Chicago Botanic Garden

2008 Annual Report

Financial Information

Executive Summary

Like many cultural institutions, the Chicago Botanic Garden faced difficult challenges during 2008. As a result of the historic worldwide financial crisis and record levels of rainfall—closing the Garden for four days during the busy fall season—the Garden encountered decreased revenues while also experiencing dramatically higher costs of health benefits and insurance.

In response, the Garden prepared a conservative budget for 2009—including a hiring freeze, elimination of a dozen positions, and a 2% across-the-board salary reduction—while at the same time continuing with key program initiatives. These include the Garden’s major capital project, the Daniel F. and Ada L. Rice Plant Conservation Science Center, a unique research and teaching facility, open on September 21, 2009, and a commitment to making a significant impact on the lives of all who live in Cook County and the City of Chicago, with initiatives such as Windy City Harvest, Green Youth Farm, Chicago Trees Initiative, Growing School Gardens, and Chicago Wilderness.

Although challenging times are expected to continue, the Garden is committed to bringing expenses and revenues into balance through the work of dedicated Boards, staff, volunteers, members, visitors, and the generous support of donors and the Forest Preserve District of Cook County. A more detailed discussion of the Garden’s financial results for 2008 follows.

Operating Results

The Garden ended 2008 with a deficit of almost $1.5 million, following surpluses of $156,000 and $118,000 the two previous years. Operating revenue (see above) decreased to $26.9 million from $27.2 million in 2007, a decrease of 1 percent. The decrease resulted primarily from lower earned revenues for Visitor Programs and Operations.

When board designated and restricted net assets are included, total revenue was $37.8 million, a decrease of $3 million from the 2007 total of $40.8 million. In addition, the Garden’s institutional investments (primarily the endowment) decreased by $16.3 million, or approximately 30 percent, for the year. The investment results outperformed most of the major market indices and the principal benchmarks against which they are measured, but this was small consolation given the significant overall decline in the market.

Actual operating expenditures in 2008 (see below) were $28.4 million, an increase of $1.3 million, or 5 percent, over 2007. Included in this amount was an increase of $600,000 in health benefits from the 2007 total. All other operating expenses were either reduced or tightly controlled in an effort to bring them in line with the reduction in revenues.

With the inclusion of depreciation, interest expense, major gift fundraising costs, and other designated expenditures that are not included in the operating budget, total expenses for 2008 were $38.1 million, an increase of 1 percent over the $37.9 million incurred in 2007.

Change in Net Assets

The Garden’s Statement of Financial Position (see below) reflects a decrease in net assets of 12.4 percent to $122.9 million in 2008 from $140.3 million at the end of 2007. The decrease was due mainly to the decline of the institutional investments.

The $80.8 million of unrestricted net assets represented the majority of total net assets, while $21.9 million were temporarily restricted, and $20.1 million were permanently restricted. This compares to $96.4 million of unrestricted net assets, $24.2 million of temporarily restricted net assets, and $19.7 million of permanently restricted net assets in 2007.

Total assets increased from $167.7 million in 2007 to $181.0 million in 2008, an increase of $13.3 million. The increase in asset value was due largely to the remaining proceeds of the Garden’s 2008 $30 million tax-exempt bond issue held by the bond trustee pending their use to fund construction of the Rice Plant Conservation Science Center. Total liabilities increased by $30.7 million, also due to the issuance of the tax-exempt bonds during the year.

Summary

In a challenging economic environment, management continues to pursue new revenue-producing opportunities while at the same time identifying operating efficiencies to offset the impact of this uncertain climate. With the support of its Board of Directors, staff, volunteers, members, visitors, donors and the Forest Preserve District of Cook County, the Garden will continue its leadership role in the advancement of botanical education and research throughout the region, the nation and internationally.

Complete audited financial statements for the Chicago Botanic Garden, including the auditor’s report, for the year ended December 31, 2008, are available at: www.chicagobotanic.org/financialreport.