Financial mess at Williamsburg

Bloomberg News

The Colonial Williamsburg Foundation is hiring outside managers for its commercial operations to ease financial woes that include more than $300 million in debt and overspending from its endowment.

The nonprofit foundation that manages Colonial Williamsburg in Virginia — a historic district where actors in 18th-century garb depict life in government halls, homes and taverns — will outsource management of its golf courses, retail stores, maintenance and facilities, and real estate. The restructuring affects 333 employees, with 71 being dismissed and the rest moved to jobs with new employers, the foundation announced Thursday in a statement.

“Business decisions made in years past, less American history being taught in schools” and changing tastes contributed to the financial struggles, Mitchell Reiss, the foundation’s chief executive officer, said in a letter to the community.

By the end of 2016, debt was more than $300 million, with due dates for repayment coming “very soon,” Reiss said.

Financial difficulties have placed “significant pressure” on the endowment, which is managed by Charlottesville, Va.-based Investure. Former University of Virginia investing chief Alice Handy runs the money manager, which caters to a select group of endowments and founda- tions.

Handy declined to comment.

The value of the foundation’s endowment declined 6.9 percent last year to $664 million.

The fund “has in the past covered our yearly losses and allowed us to stay in business,” Reiss said in the letter. “While most nonprofit organizations withdraw 5 percent annually from their endowment, in 2001 we began to withdraw more than 5 percent, at times reaching as high as 12 percent.

“If we continue at this rate, we could exhaust the endowment available to support our operations, including many related to our core educational mission, in just eight years, and perhaps sooner,” he said. “That outcome would lead to mission failure.”

The foundation, which lost $54 million from operations in 2016, declined to comment on the endowment’s fiscal 2016 performance.