BAR HARBOR — As a private, nonprofit corporation, The Jackson Laboratory is exempt from local, state and federal taxes on its earnings and its assets, including land, buildings, equipment and investment income.

“When people understand what our mission is, they understand why we are not-for-profit,” said Richard Woychik, the Laboratory’s director. “The driver for a business like a drug company is Wall Street, investors looking for a return on their investment. The driver for a business is to make money.

“As a not-for-profit business — for the research that we do, the resources that we provide and the education that we provide — the driver is our mission. That’s very different than a business.

“That doesn’t mean we can’t be rigorous in what we do in every element of this. We can be very rigorous in our outreach to the community. It creates jobs. It’s good for the community. But the key thing in the end, which warrants our nonprofit status, is that we are not a business. We are a first-class, world-renowned biomedical research facility that has a very important mission around education, research and resources.”

Technically, the Internal Revenue Service (IRS) granted the Lab its tax-exempt status as “an organization that normally receives a substantial part of its support from a governmental unit or from the general public.”

That it does.

For the Lab’s 2007 budget year, revenues totaled $150.6 million, up from $143.2 million in fiscal year 2006. While the $62.8 million in 2007 income that came from federal and foundation grants was down slightly from $63.5 million in 2006, private-sector gifts were up, from $1.8 million in 2006 to $2.3 million in 2007.

The Lab’s single largest source of income continues to be revenue from its JAX Mice & Services division, which recorded $80 million in annual sales of laboratory mice and related services in 2007. That’s a $5.4 million increase over sales in 2006, which totaled $74.6 million.

On the expense side of the ledger, revenue generated by JAX Mice & Services was offset by that division’s 2007 operating expenses of $49.4 million, up from $45.6 million in 2006. The Lab spent more last year in all program categories than it did in 2006, including research: $64.2 million in 2007, versus $59.2 million in 2006.

Overall, the Lab finished its 2007 budget year with a $5.1 million increase in its net assets from operational activities. That’s down from the 2006 figure of $14.3 million.

The Lab’s most recent statement of its financial position lists total assets of $339.4 million in 2007, up from $318.6 million in 2006. Its land, buildings and equipment were valued in 2007 at $178.9 million, up from $160.8 million in 2006. The statement also shows a significant increase in its endowment fund. The 2006 fund balance of $68.1 million had grown to $80.1 million by 2007.

Michael Hyde, the Lab’s vice president for advancement and external relations, said he expects federal grants made to the Lab by the National Institutes of Health (NIH) will be down again in 2008.

“NIH is our biggest source of federal dollars at more than $50 million in a typical year,” he said. “While our success rate in competing for NIH grants is about double the national average, funding has been flat for the last several years, and there’s been more competition for the same amount of money. And it seems that each new grant we get is a little bit smaller.”

Hyde expects grants from foundations to decrease, at least slightly, in 2008. He also expects private-sector gifts to increase this year as a reflection of the Lab increasing its fund-raising staff and activities.

Hyde also anticipates 1 percent growth in the Lab’s $80.1 million endowment through a blend of new contributions and investment income. An eight-member Investment Committee of the Lab’s board of trustees oversees management of the endowment and allocates its assets among four investment categories: U.S. equities, international equities, fixed income investments and “alternative” investments such as real estate and venture capital commitments.

“While our success rate in competing for [federal] grants is about double the national average, funding has been flat for the last several years, and there’s been more competition for the same amount of money.”  — Michael Hyde, vice president for advancement and external relations,

Endowment investment performance is calculated on a calendar year basis, Hyde said. While not all of the 2007 results have been tabulated, he expects the endowment fund will see an overall rate of return for 2007 of between 8 and 9 percent, down slightly from results in 2006.

The Jackson Laboratory pays no property taxes on its 100-acre, seaside campus in Bar Harbor. Instead, it makes an annual, voluntary “Payment in Lieu of Taxes” to the town of Bar Harbor to help share the cost of fire protection and other municipal services. The 2008 payment is $61,800.

The Lab’s land and buildings in Bar Harbor are currently assessed by the town at $156 million. Given the town’s current tax rate, that level of valuation would generate nearly $1.4 million in annual property tax payments, or about 11 percent of the total payments now being collected from Bar Harbor property owners. That amount doesn’t include tax assessments made against equipment.

“We try to relieve some of the financial burden on the local economy by making contributions to the town of Bar Harbor for fire protection and other things we have,” Woychik said. “They appreciate this, and we appreciate the support of the town.”