Financial Statement Year End December 2021

NATIONAL GHOST RANCH FOUNDATION, INC.

TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2021

INDEPENDENT AUDITORS’ REPORT

FINANCIAL STATEMENTS

1

STATEMENT OF FINANCIAL POSITION 3

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS 4

STATEMENT OF FUNCTIONAL EXPENSES 5

STATEMENT OF CASH FLOWS 6

NOTES TO FINANCIAL STATEMENTS 7

INDEPENDENT AUDITORS’ REPORT

Board of Directors

National Ghost Ranch Foundation, Inc. Santa Fe, New Mexico

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of National Ghost Ranch Foundation, Inc. (a New Mexico nonprofit corporation), which comprise the statement of financial position as of December 31, 2021, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of National Ghost Ranch Foundation, Inc. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of National Ghost Ranch Foundation, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about National Ghost Ranch Foundation, Inc.’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Board

of Directors

National Ghost Ranch Foundation, Inc.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we: 

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. 

Obtain an understanding of internal control relevant to the audit 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 National Ghost Ranch Foundation, Inc.’s internal control. Accordingly, no such opinion is expressed. 

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. 

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about National Ghost Ranch Foundation, Inc.’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

CliftonLarsonAllen LLP

Albuquerque, New Mexico

August 16, 2022

NATIONAL GHOST RANCH FOUNDATION, INC.

STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2021

ASSETS

CURRENT ASSETS

Cash and Cash Equivalents1,865,168 $ Contributions Receivable 6,905 Prepaid Expenses 22,691 Inventory, Net 95,848

Total Current Assets 1,990,612

INVESTMENTS AND TRUSTS

Investments 5,317,209

Charitable Remainder Trusts Held by Others374,741 Perpetual Trusts Held by Others389,230

Cash Surrender Value of Life Insurance Policy180,464

Total Investments and Trusts, Measured at Fair Value6,261,644

PROPERTY AND

EQUIPMENT,

NET 965,412

Total Assets 9,217,668 $

LIABILITIES AND NET ASSETS

LIABILITIES

Accounts Payable 121,209 $ Guest and Group Deposits 194,617 Accrued Liabilities 205,332

Capital Lease, Current Portion18,859 Note Payable, Current Portion 1,824

Total Current Liabilities541,841

Capital Lease, Less Current Portion51,350 Note Payable, Less Current Portion516,409

Total Long-Term Liabilities567,759

Total Liabilities 1,109,600

NET ASSETS

Without Donor Restrictions1,751,316

With Donor Restrictions: Restricted by Purpose or Time3,726,762 Restricted in Perpetuity 2,629,990

Total With Donor Restrictions6,356,752

Total Net Assets 8,108,068

Total Liabilities and Net Assets9,217,668 $

See accompanying Notes to Financial Statements.

NATIONAL GHOST RANCH FOUNDATION, INC.

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31, 2021

Without DonorWith Donor RestrictionsRestrictionsTotal

REVENUES AND SUPPORT

Lodging, Tuition, and Activities2,741,225$ 2,741,225 $ Retail Operations 507,930 507,930 Contributions 699,747 568,781 1,268,528

PPP Loan Forgiveness 424,800 424,800 Site Fees 228,766 228,766

Investment Return, Net 274,348 621,450 895,798 Endowment Distribution 218,316 (218,316)

Total Revenues and Support 5,095,132 971,915 6,067,047

EXPENSES

Program 3,404,951 3,404,951 General and Administrative 1,200,557 1,200,557 Funds Development 251,418 251,418

Total Expenses 4,856,926 4,856,926

CHANGE IN NET ASSETS 238,206 971,915 1,210,121

Net Assets - Beginning of Year 1,513,110 5,384,837 6,897,947

NET ASSETS - END OF YEAR 1,751,316 $ 6,356,752 $ 8,108,068 $

See accompanying Notes to Financial Statements.

NATIONAL GHOST RANCH FOUNDATION, INC. STATEMENT OF FUNCTIONAL EXPENSES

YEAR ENDED DECEMBER 31, 2021

Program Services

Supporting Activities

VisitorEducationalManagementFundraising and ExperienceProgramsMuseumsTotaland GeneralDevelopmentTotal

Salaries and Wages836,635 $ 292,710 $ 75,823 $ 1,205,168 $ 397,543 $ 114,494 $ 1,717,205 $ Employee Benefits180,206 62,521 14,711 257,438 84,587 25,744 367,769 Payroll Taxes69,825 24,225 5,700 99,750 32,775 9,975 142,500 Facility Costs372,337 110 200 372,647 8,331 - 380,978 Professional Services72,508 157,975 - 230,483 128,481 63,783 422,747 Contract Service Cost of Sales787,086 - - 787,086 - - 787,086 Insurance92,869 - - 92,869 56,919 - 149,788 Advertising and Promotion- - - - 103,765 7,343 111,108 Information Technology13,823 - - 13,823 102,263 17,039 133,125

Gift Shop Cost of Sales217,462 - - 217,462 - - 217,462

Office Expenses21,729 29,802 2,716 54,247 67,464 8,184 129,895 Accounting Fees5,370 8,503 - 13,873 30,431 448 44,752 Other- - - - 92,256 - 92,256 Interest- - - - 18,661 - 18,661 Travel- 3,334 - 3,334 1,825 889 6,048

Total Operating Expenses2,669,850 579,180 99,150 3,348,180 1,125,301 247,899 4,721,380 Depreciation and Amortization55,393 1,090 288 56,771 75,256 3,519 135,546

Total Expenses by Function2,725,243 $ 580,270 $ 99,438 $ 3,404,951 $ 1,200,557 $ 251,418 $ 4,856,926 $

See accompanying Notes to Financial Statements.

NATIONAL GHOST RANCH FOUNDATION, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2021

CASH FLOWS FROM OPERATING ACTIVITIES

Change in Net Assets 1,210,121 $

Adjustments to Reconcile Change in Net Assets to Net Cash

Provided by Operating Activities:

Depreciation 135,546

Unrealized Gain on Investments(799,724)

Unrealized Gain on Split Interest Agreements(49,271)

Unrealized Gain on Perpetual Trusts(46,814)

Changes in Operating Assets and Liabilities:

Contributions Receivable 38,095

Prepaid Expenses 26,622

Inventory (7,650) Accounts Payable 2,490

Guest and Group Deposits(146,043)

Accrued Liabilities (1,699) Net Cash Provided by Operating Activities361,673

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Property and Equipment(360,466)

Proceeds from Sales of Operating Investments287,176 Purchase of Investments (5,822) Net Cash Used by Investing Activities(79,112)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal Payments on Capital Lease(6,082) Net Cash Used by Financing Activities(6,082)

NET INCREASE IN CASH AND CASH EQUIVALENTS 276,479

Cash and Cash Equivalents - Beginning of Year1,588,689

CASH AND CASH EQUIVALENTS - END OF Year 1,865,168 $

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash Paid for Interest 9,494 $

See accompanying Notes to Financial Statements.

NATIONAL GHOST RANCH FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021

NOTE 1 NATURE OF THE ORGANIZATION

Incorporated in 1972, the National Ghost Ranch Foundation, Inc. (NGRF or the Foundation), a 501(c)3 organization, is today organized exclusively for the purpose of operating and providing financial aid and assistance to the Ghost Ranch Education and Retreat Center (Ghost Ranch) facilities in New Mexico. As of January 2017, the NGRF is the operator of Ghost Ranch and the sole employer of the Ghost Ranch staff, with the responsibility to manage and run the facilities and programs of Ghost Ranch pursuant to a lease agreement through December 31, 2069 with the legal owners of Ghost Ranch, constituent corporations of the Presbyterian Church (USA) Foundation. (See Note 2).

The Board of Christian Education of the Presbyterian Church (USA), a New York nonprofit corporation, and the Board of Christian Education of the Presbyterian Church (USA), a Pennsylvania nonprofit corporation, which are constituent corporations of the Presbyterian Church (USA) Foundation (collectively referred to as BCE), are the legal owner of Ghost Ranch.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the NGRF have been prepared on the accrual basis of accounting whereby revenues are recognized when earned and expenditures are recognized when incurred in accordance with accounting principles generally accepted in the United States of America for nonprofit organizations (GAAP). The significant accounting policies are described below to enhance the usefulness of the financial statements to the reader.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Foundation 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 revenues and expenses during the reporting period. Actual results could differ from those estimates, and those differences could be material.

Classes of Net Assets

The financial statements report amounts by class of net assets.

Net assets without donor restrictions are assets not subject to stipulations imposed by the donor and are currently available for expenditures. Revenues are reported as increases in net assets without donor restrictions unless use of the related assets is limited by explicit donor restrictions. Contributions are reported as without donor restriction where donor-imposed restrictions are met in the same reporting period as they are received. Expenses are reported as decreases in net assets without donor restrictions. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor stipulations or law.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Classes of Net Assets (Continued)

Net assets without donor restrictions include net assets transferred from net assets with donor restrictions after temporary restrictions imposed by the donor have been accomplished or the stipulated time period has elapsed. A donor’s restriction, however, may be released or modified by the donor, a court, or in the circumstances and manner set forth in the Uniform Prudent Management of Institutional Funds Act (UPMIFA).

Net assets with donor restrictions are stipulated by donors for specific operating purposes or for the acquisition of property and equipment or are time restricted. These include donor restrictions requiring the net assets be held in perpetuity or for a specified term with investment return available for operations.

Cash and Cash Equivalents

Cash equivalents consist of cash in banks and highly liquid investments with original maturities of three months or less unless held for meeting restrictions of a capital or endowment nature. The NGRF maintains its cash and cash equivalents with high credit, quality financial institutions, which, at times, may exceed federally insured limits (FDIC). Cash on deposit exceeded FDIC limits by $1,560,497. The NGRF has not experienced any losses on such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Revolving Line of Credit

A revolving business line of credit was established with a financial institution for $90,000 at an annual rate equal to the financial institutions prime rate plus 6.75% (10% at December 31, 2021). The business line of credit has no maturity date and no financial covenants. There was no outstanding balance on the line-of-credit as of December 31, 2021.

Contributions Receivable

Contributions receivable are unconditional promises to give that are expected to be collected within one year and are recorded at their net realizable value. Management has deemed all amounts fully collectible and has not established an allowance.

Inventory

Inventory is stated at the lower of cost or net realizable value based on the first-in, first-out basis. Inventory consists of items for sale at the Trading Post, net of a reserve for shrinkage. As of December 31, 2021, the reserve for shrinkage was $5,000.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investments

Investments are recorded at fair value in accordance with ASC 820 Fair Value Measurements and Disclosures (See Note 3) and the realized and unrealized gains and losses on investments are recorded as increases or decreases in net assets without donor restrictions or net assets with donor restrictions based upon donor-imposed restrictions or applicable law. Donated investments are recorded at fair value at the date of donation and are thereafter carried in conformity with the stated policy. Investment return is reported net of related expenses.

Charitable Remainder Trusts Held by the Presbyterian Foundation

Charitable remainder trusts are split interest agreements where the donor establishes and funds a trust with specified distributions to be made to a designated beneficiary over the trusts term. The charitable remainder trusts are held for the benefit of the NGRF, who will receive all or a portion of the assets remaining at the end of the agreement’s term. The split interest agreements are recorded at fair value using the NGRF’s beneficial interest of the related assets as reported by the third-party trustee.

Subsequent changes in the fair value of the beneficial interest in the trust assets are recorded as changes in the value of split interest agreements in accordance the with the donor-restricted net asset class. The value of the charitable remainder trusts increased by $49,271 for the year ended December 31, 2021.

Perpetual Trusts Held by the Presbyterian Foundation

Perpetual trusts held by others are funds held for the benefit of the NGRF in accordance with the terms of the irrevocable trusts. These funds are neither in the possession, nor under the control, of the NGRF. Such terms provide that the NGRF is to receive annually all or a portion of the income earned by the funds that are held in trust. The NGRF has recorded the asset and has recognized permanently restricted contribution revenue at the fair market value of the NGRF’s beneficial interest in the trust assets.

Subsequent changes in the fair value of the beneficial interest in the trust assets are recorded as changes in the value of beneficial interest in perpetual trusts in the donorrestricted net asset class. The value of the perpetual trust increased by $46,814 for the year ended December 31, 2021.

Property and Equipment

Property and equipment additions over $2,500 are recorded at cost or, if donated, at estimated fair value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging from 3 to 30 years, or in the case of capitalized leased assets or leasehold improvements, the lesser of the useful life of the asset or the lease term. When assets are sold or otherwise disposed of, the cost and related depreciation is removed from the accounts, and any resulting gain or loss is included in the statement of activities. Costs of maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed currently.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Long-Lived Assets

The NGRF reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset (fair value). If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment of such assets as of December 31, 2021.

Lease with Board of Christian Education

The NGRF has entered into a lease agreement with the Board of Christian Education (BCE), an agency of the Presbyterian Church USA who owns the Ghost Ranch. The lease agreement originally commenced on January 1, 2017, was renewed January 1, 2020, and terminates on December 31, 2069. The purpose of the lease is to engage NGRF as the operator of the Ghost Ranch as a Presbyterian education and retreat center to be referred to as Ghost Ranch and to assign obligations for certain annual expenses and capital property improvements to NGRF.

Under the prior lease agreement, originally effective through December 31, 2019, BCE agreed to accept the costs incurred by the NGRF for property improvements as rent payments. In recognition that Ghost Ranch facilities need continuing updates and improvements and that all such improvements shall become the property of BCE at the termination of this Lease, the NGRF leases Ghost Ranch land (21,000 acres) and all improvements for a rent payment of one dollar per year annually through the term of the lease agreement. The Foundation in consultation with BCE shall continue to implement budgeted capital projects and repairs and pay annual property taxes.

In addition, the NGRF has agreed to certain financial and operating stipulations including increasing on hand cash reserves, obtaining a line-of-credit, commencing a capital campaign, engaging a strategic consultant, and providing interim financial reporting to BCE. The parties will review and may renegotiate the amount of the rent payment every seven years through the term of the lease agreement. BCE appoints up to three members of the NGRF governing board.

Leasehold improvements and annual payments made under the agreement for the four-year period from 2017 through 2021 are provided below. The average expenditure per year is approximately $300,000. Expenditures for the year ended December 31, 2021, were $414,315.

Leasehold Improvements 940,024 $ Building Maintenance and Repair 500,359 Property Taxes 46,015 Total 1,486,398 $

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Grants and Contributions

Contributions are recognized when cash, securities or other assets, an unconditional promise to give, or notification of a beneficial interest is received. Conditional promises to give are not recognized until the conditions on which they depend have been substantially met.

The NGRF reports gifts of cash and other assets as restricted revenue if they are received with donor stipulations that limit the use of the donated net assets. When a stipulated time restriction expires or purpose restriction is accomplished, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities as net assets released from restrictions.

Donated goods are recorded at their estimated fair value when received. Contributions of services are recognized if the services received create or enhance nonfinancial assets or require specialized skills, are provided by individuals possessing these skills, and would typically need to be purchased if not provided by donation.

Advertising and Promotion

Advertising and promotion costs are expensed as they are incurred. The NGRF expended $111,108 on advertising and promotion for the year ended December 31, 2021.

Revenue Recognition

Lodging, Tuition, and Activities (Individual and Group Retreats) – Individual and group fees entitle customers to various activities, retreats, workshops (day or overnight). Deposits and fees are due in advance (deferred) and are recognized as revenue when activities and workshops occur (point in time) or based on the number of days (lodging and food).

Retail Operations – The NGRF operates a retail store (Trading Post) where inventory is sold, and revenue is recognized at the point of sale (point in time).

Site Fees – Site fees entitle customers access to real property and use of facilities. Fees are due in advance (deferred) and are recognized as revenue based on the number of days rented (over time).

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (continued)

The NGRF does not have contract assets (receivables) in the ordinary course of business. However, deposits are received from customers based on a billing schedule established in the contracts, specifically related to Lodging, Tuition and Activities. Below is a summary of contracts with customers:

Contract Liability, December 31, 2020 340,660 $ Revenue recognized in the period from: Amounts included in contract liabilitiy at the beginning of the period (301,956) Deposits received during the year: Related to services rendered in subsequent years. 155,913

Contract Liability, December 31, 2021 194,617 $

Functional Allocation of Expenses

The costs of program and supporting services activities have been summarized on a functional basis in the statements of activities. The statement of functional expenses present the natural classification detail of expenses by function. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Methodology Salaries and Related Expenses Estimated Time Depreciation Square Footage

Allocated Expense

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The NGRF is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (IRC) except to the extent of unrelated business taxable income as defined under IRC sections 511 through 515. The NGRF files an exempt organization return in the U.S. federal jurisdiction and with the State of New Mexico.

The NGRF follows the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, Income Taxes. In management’s opinion, there were no uncertain tax positions taken by the NGRF for the tax period ended December 31, 2021. The NGRF’s policy is to classify income tax penalties and interest, when applicable, according to their natural classification. Under the statute of limitations, the NGRF’s tax returns are no longer subject to examination by tax authorities for fiscal years prior to 2018.

The Foundation incurred unrelated business taxes in the amount of $3,059 attributable principally to store sales for year ended December 31, 2021.

Subsequent Events

Management evaluated subsequent events through August 16, 2022, the date the financial statements were available to be issued. Events or transactions occurring after December 31, 2021, but prior to August 16, 2022, that provided additional evidence about conditions that existed at December 31, 2021 have been recognized in the financial statements for the year ended December 31, 2021. Events or transactions that provided evidence about conditions that did not exist at December 31, 2021, but arose before the financial statements were available to be issued, have not been recognized in the financial statements for the year ended December 31, 2021. In the opinion of management, there are no transactions subsequent to year-end that require recording or disclosure.

NOTE 3 FAIR VALUE MEASUREMENT

The following is a description of the valuation methodologies used for assets measured at fair value.

Money market funds are valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer.

Mutual funds are valued at the net asset value (NAV) of shares held are valued at their closing prices reported on the active market on which the individual securities are traded.

Charitable remainder trusts and perpetual trusts held by others are reported at fair value as of the date of the financial statements. When possible, the fair value of the assets held as trustee or agent are determined by reference to quoted market prices. When quoted market prices are not available, fair value is estimated by reference to market values for similar securities or by discounting cash flows at an appropriate risk rate, taking into consideration the varying degrees of risk specific to each financial asset.

NOTES TO FINANCIAL STATEMENTS

NOTE 3 FAIR VALUE MEASUREMENT (CONTINUED)

Cash value life insurance policies are valued based on the cash surrender value on the individual policy provided by the insurance carrier in which the NGRF is the beneficiary.

The following table presents information about the NGRF’s assets that are measured at fair value on a recurring basis (no liabilities are reported at fair value) as of December 31, 2021, and indicated the fair value hierarchy of the valuation techniques used to determine such fair value. The three levels for measuring fair value are based on the reliability of inputs and are as follows:

Level 1 – Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset of liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The NGRF uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, the NGRF measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3 inputs are used only when Level 1 or Level 2 inputs are not available.

Investments measured at fair value on a recurring basis are as follows:

December 31, 2021

Level 1 Level 2 Level 3 Total

Money Market Funds 17,665 $ $ $ 17,665 $

Mutual Funds 5,299,544 5,299,544

Charitable Remainder Trusts 374,741 374,741

Perpetual Trusts 389,230 389,230

Cash Value of Life Insurance 180,464 180,464 Investments at Fair Value 5,317,209 $ 944,435 $ $ 6,261,644 $

The NGRF’s policy is to recognize transfers between levels of the fair value hierarchy as if the transfer occurred at the beginning of the year. For the year ended December 31, 2021, there were no transfers between levels.

Investment securities are exposed to various risks, such as interest rate, market, and credit. Due to the level of uncertainty related to changes in interest rates, market volatility, and credit risks, it is at least reasonably possible that changes in these risks could materially affect the estimated fair value of investments reported in the statement of financial position as of December 31, 2021. However, in the opinion of management, the diversification of the NGRF’s invested assets among these various asset classes should mitigate the impact of any dramatic change in any one asset class.

NATIONAL GHOST RANCH FOUNDATION, INC.

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021

NOTE 4 PROPERTY AND EQUIPMENT

At December 31, 2021, property and equipment consisted of the following:

Leasehold Improvements 940,024 $ Vehicles 305,473 Furniture and Fixtures 71,972 Computers and Software 121,551 Subtotal 1,439,020

Less: Accumulated Depreciation (473,608) Total Property and Equipment, Net 965,412 $

Depreciation expense for the year ended December 31, 2021, was $135,546.

NOTE 5 NET ASSETS

Net assets consists of the following at December 31, 2021:

Net Assets Without Donor Restrictions: Board Designated Endowments1,405,019 $ Undesignated346,297

Total Net Assets Without Donor Restrictions 1,751,316

Net Assets With Donor Restrictions: Subject to Expenditure for Specified Purpose or Passage of Time: Donor Funds Held at New Covenant 463,059 Capital Campaign 500,000 Museum Expenses 110,338 Other Miscellaneous Projects 1,060,860 Trusts Held by Third Party 352,654

Accumulated Gains and Term Endowments Subject to NGRF's Spending Policy and Appropriation 1,239,851 Subtotal 3,726,762

Subject to Restriction in Perpetuity: Trusts Held by Others 411,317 Endowment and Other Funds 2,218,673 Subtotal 2,629,990

Total Net Assets With Donor Restrictions 6,356,752

Total Net Assets 8,108,068 $

The NGRF’s governing board through specific action has created self-imposed limits on net assets without donor restrictions. The board has designated $1,405,019 for investment as a board designated endowment as of December 31, 2021 primarily for capital improvements. These net assets can be drawn upon if the board approves such action.

NATIONAL GHOST RANCH FOUNDATION, INC.

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021

NOTE 6 LIQUIDITY AND FUNDS AVAILABLE

The following table reflects the NGRF’s financial assets as of December 31, 2021, reduced by amounts not available for general expenditure within one year. Financial assets are considered unavailable when illiquid or not convertible to cash within one year, trust assets, perpetual endowments and accumulated earnings net of appropriations within one year, or because the governing board has set aside the funds for a specific contingency reserve or a long-term investment as board designated endowments. These board designations could be drawn upon if the board approves that action. In addition, the NGRF has a line of credit with the bank for $90,000. As of December 31, 2021, the NGRF has not drawn on the line-of-credit.

Financial Assets: Cash and Cash Equivalents1,865,168 $ Contributions Receivable6,905 Investments5,497,673

Cash Surrender Value of Life Insurance180,464 Charitable Remainder Trusts374,741 Perpetual Trusts Held by Others389,230 Financial Assets - End of Year8,314,181

Liquidity Resources: Bank Line-of-Credit90,000

Less Those Unavailable for General Expenditure Within One Year, Due to: Subject to Expenditure for Specified Purpose or Passage of Time: (3,726,762) Trusts and Cash Surrender Value Held by Others Earnings Subject to Appropriation Beyond One Year (2,629,990) Investments in Board Designated Endowments (1,405,019)

Financial Assets and Liquidity Resources Available to Meet Cash Needs for General Expenditures Within One Year 642,411 $

NOTE 7 ENDOWMENT FUNDS

The NGRFʼs endowment consists of twelve individual funds established to support the operations of Ghost Ranch. Its endowment includes both donor-restricted endowment funds and funds designated by the board to function as endowments. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

Donor-restricted endowments are classified as net assets with donor restrictions and board-designated endowments are classified as net assets without donor restrictions.

NOTES TO FINANCIAL STATEMENTS

NOTE 7 ENDOWMENT FUNDS (CONTINUED)

Effective July 1, 2009, the State of New Mexico enacted The Uniform Prudent Management of Institutional Funds Act (UPMIFA), the provisions of which apply to endowment funds existing on or established after that date.

From time to time, the fair value of assets associated with individual donor-restricted endowment funds could fall below the level that the donor or UPMIFA requires the NGRF to retain as a fund of perpetual duration. In accordance with GAAP, no deficiencies of this nature have been reported in net assets with donor restrictions.

FASB ASC 958-205 provides guidance on the net asset classification of donor-restricted funds for a nonprofit organization that is subject to an enacted version of UPMIFA and required disclosures about endowment funds, both donor-restricted endowment funds and board-designated endowment funds.

Interpretation of Relevant Law

Based on the interpretation of UPMIFA by the board of directors of the NGRF, the guidance in ASC 958-205, and absent explicit donor stipulations to the contrary, the NGRF classifies as net assets with donor restriction: (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. Also included in net assets with donor restrictions is accumulated appreciation on donorrestricted endowment funds which are available for expenditure in a manner consistent with the standard of prudence prescribed by UPMIFA and deficiencies associated with funds where the value of the fund has fallen below the original value of the gift. In accordance with UPMIFA, the NGRF 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 NGRF and the donor-restricted endowment fund

possible effect of inflation and deflation

resources of the NGRF

investment policies of the NGRF

NOTES TO FINANCIAL STATEMENTS

NOTE 7 ENDOWMENT FUNDS (CONTINUED)

Interpretation of Relevant Law (Continued)

Changes in endowment net assets for the year ended December 31, 2021:

Without AccumulatedTotal With DonorOriginal GiftGains (Losses)Donor Total RestrictionsAmountand OthersRestrictionsFunds

Endowment Net AssetsBeginning of Year 1,199,506 $ 2,212,851 $ 987,669 $ 3,200,520 $ 4,400,026 $ Investment Return, Net 276,701 468,170468,170 744,871 Contributions 5,822 5,822 5,822 Amounts Appropriated for Expenditure (71,188) (215,988) (215,988) (287,176) Endowment Net AssetsEnd of Year 1,405,019 $ 2,218,673 $ 1,239,851 $ 3,458,524 $ 4,863,543 $

Return Objectives and Risk Parameters

The NGRF has adopted investment and spending policies 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. Endowment assets include those assets of donor-restricted funds that the organization must hold in perpetuity or for a donor-specified period, as well as board-designated funds. Under this policy, as approved by the board, the endowment assets are invested in a manner that is intended to produce results that exceed the spending rate, and aggregate costs of portfolio management, the long-term inflation rate and any growth factor that the board may, from time to time, determine appropriate, while assuming a moderate level of investment risk. The NGRF expects its endowment funds, over time, to provide an average rate of return of approximately 8%.

Furthermore, the objective is to earn a long-term rate of return at least 5.5% greater than the rate of inflation as measured by the Consumer Price Index (CPI). Actual returns in any given year may vary from this amount.

Strategies Employed for Achieving Objectives

To satisfy its long-term rate-of-return objectives, the NGRF relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The NGRF targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.

With Donor Restrictions

NOTES TO FINANCIAL STATEMENTS

NOTE 7 ENDOWMENT FUNDS (CONTINUED)

Spending Policies and How Investment Objectives Relate to the Spending Policies

The NGRF has a policy of appropriating for distribution each year 7% of its endowment fund’s average fair value over the trailing four previous calendar quarters for the current fiscal year. In addition, the NGRF has a policy of appropriating for distribution each year 5.5% of the board designated endowment’s average fair value over the trailing four previous calendar quarters for the current fiscal year. In establishing this policy, the NGRF considered the long-term expected return on its endowment. The NGRF’s policy is to not spend from underwater endowments unless directed otherwise by the donor. As of December 31, 2021, there were no underwater endowments.

NOTE 8 EMPLOYEE BENEFIT PLAN

Substantially all employees of the NGRF are eligible to participate in and contribute to the Retirement Savings Plan of Presbyterian Church (USA) as an affiliated employer of the Presbyterian Church (USA). The Plan is qualified under section 403(b)(9) as a defined contribution plan and was most recently amended and restated as of January 1, 2017. Eligible participants may generally make contributions up to the lesser of the amount allowed under ERISA or 100% of their compensation. The employer matched a discretionary contribution of approximately $44,883 for the year ended December 31, 2021.

NOTE 9 OPERATING LEASE COMMITMENTS

The NGRF leases copier equipment under noncancelable operating lease agreements expiring at various dates through 2025. Total lease expense for the year ended December 31, 2021, was $19,446.

Future minimum lease payments under noncancelable operating leases are as follows:

Year Ending December 31, Amount 202218,859 $ 2023 20,776 2024 22,889 2025 7,685 2026 Total 70,209 $

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021

NOTE 10 PAYCHECK PROTECTION PROGRAM

In February 2021, NGRF was granted a loan in the amount of $424,800, pursuant to the Paycheck Protection Program (the PPP) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which was enacted March 27, 2020. The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after 8 to 24 weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

As of December 31, 2021, NGRF applied for and has received forgiveness in full in the amount of $424,800. The SBA may review funding eligibility and usage of funds for compliance with program requirements based on dollar thresholds and other factors. The amount of liability, if any, from potential noncompliance cannot be determined with certainty; however, management is of the opinion that any review will not have a material adverse impact on the financial statements.

NOTE 11 ECONOMIC INJURY DISASTER LOAN PROGRAM

In April 2020, NGRF was granted a loan in the amount of $500,000, pursuant to the Economic Injury Disaster Loan program (the EIDL) under Section 7(b) of the Small Business Act, as amended to be used as working capital to alleviate economic injury. The loan accrues interest at the annual rate of 2.75%. Monthly installment of $2,136 begin 30 months from the date of the note with payments being applied to interest the first year and interest and principal each year thereafter over 30 years from the date of the note. NGRF grants the Small Business Administration (SBA) security interest to collateral, which includes all of the Foundation’s assets.

NOTE 12 UPCOMING ACCOUNTING PRONOUNCENTS

ASU 2016-02

and 2020-05, Leases

This amendment changes the way lessees will recognize leases as they will recognize most leases on-balance sheet and will increase reported assets and liabilities. Lessor accounting remains substantially similar to current accounting principles generally accepted in the United States of America. Per ASU 2020-05, this standard is effective for annual periods beginning after December 15, 2021; however, early adoption is permitted. The ASU mandates a modified retrospective transition method for all entities. Management is currently evaluating the impact of this ASU on the financial statements upon adoption.

ASU 2020-07 – Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-forProfit Entities for Contributed Nonfinancial Assets

The amendments address presentation and disclosure of contributed nonfinancial assets. ASU 2020-07 should be applied on a retrospective basis and is effective for annual periods beginning after June 15, 2021. Early adoption is permitted. Management is currently evaluating the impact of this ASU upon adoption.