Thursday, December 18, 2008

An Inside Look at Monterey Bay Aquarium

As a followup to the letter from the BC Salmon Farmers Association to Monterey Bay Aquarium (MBA), we thought it might be a good idea to take a closer look at MBA and how they operate. For the most part, non-profit organizations like MBA are seen as scrappy underdogs taking on evil corporations. But if you take a closer look at MBA and their operations, you'll find that it and its Seafood Watch program aren't scrappy underdogs at all. Instead, they're really a very powerful eco-lobbying organization backed by one of the largest non-profit foundations in the world.

The Monterey Bay Aquarium (MBA) is one of the best-connected and funded charities in North America, if not the world. It was initially endowed by the David and Lucile Packard Foundation, which was established by the late Hewlett-Packard co-founder. The Packard Foundation owns more than 70 million shares of Hewlett-Packard and is the company's largest shareholder with several family members serving on the Board of Directors. The Packard Foundation's endowment totals about $6.3 billion, making it one of the top 20 charitable foundations in the world.

The Monterey Bay Aquarium was founded in 1978 by the Packards at the behest of their daughters Nancy and Julie with an initial contribution of $55 million. To this day, Julie Packard serves as the Aquarium's Vice Chairman and Executive Director and draws a salary. A third sister, Susan Packard Orr, is chairman of the David and Lucile Packard Foundation and serves on the board of the Monterey Bay Aquarium Foundation. The aquarium opened in 1984.

For tax purposes, MBA is broken into three distinct, but affiliated organizations:

• Monterey Bay Aquarium Foundation – concerned with the day-to-day operations and financing of the aquarium itself. The Seafood Watch Program is an initiative of this arm of the Aquarium;

• Monterey Bay Aquarium Support Services – which manages the real estate upon which the aquarium resides; and

Monterey Bay Aquarium Research Institute – an oceanographic research center based in Moss Landing, California. It was founded in 1987 and immediately endowed with a $13 million grant from the Packard Foundation. It has a staff of 200 and an operating budget of about $40 million per year and operates a fleet of three ocean-going research vessels.

In 2006, the last year that the Monterey Bay Aquarium Foundation filed an IRS Form 990, total revenue for Monterey Bay and its affiliates totaled well over $55 million – over $9 million in contributions, more than $339,000 in government grants, more than $26 million in program services, and over $12 million in investment income.

The largest single line item in financial support comes from admissions to the aquarium. For all intents and purposes, through a combination of paid admissions (2 million visitors per year), special events, charitable giving, membership dues and prudent management of its investment portfolio, the Monterey Bay Aquarium Foundation is a self-sufficient entity financially.

Despite spending almost $45 million in 2006, Monterey Bay Aquarium Foundation was still able to end the year with a surplus of almost $10.5 million. For the tax year ending December 31, 2007, the Monterey Bay Aquarium Foundation boasted over $307 million in total assets, $55 million in revenues and more than $13.5 million in investment income .

The David and Lucile Packard Foundation is the major funding source for the Monterey Bay Aquarium Research Institute. In the fiscal year ending December 31, 2006, the Packard Foundation distributed grants to the Research Institute totaling nearly $41 million.

Also of note are the extensive links between the Monterey Bay Aquarium Research Institute and the U.S. Government. Several large agencies, including the National Oceanographic and Atmospheric Administration (NOAA), NASA, the National Science Foundation, the Office of Naval Research, the Department of Energy and the Jet Propulsion Laboratory made contributions totaling nearly $5.5 million to the Monterey Bay Aquarium Research Institute in the fiscal year ending December 31, 2006. In 2004, NOAA awarded the Research Institute a $530,000 grant to tag and track tuna in the Pacific Ocean.

In addition, a review of the Research Institute’s tax returns reveals that outside of grants to Stanford University to support a collaborative research program, it does not provide direct financial support for any outside organizations.

While the Monterey Bay Aquarium Foundation does bestow grants on a number of outside organizations, the total dollar amount is a mere fraction of its overall budget. For the most part, these grants have been distributed to organizations engaged in direct marine biological research (white sharks, squids and sea otters).

More details, later.

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