HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Note 1 – Organization purpose and operation

The Harvard Club of Boston Foundation ("Foundation") is a trust established by the Harvard Club of Boston ("Club") and administered by the Trustee in accordance with the Declaration of Trust and the laws of the Commonwealth of Massachusetts. The Club's Board of Governors serves as the Trustee ("Trustee"). The Trustee appoints and oversees a committee with responsibility for the Foundation's day-to-day operations. The Foundation fosters scientific, literary and educational interests among members of the Club and advances and promotes the welfare of Harvard University. General operating purposes are:

 Granting scholarships to undergraduate students attending Harvard College;

 Granting scholarships and fellowships to students attending selected Harvard University graduate schools;

 Granting nonprofit management fellowships to Harvard College students for work at Harvard University's Phillips Brooks House;

 Providing Horblit concert stipends to Harvard University students who perform concerts; and

 Awarding Harvard Prize Books to outstanding high school students (primarily from Massachusetts) who have just completed their junior year in high school, as well as honoring outstanding Massachusetts high school teachers and other individuals who inspire curiosity and excellence in students.

Note 2 – Accounting policies Basis of accounting

The financial statements of the Foundation have been prepared on the accrual basis in conformity with accounting principles generally accepted in the United States of America. Consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Classification and reporting of net assets

Accounting principles generally accepted in the United States of America requires the Foundation to report information regarding its financial position and activities according to the following net asset classifications:

Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the organization. These net assets may be used at the discretion of the Foundation’s Trustee.

Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Foundation or by the passage of time; other donor restrictions are perpetual in nature, whereby the donor has stipulated funds be maintained in perpetuity.

Donor restricted contributions are reported as increases in net assets with donor restrictions if they are received with donor stipulations that limit the use of the donated assets. When a restriction expires, that is, when a stipulated time restriction ends, or purpose restriction is accomplished, net assets with donor restrictions are reclassified to net assets without donor restrictions in the Statements of Activities and Changes in Net Assets, as net assets released from restrictions.