2023-24 HCB Annual Report

2023-24 Board of Governors

PRESIDENT

Marcus O.P. DeFlorimonte, gb’95, pmd

VICE PRESIDENTS

Susan Kendall ’81, ks’99

Jillian Campbell McGrath, Legacy

SECRETARY

Edward Matson Sibble, Jr., ’73

TREASURER

Michael F. Cronin ’75, gb’77

HOUSE COMMITTEE CHAIR

Juan Carmona, g’10, ph’10, ph’14, m’16

DIRECTORS

Anthony M. Consigli ’89

Charles F. Cornish, Legacy

Andy S. Freed ’90, ks’94

Michael Gaines, gb’96

Martin J. Grasso, Jr., ’78

Courtney Jacobovits, gsd’16, MIT’22

Sarah C. Karmon, HAA

Dr. Elizabeth Micci, Ed.L.D ’18

Debbie Millin, gb’22, amp

Rev. Amy Norton, dv’16

Jan Saragoni, ks’89

Edward Matson Sibble, Jr. ’73

Secretary’s Report

Membership

Annual Report 2022 – 2023

Deceased (33)

Resigned (358)

Suspended (60)

Full

Membership

Report 2023 – 2024

The Secretary regrets to announce that since the last annual report, the following Members have died:

Dr. William Abbott, HMS Faculty

Dr. Robert Abernethy, III, HMS Faculty **

John Berylson, gb’79 **

Anna Caleb, R’57

Burton Chandler ’56, l’59 **

Dr. Carlo DeLuca, HMS Faculty

Dr. James Dickson, III, m’47

James Evans ‘75

Michael Ferrara, gb’80

Dr. John Funkhouser, Y’59

Nancy Hannaford Greer, R’59**

Dr Jay Hellman, MIT’68

Townsend Hornor ‘52**

Dr Joel Kavet, YG’67

Lawrence Lucchino YG’91

Dr. Kenneth Marshall ‘60**

Jeffrey Morby, gb’61

**Denotes a 50+ year Club Member

Respectfully Submitted,

Edward Matson Sibble, Jr., ’73

Secretary

Robert Murphy ’52, gb’57**

Dr. John Noble ‘59

Joseph J. O’Donnell ’67, gb’71

Dr. Stephen Pauker ’64, m’68

Dr. Georges Peter ’59, m’64

David Raish, Y’69, l’73

David Roane, pmd

Leonard Rosen

Dr. Martin Samuels, HMS Faculty

Robert Shaw ‘61**

Dr. Solange Skinner, assoc.

Donald Sohn, gb’51**

Arthur Stock, Y’54, YG’59

Edward Theobald, exg’87

Dr James Tillotson ’52, MIT’64

Ray Wrobel

Stanley Wulf, MIT’65

President's Report

Connection – Relevance – Value

The words that come to mind that best describes the success of the past year is connection, relevance and value. The collective efforts of Club leadership and management have guided our work on behalf of our members over the past year. I’m happy to report that the state of our beloved Harvard Club of Boston is very solid. The culture of our Club community is one of excitement and anticipation as we fulfill our mission to be the social, intellectual and athletic hub of Harvard alumni and affiliated communities in the Greater Boston area.

As my second year as President of the Harvard Club of Boston concludes, I am humbled and honored to be your President It’s been a good year for us as we have embraced new members and reconnected with those who continue to return after the pandemic as well as those who heard about the new vibrancy of the Harvard Club of Boston and want to be members of our community. I am grateful for the conversations with you, our members. You care about our club and your willingness to engage on many levels is fundamental to our success now and the future.

The Harvard Club of Boston exists because of Harvard University. We continue to embrace Harvard and strengthen our partnerships with the University on many levels. Our partnership with the University is the foundation of alumni network and fosters connection between our current members and is the basis for attracting future ones.

The details of our accomplishments over the past year are outlined in the committee reports of the Annual Report. Below are some highlights.

Connection

The connection to the University has been enhanced with current partners and new partnerships that have been established Connections have also been established through the generosity of some of our members who are willing to connect us through their networks

Our partnership has been enhanced with Harvard Alumni Association through relationships with the HAA Shared Interest Groups. This has led to collaborative experiences for HCB members and members of the SIG’s, with the goal of expanding memberships in both organizations. Many thanks to Sarah Karmon, HAA Executive Director and HCB Board of Governors member, and her team for their collaborative efforts.

Our partnership with the Harvard Varsity Club is the gift that keeps on giving. The HCB now hosts the end of season celebrations for nearly all of the Harvard Crimson teams. We also have had some wonderful joint experiences, The Fab Five Panel discussion, The Harvard-Yale Watch Party, and the recent trip to the Masters. Many thanks to Bob Glatz ’88, Executive Director of the Harvard Varsity Club, and his team for their efforts and support on our behalf. In the area of the arts, we have been quite fortunate. A new partnership has been formed with the American Repertory Theatre. This will give HCB members access to tickets for performances and other program opportunities. We are grateful to A.R.T. Executive Director Kelvin Dinkins and his team for working to form this partnership. We look forward a future of wonderful experiences.

President's Report

Our members are our greatest asset when it comes to making connections. Cristina Coletta Blau ’87 was instrumental in assisting us in securing award-winning actor and author Courtney B. Vance ’82 for a thoughtful and engaging discussion about his new book this winter. Cristina has also assisted the HCB in establishing a partnership with Handel & Hayden Society that has enriched the musical offerings for our members who enjoy classical music. Thank you, Cristina!

Relevance

We continue to follow the lead of the University regarding making our clubhouse and representations more inviting and welcoming to all in the Harvard community. One way we have chosen to do this is through artwork Thanks to your contributions, the Higginson Foundation has supported adding pieces to our collection and conserving others that embody the rich diversity and inclusion of today’s Harvard. Essential to our success as an alumni club is our ability to honor traditions, acknowledge the present and embrace the future.

The variety and depth of our member events allowed all to enjoy the intergenerational and multidisciplinary quality of our HCB community. As we move forward, the Member Experience Committee continues to focus on the member journey, member interaction, member events and our Harvard connection as key factors to enhance the value proposition of membership. Kudos to our Member Experience team for the excellence in the work you do for us.

This year we continued our work with a branding, design and production company to execute a comprehensive marketing strategy for the HCB. This is an important part of the overall plan to ensure that how and what we communicate is relevant to needs of our membership. Club leadership continues to be nibble in our approach support the evolving desires for our membership population. This year we saw an influx of young families with babies and young children. Working with club management we were able to make adjustments to create space for parents and have reintroduced food service to the Club Pub.

Value

Our financial position is strong We have fully recovered from the pandemic and are planning for the future. We have our HCB management team along with members, returning members and new members, to thank for our fiscal recovery. Membership retention and acquisition is the most important factor to our Club’s financial stability.

We are blessed to have a dedicated facilities team that takes much pride maintaining our 111-year-old clubhouse. That said, our roof system will require major work over the next year or so and the work in our basement is scheduled to be completed in the fall. The Facilities Renewal Assessment helps pay for the cost of those of repairs and upgrades, along with other similar projects that keep our building operating and maintained in good order. The Harvard Club of Boston has again been named a Platinum Club of America. We were awarded the distinction as the 9th ranked City Club in the United States. We congratulate Steve Cummings, our General Manager, and his team for this achievement. Membership in a private alumni club located in a major city is discretionary. That said, our commitment to equitable pricing means that every member feels valued and empowered to enjoy all the amenities our club has to offer. Simultaneously, we maintain fiscal responsibility to ensure we can sustain and even improve the superior experience our members deserve. We continue to seek ways to enrich the value proposition of a HCB membership We value you as a member and want you to feel that receive value for your investment in the Harvard Club of Boston

President's Report

The 415 Newbury Street development project with Trinity Financial continues to move through the City of Boston permitting process. There have been a few key approvals, however there are more required. At this point given the number of agencies, new regulations and delays in scheduling, we do not anticipate that construction will begin before mid 2025. Just a reminder that even when the project receives all the required governmental approvals and permits, the Board of Governors (BOG) intends to review the terms of the development deal and make a final decision whether to move forward with the project after receiving a recommendation from the Steering Committee. The Steering Committee, which is closely monitoring the project, consists of our four recent past presidents, the Executive Committee of the BOG, our General Manager, and a real estate consultant.

The HCB staff continue to be an important component in the life of our club Steve Cummings, our General Manager and recognized leader in the private club industry, is now in his 12th year of awardwinning management of the HCB team. We have been fortunate to have the expertise of seasoned staff along with an influx of new hires with fresh perspectives over the past year. This combination has proven to be a wonderful model for providing quality service for our members. Thank you to our staff for your dedicated service. We appreciate everything they do on our behalf.

Devoted, earnest, thoughtful – those are some of the words I use to describe my fellow members of the Board of Governors. They engage with purpose, provide forthright oversight and supportive guidance to management. They are committed stewards of our Club, and I am grateful for their time, talents and service. The board service of Reverend Amy Norton ends after this year’s annual meeting. Thank you, Amy, your contributions have served us well and we are greatly appreciative. We look forward to your service on the Nominating Committee.

Committee service is one the best ways to be involved in our club community. Thank you to our members who serve on our committees Your input has helped to influence the experiences for all of our members and guests Thanks also to our Special Interest Groups which provide an avenue for members to enjoy the fellowship of the those with similar interests Collectively your involvement makes our club better

In closing, I would like to thank the members who stepped forward to make suggestions or offer encouragement to us in the past year. When members ask what they can to assist the club, one thing always come to mind. Spread the word, talk to fellow alumni and friends about becoming members and invite them to do so. The most important asset of the HCB is its members. We are strengthened by the richness shared individually and collectively through inclusion, connectivity and engagement throughout Harvard, affiliated schools and neighboring communities. Many thanks to all of you for choosing to be members of our beloved Club. As a member of the greatest alumni network in the world, thank you for filling our Club with a spirit of unity and congeniality, respect and kindness. Your loyalty and support make us thrive as a community, onward together.

Respectfully submitted,

S u m m e r P a r t y a t E n v o y L o o k o u t

P a r t y a t E n v o y L o o k o u t

S u m m e r

Treasurer's Report

In fiscal year 2023 the Harvard Club of Boston continued its recovery from the effects of Covid-19. Fortunately, membership slightly increased by 104 net new members with returning and new members balancing our historical attrition.

In fiscal year 2023 revenues totaled $18,527,859 up 30.41% from $14,208,494 in fiscal year 2022. Improvements occurred in all areas. Membership dues increased $725,965 or 11.74%. Food and beverage revenues increased $2,921,348 or 49.26%. Room revenues increased $411,853 or 33.2%, Parking revenues increased $80,481 or 16.09% and athletics revenues increased $27,686 or 10.1%. Consequently, operating income before fixed expenses and income taxes increased $1,259,765 or 73.28%. Fixed expenses increased by $153,997 Taxes also decreased by $217 Entrance fees decreased $36,135 or 7 11% The Club was able to sell it liquor license from the now closed downtown clubhouse for $328,766 net of $123,582 in taxes Overall, the change in net assets before pension related charges was $1,745,369 compared to a gain of $2,408,400 which included $2,025,286 in one-time government support in PPL loans and ERC in fiscal year 2022.

We began the year with $4,667,305 in cash and ended the year with $5,416,804 without utilizing our line of credit. With sensible cost controls, working capital management, and despite significant capital expenditures the Club hopes to end the fiscal year 2024 with a positive cash balance again without utilizing our line of credit. In fiscal year 2023 ($1,202,165 in capital expenditures) and continuing in fiscal year 2024 (budgeted capital expenditures of $1,158,582) the Club invested in long delayed deferred maintenance of our roof and subbasement repairs totaling over $2 million. Long term debt used to fund prior renovations totaled $7,633,357 compared to $8,055,273 in 2022.

Our pension fund has an underfunded position of $3,720,786 due to changes in actuarial assumptions regarding the present value of plan benefits, portfolio performance and contributions. This year the pension fund value increased $174,153 to $8,034,557 with improved market performance The benefit obligation also decreased to $11,755,343 from $12,326,886 Consequently, the net Retirement Obligation decreased to a negative $3,720,786 in 2023 from a negative $4,466,482 in 2022 The effect of this in the audited financial statements show pension related changes other than net periodic pension gain of $539,804 compared to a loss of $4,506,758 in 2022. This year the financial markets improved, and the fund was up 2.22% on a net basis.

Both the retirement plans for union employees and all other employees have ceased benefits accruals. We still make payments into the pension plan to make up for actuarial deficits and we have additional costs for a 401K Plan the Club instituted to mitigate the changes in the pension plans. During 2023 and 2022 there were approximately $187,000 and $166,000 in employer matching contributions, respectively. Fiscal year 2023 was a strong year for our Club which we hope will continue in fiscal year 2024. Our management team has been instrumental in managing cash, controlling expenses, and maintaining the financial integrity of our Club while restoring the traditional programs and activities at the Club.

Respectfully Submitted, Michael F. Cronin ’75, gb’77

Treasurer

Budget & Finance

The Budget and Finance Committee is pleased to submit this report. Activity levels at the Club have gradually returned to those prior to Covid. Our Club has a stronger financial position and just as importantly has regained its familiar vibrancy and energy. The Committee cannot thank the Club’s General Manager Mr. Cummings, Chief Financial Officer Ms. LaWare and their team enough for their leadership and careful management through the pandemic and recovery. The Budget and Finance Committee met several times during the year to monitor financial results and advise on the fiscal 2024 budget. The Committee welcomed Mrs. Sydney Divis as the Club’s new Controller.

Our report includes a summary of fiscal 2023 financial performance and year-to-date fiscal 2024 financial results relative to budget

Fiscal Year 2023 (September 1st, 2022 through August 31st, 2023)

The Club expected improved post-pandemic activity and adopted a less conservative approach to budgeting for Fiscal Year 2023. We are happy to report that operations exceeded expectations and the year ended with a healthy surplus and strong performance relative to budget. Major contributors to the surplus were food, beverage and overnight room rentals. Club staff continued its careful management of expenses and totals were in line with the budget. The Club sold the city liquor license associated with the former Downtown Club location, netting roughly $325,000 after related taxes were paid. The Committee recommended that this one-time revenue be reserved for capital or other one-time expenses. Notably, membership levels continue to improve, however total membership dues revenue continued to lag budgeted goals.

The Club’s liquidity remains very strong with an improvement in cash position at the end of Fiscal Year 2023. It is expected that some cash will be drawn to fund significant capital projects in the coming years. The Club continues to pay down principal on its long-term construction loan, has not ever accessed its line of credit with Eastern Bank and in Fiscal Year 2023 did not take on any additional short or long-term debt

Fiscal YTD 2024 (September 1st, 2023 through February 29th, 2024)

Budget planning for Fiscal Year 2024 began in April 2023. Ms. LaWare and Mr. Cummings discussed assumptions for growth in revenue and expenditures with the Committee. The budget reflects clubhouse activity similar to pre-pandemic levels as well as steady increases in membership. Moderate increases in member dues were incorporated and expenditure budgets were adjusted to reflect inflation and other anticipated increases. The budget for member events was increased to reflect both the resumption of a full calendar of events as well as the Club’s enhanced investment in member experience. At its June 2023 meeting the Committee unanimously recommended that the Board of Governors approve the Fiscal Year 2024 budget.

Budget & Finance

Fiscal Year 2024 financial results through February 29, 2024 (six months) show good overall financial performance with revenues in food, beverage and room rentals outperforming budget. Membership levels are increasing; however, membership dues are still a bit behind budget but are well ahead of the same time period last year. As planned, expenses for member events have grown significantly, reflecting many high profile and well-attended events, and are projected to exceed budget. The Committee is grateful to the Membership Experience Team for its commitment to achieving high levels of membership growth and satisfaction. Capital expenditures for major repair, maintenance and enhancement projects are ongoing, however the Club is projected to maintain ample cash for operations. The Budget and Finance Committee continues to collaborate with staff on initiatives to develop key performance indicators (KPIs) and longrange planning The Committee expresses its appreciation to Mr Cummings, Ms LaWare and the entire staff for their careful management of the Club’s finances

The Club continues to face two major strategic challenges which will impact the Club’s long-term financial health: 1. membership growth and 2. redevelopment of our property at 415 Newbury Street. The Budget and Finance Committee is grateful for the spirit of cooperation and open communication among the Board, Management committee leaders and members. We invite our fellow club members to provide input and feedback at any time during the year. The Chair expresses thanks to Budget & Finance committee members for contributing their considerable expertise and strategic thinking as we strive to deliver the highest possible value to our members while maintaining robust long-term financial health for the Club.

Respectfully submitted,

Susan L. Kendall, ’81, ks ‘99

Chair

Budget & Finance Committee

Susan Kendall ’81, ks’99, Chair

Michael Cronin '75, gb'77, Vice Chair

Chip Flowers, ks ‘06

Michael Gaines, gb’96

Cheryl LaMonica, gb’20, gmp

Debbie Millin, gb’22, amp

V i e w i n g P a r t y

Y a l e

H a r v a r d v s

With sincere pleasure, I submit this House Committee Report in anticipation of our forthcoming 2024 Annual Meeting. The tireless efforts of our Committee are dedicated to enhancing the esteemed offerings of the Harvard Club of Boston, encompassing our distinguished facilities, culinary excellence, athletic provisions, selection of reciprocal club affiliations, and promotion of fine arts endeavors each indispensable in fostering a vibrant, best-in-class, and member-centric community experience.

In expressing my heartfelt gratitude to every Sub-Committee leader and our invaluable team of collaborators, I also offer a concise yet comprehensive overview of notable achievements and ongoing ventures. It is my honor to share these updates with our membership.

Sub-Committees

Athletics: Under the exceptional leadership of Jillian McGrath, our fitness and squash program continu to thrive, with diverse offerings including junior clinics, virtual fitness classes, and competitive box leagues. We are excited to introduce children to squash through upcoming events, encouraging family participation. Our virtual fitness program's success also endures, with 20 classes weekly for both Athletic and non-Athletic members.

Despite ongoing basement renovations, efficiently managed by Mr. Glenn Ballard and his team, our amenities remain accessible. The squash program offers box leagues for competitive play and Introduction to Squash evenings for adults. Recently, the Club Championships celebrated winners with an engaging evening followed by insights from the CEO of Squash Busters. Additionally, we offer pickleball on our upstairs court, reflecting our commitment to evolving member interests. Ms. McGrath's comprehensive report highlights these achievements, showcasing our dedication to enhancing member experiences. We eagerly anticipate sharing further updates and continuing to meet the evolving needs of our members.

Facilities: Mr Glen Ballard's strategic leadership remains instrumental in ensuring the optimal operational use and function of our industry-leading facilities, addressing both visible and less visible aspects throughout the Clubhouse. Currently, he and our dedicated staff are actively addressing basement repairs and ongoing roof work. A recent final inspection for the steel work in the basement revealed the need to remove and replace a section of the kitchen floor due to deterioration caused by prolonged water penetration. Additionally, Mr. Ballard oversees other projects, including updating locks in our overnight hotel rooms and obtaining pricing for carpet or flooring replacement in high-traffic areas like the first and second-floor foyers.

In collaboration with our esteemed General Manager, Mr. Steve Cummings, we are actively exploring projects such as the creation of an outdoor dining patio and the implementation of a dining option in the ClubPub through an ordering app. This app allows members to order food online for delivery by a food runner. Additionally, we are pleased to announce the establishment of a lactation room for members, designed to accommodate young mothers and their children. Situated in the former assistant squash professional’s office, across from the men’s locker room, this space is nearing completion.

House

Members can reserve time using the Club’s mobile app and website. These ongoing initiatives are aimed at enhancing our member experience and fostering an inclusive, safe, and enjoyable community environment for the benefit of all.

Fine Arts: Ms. Peri Onipede has demonstrated decisive and intelligent leadership in guiding a highly collaborative team dedicated to exploring the connectivity of our Club's spaces, walls, and history. To achieve this goal, the Fine Arts Committee has implemented a systematic art rotation initiative. The George Washington painting has been relocated from the Massachusetts Room to create space for a large mirror, now elegantly displayed in the stairwell from the first to the second floor. Concurrently, the John Adams painting underwent professional restoration at the Gianfranco Pocobene Studio

Following restoration, the John Adams portrait has been reinstated in its original location, while the Nicholas Boylston painting has been sent to the same studio for conservation. Presently, the Fine Arts Committee is focused on procuring suitable professional lighting for these and other artworks throughout the clubhouse. Another notable art rotation involved relocating the John Harvard painting from the back entrance to the lobby, where it now commands attention above the fireplace. Additionally, adorning the back entrance wall is a historic cast iron plate shaped like a half-moon, originating from the 1913 boiler door.

Furthermore, the Clubhouse is actively seeking to hire a history intern and an art intern from the University to catalog our art collection. Their responsibilities will also include updating QR codes and ensuring consistency in best practices, ultimately informing our short-and long-term collection management strategy. We extend our heartfelt appreciation to Ms. Onipede and the Fine Arts team for their diligent efforts and recommendations across these various key initiatives.

Food & Beverage: I express my gratitude to Dr John Tamilio for his prior leadership of the Food and Beverage Committee Now, under the capable guidance and stewardship of Ms Courtney Jacobovits, our endeavors in this realm are undergoing an exciting revitalization Ms Jacobovits brings dynamic leadership qualities and invaluable expertise in business and customer interactions, greatly informing our aspiration to enhance food and beverage quality, venue ambiance, and overall service standards in a holistic manner.

As a united team, we are committed to empowering Ms. Jacobovits to explore strategies that infuse new talent and perspectives into the committee. With our integrated approach ensuring world-class food quality, venue layout, and service standards we aim to comprehensively elevate our members' dining experiences, ensuring excellence and delivering engaging and memorable culinary encounters.

Reciprocal Clubs: Last year saw a significant increase in reciprocal club usage, mirroring the resurgence of travel. Mr. Mat Sibble has demonstrated admirable and masterful leadership in continually guiding this Sub-committee, effectively integrating several new clubs into our reciprocal network, both domestically and internationally. Committed to excellence, the Sub-committee diligently evaluates current clubs against our industry-leading standards of inclusiveness and accessibility, ensuring alignment with our vision.

House

We applaud the Sub-committee's outstanding efforts in expanding our esteemed reciprocal network, with a particular emphasis on fostering connections in underrepresented locales worldwide. To this end, member feedback is invaluable to us, and we eagerly invite comments and suggestions on their experiences with existing reciprocal clubs and proposals for new additions. Mr. Sibble has furnished a comprehensive report detailing the Sub-committee's recent triumphs, notably our inaugural reciprocal in Ottawa, Canada a noteworthy addition that provides our esteemed membership with a new destination to relish in the heart of our northern neighbor's capital.

Conclusion

I extend my deepest and sincerest gratitude to all the individuals featured in this House Committee Report, alongside their respective Sub-Committee teams. Through their tireless efforts, we have achieved significant milestones and stand ready for further accomplishments.

A special acknowledgment is owed to General Manager Steve Cummings, whose unwavering support, decisive leadership, and exemplary resilience throughout the past year have been a source of inspiration for us all. Thanks to his steadfast commitment and the unwavering dedication of our staff, our Club community has emerged stronger and more vibrant.

It is truly an honor to serve alongside such dedicated colleagues, and I am profoundly grateful for all that you do. Let us continue to uphold the high standards of our Club and serve our members with the utmost care and professionalism. Together, we create a welcoming and nurturing environment where friendships thrive, and cherished community experiences flourish.

Respectfully submitted,

Dr Juan J Carmona, g‘10, ph’10, m’16

Chair

House Committee

Dr. Juan J. Carmona, g‘10, ph’10, m’16, Chair

Anthony M. Consigli, ’89

Charles F. Cornish, Legacy

Victoria Cornish; Colin Hendrickson

Courtney L. Jacobovits, gsd’16, MIT’22

Jillian C. McGrath, Legacy; John I. Meyer, gsd’77

Peri Onipede

David Rodriguez, YG’12; Edward M. Sibble, ’73

Isaac Silberberg, MIT’16

Christine Tuttle

F a b 5 o f H a r v a r d S p o r t s

Member Experience

Empowering Tomorrow: Investing in Future Success

Foreword: It’s been said “If you don’t like change, you’re going to like irrelevance even less.” The Member Experience at the Harvard Club needs to change. And our committee and staff are driving it. At both the committee and staff levels, we have embraced the Amazon way and supported an environment where "every idea is seen as a potential game-changer and every risk an opportunity for growth”.

Mission and Vision: The Member Experience Committee’s mission is to elevate all aspects of member interaction with our community for both new and existing members. By fostering meaningful connections, providing valuable resources, and offering engaging experiences, we aim to create a thriving community that continuously attracts and retains members

We are guided by the traditional “4P’s” of marketing:

Product: Our core product is our connection with Harvard. Given this, our focus was on cultivating relationships and strategic partnerships with Harvard-affiliated groups, which represent the primary native sources of new members. These collaborations offer us enhanced access to the broader Harvard community, including alumni, students, and faculty. Moreover, they bolster our credibility among university decision-makers and grant us access to invaluable resources. We have also become a partner with the Harvard Alumni Association (HAA) collaborated on critical initiatives that will position HCB as the leader among global alumni clubs. Over the course of the year, we have co-sponsored events with Harvard Varsity Club, Harvard Athletics, Harvard Business School Alumni, and MIT. Our events represent a cornerstone of our member experience. That’s why we’ve redoubled our focus on flagship events, developed a data-driven strategy for event planning, and sought to improve logistics such as our A/V.

Promotion: Recognizing the vital importance of effective communication, our team has undertaken a comprehensive audit and assessment of our existing communication channels, over a decade old As we near the upcoming season, anticipate the debut of a new online platform accessible to both the public and members. This website update will feature automation for our member application process and reciprocal club request systems. These enhancements will streamline operations, freeing up staff time and resources to concentrate on more member-focused initiatives. Alongside this, expect a rejuvenation of our communication channels, spanning texting, email, alerts, and push notifications. These enhancements will improve the member experience by offering information in a more efficient and accessible manner. Moreover, our team will introduce more dynamic communication flows tailored to the interests and responses of both current and prospective members. This shift will reduce reliance on mass-focused communication methods, ensuring that messages are more personalized and targeted to individual preferences. We also began to engage external professionals to reassess our social media strategy, focusing on realigning our approach across multiple platforms. This aims to leverage our network and expand our reach in the digital space, maximizing our impact and engagement and creating the right tone and message for our audiences.

Member Experience

Beyond our online efforts, thanks to the dedicated efforts of our committee and staff, we expanded our reach to more campus events and activities. Our operational enhancements have paved the way for increased access to alumni networks. Starting in FY2025, we are excited to introduce three new membership programs targeting growth in two pivotal membership sectors: graduate students and International members. Additionally, we are facilitating access to Harvard-based shared interest groups (SIG) through our new SIG leader program. Expanding our horizons, we deepened collaborations with oncampus entities like Harvard Student Services and Harvard COOP, exploring avenues for joint marketing endeavors to leverage our collective networks.

Place: We embarked on measures to offer valuable feedback and suggestions to fellow Committees, aiming to enrich the member experience at the clubhouse Our recommendations center around enhancing members' time within the clubhouse, encompassing renovations, new services, and seasonal decorations to ensure an unparalleled experience. We hope to encourage continued and more collaboration across Committees to accelerate change.

Price: The review and consideration of membership fees is always a thoughtful process aimed at ensuring equity and continuously enhancing the value for our global member community. We carefully evaluate our pricing structure, taking into account factors such as fairness and the introduction of new offerings, benefits, opportunities, and experiences. Our commitment to equitable pricing means that every member feels valued and empowered to enjoy all the amenities our club has to offer. Simultaneously, we maintain fiscal responsibility to ensure we can sustain and even improve the superior experience our members deserve.

Looking Ahead: As we reflect on the past year, we are energized by the progress made and the momentum gained in exploring and experimenting with new ideas and concepts. As we do, we are committed to implement more feedback mechanisms to better engage our members in both planning and continuous improvement We will continue to innovate, adapt, and evolve to meet the needs and expectations of our members, ensuring that our community remains a hub of engagement and connection

In closing, we extend our heartfelt gratitude to all members who have contributed to our collective journey thus far. Your support, feedback, and engagement are invaluable as we work together to build a stronger and vibrant community.

Respectfully submitted,

Jan Saragoni, ks’89, Vice Chair

Andy Freed ’90, ks’94, Vice Chair

Member Experience Committee

Ginger Ahn, Y’99

Mary Bradley, exg’11

John Cornish, Legacy

Michael Cronin ’75, gb’77

Geri Denterlein, ks’90

Courtney Jacobovits, gsd’16, MIT’22

Alexandra Joyce

Susan Kendall ’81, ks’99

Cheryl LaMonica, gb’21, gmp

Dr Elizabeth A Micci, Ed L D ‘18

Debbie Millin, gb’22, amp

Rev. Amy Norton, dv’16

Andrew Rodriguez, gb’95

Alfonso Torrijos ’94

F i r e s i d e C h a t w i t h C h a r l i e B a k e r ' 7 9

Nominating Committee

A reminder as to the duties of and process used by the Nominating Committee.

The Nominating Committee itself is nominated by the Board of Governors each year and voted in by the Members at the Annual Meeting, to serve until the following Annual Meeting. The slate of candidates for the Nominating Committee, including its Chair, is typically presented by the Club President to the Board of Governors in February or March. The Committee consists of members of the Club who the Board feels either have been active in the Club or have insight into candidates from the community, or both.

The Nominating Committee meets each year with the Executive Committee of the Board of Governors and the General Manager to discuss the current productivity and functionality of the Board of Governors, the range of issues which are being considered by the Board, and the areas where the Executive Committee and the General Manager thought they might need additional help from future Board members. That meeting took place in February 2024. The Committee reviewed the rosters of the various Club Committees and discussed the leadership of those committees and potential successors to those leaders. The Committee also invited each member of the Executive Committee and the General Manager to feel free to contact the Chair of the Nominating Committee if they had any concerns about the performance of any fellow officer or Board member.

In the weeks following that meeting, the Chair of the Nominating Committee had conversations with each of the members of the Executive Committee and many of the Board members, soliciting their opinions on their willingness to serve in the future, their own assessments of the performance of fellow Board members and officers, and their thoughts about potential leaders developing on various committees. In addition, all members of the Nominating Committee and the General Manager were encouraged to seek input from Club Members at large about their satisfaction with the current Board and Executive Committee The Committee also solicited suggestions from club leadership and other community members for potential nominees for the Board of Governors and reviewed their qualifications and membership credentials

The Nominating Committee had a meeting on its own in March 2024 where it considered feedback from all of the above-mentioned sources and reviewed the needs of the Board of Governors for the upcoming year and in future years. At that meeting the Committee reviewed a list of potential Board members that is maintained by the Chair and the Club’s Membership Secretary. That list includes information on the member’s tenure with the Club, committee activity, frequency of use at the Club, and professional and educational expertise. Based upon the discussion in that meeting, the Nominating Committee priority ranks their preliminary choices for officer and Board positions and asks the Chair to have a conversation with each person so identified regarding that person’s willingness and availability to serve. With feedback from those conversations in hand, the Nominating Committee reconvened in March and, considering the information gathered by the Chair, chose a proposed slate of Officers and Board members for election at the Club’s Annual Meeting. This listing is posted in the Clubhouse and also shared via email notifications regarding the proxy voting process.

Nominating Committee

We are pleased with the slate of candidates we were able to present this year, and would be happy to receive suggestions for consideration as future members of the Board of Governors from any Member. Suggestions may be submitted to the Chair of the Nominating Committee via the Club’s Membership Secretary.

Respectfully submitted, Michael H. Shanahan, gb’82

Chair

Nominating Committee

Michael H Shanahan, gb’82, Chair

Matthew G. Hegarty ’82

Ruby Henry ’03

Nicholas J. Iselin ’87, gsd’92

Sarah Karmon, HAA

Tamara E. Rogers ’74

Geraldine Acuna Sunshine ’92, k’96

Karen M. Van Winkle ’80

M e m b e r A p p r e c i a t i o n G a l a

M e m b e r A p p r e c i a t i o n G a l a

Audit Committee

In April, 2023, following the Audit Committee's policy of regular periodic requests for and consideration of proposals for an independent auditor of and for the Harvard Club of Boston (“the Club”), the Harvard Club of Boston Retirement Plan for Employees (“the Retirement Plan”), the Harvard Club of Boston Foundation (“the Club Foundation”) and the Higginson 1908 Foundation (‘the Higginson Foundation”), the Audit Committee selected PKF, P.C. to continue as independent auditor of the Club, the Retirement Plan, the Club Foundation and the Higginson Foundation.

After the close of the Club’s 2023 fiscal year, the Audit Committee reviewed the financial reporting process, internal controls and the 2023 financial reports of the Club, the Retirement Plan, the Club Foundation and the Higginson Foundation The financial reports of the Club, the Retirement Plan, the Club Foundation and the Higginson Foundation were prepared by each entity’s management, and PKF, the independent public accounting firm serving as each such entity’s independent certified public accountants, audited the financial reports of the Club and the Retirement Plan and compiled the financial reports of the Club Foundation and the Higginson Foundation. All of the 2023 audits and compilations were completed in an efficient and timely manner, and no material weaknesses in the internal controls over the financial reporting processes have been identified by PKF.

Respectfully Submitted,

Daniel J. Murphy III, ’63, l’66

Chair

Audit Committee

Daniel J. Murphy III, ’63, l’66, Chair

Paul J. Brennan ’67; Larry Cheng ’96; Charles Frick Cornish, Legacy, CPA

Michael F. Cronin ’75, gb’77; Richard Hart Harrington ’58

Thomas Kent ’75; CPA Daniel J Murphy III, ’63, l’66

A m y E d m o n d s o n ' 8 1 , A M ' 9 5 , P H D ' 9 6

Athletics

I hope this annual report finds you and your loved ones doing well and staying healthy. We’ve had an exciting year in Athletics, and I’m thrilled to share the details. If you are not an Athletic member, please swing by to see what the buzz is all about!

Family-friendly programming continues to be a priority and we are excited to share the establishment of a lactation room for members. The space has been completed and is located in the previously under utilized space located across from the men’s locker room on the first floor). Members can reserve time via the mobile app and website. We are also planning an introduction to squash event for children. We encourage all parents and grandparents to bring the children in their lives! For children who already play squash, junior clinics are offered on Saturday mornings, and we have just reinstituted the children’s challenge ladder

The success of our virtual fitness programs continues. We offer 20 virtual classes each week, ranging from Meditation to Total Body Fitness. Classes are available to both Athletic members and non-Athletic members. If you have not tried one of these classes, I encourage you to do so.

We appreciate the patience of our members as we continue to do work in the basement. This has taken some of the amenities in the men’s locker room offline. With a building as old as ours, it’s not surprising that these fixes have taken longer than expected. Our thanks go out to Glenn Ballard and his team, who have managed this project with as little disruption as possible.

Our squash program is bustling. Box league continues to see success with new and veteran squash players alike participating. Box league is a great way to play competitive matches and meet fellow members. Boxes are held monthly, and you can see Sharon Bradey to sign up. We continue to host ‘Introduction to Squash’ evenings for adults. These are a great way to learn about the sport, get a great workout and meet fellow members

Club Championships are in full swing We will honor the winners during an award ceremony on March 8th. Please feel free to stop by the Club Pub for a drink or bite to celebrate. We had an exciting Robert Banker Cup finals with Katie Corelli and Stephen Monk defeating Francisco Carbajal and Juan Almagro. We celebrated the players with an evening of squash, followed by award presentations and a conversation with Greg Zaff, CEO and Founder of Squash Busters.

We continue to offer pickle ball to our members. Pickle Ball is available for play on our upstairs doubles court. You can find the net and equipment ready to use next to the court. This is one way we continue to evolve in order to meet the needs and desires of members. Look for ‘Introduction to Pickle Ball’ evenings on the calendar.

Athletics

None of this would have been possible without the dedication and hard work of Valerie Phillips, our Athletic Department Manager, and Sharon Bradey, our Head Squash Professional. Thank you, Valerie and Sharon!

Respectfully submitted, Jillian McGrath

Chair

Athletics Committee

Jillian Campbell McGrath Legacy, Chair

Nicholas Brewer

Rebecca Brownell

John Cornish, Legacy

Nicholas Coskren ’09

Kevin Sullivan

Jack Wain

Reciprocal Club Committee

The reciprocal clubs program continually ranks as one of the most important and enjoyable benefits of membership. Joining the Harvard Club of Boston gives our members access to a network of over 180 premier clubs throughout the United States and the world, offering a variety of dining, overnight accommodations and athletic facilities.

The Reciprocal Clubs Committee actively seeks to establish new club relationships in cities or countries where our members’ business or leisure travels may take them, as well as helping increase Harvard Club revenue through hosting reciprocal club members during their stays in the Boston area. Each of our reciprocal clubs is screened, directly or indirectly, against strict criteria. The Committee also reviews and makes recommendations in relation to the day-to-day operation of the reciprocal club network In 2023, we added 7 new reciprocal clubs to our network

Harvard Club member requests for Letters of Introduction have been stable – a typical month sees several hundred requests through our automated system. Approximately 1/3 of those Letters are for international clubs and 2/3 for visits within the United States. Our most popular destinations continue to be New York, London, Chicago, and Washington D.C, with a growing interest in our two relationships in Paris – the Cercle de L’Union Interalliee and the Paris Country Club. Reciprocal club usage has wellsurpassed pre-pandemic levels.

We will also maintain our ongoing effort to find new locations for squash, golf, beach, athletic and social facilities for our members to use when they travel. Our Committee’s plans for the future also include maintaining the quality of our current network, and continuing to seek reciprocal club relationships in new geographies, especially in Asia, Latin America and the developing world.

Harvard Club members who visit private clubs around the world which may be good candidates for reciprocity are encouraged to suggest new additions for consideration by the committee

Respectfully submitted,

Edward Matson Sibble, Jr. ’73

Chair

Reciprocal Club Committee

Edward Matson Sibble, Jr.’73, Chair

Aida Birley

Constance M. Everson, gb’81

J. Christian Kryder, MIT’83

Ranganath Papanna, HMS Faculty

Frederick Schernecker ’90

Jennifer Titus, exg’21

B a n k e r C u p C h a m p i o n s h i p

Higginson 1908 Foundation, Inc

The Higginson Foundation was established by a group of friends of the Club to provide for a more flexible and extensive charitable entity that can pursue a broader charter than the prior Club foundation. In keeping with IRS regulations, this new Foundation is managed independently of the Club’s Board of Governors which adds flexibility to the range of activities for the entity. The Higginson Foundation is an IRS approved 401(c)3 charity that can accept tax deductible gifts. The charter of the new Foundation established these priorities:

The Foundation was organized as a Massachusetts nonprofit corporation on November 23, 2015 to preserve and protect old and historic buildings in and around Boston, Massachusetts, including, specifically the Clubhouse of the Harvard Club of Boston (sometimes referred to as “the Club”), as well as to preserve and protect historically significant artwork exhibited in and around Boston, Massachusetts, including within the Clubhouse of the Club, in order to perpetuate the further education of posterity with regard to the architectural, historic, artistic and general cultural heritage of the Boston area. The Foundation was further organized to encourage education and personal advancement for youth in the Greater Boston area, to foster scientific, literary and educational interests among members of the Club and to advance the interests and promote the welfare of Harvard University. The Foundation intends to carry out its educational purposes by, among other activities, organizing a speaker series to educate members of the Harvard Club of Boston and the Harvard University community on matters of public interest and by awarding scholarships and fellowships for study at institutions of higher education.

Our principal source of fundraising has been a voluntary member assessment. We appreciate the members who contributed to the Foundation in this fashion – we were able to raise more than $185,000 last year through your generosity. This year’s voluntary assessment will be included with the Club’s April statements and we hope you will continue to support the Foundation.

Along with the Harvard Club of Boston Foundation, we continued our support of Harvard scholarships, summer fellowships, and the Harvard Book Prize We also continued to support enhancing the diversity and inclusiveness of the Club’s art Among the projects we helped with was the Club’s recognition of the first elected woman Governor of Massachusetts (Harvard’s own Maura Healy ’92) whose portrait now graces the Massachusetts Room. We also helped restore the autographed JFK portrait in the lobby, purchase a Harvard football game jersey worn by Frank Church in the 1920 Rose Bowl game, sent off the massive portraits of John Adams and Nicholas Boylston from the Club’s main staircase for cleaning and restoration, and preserved some commemorative Harvard flags. We were also proud to co-sponsor free book distribution on the occasion of Courtney B. Vance’s appearance at the Club.

The Financial Statements of the Higginson 1908 Foundation and the legacy Harvard Club of Boston Foundation as of June 30, 2023 are included in this Annual Report, and detail the support the foundations provided. As of this writing the Higginson Foundation has approximately $575,000 in assets and we have plans for additional fundraising activities in 2024 so we can broaden our support in the future.

Higginson 1908 Foundation, Inc

I am also pleased to note the addition of Katherine Craven ’94 to our group as a Trustee and Treasurer. Katherine is replacing Michael F. Cronin ’75 as Treasurer. Mike has been a great resource for our organization since our founding and we appreciate all he has done to get us up and running. Katherine, who is a former member of the Club’s Board of Governors, is the Chief Administrative and Financial Officer of Babson College and also serves as the Commonwealth’s Chair of the Board of Primary and Secondary Education. She previously served Massachusetts as a Deputy Treasurer, among other duties. Once again, we appreciate your voluntary contributions in support of the Higginson 1908 Foundation and look forward to expanded activities in support of the Foundation, the Club, and the community in the coming year.

Respectfully submitted,

Michael

H Shanahan, gb’82

President

Higginson 1908 Foundation, Inc. Committee

Michael H. Shanahan gb’82, President & Trustee

Katherine Craven ‘94, Treasurer & Trustee

Nicholas J. Iselin ’87 gsd ’92, Secretary & Trustee

Philip C. Haughey ’57 and Karen VanWinkle ’80 Trustees

B . V a n c e ' 8

W i t h C o u r t n e y

F i r e s i d e C h a t

F i r e s i d e C h a t W i t h M a u r a H e a l e y ' 9 2

HCB Foundation

This Foundation was formed in 1950 with the following purpose:

“The purposes of this Trust are to foster scientific, literary, and educational interests among the members of the Harvard Club of Boston and to advance the interests and promote the welfare of Harvard University.”

The assets of the Foundation are invested in the Harvard endowment and showed a net decrease from $14,076,874 as of June 30, 2022, to $13,671,716.97 as of June 30, 2023.

The Foundation’s principal programs continue to be:

Harvard Club of Boston scholarships providing a portion of the annual financial aid for 144 Harvard College students from the Greater Boston area. These awards totaled $475,295.00 in the year ended June 30, 2023.

Prize Book program awarding 318 Prize Books and hosting the annual Breakfast honoring Prize Book winners and teachers, and leaders in education.

Summer Community Service fellowships for students volunteering at Boston non-profit organizations.

In fiscal year 2023, the Foundation requested a distribution of approximately $315,000 to reimburse the Club and the Higginson Foundation for current and prior administration and programming costs as well to provide funds for the Prize Book Program, the community service fellowships and the Horblit Concert Fund.

The Foundation works in cooperation with the Higginson 1908 Foundation in funding these programs. The Higginson Foundation is an independent 501(c)3 organization formed in 2017. All new fundraising from Club members is now being solicited on behalf of the Higginson Foundation. A report from its trustees appears elsewhere in this Annual Report

We thank our Club members for their past contributions to the Foundation which enable us to continue to support these important programs. We also thank our Club staff for all of the time they devote to the Foundation’s programs and their efforts to make all of them successful.

Respectfully submitted,

Michael F. Cronin ’75, gb ‘77

Chair

Foundation Committee

Michael F. Cronin,’75, gbs ’77, Chair

Ameek Ponda ’89, l’92, Vice Chair

Matthew G. Hegarty ’82'

Paul J. Brennan, ’67 Emeritus

John P. Reardon, Jr. ’60, Emeritus

Prize Book

The members of the Prize Book Committee welcomed Dr. Elizabeth A. Micci as the newest member of our committee. Dr. Micci earned a doctorate in education from the Harvard School of Education. She has worked in the field of education in China, and currently she is on the staff of the Harvard School of Education. Dr. Micci is a visionary educator and has a tremendous amount of knowledge in the field of all levels of education; she is very generous with sharing her knowledge with the committee.

The Thirtieth Annual Prize Book Breakfast was held on Wednesday, October, 4, 2023. This breakfast was dedicated to William L. Burke, Ill, a great writer, speaker, and teacher who has served as the headmaster of the Saint Sebastian School in Needham, Ma for decades. The St. Sebastian School is a Catholic School serving young boys from grades seven through grades twelve Headmaster Burke also gave the keynote address to the group In recognition of land acknowledgement and of the Native American flag permanently flying with the Harvard flag in front of the main entrance to the Harvard Club, Megan Minoka Hill spoke to the group attending the breakfast. She is the Senior Director, Project on Indigenous Governance and Development, and the Director Honoring Nations at the Harvard Kennedy School. DR. Hill spoke of the importance of the attendees at the breakfast to understand and respect the traditions of the individuals who first owned the land beneath the Harvard Club of Boston.

Katherine P. Craven, currently the Chief Financial Officer, Babson College, and the Chair of the Massachusetts Board of Elementary and Secondary Education have attended most Prize Book Breakfasts. Katherine has a tremendous interest in improving the educational programs for public school students from grades kindergarten through grade twelve. Because of her contributions to the field of education, the Harvard Club of Boston elected to give Katherine P. Craven the 2023 Prize Book Friends of Education Award. This award was presented to Mrs. Craven by Harvard Club President, Marcus O.P. DeFlorimonte. President DeFlorimonte explained to the group how Mrs. Craven's father, the late Judge John j. Craven was a very active member of the Harvard Club of Boston for decades. The Late Judge Craven served twentythree years in juvenile court, retiring in 2011 During the early 1990s when the Prize Book Committee was first established, Judge Craven served as an active member of the Prize Book Committee and helped establish the foundations of the committee as it exists today

Loujs J. DiBerardinis presented the Excellence in Teaching Award to teachers in five secondary schools including Laura Kern from the Littleton High School, William Deasy of the Mansfield High School, Lisa Hanson of the Pioneer Charter School of Science, Michael Nerbonne of St. Sebastian School, and Michael Smutok of the Uxbridge High School. Paul Brennan provided those in attendance at the breakfast with a history of the Prize Book Program. He was able to identify many of the former presidents of Harvard College by way of identifying the portraits of these individuals in Harvard Hall. Committee member Lidija M. Ortloff introduced student speaker Eva Goluza of Harvard College to the audience. Eva talked about some of the jobs and challenges she experienced in the transition from secondary school to college life.

Prize Book

Before and after the Prize Book Breakfast, Harvard Club President DeFlorimonte talked to each and every individual sitting at the tables, and extended to them a personal welcome to the breakfast. He also was able to talk with some of the guidance counselors, principals, and parents who took the time out of their busy schedule to attend the breakfast with their students. President DeFlorimonte thanked these individuals for their attendance at the program and hoped to see the guidance counselors, teachers, and principals at the 2024 Prize Book Breakfast in October, 2024.

The members of the Prize Book Program thank Cheryl A. Moderski, the Prize Book Coordinator for her invaluable help in-developing this program. We also thank the chefs and the staff for the excellent breakfast prepared and served to over 1500 individuals in attendance

Respectfully submitted,

Dr. Barbara D. Pulaski, ph’73

Chair

Prize Book Committee

Barbara D. Pulaski, ph’73, Chair

Paul J. Brennan ’67

Marcus DeFlorimonte, gb’95, pmd

Louis DiBerardinis, ph’75

Philip C. Haughey ’57

Dr. Elizabeth A. Micci, Ed.LD ’18

Lidija Ortloff ’82

Karen Van Winkle ‘80

u

H a r v a r d I n v i t a t i o n a l a t M y o p i a H u n t

M e m b e r E x p e r i e n c e s

Schools Committee

In recent years the number of “first-gen” students applying to Harvard has continued to increase, now up to 20% of our applicants. This group of new applicants makes interviewing all the more interesting.

Our interviewers continue to appreciate the Interview Priority (IVP) given to each applicant. This means interviews are done only with applicants who are strong candidates for admission.

As it has in so many aspects of our lives ZOOM has been playing a big role in our interviewing process. In our 2020-2021 interviewing year it was essentially the only way to interview applicants. Over the last three years it has become a very time-efficient way to do interviews. Nevertheless, we find many interviewers still like in-person interviews, when possible We hope this flexibility will encourage members to give interviewing a try

Please contact Cheryl Moderski at the Club if you would like to learn more about interviewing.

Respectfully submitted,

Paul J. Brennan ‘67

Chair

Schools Committee

Paul J. Brennan ‘67, Chair

Barbara F. Berenson ’80

Kevin M. Bolan ’92

Michelle M. Cannon ’97

Mary Ann Pesce Choate ’77

James W. Courtemanche ’82

David J Crowley ’79

Kathleen Dorkin ’70

Elizabeth F Frates ’80

Deborah Kaufman Goldfine ‘85

Robert E. Joyce ’87

Benjamin N. Levy ’69

Karen Malone ’04

Lidija M. Ortloff ‘82

Ameek A. Ponda ’89

William F. Samuelson ’74

Susan S. Samuelson ’74

Matthew D. Schnall ‘90

Christopher G. Thomas ’75

Matthias Wagner ‘90

M e m b e r E x p e r i e n c e s

HARVARD CLUB OF BOSTON

Financial Statements for years ended August 31, 2023 and 2022

PKF

Independent Auditors’ Report

To the Board of Governors

Harvard Club of Boston

Opinion

We have audited the accompanying financial statements of the Harvard Club of Boston (a nonprofit organization) (the "Club"), which comprise the statements of financial position as of August 31, 2023 and 2022, and the related statements of changes in net assets, activities 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 the Harvard Club of Boston as of August 31, 2023 and 2022, 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.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 the Club and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. 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 the Club's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

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 generally accepted auditing standards 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.

Telephone: (617) 753-9985 | Fax: (617) 753-9986

Email: info@pkfjnd.com | Website: www.pkfjnd.com PKF JND, P.C. | 75 State Street | Boston | Massachusetts 02109 | US

JND, P.C. is a member firm of the PKF International

of any individual member or correspondent firm or firms.

In performing an audit in accordance with generally accepted auditing standards, 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 the Club’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 the Club’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.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Club adopted FASB Accounting Standards Codification (“ASC”) Topic 842, Leases in 2022. Our opinion is not modified with respect to this matter.

Boston, Massachusetts

December 14, 2023

Liabilities and Net Assets

HARVARD CLUB OF BOSTON

Statements of Financial Position

HARVARD CLUB OF BOSTON

Statements of Changes in Net Assets

Years Ended August 31, 2023 and 2022

Balance, August 31, 2021 $ 12,231,774

Change in net assets (2,098,358)

Balance, August 31, 2022 10,133,416

Change in net assets 2,285,173

Balance, August 31, 2023 $ 12,418,589

See notes to financial statements

HARVARD CLUB OF BOSTON

Statements of Activities

HARVARD CLUB OF BOSTON

Statements of Cash Flows

(2,098,358) Adjustments to reconcile change in net assets to net cash provided by operating activities

Protection Program loan forgiveness

in operating assets and liabilities

HARVARD CLUB OF BOSTON

Statements of Cash Flows (Continued)

Supplemental schedule of noncash investing and financing activities

Purchases of property and equipment unpaid at year end in accounts payable

Purchases of property and equipment unpaid at year end in accrued expenses

Paycheck Protection Program loan forgiveness

Right-of-use assets acquired upon ASC 842 implementation

Operating leases

Right-of-use assets acquired after ASC 842 implementation

Operating leases

leases

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance lease

Supplemental disclosure of cash flow information

Cash paid during the year for interest

Cash paid during the year for taxes

See notes to financial statements

125,477 $ 171,211

359,460 $ –

– $ 1,901,225

36,100 $ –

9,543

9,703

–

–

40,970 $ –

320 $ –

1,671

–

302,032 $ 309,538

123,000

–

Note 1 – Nature of operations

Harvard Club of Boston (the “Club”) is a member owned alumni club located on Commonwealth Avenue in Boston, Massachusetts. Membership consists primarily of members who have a current or past affiliation with Harvard University and live predominately in the metropolitan Boston area. The Club’s primary sources of revenue are dues and entrance fees, guest room rentals, sales of food and beverages, athletic fees and parking fees.

Note 2 – Summary of significant accounting policies

Adoption of new accounting standard

The Club adopted ASC 842, Leases, effective September 1, 2022. This standard requires lessees to recognize leases on the statement of financial position as right-of-use (ROU) assets and lease liabilities related to leases with terms of more than twelve months based on the value of the discounted future lease payments. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or operating lease. Key provisions of this standard include additional disclosures surrounding the amount, timing, and uncertainty of cash flows arising from leases.

The Club elected the effective date transition method and the package of practical expedients that permits no reassessment of whether any expired or existing contracts are or contain a lease, the lease classification for any expired or existing leases, and any initial direct costs for any existing leases as of the effective date. Upon adoption of this standard, the Club recognized an operating ROU asset and lease liability of $36,100. Adoption of this new standard did not have a significant impact on the statement of activities or cash flows for the year ended August 31, 2023.

Basis of presentation

The financial statements of the Club have been prepared in accordance with accounting principles generally accepted in the United States of America, which requires the Club 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 Club’s management and Board of Governors.

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 Club 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. When a restriction expires, net assets are reclassified from net assets with donor restrictions to net assets without donor restrictions in the Statements of Activities.

Functional allocation of expenses

The costs of program and supporting services activities have been summarized on a functional basis in Note 14. The note also presents the natural classification detail of expenses of the Club by function. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Cash and cash equivalents

The Club considers investments with an original maturity of three months or less when purchased to be cash equivalents. As of August 31, 2023, and 2022, the Club's cash equivalents were comprised primarily of money market funds.

Accounts receivable

The Club extends credit to its members for dues, parking, athletics, and food and beverage purchases. Credit is also extended to outside parties that contract to hold events at the Club. Receivables that are over 30 days old are considered past due. No collateral is required to support accounts receivable. The beginning balance of accounts receivable as of September 1, 2021, was $2,589,038.

The Club maintains an allowance for potentially uncollectible accounts. This allowance is set-up as a reserve based on the balance in the various aging categories and historical losses experienced relative to those categories. When management determines that a receivable is uncollectible, the amount is removed from the receivables balance and is charged against the allowance. Subsequent recoveries of amounts previously written off are credited directly to revenue. The allowance for accounts receivable was approximately $55,000 for 2023 and 2022.

Inventories

Inventories consist of food, beverages and supplies and are valued at the lower of cost (first-in, first-out) or net realizable value.

Property and equipment

Property and equipment are stated at cost. Depreciation and amortization are computed using the straightline method and various accelerated methods over estimated service lives as follows: buildings – 40 years; building improvements – 10 to 40 years; furniture, fixtures and equipment – 3 to 12 years. The cost of retired or disposed property and related accumulated depreciation and amortization are removed from the respective accounts. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to operations as incurred.

Leases

For leases with a lease term greater than one year, the Club recognizes a lease asset for its right-to-use the underlying leased asset and a lease liability for the corresponding lease obligation. The Club determines whether an arrangement is or contains a lease at contract inception. Leases with a duration greater than one year are included in right-of-use assets, current portion of lease liabilities, and lease liabilities, net of current portion in the Club’s Statement of Financial Position at August 31, 2023. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Club has elected to use a riskfree discount rate determined using a period comparable with that of the lease term. This election applies to all of the Club’s leases when the interest rate is not stated in the agreement. The Club considers the lease term to be the noncancelable period that it has the right to use the underlying asset, including all periods covered by an option to (1) extend the lease if the Club is reasonably certain to exercise the option, (2) terminate the lease if the Club is reasonably certain to not exercise that option, and (3) extend, or not to terminate, the lease in which exercise of the option is controlled by the lessor. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term and is reported within operating expenses in the Statement of Activities. ROU assets for finance leases are amortized on a straight-line basis to the earlier of the end of its useful life or lease term. Variable lease expenses are recorded when incurred. The Club does not report ROU assets and lease liabilities for its short-term leases (leases with a term of 12 months or less). Instead the lease payments of those leases are reported as lease expense on a straight-line basis over the lease term.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Impairment of long-lived assets

The Club evaluates long-lived assets and intangible assets with definite lives for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the future undiscounted cash flows arising from the assets with the carrying value of the asset. If impairment is indicated, the asset is written down to its estimated fair value on a discounted cash flow basis.

Collections

The Club, over the years, has received contributions of historic and/or artistic materials. The Club has not capitalized these materials since they are held and preserved for public exhibition in keeping with the Club’s exempt purpose and are not intended to be sold.

Pension benefits

The Club's pension benefit costs are accounted for using actuarial valuations which recognize the funded status of its defined benefit pension plan on the Statements of Financial Position and recognize changes in the funded status that arise during the period but are not recognized as components of net periodic benefit cost as changes in net assets without donor restrictions.

Revenue and revenue recognition

Membership dues, which are nonrefundable, are an exchange transaction and, as such, are recognized over the membership period. Room revenue is recognized when the booked room is provided to the Member. Food and beverage and parking revenues are recognized at the time of purchase. Athletics consist of athletic facility season fees which are recognized as revenue over the applicable season period. Payments for such goods and services are generally received at the point of sale in the form of member account charges. All amounts owed by members must be paid in 30 days following presentation of the bill. The Club recognizes revenue at the point in time when goods have been provided and/or services have been rendered. With the exception of goods and services provided in connection with membership dues and athletic facility season fees, which are transferred over the applicable period, all goods and services are transferred at a point in time.

Membership dues received in advance of providing access to the exchange services are recorded as a deferred revenue (contract liability) on the Statements of Financial Position. The beginning balance of deferred revenue as of September 1, 2021, was $1,765,439.

Entrance fees

Entrance fees are recorded as other changes in net assets in the period in which they are due.

Contributed services

Many members have contributed significant amounts of time to the Club’s activities. The financial statements do not reflect the value of these services because they do not meet the recognition criteria.

Insurance recoveries

The Club carries liability insurance to mitigate its exposure to certain losses, including those relating to property damage. The Club records the estimated amount of expected insurance proceeds for property damage and other losses incurred as an asset (typically a receivable from the insurer) and income up to the amount of the losses incurred when receipt of insurance proceeds is deemed probable. Any amount of insurance recovery in excess of the amount of the losses incurred is considered a gain contingency and is not recorded in other income until the proceeds are received.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Income taxes

The Club is exempt from income taxes on member income in accordance with Section 501(c)(7) of the Internal Revenue Code. The Club is, however, subject to income taxes on its income from nonmembers and on its investment income. Management of the Club has evaluated its uncertain tax positions and related income tax contingencies and does not believe that any material uncertain tax positions exist.

The Club’s tax returns are generally subject to examination by the Internal Revenue Service and the Commonwealth of Massachusetts for a period of three years from the date they are filed.

Operating income (loss)

Operating income (loss) pertains to ordinary, day-to-day operations and includes revenues from dues and assessments, user fees and sales of food and beverages, less related expenses. The Club excludes from operating income (loss) entrance fees and unusual, nonrecurring items, such as special assessments.

Accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Credit risk

The principal financial instruments subject to credit risk are cash and cash equivalents. Credit risk represents the accounting loss that would be recognized at the reporting date if the parties failed to perform as contracted. The total of these financial instruments at times exceed the insured amounts. To mitigate credit risk, the Club places its cash and cash equivalents in investment grade companies or financial institutions. The Club has not experienced any losses on its deposits. The Club’s defined benefit pension assets are invested in separate investment accounts with Bank New York Mellon.

Note 3 – Liquidity and availability

Financial assets available for general expenditure, that is, without donor restrictions limiting their use, within one year of the Statements of Financial Position date, are comprised of the following at August 31:

2023 2022

Cash and cash equivalents

$ 5,416,804 $ 4,667,305

receivable – net 2,747,186 2,589,088

$ 8,163,990 $ 7,256,393

As part of the Club’s liquidity management plan, cash in excess of daily requirements is invested in a money market account. The Club also has a line of credit available to meet short-term needs. See Note 7 for information about this arrangement.

Note 4 – Note receivable

The Club has a note receivable with a key employee for an amount advanced in connection with employment. The note bears interest at a rate of 2.55% per annum. The note is unsecured.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Note 5 – Property and equipment

Property and equipment consist of the following:

Land and buildings

857,238 $ 857,238

lot land and improvements 309,734 309,734

improvements

25,932,886 Furniture, fixtures and equipment 10,336,257 10,277,530

Construction in progress 2,079,843 1,289,869 40,068,935 38,667,257

Accumulated depreciation (19,966,127) (18,887,519)

Property and equipment – net

$ 20,102,808 $ 19,779,738

Depreciation expense was $1,096,085 and $988,358 for 2023 and 2022, respectively.

Construction in progress consists mostly of legal and consulting costs related to planning and scoping for a future construction project. The construction project is currently in a preliminary phase and the Club will not break ground on the project until various approvals have been received from the City of Boston.

Note 6 – Deferred compensation

The Club maintains deferred compensation plans with certain key employees under the provisions of Internal Revenue Code Section 457(b). Accrued deferred compensation, representing the vested portion of the future cash payments, approximates $328,000 and $369,000 as of August 31, 2023 and 2022, respectively. The Club contributed $45,000 and $41,000 to the plan for the years ended August 31, 2023 and 2022, respectively.

Note 7 – Line of credit

The Club has a revolving line of credit with a bank under which the Club can borrow up to $5,000,000 for working capital purposes through February 28, 2024. Amounts borrowed bear interest at the bank’s Base Rate, as defined in the agreement. (8.50% and 5.50% as of August 31, 2023 and 2022, respectively). Interest is payable monthly. There was no outstanding balance as of August 31, 2023 and 2022.

Note 8 – Long-term debt

Long term debt consists of the following: 2023 2022

Eastern Bank - $10M term loan

$ 7,633,427

$ 8,055,273

Less: current maturities 437,128 421,844

Long-term debt – net

$ 7,196,299

$ 7,633,429

The Club has a commercial real estate mortgage loan that matures in April 2025. The loan bears interest at a fixed rate of 3.69%. Principal and interest is payable monthly based on a 20-year amortization schedule.

The line of credit and the commercial real estate mortgage are secured by substantially all real and personal property of the Club and contain customary financial covenants.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

The following is a summary of principal payments due in each year following August 31, 2023:

Year Ending Principal August 31 Payments Due

2024

$ 437,128

2025 7,196,299

$ 7,633,427

Note 9 – Loan – Paycheck Protection Program (PPP)

In May 2021, the Club applied for and was approved for a $1,901,225 loan under the PPP created as part of the relief efforts related to COVID-19 and administered by the U.S. Small Business Administration. The loan accrued interest at 1%, but payments were not required to begin for ten months after the last day of the loan forgiveness covered period. The loan was uncollateralized and was fully guaranteed by the Federal government. On May 16, 2022, the Club was granted loan forgiveness for the $1,901,225 loan. The SBA requires that borrowers maintain documents supporting their applications for six years.

It was the Club’s policy to account for the loan under ASC 470, Debt. As such, the loan was classified as debt until the formal forgiveness was received and the loan forgiveness is presented as non-operating income on the Statements of Activities and as a non-cash reconciling item in operating activities on the Statements of Cash Flows for the year ended August 31, 2022.

Note 10 – Retirement plans

Defined

benefit pension plan

The Club maintains a noncontributory defined benefit pension plan (the “Plan”) for eligible employees. Benefits are based on employees’ years of service and compensation as defined in the plan. The Club’s policy is to contribute amounts sufficient to fund benefits provided by the plan, based on ERISA’s minimum annual funding requirements. Contributions are intended to provide not only for benefits attributed to services incurred to date, but also for those expected to be earned in the future. The Plan’s actuary performed the computations required for financial statement disclosure as of August 31, 2023 and 2022.

Effective September 1, 2012, the Club elected to curtail its defined benefit pension plan and froze benefits. The following table presents defined benefit plan disclosures required under current accounting standards.

2023 2022

Accumulated benefit obligation, beginning of year $ 12,326,886 $ 9,786,327

Benefits accumulated and net plan experience 339,865 120,198

Interest cost 531,923 666,094

Benefits paid (747,100) (541,389)

Change in assumptions (696,231) 2,295,656

Accumulated benefit obligation, end of year

Development of funded status

Projected benefit obligation

$ 11,755,343 $ 12,326,886

$ 11,755,343 $ 12,326,886

Fair value of plan assets 8,034,557 7,860,404

Under funded status

Amounts recognized in the Statements of Financial Position consist of the following:

Prepaid pension cost

$ (3,720,786) $ (4,466,482)

$ 2,447,830 $ 2,241,938

Unrecognized loss (6,168,616) (6,708,420)

Net retirement obligation

$ (3,720,786) $ (4,466,482)

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Items recognized in the Statements of Financial Position not yet recognized as a component of net periodic benefit cost

Unrecognized loss

Weighted-average assumptions

6,168,616 $ 6,708,420

for the year

Components of net periodic benefit cost

return on assets (452,027) (694,694)

periodic benefit cost

Projected net periodic benefit cost for fiscal year 2024:

Plan assets

Net periodic benefit cost

The Plan’s weighted-average asset allocations, by asset category, are as follows:

513,153

Asset allocations reflect the investment policy set by the Club’s Retirement Committee and communicated to the investment manager.

The following table summarizes investments, at fair value, held by the Plan:

to the Club (175,616) (171,008)

Total investments

8,034,557 $ 7,860,404

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Fair value refers to the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The fair value hierarchy gives the highest priority to quoted market prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). Fair value measurements are required to be separately disclosed by level within the fair value hierarchy. The Plan’s investments at August 31, 2023 and 2022 are classified as Level 1 and 2.

Expected long-term rate of return on plan assets

The expected long-term rate of return on plan assets assumption is based on historical experience and consultation with the plan’s actuary. The revised 6.00% assumption compares to the 28-year historical weighted average annual compound return of 6.13% actually achieved by the plan assets.

Cash flow information

Contributions

The minimum contribution due for fiscal year 2024 is $344,627.

Estimated benefit payments

784,754

793,523

793,368

790,846

807,950 2029-2033 3,979,453

Plan contributions are made and the actuarial present value of accumulated plan benefits are reported based on certain assumptions pertaining to interest rates, inflation rates and employee demographics, all of which are subject to change. Due to uncertainties inherent in the estimations and assumptions process, it is at least reasonably possible that changes in these estimates and assumptions in the near term would be material to the financial statements.

In 2023 and 2022, certain administrative fees incurred by the Plan were paid for by the Club. These fees are due to the Club from the Plan and are included in accounts receivable on the Statements of Financial Position. As of August 31, 2023 and 2022, these fees totaled $175,616 and $171,008, respectively.

Defined contribution plans

The Club maintains defined contribution plans under Section 401(k) of the Internal Revenue Code. Club employees who satisfy certain other conditions are eligible to participate in the plans and contribute eligible compensation, subject to certain limitations. Substantially all administrative costs are borne by the Club.

Employee contributions to the defined contribution plans are matched by the Club under safe harbor provisions. The Club matches contributions up to 5% of eligible compensation. During 2023 and 2022 there were approximately $187,000 and $166,000 in employer matching contributions, respectively.

Note 11 – Leases

The Club leases fitness and office equipment under non-cancellable lease agreements expiring at various dates through September 2027. One lease includes a renewal option which can extend the lease term for one year, which the Club is not reasonably certain to exercise. Therefore, the payments associated with the extension are not included in the ROU asset nor the lease liability recognized as of August 31, 2023. Variable payments are not determinable at lease commencement and are not included in the measurement of the ROU asset and liability. The Club’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

The weighted-average discount rate applied to calculate the lease liabilities and the weighted-average remaining lease term for the Club’s leases at August 31, 2023 are as follows:

Weighted average remaining lease term – operating leases: 1.17 years

Weighted average remaining lease term – finance leases: 4.08 years

Weighted average discount rate – operating leases: 4.54%

Weighted average discount rate – finance leases: 3.90%

The components of lease expense for the year ended August 31, 2023, are as follows:

Finance lease expense Amortization of ROU assets

1,812

on lease liabilities 320

lease expense 40,970 Short-term lease expense –

43,102

The future maturities of the operating and finance lease liabilities are as follows as of August 31, 2023:

ending August 31, Operating Finance

Reported on Statement of Financial Position

Operating leases – disclosure under FASB 840 (pre-adoption of the new standard) for the year ended August 31, 2022

The Club is committed to operating leases for fitness and office equipment that have remaining noncancellable lease terms in excess of one year at August 31, 2022. Future minimum lease payments under the aforementioned non-cancelable operating lease agreements consist of approximately $33,461 due over the course of the year ending August 31, 2023.

Note 12 – Labor subject to collective bargaining agreement

Approximately 47% of the Club’s labor force is covered by a collective bargaining agreement, which expires on June 30, 2024.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

Note 13 – Fixed expenses

The components of fixed expenses are as follows:

Note 14 – Functional expenses

The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include repairs and maintenance, insurance, real estate taxes, depreciation and amortization, interest and utilities, which are allocated based on a squarefootage basis. Also, salaries and wages and payroll taxes and benefits are allocated on the basis of estimates of time and effort.

The Club’s expenses by nature and function for the year ended August 31, 2023 are as follows:

HARVARD CLUB OF BOSTON

Notes to Financial Statements

The Club’s expenses by nature and function for the year ended August 31, 2022 are as follows:

Note 15 – Related parties

Harvard Club of Boston Foundation

The Harvard Club of Boston Foundation ("Foundation") is a trust established by the Club and administered by the trustee in accordance with the Declaration of Trust and the laws of the Commonwealth of Massachusetts. The Foundation is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Club's Board of Governors serves as 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.

The Higginson 1908 Foundation, Inc.

The Higginson 1908 Foundation, Inc. ("Higginson Foundation") was organized as a not-for-profit corporation on November 23, 2015 and is administered by its Board of Directors in accordance with its bylaws and the laws of the Commonwealth of Massachusetts. The Higginson Foundation is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Higginson Foundation's purpose is to preserve and protect old and historic buildings, artwork and other property in Boston, Massachusetts and its surrounding area in order to perpetuate the further education of posterity with regard to the arts and the architectural, historic, and general cultural heritage of the Boston, Massachusetts area. Its further purpose is to encourage education and personal advancement for youth in the Greater Boston area, to foster scientific, literary and educational interests among members of the Club and to advance the interests and promote the welfare of Harvard University.

The Club’s Commonwealth Avenue Clubhouse will be the first historic renovation project. The Foundation will make grants to the Club to restore artwork owned and exhibited by the Club. The officers and directors of the Higginson Foundation are members of the Club and some are current board members of the Club; however, the Higginson Foundation will remain an independent organization dedicated solely to its charitable and educational purposes. It is expected that the Higginson Foundation will take over several charitable programs currently conducted by the Foundation.

HARVARD CLUB OF BOSTON

Notes to Financial Statements

The Club provides administrative support staff to the Higginson Foundation, for which the Higginson Foundation reimburses the Club. The Club requests that its members donate funds for students attending Harvard University, Harvard Prize Books, and for the appraisal and cataloguing of the art collection at the Club. Donations collected by the Club are remitted to the Higginson Foundation. As of August 31, 2023 and 2022, the Club owes the Higginson Foundation approximately $9,000 and $1,000, respectively. The Club accounts for the donations as agency transactions and does not reflect them in its financial statements. Donations received for 2023 and 2022 totaled approximately $183,000 and $159,000, respectively.

Note 16 – Employee retention credit

The Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, was passed by the U.S. Congress and signed into law by the President on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic in the United States. The Employee Retention Credit is one of the provisions included in the CARES Act. The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees. The Employee Retention Credit applies to qualified wages paid after March 12, 2020 and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an eligible employer for qualified wages paid to any employee is $5,000. In order to be eligible for the payroll tax credit, the employer must either have had its operations fully or partially suspended as a result of a COVID-19 related shut down order or have incurred a decline in gross receipts by more than 50 percent when compared to the same quarter in the prior year.

The Consolidated Appropriations Act (CAA) passed in December 2020 included extensions and modifications of many provisions of the CARES Act. Effective January 1, 2021, the Employee Retention Credit is extended for two more calendar quarters, through June 30, 2021. The CAA increases the maximum credit to $7,000 per employee for each of the two quarters in 2021. This is done by providing a $10,000 maximum in each employee’s aggregate qualified wages and qualified health expenses for each quarter and by increasing the credit to 70 percent of the employee’s qualified wage and health expense amounts for that quarter. The CAA also changes one of the eligibility tests so an employer that has had a more than 20 percent decline in gross receipts in 2021, compared to the same quarter in 2019, satisfies the gross receipts test. In addition, the new rule allows an employer to elect to use the gross receipts from the immediately preceding quarter and compare these prior quarter gross receipts to the same quarter in 2019, rather than the current quarter. The American Rescue Plan Act further extended the Employee Retention credit through the end of September 2021.

The Club was eligible for the credit due to having its operations fully or partially suspended as a result of a COVID-19 related shut down order. During the year ended August 31, 2022, the Club claimed credits totaling $124,061.

Note 17 – Liquor license sale

On October 17, 2022, the Club entered into an agreement to sell the Club’s One Federal Street, Boston, Massachusetts liquor license (the “License”) for approximately $452,000. The Club reported a net gain of $328,766 on the Statement of Activities, which is net of the related Federal and state income taxes of $123,581.

Note 18 – Subsequent events

The Club has evaluated all events and transactions through December 14, 2023, the date the financial statements were available to be issued. There are no events or transactions that occurred that would require recognition or disclosures in the financial statements.

HARVARD CLUB OF BOSTON FOUNDATION

Financial Statements for years ended June 30, 2023 and 2022

(With Independent Accountants’ Compilation Report)

PKF JND, P.C.

Certified Public Accountants

Independent Accountants’ Compilation Report

To the Trustee

Harvard Club of Boston Foundation

Management is responsible for the accompanying financial statements of the Harvard Club of Boston Foundation (a nonprofit organization), which comprise the statements of financial position as of June 30, 2023 and 2022, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. We have performed compilation engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the financial statements nor were we required to perform any procedures to verify the accuracy and completeness of the information provided by management. We do not express an opinion, a conclusion, nor provide any assurance on these financial statements.

December 14, 2023

Telephone: (617) 753-9985 | Fax: (617) 753-9986

Email: info@pkfjnd.com | Website: www.pkfjnd.com

PKF JND, P.C. | 75 State Street | Boston | Massachusetts 02109 | US

PKF JND, P.C. is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

and

HARVARD CLUB OF BOSTON FOUNDATION

Statements of Financial Position

(See Independent Accountants’ Compilation Report)

See notes to financial statements

and other

HARVARD CLUB OF BOSTON FOUNDATION

Statements of Activities and Changes in Net Assets (See Independent Accountants’ Compilation Report)

HARVARD CLUB OF BOSTON FOUNDATION

Statements of Functional Expenses (See Independent Accountants’ Compilation Report)

Year Ended June 30, 2023

and Student Program Management and Fellowships Prize Books

HARVARD CLUB OF BOSTON FOUNDATION

Statements

of Cash Flows

(See Independent Accountants’ Compilation Report)

Operating activities

Change in net assets $ (258,922) $ (868,786)

Adjustments to reconcile change in net assets to net cash used by operating activities

Investment (gains) losses (323,104) 310,395

Change in due from The Higginson 1908 Foundation, Inc. – 28,835

Change in accrued expenses – 600

Change in due to The Higginson 1908 Foundation, Inc. (38,824) 38,824

Net cash used by operating activities (620,850) (490,132)

Investing activities

Additional investment in Harvard University Pooled General

Investment Account (38,726) (5,244)

Proceeds from redemption of investment in Harvard University Pooled General Investment Account 790,108 512,322 Net cash provided by investing activities 751,382 507,078

See notes to financial statements

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.

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Cash and cash equivalents

The Foundation considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents.

Investment

Investment is carried at fair value. See discussion under Note 5 – Fair Value Measurements for a description of the methodologies used for assets measured at fair value. Investment income is reported in the Statements of Activities and Changes in Net Assets and consists of interest income, realized and unrealized gains and losses, less external and direct internal investment expenses.

Contributions

The Foundation recognizes contributions when cash, securities or other assets; an unconditional promise to give; or a notification of a beneficial interest is received. Conditional promises to give, that is, those with a measurable performance or other barrier and a right of return, are not recognized until the conditions on which they depend have been met.

Scholarships and fellowships

The Foundation recognizes expenses for scholarships and fellowships when they are approved and are unconditionally promised to the recipients. Scholarship awards are conditioned on the recipients remaining enrolled as students at Harvard University and the awards are recognized annually as this condition is met.

Functional expense allocations

The costs of program and supporting services activities have been summarized on a functional and natural classification basis in the Statements of Functional Expenses. Expenses that can be identified with a specific program or supporting service are charged directly to the program or supporting service. Expenses which apply to more than one functional category have been allocated based on estimates made by management.

Use of estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

Note 3 – Liquidity and availability

Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the Statement of Financial Position date are comprised of the following: 2023 2022

Cash

$ 152,535 $ 22,003

Investment 417,942 491,892

$ 570,477 $ 513,895

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Endowment funds consist of donor-restricted endowments and funds designated by the Board as endowments. Income from donor-restricted endowments is restricted for specific purposes and is not available for general expenditure.

Board-designated endowment of $6,530,338 and $6,558,560 at June 30, 2023 and 2022, respectively, is subject to an annual spending rate. Although it is not the intent to spend from this board-designated endowment (other than amounts appropriated for general expenditure as part of the Board’s annual budget approval and appropriation), these amounts could be made available if necessary.

Note 4 – Investment and investment income

The Foundation has an agreement with Harvard University ("University") pursuant to which the University invests the Foundation's funds. The agreement provides that the Foundation's funds may be pooled with other funds managed by the University. The Foundation has the right to withdraw these funds.

The investment in the Harvard University Pooled General Investment Account (“GIA”) is carried at fair value as provided by the University. The investments in the Pooled Account are managed by Harvard Management Company ("HMC"), a wholly-owned subsidiary of the University. The Foundation has categorized the investment as a Level 2 fair value measurement in accordance with the Fair Value Measurements topic of the FASB Accounting Standards Codification ASC 820.

Units in the GIA are assigned to each fund on the basis of the fair value of the GIA at or near the time assets are received for investment. Investment income is allocated among the funds based on each fund’s units.

The GIA’s investment strategy incorporates a diversified asset allocation approach and maintains, within defined limits, exposure to the movements of the global public and private equity, fixed income, real estate, and commodities markets. Exposure to these markets is achieved through direct investments in individual securities, investments in special purpose vehicles and/or through investment in vehicles advised by external managers. (See Harvard University's 2023 financial report for additional information).

Investments in global markets involve a multitude of risks such as price, interest rate, market, sovereign, currency, liquidity, and credit risks, amongst many others. The University manages exposure to these risks through established policies and procedures related to its ongoing investment diligence and operational due diligence programs. The University anticipates that the value and composition of its investments may, from time to time, fluctuate substantially in response to any and all of the risks described herein.

The following is a summary of investment income (loss): 2023 2022

Interest earned on operating cash $ 387 $ 4

Harvard University Pooled General Investment Account

Realized gains 692,514 450,454

losses (369,410) (760,849)

Investment income (loss) $ 362,217 $ (305,147)

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Note 5 – Fair value measurements

The Fair Value Measurements topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The asset’s or liability’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.

The fair value of the Foundation’s investment in the Harvard University Pooled General Investment Account is determined based on per unit Net Asset Value (“NAV”) provided by Harvard University. There has been no change in the methodology used.

The method described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

Note 6 – Scholarships and fellowships

The Foundation provided funds to Harvard College for undergraduate scholarships totaling $475,295 and $512,322 for the years ended June 30, 2023 and 2022, respectively. The Foundation also provided a Summer Community Fellowship to Harvard College in the amount of $5,000 during each of the years ended June 30, 2023 and 2022.

Note 7 – Tax status

The Foundation is exempt from Federal and State income taxes under Section 501(c)(3) of the Internal Revenue Code and is not classified as a private foundation. Contributions to the Foundation are deductible by donors for income tax purposes.

The Income Taxes topic of the FASB ASC prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management of the Foundation has evaluated its uncertain tax positions and related income tax contingencies and does not believe that any material uncertain tax positions exist.

The Foundation’s tax returns are generally subject to examination by the Internal Revenue Service and the Commonwealth of Massachusetts for a period of three years from the date they are filed.

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Note 8 – Net assets with donor restrictions

Net assets with donor restrictions are restricted for the following purposes:

Subject to appropriation and expenditure for a specified purpose

Nathaniel J. Young, Jr. Scholarship Fund

The Fund is to be used “to support scholarships for men and women students at Harvard College from the City of Boston public high and Latin schools”.

Net assets released from donor restrictions by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors are as follows:

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Note 9 – Endowment net assets

The Foundation’s endowment consists of approximately 15 individual funds established for a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the Board to function as endowments. As required by accounting principles generally accepted in the United States of America, net assets associated with endowment funds, including funds designated by the Board to function as endowments, are classified and reported based on the existence or absence of donorimposed restrictions.

The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a reasonable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. The endowment assets are invested in a manner intended to produce results that exceed the price and yield results of the S&P 500 index while assuming a reasonable level of investment risk.

The Foundation has a policy for appropriating for distribution an amount that considers the distribution in relation to the total percentage of the endowment, as well as the long-term expected return on its endowment.

The Board of the Foundation has interpreted the State Prudent Management of Institutional Funds Act (SPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donorrestricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as net assets with donor restrictions (a) the original value of gifts donated to the endowment in perpetuity, (b) the original value of subsequent gifts to the endowment in perpetuity, and (c) accumulations to the endowment in perpetuity made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. Donor-restricted amounts not retained in perpetuity are subject to appropriation for expenditure in a manner consistent with the standard of prudence prescribed by SPMIFA. In accordance with SPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

1. The duration and preservation of the fund

2. The purposes of the Foundation and the donor-restricted endowment fund

3. General economic conditions

4. The expected total return from income and the appreciation of investments

5. The investment policies of the Foundation

The following is the composition of endowment net assets by type of fund:

Without Donor With Donor Restrictions Restrictions Total

Donor-restricted endowment funds

Original donor-restricted gift amount and amounts required to be maintained in perpetuity by donor

$ – $ 534,388 $ 534,388

Accumulated investment gains 6,753,226 6,753,226

Board-designated endowment funds 6,530,338 6,530,338

Total, June 30, 2023

$ 6,530,338 $ 7,287,614 $13,817,952

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Donor-restricted endowment funds

Original donor-restricted gift amount and amounts required to be maintained in perpetuity by donor

investment gains

Total, June 30, 2022

Without Donor With Donor Restrictions Restrictions Total

The following is a summary of the changes in endowment net assets:

Endowment net assets, June 30, 2021

577,597 $ 577,597

Without Donor With Donor Restrictions Restrictions Total

6,687,221 $ 8,258,439 $14,945,660

loss, net (89,534) (215,613) (305,147) Appropriation of endowment assets for expenditure (39,127) (524,512) (563,639)

net assets, June 30, 2022

of endowment assets for expenditure (123,183) (497,956) (621,139)

Endowment net assets, June 30, 2023

Note 10 – Related party

Harvard Club of Boston

The Club is a member owned alumni club located in Boston, Massachusetts. The Club’s primary purpose is to provide a social meeting place for its members. The Club’s Board of Governors serves at the Trustee of the Foundation; however, the Foundation remains an independent organization dedicated solely to its charitable and educational purposes. The Foundation’s operations are maintained separately from the Club’s operating activities and its assets are not available to the Club.

Note 11 – Other decrease in net assets

In March 2023, the Foundation provided a $86,000 transfer to The Higginson 1908 Foundation, Inc. as a reimbursement for prior period expenses which were paid for by The Higginson 1908 Foundation, Inc. on behalf of the Foundation. Due to the nature of the transaction, the amount has been presented as a decrease in net assets on the Statements of Activities and Changes in Net Assets for the year ended June 30, 2023.

HARVARD CLUB OF BOSTON FOUNDATION

Notes to Financial Statements

(See Independent Accountants’ Compilation Report)

Note 12 – Subsequent events

The Foundation has evaluated all events and transactions through December 14, 2023, the date the financial statements were available to be issued. There were no events or transactions that occurred that would require recognition or disclosure in the financial statements.

Financial Statements for the years ended June 30, 2023 and 2022

(With Independent Accountants’ Compilation Report)

THE HIGGINSON 1908 FOUNDATION, INC.

Independent Accountants’ Compilation Report

To the Board of Directors of The Higginson 1908 Foundation, Inc.

Management is responsible for the accompanying financial statements of The 1908 Higginson Foundation, Inc. (a nonprofit organization), which comprise the statements of financial position as of June 30, 2023 and 2022, and the related statements of activities and changes in net assets and cash flows for the years then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. We have performed compilation engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the financial statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. We do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.

December 21, 2023

Telephone: (617) 753-9985 | Fax: (617) 753-9986

Email: info@pkfjnd.com | Website: www.pkfjnd.com

Liabilities and Net Assets

Statements of Financial Position

(See Independent Accountants' Compilation Report)

See notes to financial statements

and support

THE HIGGINSON 1908 FOUNDATION, INC.

Statement of Activities and Changes in Net Assets

For the Year Ended June 30, 2023

(See Independent Accountants' Compilation Report)

See notes to financial statements

THE HIGGINSON 1908 FOUNDATION, INC.

Statement of Activities and Changes in Net Assets

For the Year Ended June 30, 2022

(See Independent Accountants' Compilation Report)

See notes to financial statements

THE HIGGINSON 1908 FOUNDATION, INC.

Statements of Cash Flows

(See Independent Accountants' Compilation Report)

activities

in operating assets and liabilities

from the Harvard Club of Boston Foundation

to the Harvard Club of Boston Foundation

(38,824)

(28,835)

to the Harvard Club of Boston – (350) Net cash provided (used) by operating activities

Investing activities

(70,480)

Purchase of short-term investments (360,000) –Maturities of short-term investments 90,000 –

Interest income added to principal (3,924) –

Net cash used by investing activities (273,924) –Net change in cash and cash equivalents

See notes to financial statements

(70,480)

Notes to Financial Statements

(See Independent Accountants' Compilation Report)

Note 1 – Organization

The Higginson 1908 Foundation, Inc. (the "Foundation"), a charitable corporation, was organized under the laws of the Commonwealth of Massachusetts in 2015. The Foundation’s purpose is to:

 Preserve and protect old and historic buildings in and around Boston, Massachusetts, including specifically the Clubhouse of the Harvard Club of Boston (the “Club”), in order to perpetuate the further education of posterity with regard to the architectural, historic, and general cultural heritage of the Boston area.

 Preserve and protect historically significant artwork exhibited in and around Boston, Massachusetts, in order to perpetuate the further education of posterity with regard to the arts.

 Encourage education and personal advancement for youth in the Greater Boston area.

 Foster scientific, literary and educational interests among members of the Club and to advance the interests and promote the welfare of Harvard University.

The Foundation’s fundraising activities consist primarily of the solicitation of Club members by direct mailings and an annual solicitation by the Club.

Note 2 – Summary of significant accounting policies

Basis of accounting

The Foundation prepares its financial statements in accordance with accounting principles generally accepted in the United States of America, which includes the application of accrual accounting. 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 require 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 Board of Directors.

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 donor 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 and reported in the Statements of Activities and Changes in Net Assets as net assets released from restrictions.

THE HIGGINSON 1908 FOUNDATION, INC.

Notes to Financial Statements

(See Independent Accountants' Compilation Report)

Cash and cash equivalents

The Foundation considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. Cash equivalents at June 30, 2023 consist of a money market fund. There were no cash equivalents at June 30, 2022.

Contributions

The Foundation recognizes contributions when cash, securities or other assets; an unconditional promise to give; or a notification of a beneficial interest is received. Conditional promises to give, that is, those with a measurable performance or other barrier and a right of return, are not recognized until the conditions on which they depend have been met.

Income taxes

The Internal Revenue Service has determined that the Foundation qualifies as an exempt organization under Internal Revenue Code Section 501(c)(3). In addition, the Foundation qualifies for the charitable contribution deduction under Section 170 (b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2).

The Income Taxes topic of the FASB Accounting Standards Codification prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management of the Foundation has evaluated its tax positions and does not believe that any material uncertain tax positions exist. The Foundation’s policy is to record interest expense and penalties, if any, in management and general expenses. For the years ended June 30, 2023 and 2022 there was no interest and penalties expense recorded.

The Foundation's tax returns are generally subject to examination by the Internal Revenue Service and the Commonwealth of Massachusetts for a period of three years from the date they are filed.

Functional expense allocations

The costs of program and supporting services activities have been summarized on a functional basis in the Statements of Activities and Changes in Net Assets, as well as by natural classification detail. Expenses that can be identified with a specific program or supporting service are charged directly to the program or supporting service. Expenses which apply to more than one functional category have been allocated based on estimates made by management.

Accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Notes to Financial Statements

(See Independent Accountants' Compilation Report)

Note 3 – Fair value measurements

The Fair Value Measurements standard provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under the Fair Value Measurements Standard are described as follows:

Level 1 – Inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date;

Level 2 – Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and

Level 3 – Inputs to the valuation method are unobservable inputs in situations where there is little or no market activity for the asset or liability and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Certificates of deposit

Certificates of deposit are recorded based on their carrying values, which approximates fair value and are classified as level 2. The certificates mature in less than one year.

Note 4 – Liquidity and availability

Financial assets available for general expenditure, that is, without donor restrictions limiting their use, within one year of the Statements of Financial Position date, are comprised of the following as of June 30:

2,156

The Foundation strives to maintain liquid financial assets sufficient to cover at least six months of general expenditures. Financial assets in excess of daily cash requirements are invested in certificates of deposit and money market funds.

Note 5 – Net assets with donor restrictions

Net assets with donor restrictions are restricted for the following purposes at June 30, 2023 and 2022: Scholarships for Harvard College students from the greater Boston area; Harvard College Community Service fellowships; Internship programs; Harvard Prize Books to be awarded to outstanding high school juniors, appraisal and cataloguing of the art collection at the Harvard Club of Boston.

Notes to Financial Statements

(See Independent Accountants' Compilation Report)

Note 6 – Related party transactions

The Club is a member owned alumni club located in Boston, Massachusetts. The Club’s primary purpose is to provide a social meeting place for its members. The Foundation has a special relationship with the Club, as the Club is expected to receive funds from the Foundation to preserve and protect the Club’s physical infrastructure as well as the cultural and artistic materials held by the Club. The Foundation remains an independent organization dedicated solely to its charitable and educational purposes. The Foundation’s operations are maintained separately from the Club’s operating activities and its assets are not available to the Club.

The Club provides administrative support staff to the Foundation, for which the Foundation reimburses the Club. The Club requests that its members donate funds to the Foundation. Donations collected by the Club are remitted to the Foundation. The Club accounts for the donations as agency transactions and does not reflect them in its financial statements. Donations reimbursable to the Foundation by the Club during 2023 and 2022 totaled approximately $183,000 and $159,000, respectively.

Note 7 – Other increase in net assets

In March 2023, the Foundation received an $86,000 transfer from the Harvard Club of Boston Foundation as a reimbursement for prior period expenses which were paid for by the Foundation on behalf of the Harvard Club of Boston Foundation. Due to the nature of the transaction, the amount has been presented as an increase in net assets on the Statement of Activities and Changes in Net Assets for the year ended June 30, 2023.

Note 8 – Subsequent events

The Foundation has evaluated subsequent events and transactions through December 21, 2023, the date the financial statements were available to be issued. There were no events or transactions that occurred that would require recognition or disclosure in the financial statements.