Yellowstone Boys and Girls Ranch Foundation,
Inc.
Billings, Montana
CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION WITH INDEPENDENT AUDITORS’ REPORT
June 30, 2024 and 2023
Yellowstone Boys and Girls Ranch Foundation, Inc.
Consolidated Statements of Financial Position
Consolidated Statements of Activities
Consolidated Statements of Functional Expenses
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
ADDITIONAL INFORMATION SECTION
Independent Auditors’ Report on Additional Information
Consolidating Statements of Financial Position
Consolidating Statements of Activities
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Yellowstone Boys and Girls Ranch Foundation, Inc.
Billings, Montana
Opinion
We have audited the consolidated financial statements of the Yellowstone Boys and Girls Ranch Foundation, Inc. and its Subsidiary, a nonprofit organization (the Foundation), which comprise the consolidated statements of financial position as of June 30, 2024 and 2023; the related consolidated statements of activities, functional expenses, and cash flows for the years then ended; and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Foundation as of June 30, 2024 and 2023, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America (GAAP).
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Foundation 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 Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with GAAP, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Foundation’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
INDEPENDENT AUDITORS’ REPORT
(Continued)
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 GAAS 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 consolidated financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated 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 consolidated 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 Foundation’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 consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Foundation’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.
April 9, 2025
Missoula, Montana
FINANCIAL SECTION
Yellowstone Boys and Girls Ranch Foundation, Inc.
LIABILITIES AND NET ASSETS
The accompanying notes are an integral part of these
Yellowstone Boys and Girls Ranch Foundation, Inc.
The accompanying notes are an integral part of these consolidated financial statements.
Yellowstone Boys and Girls Ranch Foundation, Inc.
(Continued)
Yellowstone Boys and Girls Ranch Foundation, Inc.
CONSOLIDATED STATEMENTS OF FUNCTIONAL EXPENSES
The accompanying notes are an integral part of these consolidated financial statements.
Yellowstone Boys and Girls Ranch Foundation, Inc.
CONSOLIDATED STATEMENTS OF FUNCTIONAL EXPENSES
(Continued)
Yellowstone Boys and Girls Ranch Foundation, Inc.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Yellowstone Boys and Girls Ranch Foundation, Inc.
1. NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization Yellowstone Boys and Girls Ranch Foundation, Inc. (the Foundation) is a nonprofit public benefit corporation. The mission of the Foundation is to: support, promote, advance, and enable charitable, religious, and educational organizations and programs whose services primarily benefit youth and adults with special needs. The Foundation primarily directs its support to the Yellowstone Boys and Girls Ranch, which provides residential and community-based care and treatment for emotionally troubled youth and K-12 education at the Yellowstone Academy. The Foundation’s main source of support is contributions and investment income.
In February 2007, the Foundation formed a limited liability company, Yellowstone Foundation Properties, LLC. This company holds certain real estate donated to or purchased by the Foundation.
Basis of Consolidation The accompanying consolidated financial statements include the accounts of the Foundation and its wholly owned subsidiary, Yellowstone Foundation Properties, LLC. Significant intercompany transactions and balances have been eliminated in consolidation.
Basis of Presentation The accompanying consolidated statements are presented in accordance with accounting principles generally accepted in the United States of America (GAAP), as codified by the Financial Accounting Standards Board (FASB).
The Foundation reports gifts of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. Accordingly, net assets of the Foundation and changes therein are classified and reported as follows:
Without Donor Restrictions: Net assets that are not subject to donor-imposed stipulations and donor restricted contributions whose restrictions are met in the same reporting period.
With Donor Restrictions: Net assets subject to donor-imposed stipulations that may, or will be, met either by actions of the Foundation and/or the passage of time, and net assets subject to donor-imposed stipulations that they be maintained permanently by the Foundation. The income earned from the investment of these assets is available for use by the Foundation in accordance with donor restrictions.
Revenue Recognition Contributions received are recorded as net assets without donor restrictions or net assets with donor restrictions, depending on the existence and/or nature of any donor-imposed restrictions. Contributions received and unconditional contributions received are measured at their fair values and are reported as an increase in net assets in the year in which there is sufficient evidence, in the form of verifiable documentation, that a promise was made (by the donor) and received, and when the amount of the promise is ascertainable. The Foundation reports gifts of cash and other assets as net assets with donor restrictions if they are received with donor stipulations that limit the use of the donated assets, or if they are designated for future periods. 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, and are reported on the statements of activities as net assets released from restrictions. Donor-restricted contributions whose restrictions are met in the same reporting period are reported as net assets without donor restriction.
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Conditional promises to give are not recognized until they become unconditional; that is, when the conditions on which they depend are substantially met. Conditional contributions received in the same year in which the conditions are met are recorded as an increase in net assets without donor restrictions at the time of receipt. Unexpended conditional contributions are reported as refundable advances until they are spent for the purpose of the contributions. Contributions of assets other than cash are recorded at their estimated fair value of the time of contribution.
The Foundation has no unconditional or conditional contributions receivable at June 30, 2024 and 2023.
New Accounting Standard On January 1, 2023, the Foundation adopted FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, and all related subsequent amendments. This guidance significantly changed how the Foundation will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through the change in net assets. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing the Foundation’s exposure to credit risk and the measurement of credit losses. Financial assets held by the Foundation that are subject to this guidance were accounts receivable The impact of the adoption was not considered material to the financial statements
Fair Value Measurements The framework for measuring fair value 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 are described below:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.
Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset 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 maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Following is a description of the valuation methodologies used for investments measured at fair value. There have been no changes in the methodologies used at June 30, 2024 or 2023.
Money Market Funds: Assets are valued at the net asset value (NAV), generally $1 per share, and are reported on the active market on which the securities are traded.
Exchange-Traded Funds: Exchange-traded funds are valued at the closing price reported in the active market in which the funds are traded.
Mutual Funds: Valued at market-traded price of shares.
Real Estate: Valued at the lesser of most recent appraised value or listed sale value.
Alternative Investments: Valued at the NAV of shares held at year-end.
Annuities: Valued at cash surrender value.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Foundation believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The Foundation’s policy for determining the timing of significant transfers between levels 1, 2, and 3 is at the end of the reporting period. There were no transfers for the years ended June 30, 2024 and 2023
Cash and Cash Equivalents The Foundation’s cash balances in its general operating account are swept to an institutional money market fund daily. For purposes of reporting cash flows, the Foundation considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Federal Deposit Insurance Corporation (FDIC) coverage is limited to $250,000 per account holder. From time to time, certain bank accounts that are subject to limited FDIC coverage exceed their insured limits. At June 30, 2024 and 2023, bank accounts exceeded insured limits by $711,201 and $872,222, respectively
Investments - Securities and Investments Held in Trust Investments are stated at fair value, determined based on quoted market prices (if available), or estimated using quoted market prices for similar securities. Unrealized gains and losses are reported with other investment income in the change in net assets on the accompanying consolidated statements of activities Certain investments, such as money market accounts and notes receivable, are stated at historical or amortized cost.
Alternative investments include institutional funds, private equity funds, and limited liability partnerships. Institutional funds are multi-strategy, commingled equity and bond funds. Private equity funds are primarily comprised of investments in limited partnerships. The partnerships generally represent restricted investment securities whose values have been estimated by the managing partner of the partnership in the absence of readily ascertainable market values.
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Investments - Real Estate Investments in real estate represent real estate received from donors or purchased by the Foundation for investment purposes. Realized gains or losses on sales of real estate are recognized upon disposition based on a specific identification basis.
Investments - Other Other investments consist mainly o:f mineral rights, oil royalties, collectibles, and commercial annuities donated to the Foundation. These are recorded at carrying value (estimated fair value at the time of donation). Commercial annuities are revalued to cash surrender value at the end of each reporting period.
Property and Equipment Property and equipment acquisitions with an original value of at least $500 are recorded at cost, if purchased, or fair market value at date of donation, if donated. Property and equipment are depreciated using the straight-line method based on the estimated useful lives of the assets as follows:
Building and improvements
Furniture, fixtures, and equipment
Computer software
8 to 30 years
4 to 12 years
6 years
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is determined by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount exceeds the future cash flows, the assets are considered to be impaired and the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less estimated costs to sell.
Split-Interest Agreements
The Foundation has entered into split-interest agreements, some of which the Foundation is the trustee. The Foundation has segregated these assets as separate and distinct funds, independent from other funds and not to be applied to payment of the debts and obligations of the Foundation or any other purpose other than annuity benefits specified in the agreements. Assets are recorded at fair value, when possible. Liabilities incurred in the exchange portion of the agreement are also recognized based on each arrangement’s terms and actuarial assumptions The liabilities reported on the consolidated statements of financial position as annuity obligations and trust obligations are revalued annually using present value techniques, which factor in actuarial life expectancy tables and Internal Revenue Service (IRS) discount rates that were in effect at the time the of the original gift. Discount rates range from 1.2% to 10.6%. The following types of agreements are in effect during the years ended June 30, 2024 and 2023:
Charitable Gift Annuity Agreements and Charitable Remainder Trusts: Under these agreements, the donor contributes assets in exchange for regular distributions to the donor or other beneficiaries, over a period of time, based on life expectancies of the beneficiaries. Distributions are based on the value of the assets contributed and terms specified in the agreement. When the agreement matures, the remaining assets are available for the Foundation’s use, or they are distributed to a separately designated charitable organization.
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(Continued)
The difference between the fair value of the assets received and the liability to the donor or other beneficiary is recognized as contribution revenue at the date of inception. During the term of the arrangement, annuity benefits, amortizations, and revaluations in the assets and liabilities are recognized in the accompanying consolidated statements of activities as changes in value of split-interest agreements. These changes are classified as net assets without or with donor restriction depending on the classification used when the contribution was recognized initially.
Charitable Lead Trusts: Under these agreements, the donor transfers assets to the Foundation to hold in trust. The annual distributions from the trust are deemed contributions to either the Foundation, or an unrelated charitable organization. At the end of the specified time, the remaining assets are distributed to the designated beneficiary.
Revocable Trusts: Under these agreements, the donor transfers assets to the Foundation to hold in trust. The full value of the asset transferred is reported as a liability, as the donor has the legal right to remove such assets from the trust.
Legacies and Bequests The Foundation is a named beneficiary in a number of testamentary wills. The value of the Foundation’s interest is unknown until the benefits are received. As a result, benefits received from legacies and bequests are recognized as revenue when the Foundation’s interest becomes irrevocable and unassignable, which is usually at the time the assets are received.
Irrevocable Interest in Third Party Trust The Foundation has knowledge of irrevocable interests it has in trusts held by other third-party trustees. As soon as the Foundation becomes aware of an irrevocable interest in a trust held by a third party and the fair value of the assets, the Foundation records the present value of those interests.
Royalty Income The Foundation has been gifted royalty interests, which are the mineral owner’s share of production of oil and gas. A royalty interest does not bear any of the operational costs needed to produce the resource, yet still owns a portion of the revenue produced. Royalty income is recognized when received, depending on the existence and/or nature of any donor-imposed restrictions.
Income Tax Matters The IRS has determined that the Foundation is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The Foundation is deemed not to be a private foundation. Yellowstone Foundation Properties, LLC is a single-member limited liability company; accordingly, it is deemed to be a disregarded entity for income tax purposes, and no provision for income taxes is presented in the accompanying consolidated financial statements.
Functional Allocation of Expenses The Foundation's president and his assistant’s time and benefits are allocated based on an estimate of time spent between deferred giving program, general and administrative, and fundraising. Any further allocations are based on the full-time equivalent per area.
Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Evaluation of Subsequent Events Management has evaluated subsequent events through April 9, 2025, the date the consolidated financial statements were available to be issued.
2. RESTRICTED CASH AND CASH EQUIVALENTS
Restricted cash and cash equivalents included amounts for the following purposes:
Yellowstone Boys and Girls Ranch Foundation, Inc.
3. INVESTMENTS - SECURITIES
Yellowstone Boys and Girls Ranch Foundation, Inc.
TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Certain investments that were measured at NAV per share as a practical expedient (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the consolidated statements of financial position.
The alternative investments are made via Merrill Lynch utilizing subscription agreements, prospectuses, and offering documents. The Foundation had committed to funding $17,056,758 toward private equity funds within this program. At June 30, 2024, $5,211,473 of further funding commitments remain outstanding and will be satisfied upon notice of equity call from the funds, by using cash distributions from active alternative investments, selling funds, and new cash. By design, these investments should be considered illiquid in nature with currently 35.0% of the holdings using 10 to 15 years to cash out from date of first funding and the balance of the holdings allowing limited redemptions on a quarterly basis.
Investments held to satisfy annuity obligations were $8,618,577 and $8,143,144, at June 30, 2024 and 2023, respectively, and are included in investments - securities on the accompanying consolidated statements of financial position.
4. INVESTMENTS - OTHER
Other investments were comprised of the following:
5. INVESTMENTS - REAL ESTATE
Investments in real estate are categorized as level 3 investments and investment activity specific to real estate is reflected in the table below.
Yellowstone Boys and Girls Ranch Foundation, Inc.
6. ASSETS HELD IN TRUSTS
Investments held in trusts consisted of the following:
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TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Yellowstone Boys and Girls Ranch Foundation, Inc.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Investment activity specific to investments held in trust valued with level 3 inputs are reflected in the table below:
7. IRREVOCABLE INTEREST IN THIRD PARTY TRUST
During the year ended June 30, 2016, the Foundation was named as the beneficiary for a Charitable Lead Annuity Trust. The Foundation has recorded the estimated present value of the future payment stream of $2,061,733 and $2,593,126 at June 30, 2024 and 2023, respectively. Quarterly payments are expected through 2032.
8. PROPERTY AND EQUIPMENT
Property and
were
of the following:
9. TRUST OBLIGATIONS
The Foundation’s trust obligations were comprised of the following:
Yellowstone Boys and Girls Ranch Foundation, Inc.
10. NET ASSETS
assets were designated by the Board of Directors for the following purposes:
Net assets with donor restrictions to be held in perpetuity:
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(Continued)
11. ENDOWMENT
The Foundation’s endowment consists of numerous individual funds. The endowment includes donorrestricted endowment funds. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.
Interpretation of Relevant Law
The Board of Directors has interpreted the Montana Uniform Prudent Management of Institutional Funds Act (MUPMIFA) as assuming institutions will attempt to preserve the fair value of original gifts as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of the interpretation, the Foundation classifies as net assets with donor restriction to be held in perpetuity: (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) any 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 to be held in perpetuity are classified as time restricted for future periods until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by MUPMIFA. In accordance with MUPMIFA, 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 possible effect of inflation and deflation;
5) The expected total return from income and the appreciation of investments;
6) Other resources of the Foundation; and
7) The investment policies of the Foundation.
Funds With Deficiencies
From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the permanently restricted value. In accordance with GAAP, the deficiencies of this nature are reported in unrestricted net assets. At June 30, 2024, there were no funds with deficiencies.
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Return Objectives and Risk Parameters
The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation must hold in perpetuity or for a donor-specified period(s) as well as board-designated funds. The policy approved by the Board of Directors invests the endowment assets for long-term growth of the Fund, exclusive of contributions or withdrawals. The policy is intended to earn a long-term rate of return, through a combination of investment income and capital appreciation, in excess of the Fund’s annual distribution rate that equals or exceeds the rate of inflation.
Strategies Employed for Achieving Objectives
To satisfy its long-term, rate-of-return objectives, the Foundation 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 Foundation targets a diversified asset allocation including: cash equivalents, fixed income, equity securities, and alternative investments to achieve its long-term return objectives within prudent risk constraints.
Spending Policy and How the Investment Objectives Relate to Spending Policy
It is the policy of the Foundation to annually appropriate an amount determined pursuant to the seven factors contained in MUPMIFA, as previously shown in this note. In establishing this policy, the Foundation considered the long-term expected return on its endowment. Accordingly, over the long term, the Foundation expects the current spending policy to allow its endowment to grow. This is consistent with the Foundation’s objective to maintain the purchasing power of the endowment assets held in perpetuity, or for a donor-specified term, as well as to provide additional real growth through new gifts and investment return.
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TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Endowment net asset composition by type of fund were as follows:
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TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Changes in endowment net asset composition by type of fund were as follows:
Yellowstone Boys and Girls Ranch Foundation, Inc.
12. RETIREMENT PLAN
The Foundation has a defined contribution retirement plan that covers all employees. The Foundation makes contributions based upon a percentage of eligible employees’ salaries. Contributions to the plan were $67,996 and $70,629 for the years ended June 30, 2024 and 2023, respectively.
13. ASSOCIATED PARTIES
The Foundation is associated with a separate corporation, Yellowstone Boys and Girls Ranch, Inc. (YBGR). YBGR is independently controlled by its own Board of Directors. YBGR is a favored grantee of the Foundation. Grants and other miscellaneous contributions made to YBGR from the Foundation were $3,904,733 and $3,263,333 for the years ended June 30, 2024 and 2023, respectively.
The Foundation has a long-term grant commitment payable to the YBGR. The original commitment was $1,958,550 payable over 20 years, discounted to present value using 1.8%. The present value of the long-term grant commitment at June 30, 2024 and 2023, was $700,905 and $759,481, respectively
14. COMMITMENTS AND CONTINGENCIES
Funding Commitment
At June 30, 2024 and 2023, the Foundation had committed up to $3,750,072 and $3,022,128, respectively, of grant funding to YBGR, if needed.
Contingent Gain
The Foundation has been the recipient of several lots of land, which had been transferred to the Foundation, inclusive of mineral and oil rights, at the time of the gift. In September 2012, the Foundation contracted with a consulting firm to estimate the oil and gas reserves, and the potential future income from exploring these reserves. The ultimate realization of income from these reserves is dependent on future exploration, extraction activities, and changes in market prices of the underlying asset. However, the Foundation has not received any updated valuations of these reserves. Accordingly, no amount is deemed appropriate to disclose or record in the accompanying consolidated financial statements. See note 4 for the carrying value of these rights.
Yellowstone Boys and Girls Ranch Foundation, Inc.
15. LIQUIDITY AND AVAILABILITY
The Foundation’s financial assets available for general expenditure include only those without contractual or donor-imposed restrictions within one year of the consolidated statement of financial position date. Management has identified the following assets available for general operations:
Financial assets not included are those set aside for long-term investing as board-designated that could be drawn upon if the governing Board of Directors approves that action. However, amounts already appropriated from either the donor-restricted endowment or board-designated endowment for general expenditure are included See note 11 for further discussion on the endowment spending policy.
16. ANNUITY OBLIGATIONS
The Foundation is subject to certain provisions of the Montana Code Annotated, which specify that a charitable organization may only issue a "qualified charitable gift annuity" if it meets the following statutory requirements on the date of the annuity agreement:
• Has a minimum of $300,000 net assets or has a minimum of $100,000 in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement.
• Has been in continuous operation for at least three years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years.
• Maintains a separate annuity fund with at least one-half the value of the initial amount transferred for outstanding annuities.
If the charitable organization cannot meet the requirements, the issuance of a qualified charitable gift annuity by a charitable organization must be commercially insured by a licensed insurance company that is qualified to do business in Montana.
For the years ended June 30, 2024 and 2023, the Foundation met the requirements to issue qualified charitable gift annuities.
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The liability for each gift annuity described in note 1 changes each year with the receipt of: new gifts, payments under contracts, change in annuity asset values, and the change in the present value of required payments to beneficiaries.
The following summarizes the change in planned gift liabilities:
17. PRIOR-PERIOD ADJUSTMENT
The Foundation recorded the following corrections to errors in the classifications of net assets:
Endowment fund appropriations approved by the Board of Directors in prior years, but the restriction was not released
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(Continued)
18. SUBSEQUENT EVENTS
The Foundation is subject to various risks and uncertainties, including recent market volatility subsequent to year end, which has led to declines in the value of certain investments. Management continues to monitor these developments and their impact on the Foundation’s financial position.
ADDITIONAL INFORMATION SECTION
INDEPENDENT AUDITORS’ REPORT ON ADDITIONAL INFORMATION
To the Board of Directors
Yellowstone Boys and Girls Ranch Foundation, Inc.
Billings, Montana
We have audited the consolidated financial statements of the Yellowstone Boys and Girls Ranch Foundation, Inc. and subsidiary as of and for the years ended June 30, 2024 and 2023, and our report thereon dated April 9, 2025, which expressed an unmodified opinion on those consolidated financial statements, appearing on page 1. Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The accompanying consolidating statements of financial position and consolidating statements of activities are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.
April 9, 2025
Missoula, Montana
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(Continued)
AND NET ASSETS
Yellowstone Boys and Girls Ranch Foundation, Inc.
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STATEMENTS OF ACTIVITIES
(Continued)