Related Entities

There are many financial transactions exchanged between the member organizations of the National Academies. The NRC serves as the clearinghouse for these transactions. However, it is important to note that only the financial activity and results of the NAS, NAE, IOM, and NRC are included in these financial statements. The financial activity and results of the National Academy of Engineering Fund (NAEF) and The National Academies’ Corporation (TNAC) are audited and reported separately. Financial information for the NAEF is available on request from the NAE Finance Office; information for TNAC is available from the NAS Controller’s Office.

Overall Financial Condition

Each year, the overall financial condition of the NAS can be reviewed by taking into account the increase or decrease in the net assets of the organization. During calendar year 2009, the NAS has been able to grow its net assets through increased program revenues and recovery of a significant portion of the investment losses suffered in 2008. The 2008 investment losses are reflected in lower revenue total for 2008 in the chart below:


(dollars in millions)




Total Revenues

$ 370.1

$ 130.8

Total Expenses



Change in Net Assets

$ 62.7

$ (173.0)

These NAS 2009 results of operations are further described in the financial statements starting on page 42.


The NRC demonstrated strong financial growth during 2009, with revenues projected to continue to grow in 2010. Indirect expenses have been well-managed during the year. As is the case for all endowments, the stock market’s major decline in 2008 has had a serious impact on the value of our endowment although it has experienced strong rebuilding in 2009. The Finance Committee has made some changes to the endowment investments and will continue to work to strengthen the portfolio.

I would like to thank the Council, the Committee on Budget and Internal Affairs, the Finance Committee, and NRC management for their continued input and support. Also, thanks go to the Office of the Chief Financial Officer for careful and steady oversight of the budgets, for preparation of the financial statements, and its help with oversight of the endowment.

Jeremiah P. Ostriker


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