SEEDS OF PEACE, INC. FINANCIAL STATEMENTS, AND AUDITOR'S REPORT
DECEMBER 31, 2015 AND 2014
SEEDS OF PEACE, INC. TABLE OF CONTENTS
PAGE INDEPENDENT AUDITOR'S REPORT
1
FINANCIAL STATEMENTS Statements of financial position as of December 31, 2015 and 2014
2
Statements of activities for the years ended December 31, 2015 and 2014
3
Statements of cash flows for the years ended December 31, 2015 and 2014
4
Statement of functional expenses for the year ended December 31, 2015 with comparative totals for 2014
5
Notes to financial statements
6 - 15
INDEPENDENT AUDITOR’S REPORT To:
The Board of Directors of Seeds of Peace, Inc.
We have audited the accompanying financial statements of Seeds of Peace, Inc. (a nonprofit organization), which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities, cash flows and functional expenses 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 audits. We conducted our audits 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 Seeds of Peace, Inc. as of December 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Skody Scot & Company, CPAS, P.C. New York, NY August 8, 2016
-1-
SEEDS OF PEACE, INC. STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2015 AND 2014
2015
2014
$ 1,394,478 344,385 627,486 9,007 3,964 23,315 144,354 1,020 195,380 55,434 8,442
$ 1,151,750 344,215 598,897 87,654 12,425 24,202 211,882 62,322 154,868 52,046 2,042
$ 2,807,265
$ 2,702,303
ASSETS Cash and cash equivalents: Unrestricted Permanently restricted Contributions receivable, net Grants receivable Other receivables Inventory Prepaid expenses Investments Property and equipment, net Intangible assets, net Security deposits Total assets
LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses Deferred income and refundable advances
$
Total liabilities
439,252 44,378
$
455,809 12,800
483,630
468,609
1,225,756 753,494 344,385
1,011,216 878,263 344,215
2,323,635
2,233,694
$ 2,807,265
$ 2,702,303
Commitments and contingencies (see notes) Net Assets: Unrestricted Temporarily restricted Permanently restricted Total net assets/(deficit) Total liabilities and net assets/(deficit)
See accompanying notes to financial statements.
-2-
SEEDS OF PEACE, INC. STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2015 AND 2014 2015 Support and Revenues: Unrestricted: Contributions (non-event) Government grants Contributions in-kind Camp fees and misc. program services Investment and other income Release of restricted assets
$
Special events: Auction sales Event related revenue and support Less: related costs Net special event income and support Temporarily restricted: Contributions Release of restricted assets
2014
3,533,520 220,603 21,963 852,410 21,692 636,403
$
4,155 1,330,200 (200,099)
31,502 1,339,952 (286,931)
1,134,256
1,084,523
511,634 (636,403)
Permanently restricted: Investment and other income Total support and revenues Expenses: Program Expenses: Seeds of Peace Camp Middle East Multi-regional US programs South Asia (SA) Program administration Total program expenses Supporting Services: Management and general Fundraising Total expenses Increase/(Decrease) In Net Assets: Unrestricted Temporarily restricted Permanently restricted Increase/(decrease) in net assets Net assets, beginning of year Net assets, end of year
$
715,862 (430,717)
170
35
6,296,248
6,038,638
1,666,372 1,039,215 1,120,178 140,826 103,637 510,397
1,700,644 1,141,321 755,302 123,175 115,708 449,102
4,580,625
4,285,252
992,930 632,752
930,006 709,499
6,206,307
5,924,757
214,540 (124,769) 170
(171,299) 285,145 35
89,941
113,881
2,233,694
2,119,813
2,323,635
See accompanying notes to financial statements.
-3-
3,022,711 451,755 121,585 631,016 11,151 430,717
$
2,233,694
SEEDS OF PEACE, INC. STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2015 AND 2014 2015
2014
Cash Flows From Operating Activities: Increase/(decrease) in net assets
$
89,941
$
113,881
Adjustments for non-cash items included in operating activities: Depreciation and amortization Loss/(gain) on investments Donation of investments Bad debts Changes in assets and liabilities: Contributions receivable Grants receivable Other receivables Inventory Prepaid expenses Security deposits Accounts payable & accrued expenses Deferred income and refundable advances Net cash provided/(used) by operating activities Cash Flows From Investing Activities: Sale of investments Purchase of property, equipment and intangibles Net cash provided/(used) by investing activities
44,408 (5,661) (172,041) 5,596
44,354 1,469 (144,581) 548
(34,185) 78,647 8,461 887 67,528 (6,400) (16,557) 31,578
13,169 (18,235) 6,728 (16,166) (95,423) 347 60,951 12,800
92,202
(20,158)
239,005 (88,309)
83,539 -
150,696
83,539
Cash Flows From financing activities: Repayment of loans
-
(465,000)
Net cash provided/(used) by investing activities
-
(465,000)
Net increase/(decrease) in cash and cash equivalents
242,898
(401,619)
Cash and cash equivalents at beginning of year
1,495,965
1,897,584
Cash and cash equivalents at end of year
$ 1,738,863
$ 1,495,965
Supplemental Information: Interst paid
$
$
See accompanying notes to the financial statements.
-4-
-
12,079
SEEDS OF PEACE, INC. STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2015 WITH COMPARATIVE TOTALS FOR 2014 2 Seeds of Peace Camp Compensation and related expenses: Salaries Payroll taxes Employee benefits & pension Total Awards Bad debts Camp apparel Contributions Credit card fees Currency translation costs Depreciation and amortization Design fee Dues, books and subscriptions Equipment and vehicle rentals Field trips Insurance Interest Kitchen food and supplies Laundry License, fees and permits Meals, entertainment and hospitality Medical supplies and expenses Miscellaneous Office expenses Outside consultants Postage and delivery Printing, photos & publications Professional fees Property taxes Rent Repairs and maintenance - facilities Repairs and maintenance - other Scholarships and education Security Sports, games and other activities Supplies Telephone & communications Travel, hotels and conferences Utilities and trash removal Website Total direct expenses Total expenses
$
225,883 16,790 22,605
Program Expenses MultiUS Regional Programs
Middle East $
336,820 24,318 51,077
$
342,079 26,727 40,273
$
27,840 2,153 7,418
0
1
South Asia (SA) $
2,821 211 1,211
5 Program Admin.
$
2014
Total
351,397 28,191 43,995
$ 1,286,840 98,390 166,579
Support Services Management & General Fundraising $
590,631 40,876 58,521
$
Total Expenses
345,942 24,894 57,422
$ 2,223,413 $ 164,160 $ 282,522
Total Expenses $
2,210,586 157,933 221,119
265,278
412,215
409,079
37,411
4,243
423,583
1,551,809
690,028
428,258
2,670,095
2,589,638
31,669 29,644 4,132 5,982 10,611 97,684 177,316 28,164 4,177 3,277 420 2,725 5,088 104,075 369 158 17,961 26,847 37,189 526 255,169 82,916 56,500 2,466 7,227 365,796 43,006 -
4,250 350 341 5,792 84,668 3,937 34,692 1,804 30,228 30,818 119,707 48 14,177 11,152 1,106 57,805 2,024 2,760 5,039 31,274 168,996 2,657 13,375
73,000 1 6,943 1,106 8,099 12,960 5,086 11,696 116,286 26 653 9,221 130,908 4,105 29,777 18,548 2,856 450 7,240 90 16,128 6,149 243,081 6,690
14,200 1,398 400 26 4 250 362 20,510 31 24 18 5,446 85 39 500 370 4,800 388 657 53,907 -
88 95 32 77 197 3 1,357 3,468 7 1,036 3,944 65,791 5 1,024 382 7,839 1,012 6 1,301 1,703 8,906 1,121 -
253 394 2,954 2,942 170 7,291 9,893 46 30 8,319 18,379 7 68 3,868 32,200 -
91,450 33,067 89 37,337 95 5,864 19,950 23,794 187,836 177,316 28,417 24,483 181,175 2,288 34,836 56,380 435,820 4,658 45,205 37,814 27,953 103,071 37,189 6,795 263,179 90,156 56,596 25,390 50,878 872,886 46,784 20,065
5,596 101 7,071 3,467 3,158 8,698 8,250 505 5,697 34,446 8,065 1,074 1,303 34,076 149,443 294 6,104 770 17,707 4,275 2,702
21,015 5,012 200 602 2,702 1,798 2,203 7,292 65,877 15,827 14,846 5,978 10,152 7,633 3,239 1,329 32,346 6,443
91,450 5,596 33,067 89 21,116 5,012 44,408 295 9,933 23,108 23,794 196,534 177,316 28,417 35,435 183,478 2,288 42,736 98,118 509,762 21,559 61,354 77,868 27,953 262,666 37,483 20,532 263,179 90,156 56,596 29,399 69,914 909,507 46,784 29,210
24,225 548 29,636 291 23,549 14,737 44,354 317 8,677 19,245 20,929 189,310 12,079 166,515 24,940 28,400 124,500 4,298 16,733 110,498 753,178 20,682 52,291 60,515 26,744 245,885 40,914 20,327 142,298 85,624 62,264 13,913 80,517 813,552 44,410 8,224
1,401,094
627,000
711,099
103,415
99,394
86,814
3,028,816
302,802
204,494
3,536,112
3,335,119
$ 1,666,372
$ 1,039,215
510,397
$ 4,580,625
632,752
$ 6,206,207
$
1,120,178
$
140,826
$
103,637
$
See accompanying notes to financial statements.
-5-
$
992,830
$
$
5,924,757
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
1.
Nature of Activities and Summary of Significant Accounting Policies Organization: Seeds of Peace, Inc., (hereafter referred to as the Organization) is a not-for-profit corporation, incorporated in the State of Delaware on March 8, 1993. The primary purpose of the organization is to empower young leaders from regions of conflict with the leadership skills required to advance reconciliation and coexistence. As young teens, they live together in a summer camp for three weeks to learn conflict management skills. After attending camp, the organization provides participants with follow-up leadership training and dialogue through their college years, and after college, a graduate program to maintain cross-border network and dialogue. Tax exempt status: The Organization has been granted tax-exempt status by the Internal Revenue Service under Internal Revenue Code Section 501(c)(3) on July 2, 1993. Accordingly, no provision for federal, state or local income taxes has been recorded. The Organization does not believe its financial statements include any uncertain tax positions. Programs and services provided: The Organization’s six major program areas include the following: Seeds of Peace Camp – Summer leadership development program in Maine for teenagers and educators from communities divided by conflict; Middle East – Local initiatives for Camp alumni from Egypt, Israel, Jordan, and Palestine designed to reinforce relationships and build leadership skills; MultiRegional – Convening’s and fellowship programs in the Middle East, South Asia, and the United States for Camp alumni and other change-makers designed to accelerate their impact as they work to transform conflict; US Programs – Local initiatives for Camp alumni from the United States designed to reinforce relationships and build leadership skills; South Asia (SA) – Local initiatives for Camp alumni from Afghanistan, India, and Pakistan designed to reinforce relationships and build leadership skills; and Program Administration – Provides program administration and review of all program activities. Major source of income: The Organization derives most of its income from contributions from individuals, corporations, foundations, government grants, program service revenue and special events. Basis of accounting: The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. Basis of presentation: In accordance with GAAP the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. In addition, the Organization is required to present a statement of cash flows.
-6-
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
1.
Nature of Activities and Summary of Significant Accounting Policies (continued) Estimates and assumptions: Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions effect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. Cash equivalents: For purposes of the statements of financial position and the statements of cash flows, the Organization considers as cash equivalents money market funds and all highly liquid resources, such as certificates of deposit with an original maturity of three months or less. Inventory: Inventory of merchandise purchased by, or donated to, the Organization for sale at the camp store, or auction at one of its special events, are valued at the lower of cost or market. Property and equipment: The Organization capitalizes certain property and equipment with estimated lives of three years or more. Property and equipment are stated at cost or donated value, less accumulated depreciation. Depreciation is computed on the straight-line and accelerated basis over the respective assets’ estimated useful lives of five to ten years. Expenditures for maintenance and repairs are charged to current operations. Investments: All marketable debt and equity securities and mutual funds are measured at fair value on a recurring basis and are reported at their fair values as of December 31, 2015 and 2014 in the consolidated statements of financial position. The Organization initially records the investments it receives as a donation at the fair value as of the dates the investments are donated to the Organization and thereafter carries such investments at current fair values. Investment income (interest and dividends) is recognized as revenue in the period earned, and gains and losses (realized and unrealized) are recognized in the period they occur. Donated services and facilities: Significant services and facilities are donated to the Organization by various individuals and organizations. Only those items whose value can be objectively determined or meet the criteria for being recognized as contributions in accordance with GAAP, are included in the accompanied financial statements. For the years ended December 31, 2015 and 2014, $21,963 and $121,585, respectfully, was received and reported as contributions in-kind on the accompanying statements of activities and consisted mostly of donated labor for camp security, consulting, medical services, and independent impact evaluation.
-7-
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
1.
Nature of Activities and Summary of Significant Accounting Policies (continued) Revenue recognition: All contributions are considered available for the Organization’s general programs unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted by the donor are reported as temporarily or permanently restricted support and increases in the respective class of net assets. Contributions received with temporary restrictions that are met in the same reporting period are reported as unrestricted support and increase unrestricted net assets. Investment income and gains restricted by donors are reported as increases in unrestricted net assets if the restrictions are met (either a stipulated time period ends or a purpose restriction is accomplished) in the reporting period in which the income and gains are recognized. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Program service revenue relates to fees received in exchange for program services. Revenue is recognized when the program service is provided. Any revenue received which has not been earned is recorded as deferred income.
Management and general expenses: The Organization classifies expenses, which are not directly related to a specific program, as Management and General expenses. Grants receivable/due to grantors: The Organization received several grants from the U.S. Agency for International Development and U.S. Department of State for the International Camp and Follow-Up programs. In accordance with the grant provisions, the Organization either receives grant funds following the disbursement of approved expenses or is authorized to receive funds in advance of anticipated expenditures. All unreimbursed expenses as of period-end are recorded as grant receivables and all advanced funds not expended are recorded as either refundable advances or deferred income. Functional expense allocation: The direct costs of providing programs and other activities have been summarized on a functional basis in the statements of activities and functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. The joint costs associated with the fundraising activities are deemed negligible, and as such, have not been reported. Reclassifications: Certain reclassifications have been made to the 2014 financial statement presentation to correspond to the current year’s format. Net assets and changes in net assets are unchanged due to these reclassifications.
-8-
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
2.
Fair Value Measurement of Investments The Financial Accounting Standards Board (FASB) requires enhanced disclosures about investments that are measured and reported at fair value. FASB establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1: Investments falling within Level 1 of the fair value hierarchy are valued using inputs based upon quoted prices in active markets for identical investments. Investments that are typically included in Level 1 are listed equity securities, publicly traded mutual funds, and exchange traded funds. Level 2: Investments falling within Level 2 of the fair value hierarchy are valued using significant observable inputs other than prices quoted in active markets. Examples of Level 2 inputs are model-driven prices, quoted prices for similar investments in active markets, and quoted prices for identical of similar investments in inactive markets. Investments that are typically included in Level 2 are municipal bonds, corporate bonds, and government debt securities. Level 3: Investments falling within Level 3 of the fair value hierarchy are valued using methodology that is unobservable and significant to the fair value measurement. Level 3 inputs require significant management judgment or estimation. Investments that are typically included in this category are investments in limited partnerships, and investments in private companies or unregistered securities. The investment’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. During the years ended December 31, 2015 and 2014, all of the Organizations investments were Level 1 investments.
3.
Cash and Cash Equivalents As of December 31, 2015 and 2014, the components of cash and cash equivalents are as follows: Cash Money Market Funds Total -9-
2015
2014
$ 865,962 872,901 $1,738,863
$ 761,664 734,301 $1,495,965
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
4.
Property, Equipment and Intangibles Property, equipment and intangibles by major class consisted of the following at December 31, 2015 and 2014: 2015 2014 Nondepreciable: Construction in progress $ 60,000 Depreciable: Furniture and fixtures Equipment & software Leasehold improvements Website design
$
26,562 $ 26,562 187,714 190,935 644,339 627,079 77,178 69,178
Less: accumulated depreciation and amortization ( 744,979) ( 706,840) $ 250,814 $ 206,914 Depreciation and amortization expense amounted to $44,408 and $44,354 in 2015 and 2014, respectively. 5.
Investments and Related Income The Organization’s investments are stated at fair values, based on quoted prices in active markets (all Level 1 Measurements), and consist of marketable securities. Fair values and unrealized appreciation/(depreciation) at December 31, 2015 and 2014 are summarized below as follows: 2015 2014 Fair market values $ 1,020 $ 62,322 Less: Cost ( 1,037) ( 62,611) Unrealized appreciation/ (Depreciation) $( 17) $( 289) The statements of activities summarize the investment return for the years ended December 31, 2015 and 2014, as follows: 2015 2014 Unrestricted: Interest/dividend income (*) $ 2,969 $ 482 Gains/(losses) 5,661 ( 1,469) Permanently Restricted: Dividend income (*) 170 35 Total Investment income $ 8,800 $( 952) * Includes income earned from money market funds
- 10 -
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
6.
Restricted Assets As of December 31, 2015 and 2014, contributions are restricted for the following activities: Temporarily restricted: Campership, Seeds and other Facilitator training Multinational programing Scholarships, internships mediation and education Total Permanently restricted: Endowment
7.
2015
2014
$ 544,364 139,767
$ 547,801 204 281,051
69,363 $ 753,494
49,207 $ 878,263
$ 344,385
$ 344,215
Loans and Notes Payable The Organization has a credit line with a financial institution that matures on April 18, 2016, is secured by all present and future personal property and fixtures of the organization. Interest is to be paid monthly on the outstanding balance based on two percent above prime rate in effect. As of December 31, 2015 and 2014, the Organization had no outstanding loan balances.
8.
Permanently Restricted Endowment The Organization’s endowment is comprised of funds for future program support. Its endowment includes only donor-restricted funds. The fund currently consists of money market funds. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. The Board of Directors of the Organization has interpreted the New York Prudent Management of Institutional Funds Act (NYPMIFA) 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 Organization 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-
- 11 -
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
8.
Permanently Restricted Endowment (continued) 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 Organization in a manner consistent with the standard of prudence prescribed by NYPMIFA. In accordance with NYPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donorrestricted endowment funds: (1) the duration and preservation of the various funds, (2) the purposes of the donor-restricted endowment funds, (3) general economic conditions, (4) the possible effect of inflation and deflation, (5) the expected total return from income and the appreciation of the investments, (6) other resources of the Organization, and (7) the Organization’s investment policies. Investment Return Objectives, Risk Parameters and Strategies. The Organization has adopted investment and spending policies, approved by the Board of Directors, for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment funds while also maintaining the purchasing power of those endowment assets over the long-term. Accordingly, the investment process seeks to achieve an after-cost total real rate of return, including investment income, with acceptable levels of risk. Endowment assets are invested in money market funds. This asset mix is intended to result in a consistent inflation-protected rate of return that has sufficient liquidity to make an annual distribution, if appropriate, while growing the funds if possible. Therefore, the Organization expects its endowment assets, over time, to produce an average rate of return of approximately 1% annually. Actual returns in any given year may vary from this amount. Investment risk is measured in terms of the total endowment fund; investment assets and allocation between asset classes and strategies are managed in order not to expose the fund to unacceptable levels of risk. Spending Policy. The donor restriction states that interest and dividend income must be reinvested until the endowment fund reaches $3,000,000. After that interest and dividend income may be used to support program activities. In establishing these policies, the Organization considered the long-term expected return on its investment assets, the nature and duration of the individual endowment funds, many of which must be maintained in perpetuity because of donor-restrictions, and the possible effects of inflation. The Organization expects the current spending policy to allow its endowment funds to grow at a nominal average rate of 1% annually, which is consistent with the Organization’s objective to maintain the purchasing power of the endowment assets as well as to provide additional real growth through investment return.
- 12 -
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 8.
Permanently Restricted Endowment (continued) Changes in permanently restricted net assets for the years ended December 31, 2015 and 2014 are as follows: Endowment net assets, beginning of year Investment return: Investment income Net gains and losses Total investment return Endowment net assets, end of year
9.
2015
2014
$ 344,215
$ 344,180
170 170 $ 344,385
35 35 $ 344,215
Commitments and Contingencies Office lease: The Organization leases office space at 370 Lexington Avenue, NY, NY, under a non-cancelable lease that was extended until August 31, 2021. In accordance with the lease agreement, the Organization has outstanding an irrevocable letter of credit with a bank in the amount of $63,512 and $36,718 as of December 31, 2015 and 2014, respectively. As security for such letter of credit, the Organization has a certificate of deposit, covering this amount, with the bank. Camp lease: The Organization leases property located in Pleasant Lake, Otisfield, Maine, under a 10 year non-cancelable lease that was extended and expired on March 31, 2013. The lease was extended and is set to expire on March 31, 2016. Management is currently in negotiations regarding future rentals. In lieu of rent payments, the Leasor had agreed to accept up to $200,000 in leasehold improvements made by the Organization during the term of the lease. As of September 30, 2001 the Organization exceeded $200,000 in capital improvements and accordingly was not required to pay the $50,000 annual rent. During the 2002 fiscal year, the Leasor agreed to forgo receiving all future rent as long as the Organization continues to maintain and make capital improvements on the property. The Organization expects to continue making capital improvements on the property and therefore does not expect to make any future rent payment. Regional leases: The Organization has several non-cancelable leases for office space in the Mideast and South Asia. The term of these leases range in length from one to three years. Equipment leases: The Organization has several non-cancelable operating leases for office equipment.
- 13 -
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 9.
Commitments and Contingencies (continued) As of December 31, 2015, the minimum aggregate annual rentals for all existing leases are as follows: Year ended December 31, 2016 2017 2018 2019 2020 2021 Total
$ 266,461 273,123 279,953 286,951 294,124 199,950 $1,600,562
Total rent expense charged to operations for the years ended December 31, 2015 and 2014 was $262,666 and $245,885, respectively. Insurance coverage: The Organization maintains its bank accounts, money market funds, marketable securities and certificates of deposit with financial institutions. The combined balances that exceed the Federal Deposit Insurance Corporation's (FDIC), Security Investor Protection Corporation’s (SIPC) and other insurance coverage are summarized for the years ended December 31, 2015 and 2014 as follows: Institutional balances Less: amounts covered Uninsured amounts 10.
2015 2014 $1,625,459 $1,483,026 ( 849,821) ( 787,284) $ 775,638 $ 695,742
Pension Plan On February 1, 2002 the Organization adopted a salary reduction, 401(K) retirement plan that is funded by voluntary employee contributions and discretionary employer contributions. The plan was converted to a tax-deferred 403(b) plan in 2010. Organization contributions to the plan amounted to $7,154 and $7,609, for the years ended December 31, 2015 and 2014, respectively.
11.
Government Grants The Organization was awarded various government grants to support its programs. Total expenses expended under the grants amounted to $220,603 and $451,755 during the years ended December 31, 2015 and 2014, respectively.
- 14 -
SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 12.
Contributions Receivable Promises to give are unconditional and nonreciprocal. Long term pledges are discounted as of December 31, 2015 and 2014. Contributions receivable are written-off as bad debts in the year deemed uncollectible and are reported as such in the statement of functional expenses. The amount of promised contributions and unamortized discount consisted of the following as of December 31, 2015 and 2014: 2015
2014
Contributions receivable: 2015 2016 2017 2018 Less: unamortized discount
13.
$
$ 422,028 537,113 142,000 87,000 45,000 16,000 640,113 609,028 ( 12,627) ( 10,131) $ 627,486 $ 598,897
Subsequent Events Management has evaluated subsequent events through August 8, 2016, the date the financial statements were available to be issued, to evaluate whether any such events warrant adjustment to any reported amounts or inclusion of additional disclosures. No such adjustments or disclosures were judged to be necessary.
- 15 -