Financial Statements and
Independent Auditor’s Report
As of and for the Years Ended June 30, 2024 and 2023
Independent Auditor’s Report
The Board of Directors
United Way of the Coastal Empire, Inc.
Savannah, Georgia
Opinion
We have audited the accompanying financial statements of United Way of the Coastal Empire, Inc. (United Way) (a nonprofit organization), which comprise the statements of financial position as of June 30, 2024 and 2023, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements present fairly, in all material respects, the financial position of United Way of the Coastal Empire, Inc. as of June 30, 2024 and 2023, 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of United Way 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 United Way’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued
Auditor’s 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 auditor’s 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.
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 United Way'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 aboutUnited Way'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.
Savannah, Georgia
February 27, 2025
Campaign pledges receivable, net of allowance for uncollectible accounts of $367,325 and $316,902, respectively
United Way of the Coastal Empire, Inc.
Statements of Financial Position
AND NET ASSETS
The
United Way of the Coastal Empire, Inc.
Statements of Activities
For the year ended June 30, 2024
The accompanying notes are an integral part of these financial statements.
For the year ended June 30, 2023
The accompanying notes are an integral part of these financial statements.
For the year ended June 30, 2024
Community Service Expenses
For the year ended June 30, 2023
Statements of Cash Flows
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
1. Nature of Activities
The mission of United Way of the Coastal Empire, Inc. (United Way or the Organization) is to improve lives by mobilizing the caring power of communities. The United Way provides voluntary leadership for a network of organizations andindividuals, which assesses human service needs,develops resourcesto meetthose needs and assures their effective use for the well-being of the people it serves. The United Way provides an organizational structure to conduct an annual fundraising campaign which benefits numerous human service programs. While a major function of United Way is the raising of funds and allocation of funds to the programs of other agencies, the United Way also provides direct programs such as 2-1-1, Hands on Savannah, United Way Volunteers and various client services at the Bryan, Effingham, and Liberty locations.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Net Assets
United Way reports information regarding its financial position and activities according to two classes of net assets: with donor restrictions and without donor restrictions.
Net assets with donor restrictions contain donor-imposed restrictions stipulating those resources either be maintained untilaspecifieddate,bemaintainedinperpetuity,orbeusedforaspecifiedpurpose.Resourcesthatmustbemaintained in perpetuity are considered endowment funds and unless specifically restricted by the donor, the earnings on investments are available to be used at the discretion of the Board of Directors. All other net assets with donor restrictions that are not perpetual in nature contain donor-imposed restrictions that permit United Way to use or expend the donated assets as specified. The restriction is satisfied either by the passage of time or by actions of the United Way.
Net assets without donor restrictions include all resources that are not subject to donor-imposed restrictions. Certain of these resources have been designated by United Way’s Board of Directors for specific purposes and are disclosed in Note 7 The Board of Directors can release these designations at its discretion. All other unrestricted resources are included in undesignated net assets without donor restriction.
Public Support
Contributions, including unconditional promises to give and grants, are recognized as revenue in the period the contributions or the unconditionalpromise is received. Unconditionalpromises to give thatare expected to be collected within one year are reported at their net realizable value. Conditional promises to give are not recognized until the conditions on which they depend are substantially met.
Contributions and grants received are recorded as net assets with donor restrictions or net assets without donor restrictions depending on the existence and/or nature of any donor restrictions. All donor-restricted support is reported as an increase in purpose restricted, time restricted, or perpetual in nature, depending on the nature of the restriction. When a restriction expires (that is when a stipulated time restriction ends, or purpose restriction is accomplished) restricted net assets are reclassified to net assets without donor restrictions and reported in the statements of activities as net assets released from restrictions. Contributions received with donor-imposed restrictions that are satisfied within the same reporting period are reported as net assets without donor restrictions in that period.
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (cont.)
Promises to Give and Allowances for Uncollectable Contributions
United Way provides an allowance for uncollectible campaign pledges receivable based on historical write-off percentages at the time campaign results are recorded. This estimated allowance is periodically adjusted based on campaign collection trends.A campaign is officially closed for accounting purposes, and the finaluncollectible amount determined, in the year following the year of workplace campaign collections. Any difference in the actual campaign collection results compared with the estimates previously recorded are reflected as an adjustment to net campaign results in the statements of activities.
Non-campaign related unconditional promises to give that are expected to be collected in future years are discounted to their net present value. The discount rate used includes a premium to account for possible future uncollectible amounts. Amortization of the discount is recorded as an adjustment to contributions revenue of the appropriate net asset class.
Contributed Nonfinancial Assets
In-kind contributions are reflected as contributions attheir fair value atdate of donationand are reported asunrestricted support unless explicit donor stipulations specify how donated assets must be used. United Way benefits from donated advertising promoting the Organization’s annual campaign and programs from local media providers. The donated advertising received was recognized at fair value based on the prevailing rates of the media companies broadcasting the announcements. The value of these donated services were $286,690 and $362,212 during the years ended June 30, 2024 and 2023, respectively. These amounts have been reported as both in-kind contribution revenue without donor restriction and in-kind advertising expense on the statements of activities and functional expenses.
The Organization recognizes the fair value of contributed services received if such services a) create or enhance nonfinancial assets or b) require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not contributed.
A number of volunteers have contributed significant amounts of time to United Way's program services and its fundraising campaign; however, no amounts have been reflected in the accompanying financial statements for such contributed servicesas the services do not meet the criteria for recognition as contributions under accounting principles generally accepted in the United States of America.
Revenue Recognition
United Way follows Financial Accounting Standards Board (FASB) guidance on Revenue from Contracts with Customers (Topic 606). The Organization’s revenue streams that are accounted for as exchange transactions within the scope of Topic 606 mainly include administrative income.
Administrative income recognized byUnited Way relates to the management of funds on behalf of otherorganizations. In exchange for the management of these funds, United Way may earn a percentage fee to defray administrative costs. As funds are periodically disbursed to United Way, the Organization recognizes income relative to the amount of funds under their care in accordance with the respective agreement.
The majority ofUnited Way’s revenuesareunconditionalcontributions and investmentincome,which are notincluded in the scope of Topic 606.
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (cont.)
Rental Income
United Way’s rental income primarily consists of rent earned from operating leases of office space to area nonprofits at the Organization’s Savannah, Georgia headquarters and Effingham County service center. United Way applies a portfolio approach to account for its lessor leases and assesses whether an arrangement qualifies as a lease at inception. United Way only reassesses its determination if the terms and conditions of the arrangement are changed.
Rental contracts commence once the tenant is given control of the underlying asset. Revenue on operating leases is recognized over the lease term on a straight-line basis. There are no variable lease payments associated with office space rentals. Rental contracts generally do not include lessee provisions to purchase the underlying asset or extend the lease term. Advance rental payments are recorded as deferred revenues on the statement of financial position.
At lease inception, United Way estimates the residual value expected from the leased asset at the end of the lease term based on expected useful lives of the underlying assets and expected market conditions. United Way’s ability to realize the residual value at the end of the lease term could be affected by unusual wear and tear of each rented office. This risk is managed through on-site monitoring and periodic inspection by management of United Way.
Funds Due to Designated Agencies and Funds Held for Disposition
Overall campaign results are reduced by contributions that are fundraised by United Way, but the donor has specified another nonprofitorganization as thebeneficiary.UnitedWay is consideredan agentfor these designated organizations and, as such, treats the pledges as liabilities to those non-profits
United Way has also entered into agreements with certain local organizations to hold and administer funds on their behalf. In certain instances, the United Way may recognize a fee relative to the management of these funds based on the provisions of the respective agreement. These funds held for disposition are reported as liabilities on the statements of financial position. The receipt of these funds by United Way are not reported in the results of the annual campaign.
Cash and Cash Equivalents
United Way considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Beneficial Interest Agreements
United Way has a beneficiary interest in the Herschel Jenkins Trust accounted for in net assets with donor restrictions as a charitable foundation beneficial interest in a perpetual trust. The interest is irrevocable, and the underlying assets are held by a third party. The fair value recognized on the date the interest was initially determined, was calculated using a discount rate which approximates the rate of return on similar securities. Fair value is calculated annually and changes in the fair value are recognized as increases or decreases in investment income with donor restrictions in the statement of activities Distributions taken from the Trust are reported in contributions without donor restrictions. See Note 3 for a further discussion on the Herschel Jenkins Trust
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (cont.)
Beneficial Interest Agreements (cont.)
United Way is the beneficiary ofcertain funds held and administered by SavannahCommunity Foundation, Inc. (SCF), a local community foundation. One of the funds at SCF contains the endowment described below. Funds invested with SCF are not subject to the control or direction of the United Way. The funds represent pooled investments accounted for as beneficial interests. The beneficial interests held with SCF are reported on the statements of financial position at fair value. United Way’s estimated fair value is based on fair value information received from the community foundation. Net appreciation or depreciation in the fair value of these pooled investments are reported in investment income in net assets with donor restrictions in the statements of activities.
Endowment
The endowment consists of funds received from the E.J. & E.M. Derst Charitable Remainder Annuity Trust (Derst Trust). The Derst Trust stipulated that the funds received by United Way in 2021 be maintained in perpetuity and that the earnings of those funds are to be spent for capital improvements. Subsequently, United Way invested the funds received from the Derst Trust with SCF. The endowment funds are held in pooled investment accounts at SCF similar to other United Way fundsheld with SCFandare reportedas beneficialinterests on thestatements of financialposition
Certificates of Deposit
Certificates of deposits are reported at cost plus accrued interest, which approximates fair value.
Fair Value
United Way applies the U.S. GAAP authoritative guidance for Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and requires certain disclosures about fair value measurements used to measure fair value.
The standard describes three levels of inputs that may be used to measure fair value:
Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Tax Status
United Way has been recognized by the Internal Revenue Service (IRS) as exempt from federal tax under Section 501(c)(3) of the U.S. Internal Revenue Code, except for taxes on activities unrelated to its exempt purpose. Accordingly, no provision for income taxes has been made in the accompanying financial statements. Accounting principles generally accepted in the United States of America require management to evaluate the tax positions taken by United Way and recognize a tax liability (or asset) if the Organization has an uncertain tax position that more likely than not would not be sustained upon examination by the IRS. Management has concluded that as of June 30, 2024, there are no uncertain tax positions taken or expected to be taken by United Way that would require recognition of a liability (or asset) or disclosure in the financial statements. Management believes that it is no longer subject to income tax examinations for years beginning prior to 2021
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (cont.)
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. United Way capitalizes expenditures on capital assets greater than $1,000 and if the purchase benefits more than one year. The basis of evaluation for depreciable assets is cost if purchased or fair value if contributed. Depreciation is computed using the straight-line method over the estimated useful lives of the property and equipment as follows:
Donationsofpropertyandequipmentarereportedasnetassetswithoutdonorrestrictionsunlessthedonorhasrestricted the asset for a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. Absent donor stipulation regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies temporarily restricted net assets to unrestricted net assets at that time.
United Way reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.
Prepaid Expenses and Other Assets
Prepaid expenses generally include in-advance expenditures related to organizational insurance policies and software licenses. These expenditures are amortized over their contract terms. United Way is also a beneficiary of a donated life insurance policy. The cash surrender value of this policy is reported in other assets on the statements of financial position. See Note 8 for additional information on this policy.
Functional Allocation of Expenses
The statements of functional expenses present expense by function and natural classification. Expenses directly attributable to a specific functional area of United Way are reported as expenses of those functional areas. Certain categories of expenses are attributable to more than one program or supporting function and are allocated on a reasonable basis that is consistently applied. The expenses that are allocated are compensation and benefits, which are allocated on the basis of estimates of time and effort; building expenses, insurance, equipment maintenance, professional fees, miscellaneous expenses, and depreciation expense, which are allocated based on usage.
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 of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results in the future could differ from those estimates.
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
2. Summary of Significant Accounting Policies (cont.)
Risks and Uncertainties
United Way has beneficial interests in trusts and foundations that invest in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in values of investment securities will occur in the near term and that such changes could materially affect the amounts reported.
Reclassification
Certain reclassifications of prior year amounts have been made to conform with the current year presentation.
3. Herschel Jenkins Trust
In his last will and testament, Herschel V. Jenkins, one of the original founders of the United Way of the Coastal Empire, Inc., established a trust known as the Herschel Jenkins Irrevocable TUW III(5) (Herschel Jenkins Trust). Bank of America, N.A. (the Trustee) was named to serve as Trustee. United Way was named the primary beneficiary of the Trust. Under the terms of the will, the Trustee invested the Trust’s assets and pays proceeds from the net income of the Trust to the beneficiaries at least annually. The Trust distributes approximately $1,500 of its income to other organizations annually, and United Way is entitled to the remainder of the income from the Trust. Disbursements are generally used to defray administrative costs of the Organization.
The underlying assets held and invested by the Trustee are various equity securities, bonds and other investments chosen at the discretion of the Trustee. United Way records only one asset, the beneficial interest in the trust. The beneficial interest is classified as a level three asset in the valuation hierarchy. The fair value is measured by the net present value of the expected future distributions from the Trust. During 2024 and 2023, the calculation assumed a long-term return on assets of 7% and long-term inflation rate of 3% for a net capitalization rate applied to trailing trust income of 4%. On June 30, 2024 and 2023, the estimated fair value of the United Way’s interest in the Trust was $19,450,000 and $19,930,000, respectively. It is reasonably possible that a change in this estimate of value will occur in the nextyear. The originalvalue of the corpusof the Trustatthe time of the bequestwas$15,000,000 and is recorded as permanently restricted net assets The value of United Way’s beneficial interest that exceeds the original bequest is recorded as temporarily restricted as such amount represents undistributed investment earnings. This was approximately $4,450,000 and $4,930,000 at June 30, 2024 and 2023, respectively.
United Way is entitled to all income from the trust each year after the small distributions to other organizations; however, United Way has an agreement with the Trustee whereby annual distributions are determined by the Trustee and are calculated based on a 3-year average of the Trust’s fair value of assets. The distribution rate in effect for United Way during the years ended June 30, 2024 and 2023 was 4%. During 2024 and 2023, United Way received $814,474 and $857,933, respectively, in distributions from the Trust, which are reported as contributions without donor restriction on the statements of activities.
4. Non-Campaign Pledges Receivable
In 2024 United Way received a long-term promise to give from a donor with a gross value of $930,000, payable in installments to support housing assistance in Bryan County. This promise to give is reported as a non-campaign pledge receivable on the statements of financial position, discounted to its net present value using a discount rate of 10.6%.
Payments on this promise to give during 2024 totaled $180,000.
4.
Non-Campaign Pledges Receivable (cont.)
The following reconciles the remaining payments associated with non-campaign pledges receivable:
June 30, 2024
Receivable in less than one year $
Receivable in one to five years
non-campaign pledges receivable
Less: discount to present value (194,000)
Net non-campaign pledges receivable $ 556,000
5. Property and Equipment
Property and equipment consist of the following:
Depreciation expense for property and equipment was $147,632 and $138,535 for the years ending June 30, 2024 and 2023, respectively
6. Fair Value of Financial Instruments
Valuation Hierarchy
The following tables present assets that are measured at fair value on a recurring basis as of the end of the reporting period.
United Way of the Coastal Empire, Inc.
6. Fair Value of Financial Instruments
(cont.)
The beneficial interest from the Herschel Jenkins Trust is a Level 3 asset. The assets are valued using the income approach by discounting the expected future payments from the Trust.
Savannah Community Foundation holds pooled investment accounts, including the Derst Endowment, for United Way that are classified as beneficial interests. The assets are valued based on the United Way’s percentage of marketable securities invested by the pooled account United Way’s beneficial interest in funds held at the Savannah Community Foundation are considered by United Way to be Level 3 investments because they represent receivables to be paid from the investments managed by Savannah Community Foundation. Investment management fees deducted from the funds held at the Savannah Community Foundation during 2024 and 2023 were $6,438 and $5,420, respectively.
In some cases, inputs used to measure fair value might fall in different levels of the fair value hierarchy. In such cases, the level within which the assets falls is determined based on the lowest level input that is significant to the asset in its entirety. Assessing the significance of a particular input to the asset in its entirety requires judgment and considers factors specific to the asset. The categorization of an asset within the hierarchy is based on the pricing transparency of the asset and does not necessarily correspond to the United Way’s perceived risk of liquidity for that asset.
The table below sets forth a summary of changes in the fair value of United Way’s Level 3 investment assets for the years ended June 30, 2024 and 2023.
Level 3 InvestmentAssets
June 30, 2023
Balance, June 30, 2024 $
$
Community Foundation activity includes the funds associated with the Derst Endowment.
Notes to Financial Statements
6. Fair Value of Financial Instruments (cont.)
The following table presents the qualitative information about the unobservable inputs used in the recurring Level 3 measurements:
June 30, 2024
Beneficial interests in assets held by others $ 19,883,420
June 30, 2023
Beneficial interests in assets held by others $ 20,333,699
Fair value of underlying assets
Timing of realization N/A
Fair value of underlying assets
Timing of realization N/A
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
7. Net Assets with Donor Restrictions and Board Designations
Net assets with donor restrictions and net assets without donor restrictions that have been designated by the Board of Directors for certain purposes consist of the following:
June 30, 2024 2023
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
7. Net Assets with Donor Restrictions and Board Designations (cont.)
Endowment
The endowment consists of funds received from the Derst Trust as described in Note 2. The trust stipulated that the $114,429 in funds received by United Way be maintained in perpetuity and that the earnings of those funds are to be spent for capital improvements. In 2022, United Way invested the funds received from the trust with the Savannah Community Foundation
Interpretation of Relevant Law
The Board of Directors of the United Way has interpreted the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as netassets with donor restrictions perpetualin nature (a) the originalvalue of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in net assets with donor restrictions perpetual in nature is classified as net assets with donor restrictions for a purpose until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by UPMIFA.
In accordance with UPMIFA, United Way 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 organization and the donor-restricted endowment fund.
3. General economic conditions.
4. The possible effect of inflation and deflation.
5. The expected total return from income and the appreciation of investments.
6. Other resources of the organization.
7. The investment policies of the organization.
Return Objectives and Risk Parameters
The Organization has adopted investment and spending policies for endowment assets that attempt to provide a predictable streamof funding to programs supported by its endowmentwhile seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that United Way must hold in perpetuity. Under this policy, as approved by the Board of Directors, the endowment assets are invested with the Savannah Community Foundation in a manner that is intended to produce long-term capital growth while assuming a moderate level of investment risk.
Strategies Employed for Achieving Objectives
To satisfy its long-term return objectives, United Way 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). The Organizationtargets adiversified assetallocation thatplaces agreater emphasis onequity-based investmentsto achieve its long-term return objectives within prudent risk constraints.
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
7. Net Assets with Donor Restrictions and Board Designations (cont.)
Spending Policy and How the Investment Objectives Relate to Spending Policy
In establishing the endowment fund with Savannah Community Foundation, the United Way has agreed to a policy of appropriating for distributions of accumulated investment earnings each year, generally up to 5%. This calculation is based on the investment fund’s average fair value over the prior three years preceding the fiscal year in which the distribution is planned. Additional distributions may be authorized with the consent of the Board of Directors and the Savannah Community Foundation. In establishing this policy, the Organization considered the long-term expected return on its endowment. Accordingly, over the long-term, United Way expects the current spending policy to allow its endowment to grow annually. This is consistent with the Organization’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.
The following table provides detail of invested assets for endowment.
United Way’s endowment net asset composition for the years ended June 30, 2024 and 2023 are as follows:
June 30, 2024 2023
Changes in endowment net assets for the years presented are as follows:
with Donor Restrictions
8. Cash Surrender Value of Life Insurance
United Way is the owner and beneficiary of an insurance policy on the lives of certain supporters of United Way. The policy has a death benefit of $500,000 and a cash surrender value at June 30, 2024 and 2023 of $149,991 and $131,032, respectively The cash surrender value is reported in other assets on the statements of financial position.
9. Line of Credit
United Way opened a revolving line of credit facility with a bank during 2024 that allows for draws up to $300,000 and bears interest at the lender’s prime rate plus 2%, which was 10.6% at June 30, 2024. Interest is payable monthly in arrears. All outstanding principal and accrued interest is due at maturity, January 31, 2025. This facility is collateralized by United Way’s assets except for its real estate assets.
United Way of the Coastal Empire, Inc.
Notes to Financial Statements
9. Line of Credit (cont.)
There was no outstanding balance on the line of credit at June 30, 2024 There was no interest expense recorded on the line of credit during the year ended June 30, 2024
Subsequent to year-end United Way renewed their line of credit, extending the maturity date to November 4, 2025, and increasing the limit on the line to $600,000.
10. Employee Benefit Plan
United Way offers an employee savings plan, covering employees who meet certain minimum age and service requirements. United Way contributes a 100%match ofparticipants'first6% of contributions ofeligible compensation. The plan also provides for additional employer discretionary contributions. Employer contributions for the years ended June 30, 2024 and 2023 totaled $93,438 and $63,437, respectively
11. Advertising Expenses
United Way expenses advertising costs as incurred. In fiscal years 2024 and 2023 total advertising expenses were $294,103 and $379,165, respectively. In 2024 and 2023, $286,690 and $362,212, respectively, of the reported costs were in-kind from donated advertising for United Way’s annual campaigns.
12. Concentration of Credit Risk
Financial instruments that potentially subject the Organization to concentrations of credit risk consist principally of cashandcashequivalentsandcampaignreceivables.UnitedWayplacesitscashwithhigh-qualityfinancialinstitutions. The cash balances may, from time to time, exceed the $250,000 federally insured limit for a single banking institution.
Approximately 18% of campaign pledges receivable outstanding at June 30, 2024 and 2023, respectively were due from one organization.
Approximately 20% of campaign contributions for the year ended June 30, 2024 were related to two organizations Approximately 13% of campaign contributions for the year ended June 30, 2023 were related to one organization.
The total non-campaign pledges receivable balance was due from one donor at June 30, 2024. This donor’s 2024 contributions were 47% of total non-campaign contributions recognized.
United Way of the Coastal Empire,
13. Liquidity and Availability of Financial Assets
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the date of the statements of financial position, comprise the following:
assets at year-end
amounts not available to be used for general expenditures within one year
Financial assets available to meet general expenditures within one year $ 1,717,992
For purposes of analyzing resources available to meet general expenditures over a 12-month period, United Way considers all expenditures related to its ongoing mission-related activities as well as the conduct of services undertaken to support those activities to be general expenditures.
In the event of an unanticipated liquidity need, United Way could also draw upon $300,000 of an available line of credit, which was increased to $600,000 subsequent to year-end, as discussed in Note 9.
14. Rental Income
The following table presents future undiscounted minimum rents United Way expects to receive from its operating leases as of June 30, 2024: Year ending June 30,
$ 100,202
United Way of the Coastal Empire,
Notes to Financial Statements
15. Employee Retention Credits
The Employee Retention Tax Credit (ERC) was introduced in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act or CARES Act. This credit is available to eligible employers who retained employees during the COVID-19 pandemic.
This credit was modified in December 2020 to include employers who took PPP loans as eligible, with the one restriction that the wages paid with forgiven PPP loan proceeds are not eligible for the ERC. Based upon amended payroll tax returns, the Organization was entitled to credits totaling $381,091, which were received and recognized in other income during 2023. No income related to ERC was recognized during 2024.
16. Subsequent Events
The Organization has evaluated subsequent events through February 27, 2025, the date the financial statements were available to be issued.
As described in Note 9, in November 2024 United Way renewed their line of credit, extending the maturity date and increasing the funds available under the credit facility.