Hillel Jewish University Center of Pittsburgh Financial Statements 2020 2019

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH Pittsburgh, Pennsylvania Financial Statements For the years ended June 30, 2020 and 2019 and Independent Auditors’ Report Thereon

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CONTENTS

PAGE INDEPENDENT AUDITORS’ REPORT

1

FINANCIAL STATEMENTS Statements of Financial Position, June 30, 2020 and 2019

3

Statements for the years ended June 30, 2020 and 2019: Activities and Changes in Net Assets

4

Functional Expenses

6

Cash Flows

8

Notes to Financial Statements

9

INDEPENDENT AUDITORS’ REPORT

Board of Governors The Hillel Jewish University Center of Pittsburgh Pittsburgh, Pennsylvania We have audited the accompanying financial statements of The Hillel Jewish University Center of Pittsburgh (Hillel JUC), which comprise the statements of financial position as of June 30, 2020 and 2019, 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.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Hillel JUC’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Hillel JUC’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Schneider Downs & Co., Inc. www.schneiderdowns.com

An Association of Independent Accounting Firms

1

One PPG Place, Suite 1700 Pittsburgh, PA 15222 T EL 412.261.3644 FAX 412.261.4876

65 E. State Street, Suite 2000 Columbus, OH 43215 T EL 614.621.4060 FAX 614.621.4062

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hillel JUC as of June 30, 2020 and 2019, and the changes in its net assets, functional expenses and its cash flows for the years then ended in accordance with U.S. GAAP.

Schneider Downs & Co., Inc. Pittsburgh, Pennsylvania January 19, 2021

2

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH STATEMENTS OF FINANCIAL POSITION 2020

ASSETS CURRENT ASSETS Cash and cash equivalents Investments Pledges receivable Other current assets

$

Total Current Assets INVESTMENTS - LONG-TERM PLEDGES RECEIVABLE - LONG-TERM PROPERTY AND EQUIPMENT, net Total Assets

June 30

777,339 572,535 28,000 12,329

$

2019

514,603 656,973 59,200 11,291

1,390,203

1,242,067

1,553,996

1,553,996

6,000

25,000

1,252,394

1,304,258

$

4,202,593

$

4,125,321

$

12,115 141,043 28,983

$

27,262 15,000

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and other accrued liabilities Jewish Federation of Greater Pittsburgh operating loan Deferred grant revenue Accrued wages and benefits Total Current Liabilities JEWISH FEDERATION OF GREATER PITTSBURGH OPERATING LOAN NET ASSETS Without donor restrictions: Board-designated Undesignated With donor restrictions Total Net Assets Total Liabilities And Net Assets

$

See notes to financial statements.

3

-

45,500

182,141

87,762

12,500

5,000

26,919 1,551,821 2,429,212

26,423 1,706,553 2,299,583

4,007,952

4,032,559

4,202,593

$

4,125,321

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED JUNE 30, 2020 AND 2019

Without Donor Restrictions SUPPORT AND REVENUE Contributions: Public and private support Jewish Federation of Greater Pittsburgh

$

Total Contributions Revenue: Program revenue and fee income Rental income Investment income Total Revenues NET ASSETS RELEASED FROM RESTRICTIONS Total Support And Revenue

223,236 160,836

2020 With Donor Restrictions

$

Total Expenses Changes In Net Assets

1,311,655

19,023 667

25,011

19,023 25,678

19,690

25,011

44,701

822,965

(822,965)

$

4

-

129,629

1,356,356

912,805 298,464 169,694

-

912,805 298,464 169,694

1,380,963

-

1,380,963

129,629

1,578,740

(24,607)

2,299,583

1,732,976

End of year

1,150,819 160,836

927,583

(154,236)

NET ASSETS Beginning of year

$

384,072

1,226,727

EXPENSES Program services Management and general Fundraising

927,583 -

Total

$

2,429,212

4,032,559 $

4,007,952

Without Donor Restrictions

$

491,593 162,332

2019 With Donor Restrictions

$

$

1,349,910 162,332

653,925

858,317

1,512,242

20,488 550 1,542

118,863

20,488 550 120,405

22,580

118,863

141,443

984,707

(984,707)

1,661,212

(7,527)

1,653,685

1,167,859 293,417 165,872

-

1,167,859 293,417 165,872

1,627,148

-

1,627,148

34,064

(7,527)

1,698,912 $

858,317 -

Total

1,732,976

26,537

2,307,110 $

2,299,583

4,006,022 $

4,032,559

See notes to financial statements.

5

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH FUNCTIONAL EXPENSES FOR THE YEARS ENDED JUNE 30, 2020 AND 2019

Program Services Salaries and benefits Student programs Utilities and maintenance Depreciation and amortization Telephone/internet Professional fees

$

Management and General

464,255 295,750 61,463 34,230 26,789 -

$

195,133 27,005 15,041 11,771 30,795

Campus Superstar Insurance Fundraising Parking Service charges Travel

17,782 8,890 2,321

11,191 4,477 497

Office Miscellaneous Professional development Interest Postage and delivery Printing and photocopying

-

1,325

582 611 821 421 119

$

-

912,805

$

6

298,464

2020 Fundraising $

149,769 4,657 2,593 2,029 -

$

Total $

294

809,157 295,750 93,125 51,864 40,589 30,795 18,076 11,191 9,534 8,890 4,477 3,315

9,534 497 100

221

169,694

$

2,007 611 821 421 340

1,380,963

Program Services $

503,849 440,571 63,357 34,890 26,711 -

Management and General $

79,367 13,609 4,328 $

-

1,177

1,167,859

191,256 27,837 15,331 11,736 30,368

-

$

2019 Fundraising $

4,249

-

517

-

7,143 997 123 676

293,417

146,178 4,800 2,643 2,024 -

2,256 928

$

Total $

313

841,283 440,571 95,994 52,864 40,471 30,368 79,680 4,249 7,412 13,609 2,256 6,184

7,412 928 89

-

229 1,256

165,872

$

See notes to financial statements.

7

1,783 7,143 997 352 1,932

1,627,148

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2020 AND 2019

2020 CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets Adjustments to reconcile changes in net assets to net cash provided by (used in) operating activities: Depreciation and amortization Realized and unrealized investment losses (gains) Changes in assets and liabilities: Pledges receivable Other current assets Accounts payable and other accrued liabilities Deferred grant revenue Accrued wages and benefits Net Cash Provided By (Used In) Operating Activities

$

(24,607)

2019 $

26,537

51,864 47,230

52,864 (28,507)

50,200 (1,038) (15,147) 141,043 (16,517) 233,028

(59,930) (2,102) (1,234) (7,631) (20,003)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of investments Purchases of investments Net Cash Provided By Investing Activities

109,315 (72,107) 37,208

106,495 (88,878) 17,617

CASH FLOWS FROM FINANCING ACTIVITIES Payments on note payable

(7,500)

(20,000)

Net Increase (Decrease) In Cash And Cash Equivalents CASH AND CASH EQUIVALENTS Beginning of year End of year

$

See notes to financial statements.

8

262,736

(22,386)

514,603

536,989

777,339

$

514,603

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 1 - ORGANIZATION The Hillel Jewish University Center of Pittsburgh (Hillel JUC) is a beneficiary agency of the Jewish Federation of Greater Pittsburgh (Federation) and affiliate of the Hillel: The Foundation for Jewish Campus Life.

The purpose of the Hillel JUC is to provide activities for Jewish students on college campuses. The primary concern of the Hillel JUC is to foster Jewish identity and enhance a commitment to Jewish life that will continue beyond the campus years.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of significant accounting policies consistently applied by management in the preparation of the accompanying financial statements follows: Basis of Accounting - The accounts of Hillel JUC are maintained on the accrual basis of accounting.

Revenues are recognized as they are earned, and expenses are recorded when incurred.

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 of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Net Assets - Hillel JUC classifies resources for accounting and reporting purposes into separate net asset classes based on the absence or existence of donor-imposed restrictions. In the accompanying financial statements, net assets that have similar characteristics have been combined into similar categories. A description of Hillel JUC’s net asset categories is as follows: Net Assets Without Donor Restrictions - Net assets over which Hillel JUC’s Board of Governors (Board) has discretionary control to use in carrying on the operations. This includes Boarddesignated net assets, which have been designated by the Board to provide support for activities that further Hillel JUC’s mission.

Net Assets With Donor Restrictions - Net assets subject to donor-imposed restrictions that may or will be met by either actions of Hillel JUC and/or the passage of time, as well as net assets subject to restrictions of gift instruments requiring that the principal is invested in perpetuity and the income is used only to support Hillel JUC’s mission and operations. This category also includes the cumulative investment return on net assets with donor restriction.

Cash and Cash Equivalents - Hillel JUC considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Hillel JUC maintains cash and cash equivalents that might exceed federally insured amounts at times. For purposes of the statement of cash flows, all investments with a purchased maturity of three months or less are considered to be cash equivalents.

9

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments - Investments are recorded at fair value. The change in unrealized appreciation (depreciation) on investments is the difference between the excess of fair market value over the cost of the portfolio at the end of the current period and the difference at the end of the prior period. Realized gains on security transactions are the result of all gains and losses realized in the current period using the specific identification method. Investments received by gift are recorded at market value on the date of the donation. Hillel JUC records its investments that are perpetual in nature as long-term assets, as they are intended to provide long-term support to the organization.

Investments are exposed to various risks, such as interest rates and market and credit conditions. Due to the level of risk associated with investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in the near term could materially affect the amounts reported in the statement of financial position.

Fair Value Measurement - Hillel JUC follows the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification) topic Fair Value Measurement, which establishes a framework for measuring fair value and disclosures related to fair value measurements. (See Note 5.)

Pledges Receivable - Receipts of unconditional promises to give with payments due in future periods are recorded as pledges receivable and recognized as increases to net assets at the date of promise. There is no provision for uncollectable accounts. Hillel JUC’s evaluation of the need for an allowance is based on historical collection experience, a review of the current status of outstanding promises to give and judgment. It is reasonably possible that Hillel JUC’s assessment of the need for an allowance for doubtful accounts may change.

Hillel JUC pledges receivable at June 30, 2020 and 2019 are $34,000 and $84,200, respectively. The amount of $28,000 and $59,200 as of June 30, 2020 and 2019, respectively, is due to be received in less than one year, and $6,000 and $25,000 of total pledges receivable as of June 30, 2020 and 2019, respectively, are due in over one year. Hillel JUC has not recorded a discount on the balances because the amount of the discount has been determined to be insignificant to the financial position of Hillel JUC at June 30, 2020 and 2019.

Property and Equipment - Property and equipment are recorded at the lower of cost or fair value. Donated property and equipment are recorded at fair value as of the date of the gift. Depreciation and amortization are provided on the straight-line method using estimated useful lives ranging from five years to 40 years.

Hillel JUC reviews the carrying amount of property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset exceeds the related estimated fair value. Based on management’s analysis, there was no impairment for the years ended June 30, 2020 and 2019.

10

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes - Hillel JUC is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code (IRC); therefore, no provision for income taxes is necessary. Hillel JUC follows the Codification topic on Income Taxes. The topic prescribes a minimum recognition threshold and measurement methodology that a tax position taken or expected to be taken in a tax return is required to meet before being recognized in financial statements. Hillel JUC classifies interest and penalties as income tax expense, if incurred. Hillel JUC’s statements of financial position at June 30, 2020 and 2019 do not include any liabilities associated with uncertain tax positions; further, Hillel JUC has no unrecognized tax benefits. Hillel JUC believes that it is no longer subject to examination of its tax returns for years before 2017.

Contributions and Grants - Contributions and grants include gifts of cash, other assets or unconditional promises to give. Hillel JUC reports such donations as donations with donor restrictions if they are received with donor restrictions that limit the use of the donated assets. When a purpose restriction is accomplished or a time restriction ends, net assets with donor restriction are reclassified to net assets without donor restrictions and reported in the statement of activities as net assets released from restrictions. Gifts of cash or other assets that must be used to acquire long-lived assets are reported as donations with donor restrictions. Net assets with donor restrictions also consist of donations that have been directed to the Hillel JUC’s Endowment Fund by the donors. Donations that are committed to the Endowment Fund will have the principal held in perpetuity so long as that is permitted by law.

All restricted donations are invested in accordance with Hillel JUC’s investment policies. Conditional promises to give are recognized as income when the conditions are substantially met and recorded as deferred grant revenue until the conditions are met.

Income and realized net gains and losses on investments of the endowment are reported as follows: •

As changes in net assets with donor restrictions if so restricted by the donor or if the terms of the gift or relevant state law impose restrictions on the use of the income or gains and losses; and

•

As changes in net assets without donor restrictions in all other cases.

Functional Expenses - The costs of providing the various activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services based primarily on analysis of personnel time on the related programs or activities.

Recently Adopted Accounting Pronouncement - In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09 Revenue from Contracts with Customers (ASU 2014-09), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, ASU 2014-09 (1) specifies the accounting for some costs to obtain or fulfill a contract with a customer and (2) expands disclosure requirements related to revenue and cash flows arising from contracts with customers. Hillel JUC adopted ASU 2014-09 on its financial statements in the current year with no significant impact.

The FASB issued ASU No. 2018-08 Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made (ASU 2018-08), which should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transactions) within the scope of Topic 958 Not-for-Profit Entities, or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution is conditional. Hillel JUC adopted ASU 2018-08 on its financial statements in the current year with no significant impact.

11

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Recent Accounting Pronouncements - In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which clarifies that entities should disclose information about the uncertainty of fair value measurements as of the reporting date. ASU 2018-13 removes the requirement to disclose the amount and reasons for transfers between Level 1 and 2 of the fair value hierarchy table, the policy for timing of transfers between levels, the valuation processes for Level 3 fair value measurements and the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. ASU 2018-13 requires transfers out of and into Level 3 and purchases and issues of Level 3 assets and liabilities to be disclosed.

Also required to be disclosed is liquidation timing of an investee’s assets and the date when restrictions from redemption might lapse. ASU 2018-13 is effective for nonpublic entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. A reporting entity should apply amendments retrospectively to all periods presented. Early application is permitted. Hillel JUC is currently evaluating the impact of ASU 2018-13.

Subsequent Events - Subsequent events are defined as events or transactions that occur after the statement of financial position date, but before the financial statements are issued or are available to be issued. Management has evaluated subsequent events through January 19, 2021, the date that the financial statements were issued and determined that there have been no events that have occurred that would require adjustments to the disclosures in the financial statements except for the matters described in the following paragraphs.

The coronavirus pandemic (COVID-19), and subsequent government-imposed business closures and community guidelines have adversely affected Hillel JUC’s operations during 2020. The impact of COVID-19 on Hillel JUC may result in ongoing adverse effects that could negatively impact Hillel JUC’s mission. Hillel JUC is unable to accurately predict how the coronavirus outbreak will ultimately affect the results of its operations because the disease’s severity and the duration of the outbreak continue to be uncertain. However, while it is premature to accurately predict the ultimate impact of these conditions, Hillel JUC expects its results for the year ending June 30, 2021 to be impacted.

In response to the impacts of the COVID-19, Hillel JUC received additional funding relief from the Federation in the amount of $100,000 subsequent to June 30, 2020.

NOTE 3 - AVAILABILITY AND LIQUIDITY Hillel JUC strives to maintain liquid financial assets sufficient to cover 90 days of general expenditures.

Financial assets in excess of daily cash requirements are held in an interest savings account and invested in the Pooled Federation investments as described in Note 4.

The following table reflects Hillel JUC’s financial assets, which include cash and cash equivalents, investments and pledges receivable, as of June 30, 2020 and 2019, reduced by amounts that are not available to meet general expenditures within one year of the statement of financial position date because of contractual restrictions or internal board designations. Amounts not available include Hillel JUC’s endowment investments that are restricted in perpetuity as more fully described in Notes 7 and 8. In the event the need arises to utilize the Board-designated funds for liquidity purposes, the reserves could be drawn upon through Board resolution.

Amounts not available to meet general expenditures within one year also includes net assets with donor restrictions.

12

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 3 - AVAILABILITY AND LIQUIDITY (Continued) 2020 Total financial assets Less funds subject to purpose restrictions Less endowments Less pledges due in more than one year Less Board-designated funds Financial Assets Available For General Expenditures Within One Year

2019

$

2,937,870 $ (875,216) (1,553,996) (6,000) (26,919)

$

475,739

$

2,809,772 (745,587) (1,553,996) (25,000) (26,423) 458,766

NOTE 4 - INVESTMENTS Hillel JUC investments are entirely composed of its investments within the Federation endowment at June 30, 2020 and 2019. The Federation holds for its beneficiary agencies assets that are pooled with other funds for investment purposes. The pooled investments of the Federation endowment are composed primarily of equity and fixed-income mutual funds, bond funds and limited partnerships.

The return on investments, net of investment fees, for the years ended June 30 is summarized as follows: 2020 Net realized and unrealized (loss) gain on investments carried at fair value Interest and dividend income

$ $

2019

(47,230) $ 72,908 25,678

$

28,507 91,898 120,405

Hillel JUC is designated as a beneficiary agency of a certain endowment held by Carnegie Mellon University (CMU). This endowment is not recorded as an asset of Hillel JUC because the donor provided variance power to CMU on this fund. For the year ended June 30, 2020, Hillel JUC is entitled to receive annual distributions of a percentage of this endowment. For the year ended June 30, 2020, Hillel JUC chose not to receive the annual distribution. The balance of this CMU-Hillel JUC Endowed Fund held by CMU is $1,550,000 and $1,000,000 as of June 30, 2020 and 2019, respectively.

NOTE 5 - FAIR VALUE MEASUREMENT Hillel JUC follows the Codification topic Fair Value Measurement, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Fair Value Measurement requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels, depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement.

13

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 5 - FAIR VALUE MEASUREMENT (Continued) Fair Value Measurement fair value hierarchy is defined as follows: Level 1 - Valuations are based on unadjusted, quoted prices in active markets for identical assets or liabilities.

Level 2 - Valuations are based on quoted prices for similar assets or liabilities in active markets, or on quoted prices in markets that are not active, but for which significant inputs are observable, either directly or indirectly.

Level 3 - Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

Hillel JUC uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. When available, Hillel JUC measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3 inputs have the lowest priority.

Hillel JUC’s financial instruments consist primarily of cash and cash equivalents, investments, pledges receivable, accounts payable, deferred grant revenue and other accrued liabilities and an operating loan. The carrying value of cash and cash equivalents, pledges receivable, accounts payable, deferred grant revenue and other accrued liabilities approximates fair value due to the short-term nature of such instruments. The operating loan, which bears interest at a variable rate, is market-based, and any adjustment in fair value the value of the loan is not significant to financial position of Hillel JUC. Investments - Hillel JUC’s investment in the pooled Federation investments is valued at fair value, which is determined by the Federation daily. The assets held by the Federation in the investment pool are composed of both marketable and non-readily marketable securities. Hillel JUC’s investment in the pooled Federation investments does not contain any unfunded commitments, liquidity constraints or redemption restrictions as of June 30, 2020 and 2019.

The valuation of Hillel JUC’s investments at June 30 measured at fair value according to the fair value hierarchy is summarized as follows: Assets at Fair Value at June 30, 2020 Level 2 Level 3

Level 1 Pooled Federation investments

-

-

2,126,531

$

Assets at Fair Value at June 30, 2019 Level 2 Level 3

Level 1 Pooled Federation investments

$

Total

-

-

14

$

2,210,969

2,126,531

Total $

2,210,969

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 5 - FAIR VALUE MEASUREMENT (Continued) The changes in those items measured at fair value for which Hillel JUC has used Level 3 inputs to determine fair value are as follows: Balance, June 30, 2018 Purchases of investments Sales of investments Realized and unrealized investment gains, net

$

Balance, June 30, 2019

2,200,079 88,878 (106,495) 28,507 2,210,969

Purchases of investments Sales of investments Realized and unrealized investment losses, net

72,107 (109,315) (47,230)

Balance, June 30, 2020

$

2,126,531

NOTE 6 - PROPERTY AND EQUIPMENT, NET Property and equipment, net, at June 30 consisted of the following: 2020 Office equipment and furniture Building Building improvements

$

Less - Accumulated depreciation and amortization

Land $

15

259,410 1,871,387 138,316

2019 $

259,410 1,871,387 138,316

2,269,113

2,269,113

1,213,049

1,161,185

1,056,064

1,107,928

196,330

196,330

1,252,394

$

1,304,258

THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 7 - NET ASSETS WITH DONOR RESTRICTIONS Net assets with donor restrictions at June 30 are restricted for the following purposes or periods: 2020 Subject to expenditure for specified purpose: Facility and operations Israel trip and programs Senior Jewish Educator Endowment: Accumulated gain on endowment Restricted in perpetuity

$

635,142 137,656 -

2019 $

102,418 1,553,996 $

2,429,212

459,850 58,928 56,109 170,700 1,553,996

$

2,299,583

Net assets released from donor restrictions by incurring expenses satisfying the restricted purposes or by occurrence of other events specified by donors and grantors at June 30 were as follows: 2020 Subject to expenditure for specified purpose: Facility and operations Senior Jewish Educator Jewish community support and initiatives Israel trip and programs

2019

$

253,732 110,701 304,038 154,494

$

367,480 45,000 331,305 240,922

$

822,965

$

984,707

NOTE 8 - ENDOWMENT Hillel JUC’s endowment consists of a Board-designated fund and an investment fund established primarily for support of the Director of Jewish Student Life at the University of Pittsburgh. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by Hillel JUC to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions.

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THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 8 - ENDOWMENT (Continued) Interpretation of Relevant Law - The Board has determined that it is appropriate for the donor-restricted endowment funds of Hillel JUC to be governed by the Commonwealth of Pennsylvania’s Act 141 (Act 141), in accordance with the policy of the Federation. Act 141 is a total return policy that allows a nonprofit to choose to treat a percentage of the average market value of the endowment’s investments as income each year. However, the long-term preservation of the real value of the assets must be taken into consideration when the Board elects the amount. On an annual basis, Hillel JUC must approve the Federation’s disbursement rate of between 2% and 7%.

This percentage is applied to the average market value of the investments at the end of the prior year. Average market value is based on the previous three years. Hillel JUC classifies as net assets with donor restrictions the original value of gifts donated to the endowment and the original value of subsequent gifts to the endowment. This percentage is applied to a three-year average market value of the investments at December 31 of the previous year.

The Hillel JUC considers the following factors in making a determination to set a spending rate: 1. Protecting the corpus of the endowment fund.

2. Preserving the spending power of the assets.

3. Obtaining maximum investment return with reasonable risk and operational consideration.

4. Complying with applicable laws and donor restrictions.

The following represents the change in Board-designated and donor-restricted endowment funds by net asset type for the year ended June 30: Without Donor Restrictions Board Designated Balance, June 30, 2018 Income and market return, net Appropriation for spending

$

Balance, June 30, 2019 Income and market return, net Appropriation for spending Balance, June 30, 2020

With Donor Restrictions Purpose PerpetualRestricted In-Nature

27,855 $ 1,357 (2,789)

160,257 $ 95,041 (84,598)

1,553,996 -

26,423

170,700

1,553,996

496

18,452 (86,734)

$

26,919

$

102,418

Total $

1,751,119

$

1,553,996

1,742,108 96,398 (87,387)

18,948 (86,734) $

1,683,333

Funds with Deficiencies - From time to time, the fair value of assets associated with individual donorrestricted endowment funds may fall below the level that the donor or applicable law (Act 141) requires the Hillel JUC to retain as a fund of perpetual duration. There were no deficiencies of this nature at June 30, 2020 and 2019.

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THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 8 - ENDOWMENT (Continued) Return Objectives and Risk Parameters - Hillel JUC, through the Federation, has adopted investment and spending policies for endowment assets that attempt to provide a reasonable level of funding to programs supported by its endowment while seeking to enhance the purchasing power of the fund’s corpus by striving for long-term growth. Endowment assets are composed of funds to help support a position of Hillel JUC. Under this policy, as approved by the Board, the endowment assets are invested by the Federation in a manner that is intended to produce results that exceed the price and yield results of a blended benchmark of equity, fixed income, private equity and real estate peer groups.

Strategies Employed for Achieving Objectives - To satisfy its long-term rate-of-return objectives, Hillel JUC, through the Federation, relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). Hillel JUC has approved the investment of its assets in accordance with the Federation’s investment strategy, which targets a diversified asset allocation to achieve its long-term return objectives within prudent risk constraints. Investment advisors, at the discretion of the Investment Committee of the Board of Trustees of the Federation, are given guidelines to the percentage that can be committed to a particular investment or investment category.

Spending Policy and Investment Objectives Related to Spending Policy - As permitted by Act 141 and with the approval of the Board of Governors, Hillel JUC annually transfers an amount equal to 5% of the previous three years’ market value average of the endowment fund to net assets without donor restrictions for use in current and future operations. Distributions from endowment funds for the years ended June 30, 2020 and 2019 totaled approximately $86,700 and $87,400, respectively. Hillel JUC believes that this spending policy is consistent with the Commonwealth of Pennsylvania’s guidelines and with Hillel JUC’s objective to maintain the purchasing power of the endowment assets held in perpetuity, as well as to provide additional real growth through new gifts and investment return.

NOTE 9 - EMPLOYEE BENEFIT PLAN Hillel JUC has in effect a qualified defined contribution plan that operates under Section 403(b) of the IRC. The purpose of the plan is to provide retirement benefits to any employee who meets a service requirement of two years. A service year is defined as completing 1,000 or more hours in any plan year. Employees can voluntarily contribute a portion of their compensation either as pre-tax or after-tax dollars. Hillel JUC contributes 4% of federal gross wages as reported to the employees on Form W-2. An employee who chooses to contribute 2% of his/her salary will receive an additional 4% contribution to the plan from Hillel JUC. If a participant becomes eligible during a particular plan year, the employer will contribute based on the compensation earned during the period they were eligible. Employer contributions to the plan for the years ended June 30, 2020 and 2019 approximated $24,000 and $25,000, respectively.

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THE HILLEL JEWISH UNIVERSITY CENTER OF PITTSBURGH NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 AND 2019 NOTE 10 - JEWISH FEDERATION OF GREATER PITTSBURGH OPERATING LOAN Hillel JUC has outstanding a loan due to the Jewish Federation of Greater Pittsburgh as of June 30, 2020 and 2019. The loan is for a period of ten years and has repayment terms of $10,000 per year, which commenced in July 2014 until June 2018, when the repayment increased to $15,000. The loan historically accrued interest at the current three-month London InterBank Offered Rate (0.34% at June 30, 2020) plus 2%. As a result of the COVID19 pandemic during the year ended June 30 2020, payments were postponed until the June 30, 2022 fiscal year and the loan became non-interest-bearing. During the year ended June 30, 2019, Hillel JUC elected to make additional principal payments on the loan in order to reduce the amount outstanding and the scheduled term of the loan.

NOTE 11 - GOVERNMENTAL GRANT Hillel JUC is a recipient of a Paycheck Protection Program (PPP) loan with S&T Bank of approximately $141,000 granted by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), that is reflected as deferred grant revenue as of June 30, 2020. Under the program terms, PPP loans are forgiven and recognized as grant revenue if the loan proceeds are used to maintain compensation costs and employee headcount, and other qualifying expenses (mortgage interest, rent and utilities) incurred following receipt of the loan. Hillel JUC has determined that it will meet the criteria for forgiveness; therefore, the amount included in deferred revenue will be recognized as grant revenue in fiscal year 2021.

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