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hearing handicapped participation will be continued. Art posters will be occasionally commissioned to commemorate Smithsonian events and offered for sale to the membership. The computer-based membership system will be upgraded to an on-line capacity, and the editorial, typesetting and printing functions for the Associate newsletter will be automated, both serving to increase program responsiveness. However, the acute problem of space requirements for staff and classrooms remains critical; relief from this situation is programmed into the Quadrangle development project.

[[underlined]] National Associate Program. [[/underlined]] The travel, regional events, and selected studies activies will all continue. Increasing energy costs and recessionary erosion of consumers' disposable income, however, may adversely affect growth in the travel program, both foreign and domestic tours, in the FY 1982-83 period. Higher air fares present problems for staff travel in connection with developing regional events, and in enrollment by National Associate members to come to Washington for the five-day selected studies programs. Airline cosponsorships are being sought to alleviate the problem. United Airlines has already agreed to participate.

The contributing membership of the National Associates is forecast to more than double, from 12,000 to 30,000 members, producing a net surplus by 1986 or 1987 of $1,000,000 or more. The projected overall performance for National Associates indicates an FY 1983 surplus of around $300,000.

The Development Office will continue to respond to the various project or acquisition needs of the bureaus and will be deeply involved in fund raising for the Quadrangle project, including a large-scale corporate drive. There will be continued emphasis on the deferred giving program launched in September 1979.

Projecting future trends in individual and foundation philanthropy is difficult, with both depending heavily on the state of the U.S. and world economy. However, corporate support of art and culture has been growing over recent years. The Development Office has been involved with gifts and grants to the Institution and its many organizations of approximately $2,000,000 per year. Assuming economic recovery by FY 1983 and a period of healthy growth, prospects for increased private support of the Institution seem favorable.

[[underlined]] Smithsonian Magazine. [[/underlined]] Although the Magazine's management is justifiably cautious about the ebb and flow of fashion in publishing, it also expects that the demand for its product will remain strong, with an annual financial surplus estimated at $5,000,000 to $6,000,000 over the next few years. It is primarily from these funds that the Board of Regents has been able to budget for the $2,000,000 program for acquisitions, scholarly stuides and educational outreach projects, to fund certain expenses previously met with federal appropriations, and to set aside sums each year for the development of the Institution's reserves. The Magazine will continue to produce a high quality product and to be supported entirely by the trust revenues which it generates. Net growth in subscribers is expected to average 50,000 a year from the present level of about 1,850,000. Due to inflationary cost increases associated with production and mailing, subscription rates may increase in late FY 1982 and FY 1984.