SPINA BIFIDA ASSOCIATION OF AMERICA Financial Statements For the Year Ended December 31, 2012 (With Summarized Financial Information for the Year Ended December 31, 2011)
and Report Thereon
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of the Spina Bifida Association of America
Report on the Financial Statements We have audited the accompanying financial statements of the Spina Bifida Association of America (the Association), which comprise the statement of financial position as of December 31, 2012, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Association as of December 31, 2012, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Continued -1-
Report on Summarized Comparative Information We have previously audited the Association’s 2011 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 31, 2012. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2011 is consistent, in all material respects, with the audited financial statements from which it has been derived.
Raffa, P.C. Washington, DC May 15, 2013
-2-
SPINA BIFIDA ASSOCIATION OF AMERICA STATEMENT OF FINANCIAL POSITION December 31, 2012 (With Summarized Financial Information as of December 31, 2011) _______________
2012 ASSETS Cash and cash equivalents Grants and contributions receivable Investments Prepaid expenses Inventory Property and equipment, net TOTAL ASSETS LIABILITIES AND NET ASSETS Liabilities Accounts payable Accrued expenses Deferred revenue Deferred rent
$
478,186 449,955 806,485 28,177 48,583 37,697
$
460,447 769,025 810,406 55,092 24,262 42,189
$
1,849,083
$
2,161,421
$
77,240 67,628 71,103 -
$
112,090 56,320 116,602 4,908
TOTAL LIABILITIES Net Assets Unrestricted Temporarily restricted Permanently restricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS
$
215,971
289,920
926,780 646,332 60,000
963,534 553,181 354,786
1,633,112
1,871,501
1,849,083
The accompanying notes are an integral part of these financial statements. -3-
2011
$
2,161,421
SPINA BIFIDA ASSOCIATION OF AMERICA STATEMENT OF ACTIVITIES For the Year Ended December 31, 2012 (With Summarized Financial Information for the Year Ended December 31, 2011) _______________
Unrestricted OPERATING REVENUE AND SUPPORT Direct Public Support: Grants Special events Contributions Donated services Indirect Public Support: Federated fundraising organizations
$
1,218,279 513,693 510,186 58,753
Temporarily Restricted
$
92,542
Total Public Support
Total Other Revenue Net Assets Released from Restrictions: Satisfaction of program restrictions Satisfaction of time restriction Release of endowment funds from permanent restriction due to change in donors' intentions
TOTAL OPERATING REVENUE AND SUPPORT EXPENSES Program Services: Education Member services/chapter development Information and referral Government relations Research Total Program Services Supporting Services: Fundraising Management and general TOTAL EXPENSES CHANGE IN NET ASSETS FROM OPERATING ACTIVITIES
-
1,841,432 149,496 580,488 711,711
55,100
-
2,448,553
3,376,426
615,641 55,038 2,123 (2,530)
-
-
615,641 55,038 2,123 (2,530)
398,041 49,546 8,484 (3,110)
670,272
-
-
670,272
452,961
(156,735) (100,000)
-
-
-
294,786
(294,786)
-
-
256,735
38,051
(294,786)
-
-
3,320,460
93,151
(294,786)
1,585,772 329,916 246,921 203,639 182,587
-
2,548,835
3,118,825
3,829,387
-
1,585,772 329,916 246,921 203,639 182,587
2,082,792 400,845 235,181 190,414 285,934
-
-
2,548,835
3,195,166
551,145 257,234
-
-
551,145 257,234
443,086 205,531
3,357,214
-
-
3,357,214
3,843,783
-
-
CHANGE IN NET ASSETS
(36,754)
93,151
(294,786)
NET ASSETS, BEGINNING OF YEAR
963,534
553,181
354,786
$
$
93,299
93,151
NET ASSETS, END OF YEAR
1,273,379 513,693 510,186 58,753 92,542
(36,754)
Contribution from merger, net
$
2011 Total
-
156,735 100,000
Total Net Assets Released from Restrictions
$
2012 Total
-
2,393,453
Other Revenue: Conference and meetings Sales of materials and services Other Investment losses
55,100 -
Permanently Restricted
926,780
$
646,332
(294,786) -
$
60,000
The accompanying notes are an integral part of these financial statements. -4-
(238,389)
(14,396)
-
292,090
(238,389)
277,694
1,871,501 $
1,633,112
1,593,807 $
1,871,501
SPINA BIFIDA ASSOCIATION OF AMERICA STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended December 31, 2012 (With Summarized Financial Information for the Year Ended December 31, 2011) _______________
Program Services
Education Salaries and fringe benefits Consultant fees Conference and meetings Travel costs Rent Legal and accounting fees Printing Office Postage Telephone Grants Equipment rental and maintenance Supplies Filing registration Scholarships Depreciation and amortization Temporary help Entertainment Taxes Miscellaneous Publications and materials Website hosting Indirect cost allocation TOTAL EXPENSES
$
Member Services/ Chapter Development
Information and Referral
Supporting Services
Government Relations
Total Program Services
Research
Fundraising
Management and General
2012 Total
2011 Total
578,809 300,117 302,623 126,111 14,385 37,859 54,515 25,454 25,917 6,968 750 6,209 11,744 11,376 17,725 606 157 667 596 10 37 63,137
$
258,727 474 2,775 9,963 21,003 7,863 4,312 12 6,319 3,650 150 804 3,474 494 200 450 20 219 9,007
$
156,776 7,007 14,753 92 14,317 5,368 3,842 8,103 10,223 529 3,250 903 21,758
$
102,883 91,773 10 2,808 4,796 728 641 -
$
89,909 34,877 1,909 953 4,760 55 2,833 37,500 39 9,752
$
1,187,104 434,248 322,070 139,927 49,705 60,646 63,452 25,466 43,172 21,482 38,400 7,013 15,786 11,870 17,925 3,856 607 667 616 1,132 37 103,654
$
366,558 3,833 14,647 28,644 26,743 12,772 30,701 583 8,569 6,791 17,096 9,586 8,060 160 8,152 7,196 1,054 -
$
137,505 14,583 8,276 25,767 50,806 7,685 3,613 50,825 4,636 10,700 10,991 2,433 7,692 78 13,963 2,494 4,914 3,439 488 (103,654)
$ 1,691,167 452,664 344,993 194,338 127,254 81,103 97,766 76,874 56,377 38,973 38,400 35,100 27,805 27,622 18,163 13,963 12,008 10,297 5,581 5,109 1,620 37 -
$
1,358,188 1,205,954 310,660 113,603 124,157 111,584 104,257 83,243 47,167 29,655 197,644 62,922 20,680 12,477 20,983 13,094 7,086 6,686 6,611 4,735 1,954 443 -
$ 1,585,772
$
329,916
$
246,921
$
203,639
$
182,587
$
2,548,835
$
551,145
$
257,234
$ 3,357,214
$
3,843,783
The accompanying notes are an integral part of these financial statements. -5-
SPINA BIFIDA ASSOCIATION OF AMERICA STATEMENT OF CASH FLOWS For the Year Ended December 31, 2012 (With Summarized Financial Information for the Year Ended December 31, 2011) Increase (Decrease) in Cash and Cash Equivalents _______________
2012 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization Net realized and unrealized losses on investments Changes in assets and liabilities: Grants and contributions receivable Due from/to related party Prepaid expenses Inventory Accounts payable Accrued expenses Deferred revenue Deferred rent
$
NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of investments Purchases of investments Purchases of property and equipment NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR
$
(238,389)
$
277,694
13,963 14,424
13,094 7,551
319,070 26,915 (24,321) (34,850) 11,308 (45,499) (4,908)
(372,070) 159,621 24,238 (2,395) (10,819) (9,960) 104,664 (1,636)
37,713
189,982
225,883 (236,386) (9,471)
371,476 (125,686) (37,609)
(19,974)
208,181
17,739
398,163
460,447
62,284
478,186
The accompanying notes are an integral part of these financial statements. -6-
2011
$
460,447
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
1.
Organization and Summary of Significant Accounting Policies Organization The Spina Bifida Association of America (the Association) provides information related to spina bifida, including progress in the areas of medicine, education, legislation and financial support; helps to fund research into the causes, effects and treatment of spina bifida; and encourages the training of professionals involved in treatment. Basis of Presentation The accompanying financial statements are presented on the accrual basis of accounting and in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic Presentation of Financial Statements. Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents, unless they are held as part of the investment portfolio, pledged to secure loan agreements, or otherwise encumbered. The carrying amount approximates fair value because of the short maturity of those investments. Grants and Contributions Receivable Grants and contributions receivable are stated at fair value. Management considers all amounts fully collectible. Accordingly, an allowance for doubtful accounts has not been established. Investments Investments consist of corporate bonds, U.S. Treasury notes, equity mutual funds, fixedincome mutual funds, equity securities and money market funds. These investments are recorded in the accompanying financial statements at fair value. Fair value is the price that would be received upon the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quoted market prices are used to value marketable equities and fixed-income securities. Investment gains and losses are based on the appreciation or depreciation of the fair value of investments held at the end of the year and those that are disposed of during the year. Interest and dividend income are recorded as earned. Fair Value Measurements FASB ASC Topic Fair Value Measurements and Disclosures defines fair value and establishes a framework for measuring fair value for assets and liabilities that are measured at fair value on a recurring basis. In accordance with the accounting standards for fair value measurements for those assets and liabilities that are measured at fair value on a recurring basis, the Association has categorized its applicable financial instruments into a required fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Continued -7-
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
1.
Organization and Summary of Significant Accounting Policies (continued) Fair Value Measurements (continued) If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Applicable financial assets and liabilities are categorized based on the inputs to the valuation techniques as follows: Level 1 – Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities accessible at the measurement date. Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets. Level 3 – Unobservable inputs for the asset or liability, including the reporting entity’s own assumptions in determining the fair value measurement. As of December 31, 2012, the Association’s investments, as described in Note 3 of these financial statements, were measured at fair value on a recurring basis and subject to the disclosure requirements of the Fair Value Measurements and Disclosures topic of the FASB ASC. Inventory Inventory consists of books, pamphlets and videos, which are recorded at the lower of cost or market value using the first-in, first-out method. Property and Equipment and Related Depreciation and Amortization Furniture and equipment are stated at cost. Donated furniture and equipment are recorded at fair value at the date of donation. Depreciation of furniture and equipment is computed using the straight-line method over estimated useful lives of five to seven years. Computer software is amortized over an estimated useful life of three to five years. The Association follows the practice of capitalizing all expenditures that are more than $500 for property and equipment. Maintenance and repairs are expensed as incurred. Significant renewals and betterments are capitalized. At the time the assets are retired or otherwise disposed of, the property and related accumulated depreciation and amortization are relieved of the applicable amounts and any gain or loss is credited or charged to operating revenue and support or expenses in the accompanying statement of activities.
Continued -8-
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
1.
Organization and Summary of Significant Accounting Policies (continued) Classification of Net Assets The Association’s net assets are reported as follows:
Unrestricted net assets represent unrestricted revenue and contributions received without donor-imposed restrictions. These net assets are available for the Association’s operations.
Temporarily restricted net assets represent revenue and contributions subject to donor-imposed stipulations that will be met by the Association’s actions and/or the passage of time.
Permanently restricted net assets represent funds restricted by the donor to be maintained by the Association in perpetuity.
Revenue Recognition Grants and contributions, including in-kind materials and services, are considered available for unrestricted use, unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor for specific purposes are reported as temporarily restricted revenue and support. Conditional promises to give are not included as revenue and support until such time as the conditions are substantially met. Unconditional promises to give and conditional promises to give for which the inability to meet the conditions is remote are recognized as revenue in the year promised and, if uncollected, are reflected as grants and contributions receivable in the accompanying statement of financial position. When a donor restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the accompanying statement of activities as net assets released from restrictions. Federal grants and contracts treated as exchange transactions are recognized as costs are incurred on the basis of direct costs plus allowable indirect expenses. Revenue recognized on grants and contracts for which billings have not been presented to, or collected from, the awarding agency is included in grants and contributions receivable in the accompanying statement of financial position. Amounts received in advance of the performance of services are recorded as deferred revenue on the accompanying statement of financial position. Conference and meetings revenue is recognized in the period in which the activities are held. Accordingly, sponsorships and related fees received in advance of the related conference or meetings are reflected as deferred revenue in the accompanying statement of financial position.
Continued -9-
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
1.
Organization and Summary of Significant Accounting Policies (continued) Donated Services The value of contributions that enhance a nonfinancial asset and contributed services that are considered specialized and can be estimated, and would have been purchased if not donated, are reflected in the accompanying financial statements. Donated services are recognized as revenue and support and expense in the accompanying statement of activities at their estimated fair value, as provided by the donor, at the date of receipt. Donated services consist of contributed professional services. Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the accompanying statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ from those estimates.
2.
Grants and Contributions Receivable The Association’s grants and pledges receivable as of December 31, 2012 are as follows: Due in less than one year Due in one to five years Total Net Grants and Contributions Receivable
$
334,955 115,000
$
449,955
$
204,493 200,461 189,420 180,974 22,078 9,059
$
806,485
All receivables are deemed fully collectible.
3.
Investments Investments, at fair value, consisted of the following as of December 31, 2012: Corporate bonds U.S. Treasury notes Equity mutual funds Money market funds Fixed-income mutual funds Equity securities Total Continued - 10 -
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
3.
Investments (continued) Investment losses are summarized as follows for the year ended December 31, 2012: Interest and dividends Realized losses on investments Unrealized losses on investments Investment fees Total Investment Losses
4.
$
16,208 (5,578) (8,846) (4,314)
$
(2,530)
Fair Value Measurements The following table summarizes the Association’s financial assets measured at fair value on a recurring basis as of December 31, 2012:
Fair Value Investments: Corporate bonds U.S. Treasury notes Equity mutual funds: Conservative allocation Long/short Precious metals Financials International Other
$
Total equity mutual funds Money market funds Fixed-income mutual fund Intermediate bond fund Equity securities – oil and gas Total Investments
$
Continued - 11 -
204,493 200,461
Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) $
-
Significant Other Observable Inputs (Level 2) $
204,493 200,461
69,051 40,277 26,429 26,120 21,030 6,513
69,051 40,277 26,429 26,120 21,030 6,513
-
189,420
189,420
-
180,974
180,974
22,078 9,059
22,078 9,059
-
806,485
$
401,531
$
404,954
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
4.
Fair Value Measurements (continued) The Association used the following methods and significant assumptions to estimate fair value for assets recorded at fair value: Equity securities, equity and fixed-income mutual funds and money market funds – Valued based on quoted prices that are available in an active market. Corporate bonds and U.S. Treasury notes – Valued based on observable market information, rather than market quotes.
5.
Property and Equipment and Accumulated Depreciation and Amortization The Association held the following property and equipment as of December 31, 2012 Equipment Computer software Furniture
$
Total Property and Equipment
209,204
Less: Accumulated Depreciation and Amortization Property and Equipment, Net
142,606 34,523 32,075 (171,507)
$
37,697
Depreciation and amortization expense totaled $13,963 for the year ended December 31, 2012.
6.
Commitments and Risks Operating Leases The Association is obligated under a noncancelable operating lease for office and storage space in Washington, DC. The lease is scheduled to expire on August 31, 2014. The lease requires monthly base rent of $7,886 with annual increases of 3%, and one month rental abatement. Under accounting principles generally accepted in the United States of America, all fixed rent increases are recognized on a straight-line basis over the term of the lease. As of December 31, 2012, future minimum lease payments for the office and other space total $93,152 and $69,461, which will be paid during 2013 and 2014, respectively.
Continued - 12 -
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
6.
Commitments and Risks (continued) Concentration of Credit Risk The Association maintains its cash and cash equivalents with certain commercial financial institutions which aggregate balances may exceed at times the Federal Deposit Insurance Corporation (FDIC) insured limit of $250,000 per depositor per institution. As of December 31, 2012, the entity had $201,769 comprised of demand deposits (excluding noninterest-bearing transaction accounts, which were fully insured regardless of their balance as of December 31, 2012) and did not exceed the maximum limit insured by the FDIC. On January 1, 2013, as a result of the expiration of the temporary provision of The Dodd-Frank Act for unlimited deposit insurance coverage for noninterest-bearing transaction accounts, the balance exceeded the maximum limit insured by the FDIC by approximately $52,000. The Association monitors the credit worthiness of these institutions and has not experienced any historical credit losses on its cash and cash equivalents. Hotel Contracts The Association has entered into agreements with hotels to provide conference facilities and room accommodations for its annual meetings through July 2014. The agreements contain various clauses whereby the Association is liable for liquidated damages in the event of cancellation or lower than anticipated attendance. The Association’s management does not believe that any losses will be incurred under these contracts. The maximum possible amount of liquidated damages was approximately $26,000 as of December 31, 2012. Office of Management and Budget Circular A-133 The Association has instructed its independent auditors to audit its federal programs for the year ended December 31, 2012, in compliance with Circular A-133 issued by the U.S. Office of Management and Budget. Until such audit is reviewed and accepted by the contracting or granting agencies, there exists a contingent liability to refund any amounts received in excess of allowable costs. Management believes that any matters arising from the reviews by the federal agencies of the independent auditor’s reports for fiscal year 2011 will not have a material effect on the Association’s financial position as of December 31, 2012, or its results of operations for the year then ended.
7.
Temporarily Restricted Net Assets The Association’s temporarily restricted net assets are available for the following programs or purposes as of December 31, 2012: Program restrictions: Research Education Total Temporarily Restricted Net Assets
Continued - 13 -
$
346,446 299,886
$
646,332
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
8.
Endowment Funds The Association has certain donor-restricted endowment funds, whereby the principal is to be invested in perpetuity and the investment earnings are to be restricted for the purpose of funding an annual scholarship award to an eligible individual with spina bifida and funding spina bifida research. Interpretation of Relevant Law The Association’s Board of Directors has interpreted the District of Columbia Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds, absent explicit donor stipulations to the contrary. As a result of this interpretation, the Association classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Association in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the Association considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:
The duration and preservation of the fund.
The purposes of the Association and the donor-restricted endowment fund.
General economic conditions.
The possible effects of inflation and deflation.
The expected total return from income and the appreciation of investments.
The Association’s other resources.
The Association’s investment policies.
Continued - 14 -
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
8.
Endowment Funds (continued) Interpretation of Relevant Law (continued) The Association’s endowment net asset composition by fund type was as follows as of December 31, 2012.
Donor-Restricted Endowment Funds
Unrestricted
Temporarily Restricted
Permanently Restricted
$
$
$
(684)
-
60,000
Total $
59,316
For the year ended December 31, 2012, the Association’s endowment had the following activity: Temporarily Restricted
Permanently Restricted
$
$
Unrestricted Endowment net assets, January 1, 2012 $ Investment return: Investment earnings Unrealized losses Amounts appropriated for expenditure Contributions Transfers due to change in donors’ intentions Endowment net assets, December 31, 2012 $
(590) (94)
235 (235)
-
-
-
-
(684)
354,786
$
-
Total $
-
235 (329)
-
-
(294,786) $
60,000
354,196
(294,786) $
59,316
$
50,000 10,000
$
60,000
Permanently Restricted Net Assets The portion of perpetual endowment funds that is required to be retained permanently, either by explicit donor stipulation or by UPMIFA: Sabadie Family Endowed Fund Carolyn Elizabeth Gilbert Endowed Fund Total Endowment Funds Classified as Permanently Restricted Net Assets
Continued - 15 -
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
8.
Endowment Funds (continued) Funds with Deficiencies From time to time, the fair value of assets associated with an individual donor-restricted endowment fund may fall below the level that the donor or UPMIFA requires the Association to retain as a fund of perpetual duration. There was a deficiency of $684 as of December 31, 2012. Return Objectives and Strategies Employed for Achieving Objectives The Association has adopted an investment policy and a spending policy for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Under these policies, the endowment assets are invested in a manner that is intended to achieve a balanced return of current income for program support and modest capital appreciation. Spending Policy The Board of Directors authorizes spending of up to a maximum of 4% of the cumulative investment earnings generated by the donor-restricted endowment funds for the Sabadie Family Endowed Fund and Carolyn Elizabeth Gilbert Endowed Fund. Earnings are spent based on the purposes designated by the donors (i.e., funding an annual scholarship award to an eligible individual with spina bifida and the duration and preservation of the funds). There was no spending from these funds in 2012, as the funds had investment losses for the year.
9.
Donated Services The Association received pro bono legal and consulting services during the year ended December 31, 2012. These services are recorded in the financial statements if the services create or enhance long-lived assets or require specialized skills, which are provided by individuals possessing these skills, and would typically need to be purchased if not donated. The services, which are included in donated services, are recorded at fair value in the amount of $58,753 in the accompanying statement of activities.
10.
Income Taxes Under Section 501(c)(3) of the Internal Revenue Code, the Association is exempt from the payment of taxes on income other than unrelated business income. As of December 31, 2012, no provision for income taxes was made, as the Association had no significant net taxable unrelated business income.
Continued - 16 -
SPINA BIFIDA ASSOCIATION OF AMERICA NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2012 _______________
10.
Income Taxes (continued) The Association adopted the authoritative guidance relating to accounting for uncertainty in income taxes included in ASC Topic 740, Income Taxes. These provisions provide consistent guidance for the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribe a threshold of “more likely than not” for recognition and derecognition of tax positions taken or expected to be taken in a tax return. The Association performed an evaluation of its uncertain tax positions for the year ended December 31, 2012, and determined that there were no matters that would require recognition in the financial statements or that may have any effect on its tax-exempt status. As of December 31, 2012, the statute of limitations for tax years 2009 through 2011 remains open with the U.S. federal jurisdiction or the various states and local jurisdictions in which the Association files tax returns. It is the Association’s policy to recognize interest and/or penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2012, the Association had no accrual for interest and/or penalties.
11.
Reclassifications Certain 2011 amounts have been reclassified to conform to the 2012 presentation.
12.
Subsequent Events In preparing the financial statements, the Association has evaluated events and transactions for potential recognition or disclosure through May 15, 2013, the date the financial statements were available to be issued. There were no subsequent events identified that require recognition of, or disclosure in, these financial statements.
- 17 -
