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and trust resources that will be needed to meet program and operating aspirations of the Institution.

Trust fund projections, as mentioned earlier, are particularly vulnerable to fluctuations in the nation's economic climate.  They are presented to help explain the expected use of these funds.  Trust funds are composed of restricted and unrestricted funds.  Unrestricted trust funds (general and special purpose) originate from a variety of sources including income from endowments and current fund investments, parking and food service concessions, sales of Smithsonian products based on designs and objects in the collections, the Resident and National Associate Programs (including [[underlined]] Smithsonian [[/underlined]] magazine), a publications program, and the museum shops.  In addition, certain bureaus have their own income-producing activities, such as the Theater and Spacearium operations of the Air and Space Museum.  Restricted trust funds include gifts, grants, endowment and other income designed for specific projects and purposes by the donor.  The Freer fund is the largest example in this category, being strictly controlled under the terms of the original bequest for the sole use of the Gallery.

There are three major purposes to which the unrestricted trust funds are applied.  First, the expenses of the Associate Programs and revenue-producing activities, such as the [[underlined]] Smithsonian [[/underlined]] magazine and the museum shops, are funded from the earned income of these activities.  Second, central management and administrative service units of the Institution, such as legal counsel, accounting, personnel, supply and others, receive trust fund allotments funded almost entirely from the overhead recovery on grants and contracts administered by the Smithsonian and from administrative fees charged to trust-funded activities.  General operating funds are also provided to various units for research and other specific purposes.  Third, a variety of allocations for important institutional and bureau needs has been made with the approval of the Board of Regents, such as the Collections Acquisition, Scholarly Studies, and Educations Programs; the Institution's Fellowship programs; the trust fund share of the rental costs incurred by administrative units and revenue-producing activities; and the reserves for the Quadrangle development.

After the three major categories of operating expense financed with unrestricted trust funds are met, the remaining unrestricted income is designated for three purposes.  Funds are transferred to the museums and galleries in recognition of their assistance in the planning and carrying out of museum shop, product development and concession programs.  These funds are used for the general operations of the recipient bureaus.  A second designation is for improvements to the physical plant or land acquisitions.  Finally, funds permitting, the Institution makes an annual transfer to its endowment for the purpose of providing income for rising costs in future years.