YOUNGMENSCHRISTIANASSOCIATIONOFHONOLULU
FinancialStatements
December31,2022
(WithIndependentAuditorsReportThereon)
KPMGLLP Suite2210 1003BishopStreet Honolulu,HI96813-6400
TheBoardofDirectors
YoungMensChristianAssociateofHonolulu:
ReportontheAuditoftheFinancialStatements
Opinion
WehaveauditedthefinancialstatementsofYoungMensChristianAssociationofHonolulu(theAssociation), whichcomprisethebalancesheetasofDecember31,2022,andtherelatedstatementsofactivities,functional expenses,andcashflowsfortheyearthenended,andtherelatednotestothefinancialstatements.
Inouropinion,theaccompanyingfinancialstatementspresentfairly,inallmaterialrespects,thefinancial positionoftheAssociationasofDecember31,2022,andthechangesinitsnetassetsanditscashflowsfor theyearthenendedinaccordancewithU.S.generallyacceptedaccountingprinciples.
BasisforOpinion
WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesof America(GAAS).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors ResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.Wearerequiredtobe independentoftheAssociationandtomeetourotherethicalresponsibilities,inaccordancewiththerelevant ethicalrequirementsrelatingtoouraudit.Webelievethattheauditevidencewehaveobtainedissufficientand appropriatetoprovideabasisforourauditopinion.
ResponsibilitiesofManagementfortheFinancialStatements
Managementisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordance withU.S.generallyacceptedaccountingprinciples,andforthedesign,implementation,andmaintenanceof internalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrom materialmisstatement,whetherduetofraudorerror.
Inpreparingthefinancialstatements,managementisrequiredtoevaluatewhetherthereareconditionsor events,consideredintheaggregate,thatraisesubstantialdoubtabouttheAssociationsabilitytocontinueasa goingconcernforoneyearafterthedatethatthefinancialstatementsareavailabletobeissued.
AuditorsResponsibilitiesfortheAuditoftheFinancialStatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefree frommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditorsreportthatincludesour opinion.Reasonableassuranceisahighlevelofassurancebutisnotabsoluteassuranceandthereforeisnot aguaranteethatanauditconductedinaccordancewithGAASwillalwaysdetectamaterialmisstatementwhen itexists.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresulting fromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideof internalcontrol.Misstatementsareconsideredmaterialifthereisasubstantiallikelihoodthat,individuallyorin theaggregate,theywouldinfluencethejudgmentmadebyareasonableuserbasedonthefinancial statements.
InperforminganauditinaccordancewithGAAS,we:
Exerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.
Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudor error,anddesignandperformauditproceduresresponsivetothoserisks.Suchproceduresinclude examining,onatestbasis,evidenceregardingtheamountsanddisclosuresinthefinancialstatements.
Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatare appropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessof theAssociationsinternalcontrol.Accordingly,nosuchopinionisexpressed.
Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofsignificantaccounting estimatesmadebymanagement,aswellasevaluatetheoverallpresentationofthefinancialstatements.
Concludewhether,inourjudgment,thereareconditionsorevents,consideredintheaggregate,thatraise substantialdoubtabouttheAssociationsabilitytocontinueasagoingconcernforareasonableperiodof time.
Wearerequiredtocommunicatewiththosechargedwithgovernanceregarding,amongothermatters,the plannedscopeandtimingoftheaudit,significantauditfindings,andcertaininternalcontrolrelatedmattersthat weidentifiedduringtheaudit.
ReportonSummarizedComparativeInformation
WehavepreviouslyauditedtheAssociations2021financialstatements,andweexpressedanunmodified auditopiniononthoseauditedfinancialstatementsinourreportdatedAugust24,2022.Inouropinion,the summarizedcomparativeinformationpresentedhereinasofandfortheyearendedDecember31,2021,is consistent,inallmaterialrespects,withtheauditedfinancialstatementsfromwhichithasbeenderived.
Honolulu,Hawaii September28,2023
YOUNGMENSCHRISTIANASSOCIATIONOFHONOLULU
BalanceSheet
December31,2022
(withsummarizedfinancialinformationasofDecember31,2021)
Assets20222021
Cashandcashequivalents$2,820,7275,422,150 Accountsandpledgesreceivable,net2,962,9263,944,594 Prepaidexpenses235,395199,070 Inventory40,91746,473 Operatingleaseright-of-useassets184,542 Investments24,237,25123,601,249 Land,buildings,andequipment,lessaccumulateddepreciation34,791,95535,166,302
Totalassets$65,273,71368,379,838
LiabilitiesandNetAssets
Liabilities: Accountspayableandaccruedexpenses$2,578,2932,893,363 Deferredrevenue3,148,0821,645,398 Operatingleaseliabilities184,542 Notepayable373,467 Liabilityundersplit-interestagreements10,79811,788
Totalliabilities5,921,7154,924,016
Netassets: Withoutdonorrestrictions52,534,45555,004,671 Withdonorrestrictions6,817,5438,451,151
Totalnetassets59,351,99863,455,822
Commitmentsandcontingentliabilities
Totalliabilitiesandnetassets$65,273,71368,379,838
Seeaccompanyingnotestofinancialstatements.
YOUNGMENSCHRISTIANASSOCIATIONOFHONOLULU
StatementofActivities
YearendedDecember31,2022
(withsummarizedfinancialinformationfortheyearendedDecember31,2021)
WithoutdonorWithdonor20222021 restrictionsrestrictionstotaltotal
Revenue,gains,andothersupport: Programservicefees$16,522,39816,522,39810,573,694 Governmentgrants8,701,5978,701,5976,433,616 Contributionsandbequests1,814,38368,5811,882,9643,700,660 Investmentreturn,net(3,095,688)(1,156,213)(4,251,901)3,153,729 AlohaUnitedWaycontributionallocation12,41312,4138,421 Specialeventsandothers,netofcostofsalesof $23,41455,77755,77727,828 Other72,85272,85220,290 Netassetsreleasedfromrestrictions:
Satisfactionofcapitalandprogramrestrictions545,976(545,976) Totalrevenue,gains,andothersupport24,629,708(1,633,608)22,996,10023,918,238
Expenses:
Programservices: Youthdevelopment11,776,52111,776,5218,937,346 Healthyliving7,242,1997,242,1995,409,070 Socialresponsibility4,108,4324,108,4322,574,969 Totalprogramservices23,127,15223,127,15216,921,385
Supportingservices:
Managementandgeneral3,246,3573,246,3572,778,006 Fund-raising726,415726,415539,781 Totalsupportingservices3,972,7723,972,7723,317,787 Totalexpenses27,099,92427,099,92420,239,172 Changeinnetassets(2,470,216)(1,633,608)(4,103,824)3,679,066 Netassetsatbeginningofyear55,004,6718,451,15163,455,82259,776,756 Netassetsatendofyear$52,534,4556,817,54359,351,99863,455,822
Seeaccompanyingnotestofinancialstatements.
Statement of Functional Expenses Year ended December 31, 2022 (with summarized financial information for the year ended December 31, 2021)
YOUNGMENSCHRISTIANASSOCIATIONOFHONOLULU
StatementofCashFlows
YearendedDecember31,2022
(withsummarizedfinancialinformationfortheyearendedDecember31,2021)
Cashflowsfromoperatingactivities:
20222021
Changeinnetassets$(4,103,824)3,679,066
Adjustmentstoreconcilechangeinnetassetstonetcash providedbyoperatingactivities:
Depreciation1,946,4011,859,579
Netrealizedandunrealizedloss(gain)oninvestments4,522,066(2,648,688)
Baddebtexpense83,24841,463 (Gain)lossondisposalofland,buildings,andequipment(22,000)5,445
Contributionsrestrictedforlong-terminvestment(68,581)(80,385)
Changesinoperatingassetsandliabilities:
Decrease(increase)inaccountsandpledgesreceivable898,420(2,375,025) (Increase)inprepaidexpenses(36,325)(4,225)
Decrease(increase)ininventory5,556(2,556)
Decreaseinoperatingleaseright-of-useassets65,096
Decrease(increase)inaccountspayableand accruedexpenses(281,785)399,831
Increaseindeferredrevenues1,502,6841,054,218 (Decrease)inoperatingleaseliabilities(65,096)
Netcashprovidedbyoperatingactivities4,445,8601,928,723
Cashflowsfrominvestingactivities:
Purchasesofland,buildings,andequipment(1,583,339)(1,557,678)
Proceedsfromsaleofinvestments3,567,6952,379,717
Purchasesofinvestments(8,725,763)(2,407,405)
Netcashusedininvestingactivities(6,741,407)(1,585,366)
Cashflowsfromfinancingactivities:
Decreaseinliabilitiesundersplit-interestagreements,net(990)3,976
Proceedsfromcontributionsrestrictedforlong-terminvestment:
Endowment68,58180,385
Proceedsfromnotepayable373,467
Repaymentonnotepayable(373,467)
Netcash(usedin)providedbyfinancingactivities(305,876)457,828
Net(decrease)increaseincashandcashequivalents(2,601,423)801,185
Cashandcashequivalentsatbeginningofyear5,422,1504,620,965
Cashandcashequivalentsatendofyear$2,820,7275,422,150
Supplementaldisclosuresofnoncashinvestingactivities:
Accountspayableandaccruedexpensesassociatedwith purchasesofland,buildings,andequipment$33,285 Right-of-useassetsandleaseliabilitiesuponadoption ofnewaccountingstandard249,638
Seeaccompanyingnotestofinancialstatements.
(1)OrganizationandSummaryofSignificantAccountingPolicies
(a)Organization
YoungMensChristianAssociationofHonolulu(theAssociationorYMCA)wasfoundedin1869and todayiscomprisedofnineoperatingbranchesontheislandofOahu,Hawaii.TheAssociationworksto advanceitscauseofstrengtheningcommunitythroughyouthdevelopment,healthyliving,andsocial responsibility.Youthdevelopmentaimstonurturethepotentialofeverychildandteenthrough programssuchasafterschoolandsummerchildcareprograms,educationandleadership,swimand camp.Healthylivingprogramsaimtoimprovethenationshealthandwell-beingthroughprogramsthat focusonfamilytime,well-beingandfitness,sportsandrecreation.Socialresponsibilityincorporates givingbackandprovidingsupporttoitsneighborswithprogramsthatincludesocialservices,global services,volunteerismandadvocacy.
(b)FinancialStatementPresentation
Netassetsandrevenue,gains,losses,andothersupportareclassifiedbasedontheexistenceor absenceofdonor-imposedrestrictions.Accordingly,netassetsoftheAssociationandchangestherein areclassifiedandreportedasfollows:
NetAssetswithoutdonorrestrictionsNetassetsnotsubjecttodonor-imposedstipulations.
NetAssetswithdonorrestrictionsNetassetssubjecttodonor-imposedstipulationsthatmayorwill bemeteitherbyactionsoftheAssociationand/orthepassageoftime.Otherdonor-imposed stipulationsareperpetualinnature,wherebythedonorhasstipulatedthefundsmustbemaintained permanentlybytheAssociation.ThedonorsoftheseassetspermittheAssociationtouseallofthe incomeearnedonrelatedinvestmentsforgeneralorspecificpurposes.
(c)CashEquivalents
Forpurposesofthestatementofcashflows,theAssociationconsidersallhighlyliquidinvestments withoriginalmaturitiesofthreemonthsorlesswhenpurchasedtobecashequivalents.At December31,2022,theAssociationheld$113,611ofcashequivalentsconsistingofmoneymarket accounts.
(d)Inventory
Suppliesinventoryiscarriedatthelowerofcost(determinedonthefirst-in,first-outmethod)ornet realizablevalue.
(e)Investments
Investmentsecuritiesarereportedatfairvaluewithunrealizedgainsandlossesincludedinthe statementofactivities.Gainsandlossesoninvestmentsarereportedasincreasesordecreasesinnet assetswithoutdonorrestrictions,unlesstheiruseisrestrictedbyexplicitdonorstipulationsorbylaw. Thefairvalueofinvestmentsecuritiesisthepricethatwouldbereceivedtoselltheinvestmentsecurity inanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.
Investmentsthatareusedforcurrentoperationsareclassifiedasshort-terminvestments.Investments thatarerestrictedfromwithdrawaloruseforotherthancurrentoperationsandsubjectto donor-imposedrestrictionsareclassifiedaslong-terminvestments.
(f)Land,Buildings,andEquipment
Land,buildings,andequipmentarecapitalizedatcost,ifpurchased,oratfairvalueatthedateofthe donation.
TheAssociationreportsgiftsofland,buildings,andequipmentasunrestrictedsupportunlessexplicit donorstipulationsspecifyhowthedonatedassetsmustbeused.Giftsoflong-livedassetswithexplicit restrictionsthatspecifyhowtheassetsaretobeusedandgiftsofcashorotherassetsthatmustbe usedtoacquirelong-livedassetsarereportedasrestrictedsupport.Absentexplicitdonorstipulations abouthowlongthoselong-livedassetsmustbemaintained,theAssociationreportsexpirationsof donorrestrictionswhentheacquiredlong-livedassetsareplacedinservice.
Depreciationoflong-livedassetsiscalculatedonthestraight-linebasisoverestimatedusefullivesas follows:
(g)DeferredRevenue
DeferredrevenueconsistsprimarilyofAmericanRescuePlanAct(ARPA)unearnedfunding, membershipdues,andprogramfeescollectedinadvanceoftheeffectiveperiodorservicesrendered.
(h)Contributions
Contributionsarerecordedintheperiodreceived.Unconditionalpromisestogive(pledges receivable)thatareexpectedtobecollectedwithinoneyeararerecordedatnetrealizablevalue. Contributionsreceivablethatareexpectedtobecollectedinfutureyearsarerecordedatthepresent valueoftheirestimatedfuturecashflows.Thediscountsonthoseamountsarecomputedusingfair valueinterestratesapplicabletotheyearsinwhichthepromisesarereceived.Amortizationofthe discountsisincludedincontributionsandbequests.Conditionalcontributionsarerecordedattheir estimatedfairvalueintheperiodtheconditionsaremetorintheperiodreceivedifthereisonlya remotelikelihoodthatthoseconditionswillnotbemet.
TheAssociationreportsgiftsofcashandotherassetsasrestrictedsupportiftheyarereceivedwith donorstipulationsthatlimittheuseofthedonatedassets.Whenadonorrestrictionexpires,thatis, whenastipulatedtimerestrictionendsorpurposerestrictionisaccomplished,netassetswithdonor restrictionsarereclassifiedtonetassetswithoutdonorrestrictionsandreportedinthestatementof activitiesasnetassetsreleasedfromrestrictions.
(i)Long-LivedAssets
Long-livedassets,suchasproperty,plant,andequipment,andpurchasedintangiblessubjectto amortizationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethat thecarryingamountofanassetmaynotberecoverable.Managementdidnotidentifyanymatterthat wouldleadtoanimpairmentlossfortheyearendedDecember31,2022.
(j)LiquidityandAvailability
TheAssociationsfinancialassetsavailablewithinoneyearofthebalancesheetforgeneral expenditureareasfollows:
TheAssociationsgoalisgenerallytomaintaincashandcashequivalentstomeet60daysofoperating expenses(approximately$3,300,000).Aspartofitsliquidityplan,excesscashisinvestedinshort-term investments,includingcertificatesofdeposit,mutualfunds,bondfunds,commonstockandexchange tradedfunds.TheAssociationhasamarginaccounttomeetadditionalcashflowneeds.
(k)UseofEstimates
ThepreparationofthefinancialstatementsinaccordancewithU.S.generallyacceptedaccounting principles,requiresmanagementoftheAssociationtomakeestimatesandassumptionsthataffectthe reportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedate ofthefinancialstatementsandthereportedamountsofrevenueandexpensesduringthereporting periods.Actualresultscoulddifferfromthoseestimates.Suchestimatesincludetheusefullivesof land,buildings,andequipment,thefairvalueofinvestments,andthevaluationallowancesof receivables.
(l)IncomeTaxes
TheAssociationisexemptfromincometaxesunderSection501(c)(3)oftheInternalRevenueCode. TheAssociationisgenerallynotsubjecttofederalincometaxes.However,theAssociationissubjectto incometaxesonanynetincomethatisderivedfromtradeorbusiness,regularlycarriedonandnotin furtheranceofthepurposesforwhichitwasgrantedexemption.Noincometaxprovisionhasbeen recorded,asitistheopinionofmanagementthatnetincomefromanyunrelatedtradeorbusiness,if any,isnotmaterialtothefinancialstatementstakenasawhole.TheAssociationisnolongersubject toincometaxexaminationsbyfederaltaxauthoritiesforyearsbefore2019andstatetaxauthoritiesfor yearsbefore2018.
December31,2022
(m)FairValueMeasurements
TheAssociationmeasuresitsfinancialassets,liabilities,andnonfinancialitemsthatarerecognizedor disclosedatfairvalueinthefinancialstatementsonarecurringbasis.Fairvalueisthepricethatwould bereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarket participantsatthemeasurementdate.
(n)Reclassification
Beginninginfiscalyear2022subsidizedmembershiprevenueisincludedinprogramservicefeesin thestatementofactivities.Accordingly,$503,824offiscalyear2021revenuehasbeenreclassified fromotherrevenuetoprogramservicefees.
(o)PriorYearComparativeInformation
Thefinancialstatementsincludecertainprioryearsummarizedcomparativeinformationintotalbutnot bynetassetclass.Suchinformationdoesnotincludesufficientdetailtoconstituteapresentationin conformitywithU.S.generallyacceptedaccountingprinciples.Accordingly,suchinformationshouldbe readinconjunctionwiththeAssociationsfinancialstatementsfortheyearendedDecember31,2021, fromwhichthesummarizedinformationwasderived.
(p)RecentlyAdoptedAccountingStandards
InFebruary2016,theFASBissuedASU2016-02,Leases(Topic842),whichrequireslesseesto recognizeleaseson-balancesheetanddisclosekeyinformationaboutleasingarrangements. Topic842establishesamodelthatrequiresalesseetorecognizeaROUassetandleaseliabilityon thebalancesheetforallleaseswithatermlongerthan12months.Leasesareclassifiedasoperating, withclassificationaffectingthepatternandclassificationofexpenserecognitioninthestatementof activities.
TheAssociationadoptedTopic842in2022.Theadoptionresultedinrecordingofright-of-useassets andoperatingleaseliabilitiesof$249,638onJanuary1,2022.
(2)PledgesReceivable
PledgesreceivablefortheAssociationscapitalcampaignconsistofthefollowingatDecember31,2022:
TheallowanceforuncollectiblepledgesreceivableatDecember31,2022was$13,873.
(3)Investments
(a)FairValueofFinancialInstruments
TheAssociationutilizesvaluationtechniquesthatmaximizetheuseofobservableinputsandminimize theuseofunobservableinputstotheextentpossible.TheAssociationdeterminesfairvaluebasedon assumptionsthatmarketparticipantswoulduseinpricinganassetorliabilityintheprincipalormost advantageousmarket.Whenconsideringmarketparticipantassumptionsinfairvaluemeasurements, thefollowingfairvaluehierarchydistinguishesbetweenobservableandunobservableinputs,whichare categorizedinoneofthefollowinglevels:
Level1Valuationsforassetsandliabilitiestradedinactiveexchangemarkets,suchastheNew YorkStockExchange.Valuationsareobtainedfromreadilyavailablepricingsourcesformarket transactionsinvolvingidenticalassetsorliabilities.
Level2Valuationsforassetsandliabilitiestradedinlessactivedealerorbrokermarkets.Level2 valuationsarebaseduponquotedpricesforsimilarinstrumentsinactivemarkets,quotedpricesfor identicalorsimilarinstrumentsinmarketsthatarenotactive,andmodel-basedvaluation techniquesforwhichallsignificantassumptionsareobservableinthemarket.
Level3Valuationsforassetsandliabilitiesthatarederivedfromothervaluationmethodologies, includingdiscountedcashflowmodelsandsimilartechniques,andnotbasedonmarketexchange, dealer,orbroker-tradedtransactions.Level3valuationsincorporatecertainassumptionsand projectionsindeterminingthefairvalueassignedtosuchassetsorliabilities.
Thelevelinthefairvaluehierarchywithinwhichafairvaluemeasurementinitsentiretyfallsisbased onthelowest-levelinputthatissignificanttothefairvaluemeasurementinitsentirety.
Investmentsarevaluedatclosingpricereportedontheactivemarketinwhichtheindividualsecurities aretraded.
December31,2022
Thefollowingtablepresentsthebalancesofassetsthataremeasuredatfairvalueonarecurringbasis bylevelatDecember31,2022:
TheAssociationsaccountingpolicyistorecognizetransfersbetweenlevelsofthefairvaluehierarchy onthedateoftheeventorchangeincircumstancesthatcausedthetransfer.Therewerenosignificant transfersintooroutofLevel3fortheyearendedDecember31,2022.
(4)Land,Buildings,andEquipment
Asummaryofland,buildings,andequipmentasofDecember31,2022isasfollows:
(5)PayrollProtectionProgramLoan
OnFebruary17,2021,theAssociationwasgrantedaloan(theLoan)fromafinancialinstitutioninthe aggregateamountof$2,528,375,pursuanttothePaycheckProtectionProgram(PPP)underDivisionA, TitleIoftheCARESAct,whichwasenactedMarch27,2020.
TheLoanhadaninitialmaturityofAugust4,2021andboreinterestatarateof1.00%perannum.Funds fromtheLoancouldbeusedforpayrollcosts,costsusedtocontinuegrouphealthcarebenefits,mortgage
December31,2022
payments,rent,andutilitiesincurredbeforeAugust4,2021.TheAssociationused$2,154,908for qualifyingexpenses.
UnderthetermsofthePPP,certainamountsoftheLoanwereforgivableiftheywereusedforqualifying expensesasdescribedintheCARESAct.TheAssociationappliedforforgivenessonDecember30,2021.
TheAssociationaccountedfortheLoanascontributionrevenueunderASC958-605.TheLoanprograms expendituresandresultsweresubjecttoreviewandacceptancebytheSmallBusinessAdministration (SBA).OnApril22,2022,theSBAgrantedforgivenessofthe$2,154,908.TheAssociationrecognizedthis amountascontributionrevenuein2021.Theremainingbalanceof$373,467wasrepaidonApril27,2022.
(6)CreditFacility
TheAssociationhasarevolvingmarginaccountwithaninvestmentfirmtobeusedforworkingcapital, short-term,orlong-termneeds.Thisaccounthasnoexpirationdate,andborrowingsareallowedupto50% ofitsinvestmentholdings.InterestonamountsdrawnarefloatingattheFederalFundrateplus1.5%.At December31,2022,theAssociationdidnothaveanyoutstandingborrowings.
(7)OperatingLeases (a)AsLessee
TheAssociationleasesthelandunderlyingitsKaimukibranchunderanoperatingleaseexpiringin 2026.Theleaseprovidesforearlyterminationwith180dayspriorwrittennoticebyeitherthe Associationorthelessor.TheAssociationalsoleasesparkingforitsWindwardbranchthrough2023 underanoperatinglease.Inaddition,theAssociationhasoperatingleasesforitsofficemachines, whichexpireatvariousdatesthrough2023.Totalleaseexpenseundertheseleaseswas$68,000in 2022.
Right-of-useassetsandoperatingleaseliabilitiesreportedonthebalancesheetasofDecember31, 2022were$184,542and$184,542,respectively.
OtherinformationrelatedtoleasesasofDecember31,2022isasfollows:
December31,2022
Maturitiesofleaseliabilities,netofinterest,undernoncancellableleasesasofDecember31,2022are asfollows:
(b)AsLessor
TheAssociationleasesportionsofitsKalihi,andNuuanubranchesunderoperatingleasesexpiring through2054.
AtDecember31,2022,futureminimumrentalincomeisasfollows:
Minimumfuturerentalincomedoesnotincludecontingentrentsthatmaybereceivedunderthepartial buildingleasesforrentsbasedonthetenantsgrosssales.
(8)PensionPlan
TheAssociationparticipatesinadefined-contribution,individualaccount,moneypurchaseretirementplan, whichisadministeredbytheYoungMensChristianAssociationRetirementFund(YMCARetirement Fund)(aseparatecorporation).ThisplanisforthebenefitofalleligibleemployeesoftheAssociationwho qualifyundertheparticipationrequirements.
InaccordancewiththeagreementwiththeYMCARetirementFund,contributionsbytheAssociationand employeesoftheAssociationarebasedonapercentageoftheparticipatingemployeessalariesandare toberemittedtotheYMCARetirementFundonamonthlybasis.ContributionsmadebytheAssociationto theYMCARetirementFundfortheyearendedDecember31,2022totaled$886,554.
TheYMCARetirementFundisoperatedasachurchpensionplanandisanonprofit,tax-exemptNewYork Statecorporation(1922).ParticipationisavailabletoalldulyorganizedandreorganizedYoungMens ChristianAssociationsintheUnitedStates.
(9)NetAssetswithDonorRestrictions
NetassetswithdonorrestrictionsatDecember31,2022areavailableforthefollowingpurposes:
In2022,netassetsintheamountof$545,976werereleasedfromdonorrestrictionsbyincurringexpenses satisfyingtherestrictedpurposesorbyoccurrenceofthepassageoftimeorothereventsspecifiedby donorsareasfollows:
(10)Endowment
TheAssociationsendowmentconsistsof11donor-designatedendowmentfundsestablishedforavariety ofpurposes.AtDecember31,2022,theendowmentfundamountedto$6,726,568.
FortheyearendedDecember31,2022,thechangesinendowmentnetassetsareasfollows:
Descriptionofamountsclassifiedasnetassetswithdonorrestrictionsisasfollows:
(a)InterpretationofRelevantLaw
TheAssociationissubjecttoHawaiisenactedversionoftheUniformPrudentManagementof InstitutionalFundsAct(HUPMIFA)and,thus,classifiesamountsinitsdonor-restrictedendowment fundsasnetassetswithdonorrestrictionsbecausethosenetassetsaretimerestricteduntiltheboard ofdirectorsappropriatessuchamountsforexpenditure.Mostofthosenetassetsalsoaresubjectto purposerestrictionsthatmustbemetbeforereclassifyingthosenetassetstonetassetswithoutdonor restrictions.TheboardofdirectorshasinterpretedHUPMIFAasnotrequiringthemaintenanceof purchasingpoweroftheoriginalgiftamountcontributedtoanendowmentfund,unlessadonor stipulatesthecontrary.Asaresultofthisinterpretation,whenreviewingitsdonor-restrictedendowment funds,theAssociationconsidersafundtobeunderwaterifthefairvalueofthefundislessthanthe sumof(a)theoriginalvalueofinitialandsubsequentgiftamountsdonatedtothefundand(b)any accumulationstothefundthatarerequiredtobemaintainedinperpetuityinaccordancewiththe directionoftheapplicabledonorgiftinstrument.TheAssociationhasinterpretedHUPMIFAtopermit spendingfromunderwaterfundsinaccordancewiththeprudentmeasuresrequiredunderthelaw. Additionally,inaccordancewithHUPMIFA,theAssociationconsidersthefollowingfactorsinmakinga determinationtoappropriateoraccumulatedonor-restrictedendowmentfunds:
(1)Thedurationandpreservationofthefund
(2)Thepurposesoftheorganizationandthedonor-restrictedendowmentfund
(3)Generaleconomicconditions
(4)Thepossibleeffectofinflationanddeflation
(5)Theexpectedtotalreturnfromincomeandtheappreciationofinvestments
December31,2022
(6)Otherresourcesoftheorganization
(7)TheinvestmentpoliciesoftheAssociation.
(b)DescriptionofAmountsClassifiedasNetAssetswithDonorRestrictions
(i)ReturnObjectivesandRiskParameters
TheAssociationhasadoptedinvestmentandspendingpoliciesforendowmentassetsthatattempt toprovideapredictablestreamoffundingtoprogramssupportedbyitsendowmentwhileseeking tomaintainthepurchasingpoweroftheendowmentassets.Endowmentassetsincludethose assetsofdonor-restrictedfundsthattheAssociationmustholdinperpetuity.
(ii)StrategiesEmployedforAchievingObjectives
Tosatisfyitslong-termrateofreturnobjectives,theAssociationreliesonatotalreturnstrategyin whichinvestmentreturnsareachievedthroughbothcapitalappreciation(realizedand unrealized)andcurrentyield(interestanddividends).TheAssociationtargetsadiversifiedasset allocationthatplacesagreateremphasisonequity-basedinvestmentstoachieveitslong-term returnobjectiveswithinprudentriskconstraints.
(iii)SpendingPolicyandHowtheInvestmentObjectivesRelatetoSpendingPolicy
Underthetermsoftheendowmentfund,theAssociationhasapolicyofappropriating,forprogram use,amountsnottoexceed4.5%oftheinvestmentportfolio,providedthatsuchwithdrawaldoes noterodetheprincipalbalance.Inestablishingthispolicy,theAssociationconsideredthe long-termexpectedreturnonitsendowment.Accordingly,overthelongterm,theAssociation expectsthecurrentspendingpolicytoallowitsendowmenttogrowataratethatexceedsthe spendingrate.ThisisconsistentwiththeAssociationsobjectivetomaintainthepurchasingpower oftheendowmentassetsheldinperpetuityorforaspecifiedtermaswellastoprovideadditional realgrowththroughnewgiftsandinvestmentreturn.
(11)Litigation
TheAssociationisinvolvedinclaimsarisingintheordinarycourseofbusiness.Management,after consultationwithlegalcounsel,isoftheopinionthattheultimateresolutionofthesematterswillnothavea materialadverseeffectontheAssociationsfinancialstatements.
(12)CommitmentsandContingencies
Federalgrantprogramsaresubjecttoreviewbythegrantoragencies,whichcouldresultinrequestsfor reimbursementtograntoragenciesfordisallowedexpenditures.Managementbelievesthatithasadhered tothetermsofitsgrantsandthatanydisallowedexpendituresresultingfromsuchreviewwouldnothavea materialeffectonthefinancialpositionoftheAssociation.
(13)SubsequentEvents
TheAssociationhasevaluatedsubsequenteventsfromthebalancesheetdatethroughSeptember28, 2023,thedateatwhichthefinancialstatementswereavailabletobeissued,anddeterminedthereareno otheritemstodisclose.