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8

[[underlined]]Notes on Financial Projections[[/underlined]]

The tables were designed to show trends in the Institution's future year resource patterns, and to reflect the changes and growth contained in the narrative portions of this report. The FY 1982 figures are end-of-year figures for expenditures and income. FY 1983 figures are those approved by Congress, Board of Regents' authorization to expend the FY 1983 appropriation, and Board of Regents' approval of the nonappropriated trust fund portion of the FY 1983 budget. 

The FY 1984 federal figures are those contained in the President's budget submitted to Congress in January 1983. Projections for years FY 1983-1988 were derived from basic materials prepared by the organizations and bureaus of the Institution and then reviewed by the appropriate members of the Secretary's Executive Committee. Beyond FY 1984, the trends represent management's best estimate of federal 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 designated 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 Education Programs; the Institution's Fellowship programs; and the reserves for the Quadrangle development.