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[[underlined]] FY 1978 [[/underlined]]: The [[underlined]] Unrestricted [[/underlined]] fund budget for the current FY 1978 has been amended slightly to take into account the following changes in our auxiliary activities:  (1) due to the success of [[underlined]] The Smithsonian Experience [[/underlined]] (of which over 140,000 copies have been sold to date) the budgeted net income for the Publishing Task Force has been increased to $1.3 million from the earlier estimate of $1.0 million.  (2) Similarly, the high level of orders from our Mail Order Catalogue, as well as unusually brisk Christmas sales at the Shops, have led us to increase by a conservative $100,000 the previously estimated net income of these activities.  (3) Test mailings by Performing Arts suggest that their planned promotion of the Smithsonian Jazz Album will produce better results than earlier anticipated, reducing the estimated operating deficit of this activity to $100,000. (4) A partially offsetting factor will be expenditures of roughly $100,000 at the Belmont Conference Center to upgrade the buildings and grounds.  The net effect of these changes is an increase of Auxiliary Activities estimated net income by $400,000 compared to that shown at the last meeting, to a level of $8,837,000, up 10% from FY 1977.

This estimated increase in the unallocated income for the year should allow for strengthening of the essential unrestricted purpose fund balance to a level of about $4,400,000 by the end of FY 1978.  It is still contemplated that another $4,000,000 should be added to Endowment and that some $2,000,000 can be utilized for current programs to be discussed later.

FY 1978 budget estimates for Special Purpose and Restricted Funds (Exhibit C) have not been changed materially since the last meeting.

[[underlined]] Balance Sheet [[/underlined]]: Exhibit D. summarizes the September 30, 1977, balance sheet for Current, Endowment, Plant and Agency funds, with comparative figures