I Have A Dream Foundation - Oregon

Transcription

1 I Have A Dream Foundation - Oregon Financial Statements and Other Information as of and for the Year Ended June 30, 2009 and Report of Independent Accountants

2 I H A V E A D R E A M F O U N D A T I O N O R E G O N TABLE OF CONTENTS Letter from the President 3 Report of Independent Accountants 5 Page Financial Statements: Statement of Financial Position 6 Statement of Activities 7 Statement of Functional Expenses 8 Statement of Cash Flows 10 Notes to Financial Statements 11 Other Information: Governing Board and Management 18 Inquiries and Other Information 19

3 Letter from the President October 21, 2009 Dear Friends, was an eventful and productive year for I Have a Dream Foundation Oregon, and this was certainly true on the financial side of our operation. For the past 19 years, the Oregon Community Foundation (OCF) has held the majority of I Have a Dream Foundation Oregon s financial assets under its capable management. As both organizations have grown and developed over the course of time, we entered into discussions last year about how best to manage I Have a Dream Foundation Oregon s assets in the future. In May 2009, both organizations agreed that it was time for a change. As a result, by mutual and amicable agreement, all of our assets previously held at OCF were transferred and are now fully managed by I Have a Dream Foundation Oregon. You will see this change reflected under Assets on page 6 and throughout the attached financial statements. I am also pleased to report that these financial statements are, for the first time in our organization s history, part of a full organizational audit. Gary McGee & Co., a highly regarded local firm that specializes in nonprofit work, completed this audit for us, and we received an unqualified opinion from them. Please let me know if you have any questions about the attached Financial Statements, and thank you for your interest in I Have a Dream Foundation Oregon. Sincerely, Mark N. Langseth President and CEO 3

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6 I H A V E A D R E A M F O U N D A T I O N O R E G O N STATEMENT OF FINANCIAL POSITION J U N E 3 0, ( W I T H C O M P A R A T I V E A M O U N T S F O R ) Assets: Cash $ 39,467 21,355 Investments, at market (note 5) 2,318,882 Grants and contributions receivable (note 6) 723,953 39,458 Prepaid expenses and other assets 16,451 22,573 Property and equipment (note 7) 12,726 12,437 Total assets $ 3,111,479 95,823 Liabilities: Accounts payable and accrued expenses 23,078 8,531 Accrued payroll liabilities and related expenses 19,023 Total liabilities 42,101 8,531 Net Assets: Available for programs and general operations 4,305 74,855 Net investment in capital assets 12,726 12,437 Total unrestricted 17,031 87,292 Temporarily restricted (note 8) 3,052,347 Total net assets 3,069,378 87,292 Commitments (notes 12, 13, 14, and 15) Total liabilities and net assets $ 3,111,479 95,823 See accompanying notes to financial statements. 6

7 I H A V E A D R E A M F O U N D A T I O N O R E G O N STATEMENT OF ACTIVITIES Y E A R E N D E D J U N E 3 0, ( W I T H C O M P A R A T I V E T O T A L S F O R ) 2009 Temporarily Unrestricted restricted Total 2008 Revenues, gains and other support: Private grants and contributions (note 9) $ 945,715 3,214,180 4,159,895 1,124,283 AmeriCorps grant 12,269 12,269 61,102 Investment income Total revenues and gains 958,011 3,214,180 4,172,191 1,185,385 Net assets released from restrictions (note 10) 161,833 (161,833) Total revenues, gains and other support 1,119,844 3,052,347 4,172,191 1,185,385 Expenses (note 11): Program services 850, , ,791 Management and general 146, , ,872 Development 193, , ,401 Total expenses 1,190,105 1,190,105 1,195,064 Increase (decrease) in net assets (70,261) 3,052,347 2,982,086 (9,679) Net assets at beginning of year 87,292 87,292 96,971 Net assets at end of year $ 17,031 3,052,347 3,069,378 87,292 See accompanying notes to financial statements. 7

8 " I H A V E A D R E A M " F O U N D A T I O N O R E G O N STATEMENT OF FUNCTIONAL EXPENSES Y E A R E N D E D J U N E 3 0, ( W I T H C O M P A R A T I V E T O T A L S F O R ) 2009 Program services Supporting Services Class Americorps Management services program Total and general Development Total Salaries and related costs $ 620,715 6, ,202 75, , ,391 Professional services 42,795 42,795 Americorps living allowance 8,280 8,280 LINKS members 9,392 9,392 Dreamer incentives 26,701 26,701 College preparation expenses 9,593 9,593 Scholarship expenses 31,570 31,570 Supplies 11, ,144 9,713 5,850 15,563 Travel expenses 27, ,048 3,161 1,972 5,133 Rental expenses 24,764 24,764 1,971 4,644 6,615 Office expenses 16,657 16,657 3,574 9,026 12,600 Training 2, ,465 1, ,110 Insurance 4,023 4,023 Event expenses 17,849 17,849 National dues 7,500 7,500 Depreciation 7,786 7, ,789 2,736 Other 38,052 38,052 3,411 3,725 7,136 Total expenses $ 834,102 16, , , , ,951 See accompanying notes to financial statements. 8

9 Total , ,612 42,795 47,100 8,280 67,983 9,392 40,921 26,701 35,288 9,593 11,175 31,570 15,741 27,707 23,205 33,181 27,134 31,379 29,288 29,257 30,319 4,575 6,647 4,023 3,430 17,849 15,101 7,500 7,500 10,522 10,487 45,188 38,133 1,190,105 1,195,064 9

10 I H A V E A D R E A M F O U N D A T I O N O R E G O N STATEMENT OF CASH FLOWS Y E A R E N D E D J U N E 3 0, ( W I T H C O M P A R A T I V E T O T A L S F O R ) Cash flows from operating activities: Cash received from contributors and grantors $ 1,168,814 1,172,682 Cash received from the Oregon Community Foundation in a special transfer (note 9) 2,318,882 Cash paid to employees and suppliers (1,139,891) (1,178,405) Net cash provided by (used in) operating activities 2,347,805 (5,723) Cash flows from investing activities: Capital expenditures (10,811) (3,726) Purchase of investments (2,318,882) Net cash used in investing activities (2,329,693) (3,726) Net increase (decrease) in cash 18,112 (9,449) Cash at beginning of year 21,355 30,804 Cash at end of year $ 39,467 21,355 See accompanying notes to financial statements. 10

11 I H A V E A D R E A M F O U N D A T I O N O R E G O N NOTES TO FINANCIAL STATEMENTS Y E A R E N D E D J U N E 3 0, Organization The I Have A Dream Foundation Oregon is a private nonprofit organization located in Portland, Oregon and founded in It is modeled after the I Have A Dream Foundation which began in New York City in The Foundation helps children from low-income communities in Oregon graduate from high school prepared for advanced study or rewarding employment by providing a long-term program of mentoring, tutoring, and enrichment with a partial college scholarship available to all Dreamers (students) that graduate from high school. Over its history, the Foundation has established 10 projects to date serving more than 800 students in Portland and Forest Grove. It currently has 4 active projects serving more than 300 students still in K-12 schools. 2. Program Services During the year ended June 30, 2009, the Foundation incurred expenses in the following major areas: Class services "I Have a Dream" is a longterm educational support program for children from low-income communities. Local "I Have a Dream" Projects adopt entire grades from elementary schools. Each Project provides its children ("Dreamers") with academic support, cultural and recreational activities, and individual attention for 12 to 16 years. It is the goal of "I Have a Dream" to see that every Dreamer graduates from high school and has the option to attend college and/or obtain rewarding employment. Once Dreamers graduate from high school, "I Have a Dream" provides tuition assistance to assure that they will have the opportunity to attend a college, university, or accredited vocational school. Americorps program The Foundation was awarded a grant from the Corporation for National Service for the two year period ended August 15, The primary purpose of the grant was to provide funds to engage AmeriCorps members in assisting with the organizational goals of the Foundation. 3. Summary of Significant Accounting Policies The significant accounting policies followed by the Foundation are described below to enhance the usefulness of the financial statements to the reader. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles and the principles of fund accounting. Fund accounting is the procedure by which resources for various purposes are classified for accounting purposes in accordance with activities or objectives specified by donors. 11

12 Basis of Presentation The Foundation has adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 116, Accounting for Contributions Received and Contributions Made, and SFAS No. 117, Financial Statements of Not-for-Profit Organizations. Under these provisions, net assets and all balances and transactions are presented based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified as follows: Unrestricted net assets Net assets not subject to donor-imposed stipulations. Temporarily restricted net assets Net assets subject to donor-imposed stipulations that may be met by actions of the Foundation and/or the passage of time. These balances represent the unexpended portion of externally restricted contributions and investment return to be used for specific programs and activities as directed by the donor. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as net assets released from restrictions. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of the Foundation s management, such differences would not be significant. Contributions Contributions, which include unconditional promises to give (pledges), are recognized as revenues in the period the commitment is received. Conditional promises to give are not recognized until they become unconditional, that is when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value. Contributions of Long-Lived Assets Contributions of capital assets without donor stipulations concerning the use of such long-lived assets are reported as revenues of the unrestricted net asset class. Contributions of cash or other assets to be used to acquire capital assets with such donor restrictions are reported as revenues of the temporarily restricted net asset class; the restrictions are considered to be released at the time of acquisition of such long-lived assets. In-Kind Contributions In accordance with SFAS No. 116, Accounting for Contributions Received and Contributions Made, significant services received which create or enhance a non-financial asset or require specialized skills that the Foundation would have purchased if not donated are recognized in the statement of activities. In-kind contribution of equipment and other materials and free use of facilities are recorded when there is an objective basis upon which to value the contributions where the contributions are an essential part of the Foundation s activities. For example, various school districts have provided the Foundation with office space, the use of furniture and equipment, certain transportation and other use of school facilities to conduct its program activities. Given the difficulty of fairly ascribing values to these in-kind contributions, no amounts have been included in the accompanying financial statements for the value of these contributions. 12

13 Investments Investments consist of holdings in a money market mutual fund and are carried at market value. Net appreciation (decline) in the fair value of these investments, which consists of the realized gains or losses and the unrealized appreciation (decline) of those investments, is reported in the statement of activities. Interest income is accrued as earned. Capital Assets and Depreciation Capital assets are reported at cost when purchased, and at market value when acquired by gift. Depreciation is provided on a straight-line basis over the estimated useful lives of the respective assets, which are generally 3 to7 years for furniture and equipment, and the term of the lease for leasehold improvements, which is generally 5 years. Generally capital assets with an initial carrying value in excess of $1,000 are capitalized and reported in the statement of financial position. Revenue Recognition All contributions and grants are considered available for unrestricted use unless specifically restricted by the donor. Service revenues are recognized at the time services are provided and the revenues are earned. Concentrations of Credit Risk The Foundation s financial instruments consist primarily of investments in a money market mutual fund. These financial instruments may subject the Foundation to concentrations of credit risk as, from time to time, balances may exceed amounts insured by the Federal Deposit Insurance Corporation ( FDIC ). As of June 30, 2009, the Foundation held $2,318,882 in money market mutual funds in excess of FDIC insurance. Certain grants and contributions receivable also subject the Foundation to concentrations of credit risk. Income Taxes The Foundation is exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code and comparable state law. Subsequent Events As required SFAS No. 165, Subsequent Events, subsequent events have been evaluated by management through October 14, 2009, which is the date the financial statements were available to be issued. Summarized Financial Information for 2008 The accompanying financial information as of and for the year ended June 30, 2008 is presented for comparative purposes only and is not intended to represent a complete financial statement presentation. Other Significant Accounting Policies Other significant accounting policies are set forth in the financial statements and the following notes. 4. New Accounting Pronouncements During the year ended June 30, 2009, the Foundation adopted Statement of Financial Accounting Standards No. 157 ( SFAS No. 157 ), Fair Value Measurements, a standard issued by the Financial Accounting Standards Board ( FASB ) in September of This standard defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the U.S., and expands disclosures about fair value measurements. The pronouncement applies under other accounting standards that require or permit fair value measurements. Accordingly, this statement does not require any new fair value measurements. See note Investments At June 30, 2009, the Foundation held $2,318,882 in money market mutual funds. Subsequent to June 30, 2009, the Foundation s Board of Directors reallocated and reinvested these funds in accordance with the following guidelines: 48% equity funds; 20% fixed income funds; 13% shortterm (generally 90-day) certificates of deposit; and 19% in money market funds. 13

14 6. Grants and Contributions Receivable Grants and contributions receivable, net, are summarized as follows at June 30, 2009: Unconditional promises expected to be collected in: Less than one year $ 255,968 One year to five years 431,793 Thereafter 88, ,166 Less allowance for uncollectible pledges (12,000) Less discount 1 (40,213) $ 723,953 1 Unconditional promises due in more than one year are reflected at the present value of estimated future cash flows using a discount rate of 3.28%. 7. Property and Equipment A summary of property and equipment at June 30, 2009 is as follows: Leasehold improvements $ 5,523 Furniture and equipment 92,579 98,102 Less accumulated depreciation (85,376) $ 12, Restrictions and Limitations on Net Asset Balances Temporarily restricted net assets at June 30, 2009 consist of $3,052,347 in unexpended cash and contributions pledged for the support of specific activities, as follows: Support of Classes 6-10 $ 3,030,120 Linda Wah scholarship fund 17,523 Other 4, Private Contributions and Grants $ 3,052,347 During the year ended June 30, 2009, the Foundation reported private grants and contributions as follows: Received from individual donors through the auspices of the Oregon Community Foundation 1 $ 1,083,610 Other grants and contributions (including the transfer of $735,683 in pledges held by the Oregon Community Foundation) 757,430 Final transfer from the Oregon Community Foundation 1 2,318,855 $ 4,159,895 1 Until June 1, 2009, all contributions to the Foundation were directed initially to the Oregon Community Foundation ( OCF ), which held in trust the majority of the Foundation s primary charitable funds, periodically transferring funds to the Foundation as they were needed to underwrite operating and program costs ($1,083,610 was awarded to the Foundation in this manner during the course of the year). While the Foundation remained responsible for all fundraising and other operating activities, OCF exercised primary authority for these funds. 14

15 Effective June 1, 2009, this practice was changed with OCF awarding and transferring $2,318,855 to the Foundation, representing the final balance of all funds previously held in trust. Thereafter, all contributions to the Foundation are recorded directly in Foundation accounts. The changes in funds held by OCF during the year ended June 30, 2009 are summarized as follows: Funds held by OCF on behalf of the Foundation at beginning of year $ 3,736,294 Contributions received by OCF on behalf of the Foundation 494,671 Transfers of cash to the Foundation during the July 1, May 31, 2009 period 2 (1,118,000) Management fees charged by OCF (27,890) Decline in the fair market value of investments (766,220) Final transfer of all remaining funds to the Foundation (2,318,855) Balance at end of year $ 2 Transfers to the Foundation in the above table are reported on the cash basis of accounting. The $1,118,000 in transfers received by the Foundation during the July 1, 2008 through May 31, 2009 period includes $34,390 accrued as a receivable at June 30, Expenses The costs of providing the various programs and other activities of the Foundation have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Expenses by natural classification are presented in the statement of functional expenses. 12. Operating Leases Future minimum rental payments required under the Foundation s operating leases for office space and various office equipment, with terms in excess of one year at June 30, 2009, are as follows: Years ending June 30, 2010 $ 31, , , , ,696 $ 100,941 Rent expense for office space and office equipment for the year ended June 30, 2009 totaled 28, Net Assets Released from Restrictions During the year ended June 30, 2009, the Foundation incurred $161,833 in expenses in satisfaction of the restricted purposes specified by donors, or satisfied restrictions by the occurrence of other events. Accordingly, a corresponding amount is reported as a reclassification from temporary restricted net assets to unrestricted net assets in the accompanying financial statements. 15

16 13. College Financial Aid The Foundation awards scholarships as financial aid to students attending college or postsecondary educational programs. These scholarships are awarded for up to $2,000 per year per student who enrolls and studies in a college or approved post-secondary program. Students may re-qualify each year until reaching the maximum scholarship of $8,000 per student. Additional specified scholarships may be awarded on a caseby-case basis. Because scholarship payments are contingent upon yearly re-qualification, and include conditions such as maintaining satisfactory progress, no liability has been recorded as of June 30, Scholarship expenses for the year ended June 30, 2009 totaled $31, Retirement Plan The Foundation provides all employees with a Savings Incentive Match Plan for Employees Individual Retirement Account (Simple IRA), in accordance with section 408(p) of the Internal Revenue Code. Employees make contributions to the plan on a voluntary basis up to the limits allowed by law. The Foundation makes a non-elective contribution equal to 100% of the first 3% of each employee s contribution to the plan. The Foundation s contributions to the plan totaled $16,722 for the year ended June 30, Unemployment Insurance Coverage The Foundation participates in the Northwest Agencies Trust for the funding of unemployment insurance. Use of the Trust is intended to reduce the Foundation unemployment costs. The Trust bills the Foundation for amounts that are intended to reach a predetermined reserve level. The assessments, billed quarterly, consider any investment income earned by the Trust and adjust for administrative costs, payments to former employees, and insurance payments. At June 30, 2009, The Foundation s reserve with the Trust totaled $5,038. During the year ended June 30, 2009, the Foundation contributed $8,811 to the Trust, and the Trust paid out approximately $8,876 in benefits. Contributions to the Trust are reported as insurance costs, even though substantial portions are used to build the reserve. As such, the reserve is not recorded as an asset of the Foundation and the amount of the estimated liability for unemployment insurance is not recorded as a liability because management expects that the amount will be permanently on deposit with the Trust, and the balances are not considered excessive to meet the Foundation s responsibilities under unemployment law and related regulations. 16

17 16. Fair Value Measurements The accompanying financial assets report the Foundation s investments at fair value. These assets have been classified, for disclosure purposes, based on a hierarchy defined by SFAS No. 157, Fair Value Measurements. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). At June 30, 2009, the Foundation s investments are measured at fair value on a recurring basis using quoted prices in active markets for identical assets and liabilities (i.e. Level 1). 17. Reclassification of 2008 Comparative Totals Certain other 2008 amounts presented herein have been reclassified to conform to the 2009 presentation. 18. Statement of Cash Flows Reconciliation The following presents a reconciliation of the increase in net assets (as reported on the statement of activities) to net cash provided by operating activities (as reported on the statement of cash flows): Increase in net assets $ 2,982,086 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation 10,522 Net changes in: Grants and contributions receivable (684,495) Prepaid expenses and other assets 6,122 Accounts payable and accrued expenses 14,547 Accrued payroll liabilities and related expenses 19,023 Total adjustments (634,281) Net cash provided by operating activities $ 2,347,805 17

18 I H A V E A D R E A M F O U N D A T I O N O R E G O N GOVERNING BOARD AND MANAGEMENT J U N E 3 0, Board of Directors Dave Johnson, Board Chair Rose Hartwig, Vice-Chair and Secretary Kit Johnson, Treasurer Julie Ball Eve Callahan Kate Cole Johnnie Driessner Markland Fountain Julie Frantz Debra Jenkins Devon Rehse Jim Schlachter Martin Weber Management Mark Langseth President & Chief Executive Officer 18

19 I H A V E A D R E A M F O U N D A T I O N O R E G O N INQUIRIES AND OTHER INFORMATION I HAVE A DREAM FOUNDATION OREGON 1478 N.E. Killingsworth Avenue Portland, Oregon (503) (800) (503) Fax Website 19