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ATTACHMENT 1

-37-
STATEMENT ON THE USE OF NONAPPROPRIATED FUNDS 
BOARD OF REGENTS MEETING SEPTEMBER 25, 1978

Starting with the original bequest of James Smithson, unrestricted trust funds have provided an important, although limited, source of income to the Institution to allow it to pursue significant areas of research or to support aspects of public education. The existence of unrestricted trust funds played an important role in helping to define the special character of the Institution--a character that encourages broad-based public support in the form of gifts to the National Collections and contributions and bequests for specific as well as unrestricted purposes. Such support might not have been so readily forthcoming had the public not perceived this special character of the Institution.

Development of an unrestricted endowment to provide income for current operations, to maintain flexibility in dealing with unanticipated opportunities, and to protect the Smithsonian against inflation or other adversities is not a new idea. In 1926, the Secretary, Charles G. Walcott, made an urgent appeal for a substantial increase in the Institution's endowment funds. Plans for a fund-raising drive were cut short when Secretary Walcott died shortly after the annual meeting of the Board of Regents in 1927. Fifty years later, it appeared that this goal might be realizable as a result of the public's enthusiastic acceptance of the [[underlined]]Smithsonian[[/underlined]] Magazine and the successful results of other auxiliary activities. Consequently, at its January 25, 1977 meeting, the Board of Regents, recognizing the need to preserve the special nature and abilities of the Institution, voted to pursue the objective of increasing the unrestricted endowment fund to a level of at least $50,000,000. It is the intent of