: 50 Years of the Space Age, which uses artifacts in the collection of 

the National Air and Space Museum to tell the story of space exploration; and Letters On The Wall: 

Offerings and Remembrances from the Vietnam Veterans Memorial, a moving collection of tributes left 

at the Memorial.

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