SEEDS OF PEACE, INC. FINANCIAL STATEMENTS AND AUDITORS' REPORT
DECEMBER 31, 2016 AND 2015
SEEDS OF PEACE, INC. TABLE OF CONTENTS
PAGE INDEPENDENT AUDITORS' REPORT
1
FINANCIAL STATEMENTS Statements of financial position as of December 31, 2016 and 2015
2
Statements of activities for the years ended December 31, 2016 and 2015
3
Statements of cash flows for the years ended December 31, 2016 and 2015
4
Statement of functional expenses for the year ended December 31, 2016 with comparative totals for 2015
5
Notes to financial statements
6 - 15
INDEPENDENT AUDITORS’ 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, 2016 and 2015, 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, 2016 and 2015, 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 June 30, 2017
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SEEDS OF PEACE, INC. STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2016 AND 2015
2016
2015
$ 1,472,028 345,560 473,843 6,310 9,214 23,532 183,027 2,356 191,691 67,600 13,242
$ 1,394,478 344,385 627,486 9,007 3,964 23,315 144,354 1,020 195,380 55,434 8,442
$ 2,788,403
$ 2,807,265
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
376,948 45,967
$
439,252 44,378
422,915
483,630
1,283,602 736,326 345,560
1,225,756 753,494 344,385
2,365,488
2,323,635
$ 2,788,403
$ 2,807,265
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.
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SEEDS OF PEACE, INC. STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2016 AND 2015 2016 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
3,407,778 103,102 11,515 659,059 14,210 583,374
2015
$
10,000 1,172,470 (168,554)
4,155 1,330,200 (200,099)
1,013,916
1,134,256
566,206 (583,374)
Permanently restricted: Investment and other income
3,533,520 220,603 21,963 852,410 21,692 636,403
511,634 (636,403)
1,175
170
5,776,961
6,296,248
1,565,799 853,930 849,070 66,122 140,277 450,576
1,666,372 1,039,215 1,120,178 140,826 103,637 510,397
3,925,774
4,580,625
Supporting Services: Management and general Fundraising
1,145,507 663,827
992,930 632,752
Total expenses
5,735,108
6,206,307
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
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
$
57,846 (17,168) 1,175
214,540 (124,769) 170
41,853
89,941
2,323,635
2,233,694
2,365,488
See accompanying notes to financial statements.
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$
2,323,635
SEEDS OF PEACE, INC. STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2016 AND 2015 2016
2015
Cash Flows From Operating Activities: Increase/(decrease) in net assets
$
41,853
$
89,941
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
43,401 1,234 (126,574) 1,309
44,408 (5,661) (172,041) 5,596
152,334 2,697 (5,250) (217) (38,673) (4,800) (62,304) 1,589
(34,185) 78,647 8,461 887 67,528 (6,400) (16,557) 31,578
6,599
124,004 (51,878)
239,005 (88,309)
72,126
150,696
-
-
78,725
242,898
1,738,863
1,495,965
$ 1,817,588
$ 1,738,863
Cash Flows From Financing Activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
See accompanying notes to the financial statements.
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92,202
SEEDS OF PEACE, INC. STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2016 WITH COMPARATIVE TOTALS FOR 2015
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 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
$
297,599 22,282 25,296
2 0 Program Expenses MultiUS South Regional Programs Asia (SA)
Middle East $
359,966 26,152 52,036
$
364,560 28,017 45,726
$
32,568 2,480 8,662
$
6,342 474 1,270
1
6 Program Admin.
$
2015
Total
329,703 25,080 48,509
$ 1,390,738 104,485 181,499
Support Services Management & General Fundraising $
614,635 43,467 55,941
$
Total Expenses
346,910 24,397 50,698
$ 2,352,283 172,349 288,138
Total Expenses $
2,223,413 164,160 282,522
345,177
438,154
438,303
43,710
8,086
403,292
1,676,722
714,043
422,005
2,812,770
2,670,095
20,549 33 28,385 4,548 4,624 15,409 131,391 74,976 20,607 4,978 1,267 757 4,569 9,264 118,610 507 596 11,515 28,860 4,095 33,639 2,458 194,850 82,574 87,050 7,312 11,225 279,730 36,244 -
1,202 1,019 1,165 1,318 2,969 3,184 4,027 20,413 38 1,857 11,982 110,853 148 909 18,617 60 67,753 960 6,989 2,657 12 1,960 20,530 132,474 2,680 -
14,300 14 8,776 2,139 1,218 91 2,556 2,996 64,910 22 290 13,696 107,254 4,652 30,765 2,500 38,688 1,319 3,720 6,086 100,185 4,590
260 90 40 140 12 3,824 3,499 27 116 50 390 3 13,961 -
2,335 1,454 311 263 580 52 10,329 1,745 1,435 63,875 6 6,805 560 9,782 728 1,124 2,630 1,526 25,946 698 7
2,490 8,668 1,161 177 249 880 797 55 164 639 24,801 188 55 2,415 4,545 -
16,635 20,549 307 2,656 38,180 10,743 7,463 19,189 145,811 74,976 20,607 13,214 100,920 817 8,710 37,257 404,888 5,395 39,355 33,831 28,920 145,169 33,639 5,653 201,839 85,231 88,186 16,067 41,785 556,841 39,622 4,597
1,309 10 5,104 3,471 6,205 36,237 7,606 2,673 5,190 50,363 17,874 1,177 554 32,162 227,452 8,802 949 20,132 2,209 50 1,935
21,991 20,317 117 750 4,092 1,698 555 476 109,642 10,777 23,989 3,578 13,494 9,032 1,418 14,722 5,174
16,635 1,309 20,549 22,308 22,973 43,401 14,964 13,668 19,189 182,048 74,976 20,607 24,912 105,291 817 14,455 88,096 532,404 17,349 63,898 69,571 28,920 386,115 33,639 23,487 201,839 85,231 88,186 17,016 63,335 573,772 39,672 11,706
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 98,218 509,762 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
1,220,622
415,776
410,767
22,412
132,191
47,284
2,249,052
431,464
241,822
2,922,338
3,536,212
450,576
$ 3,925,774
$ 1,145,507
663,827
$ 5,735,108
$ 1,565,799
$
853,930
$
849,070
$
66,122
$
140,277
$
See accompanying notes to financial statements.
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$
$
6,206,307
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.
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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 affect 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, 2016 and 2015 in the 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: 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, 2016 and 2015, $11,515 and $21,963, 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.
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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 fund-raising activities are deemed negligible, and as such, have not been reported.
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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 or 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, 2016 and 2015, all of the Organizations investments were Level 1 investments.
3.
Cash and Cash Equivalents As of December 31, 2016 and 2015, the components of cash and cash equivalents are as follows: Cash Money Market Funds Total -9-
2016
2015
$ 943,386 874,202 $1,817,588
$ 865,962 872,901 $1,738,863
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, 2016 and 2015: 2016 2015 Nondepreciable: Construction in progress $ 60,000 Depreciable: Furniture and fixtures Equipment & software Leasehold improvements Website design
$
37,330 $ 26,562 196,246 187,714 718,417 644,339 95,678 77,178
Less: accumulated depreciation and amortization ( 788,380) ( 744,979) $ 259,291 $ 250,814 Depreciation and amortization expense amounted to $43,401 and $44,408 in 2016 and 2015, 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, 2016 and 2015 are summarized below as follows: 2016 2015 Fair market values $ 2,356 $ 1,020 ( 2,399) ( 1,037) Less: Cost Unrealized appreciation/ (Depreciation) $( 43) $( 17) The statements of activities summarize the investment return for the years ended December 31, 2016 and 2015, as follows: 2016 2015 Unrestricted: Interest/dividend income (*) $ 2,967 $ 2,969 Gains/(losses) ( 1,234) 5,661 Permanently Restricted: Dividend income (*) 1,175 170 Total Investment income $ 2,908 $ 8,800 * Includes income earned from money market funds
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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS
6.
Restricted Assets As of December 31, 2016 and 2015, 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.
2016
2015
$ 425,464 100,000 153,706
$ 544,364 139,767
57,156 $ 736,326
69,363 $ 753,494
$ 345,560
$ 344,385
Loans and Notes Payable The Organization has a $250,000 credit line with a financial institution that matures on May 4, 2017 and 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, 2016 and 2015, 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-
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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.
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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, 2016 and 2015 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.
2016
2015
$ 344,385
$ 344,215
1,175 1,175 $ 345,560
170 170 $ 344,385
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 as of December 31, 2016 and 2015, 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, 2017. 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 Middle East 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.
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SEEDS OF PEACE, INC. NOTES TO FINANCIAL STATEMENTS 9.
Commitments and Contingencies (continued) As of December 31, 2016, the minimum aggregate annual rentals for all existing leases are as follows: Year ended December 31, 2017 2018 2019 2020 2021 Total
$ 273,123 279,953 286,951 294,124 199,950 $1,334,101
Total rent expense charged to operations for the years ended December 31, 2016 and 2015 was $386,115 and $262,666, respectively. Insurance coverage: The Organization maintains its cash, cash equivalents, and investments in various accounts. The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 per financial institution. The Securities Investor Protection Corporation insures cash and securities, including money market funds, up to $500,000 per financial institution. At times, the balances of the accounts exceeded the insured limits during the years ended December 31, 2016 and 2015. 10.
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 $26,093 and $18,805, for the years ended December 31, 2016 and 2015, respectively.
11.
Government Grants The Organization was awarded various government grants to support its programs. Total expenses expended under the grants amounted to $103,102 and $220,603 during the years ended December 31, 2016 and 2015, respectively.
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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, 2016 and 2015. Contributions receivable are written-off as bad debts in the year deemed uncollectible and are reported as such in the statement of functional expenses. As of December 31, 2016 and 2015, pledges are expected to be realized in the following period: 2016 In one year or less In one to five years Less: unamortized discount
13.
2015
$ 434,708 $ 537,113 46,000 103,000 480,708 640,113 ( 6,865) ( 12,627) $ 473,843 $ 627,486
Subsequent Events Management has evaluated subsequent events through June 30, 2017, 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.
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