Financial Statements and Report of Independent Certified Public Accountants. Points of Light Foundation. September 30, 2015 and 2014

Transcription

1 Financial Statements and Report of Independent Certified Public Accountants Points of Light Foundation September 30, 2015 and 2014

2 Points of Light Foundation Table of Contents Report of Independent Certified Public Accountants 1 Financial statements: Statements of financial position 3 Statements of activities 4 Statements of functional expenses 6 Statements of cash flows 8 Notes to financial statements 9

3 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Audit Tax Advisory Grant Thornton LLP 245 Peachtree Center Avenue, Suite 300 Atlanta, GA T F To the Board of Directors of Points of Light Foundation Report on the financial statements We have audited the accompanying financial statements of Points of Light Foundation (the Entity ) (a Delaware nonprofit organization), which comprise the statements of financial position as of September 30, 2015 and 2014, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd

4 2 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Points of Light Foundation as of September 30, 2015 and 2014, 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. Atlanta, Georgia February 11, 2016 Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd

5 Points of Light Foundation 3 Statements of financial position September Assets Current assets: Cash and cash equivalents $ 2,720,888 $ 7,401,103 Contributions receivable, current 1,633,682 1,317,546 Federal grant receivable 184, ,473 Prepaid expenses and other assets 1,046,541 96,388 Total current assets 5,585,885 9,221,510 Investments 8,733,806 6,746,637 Contributions receivable, non-current 696, ,176 Property and equipment, net 4,026,680 4,514,953 Total assets $ 19,043,185 $ 20,847,276 Liabilities and net assets Current liabilities: Accounts payable and accrued expenses $ 2,165,048 $ 2,886,697 Loan payable, current 74,765 69,999 Note payable to affiliate, current 47,578 44,816 Deferred revenue 2,373,782 2,284,056 Total current liabilities 4,661,173 5,285,568 Loan payable, non-current 1,351,093 1,424,823 Note payable to affiliate, non-current 1,919,268 1,966,849 Total liabilities 7,931,534 8,677,240 Net (deficit) assets: Unrestricted (3,491,940) 282,811 Temporarily restricted 8,500,871 6,069,890 Permanently restricted 6,102,720 5,817,335 Total net assets 11,111,651 12,170,036 Total liabilities and net assets $ 19,043,185 $ 20,847,276 The accompanying notes are an integral part of these financial statements.

6 Points of Light Foundation 4 Statements of activities For the year ended September 30, 2015 Unrestricted Temporarily Restricted Permanently Restricted Total Revenue, support and gains: Corporate contributions $ 4,241,414 $ 4,446,343 $ 310,385 $ 8,998,142 Corporate exchange 7,870, ,870,442 Individual/Foundation contributions 279,006 48, ,013 Generated revenue 3,313, ,313,250 Daily Points of Light (DPOL) , ,551 Donated services 516, ,524 Investment loss (297,198) - - (297,198) Federal grant revenue 1,590, ,590,582 Special event/benefit 602,619 1,250,000-1,852,619 Net assets released from restriction 4,305,920 (4,280,920) (25,000) - Total revenue, support and gains 22,422,559 2,430, ,385 25,138,925 Total program expenses 21,444, ,444,312 Supporting expenses: Management and general 3,204, ,204,231 Fund-raising expenses 1,548, ,548,767 Total supporting expenses 4,752, ,752,998 Total expenses 26,197, ,197,310 Change in net assets (3,774,751) 2,430, ,385 (1,058,385) Net assets, beginning of year 282,811 6,069,890 5,817,335 12,170,036 Net assets (deficit), end of year $ (3,491,940) $ 8,500,871 $ 6,102,720 $ 11,111,651 The accompanying notes are an integral part of these financial statements.

7 Points of Light Foundation 5 Statements of activities (cont d) For the year ended September 30, 2014 Unrestricted Temporarily Restricted Permanently Restricted Total Revenue, support and gains: Corporate contributions $ 7,926,753 $ 4,596,625 $ - $ 12,523,378 Corporate exchange 5,025, ,025,767 Individual/Foundation contributions 245, , ,275 Generated revenue 3,445, ,445,203 Service Generation campaign contributions - 736, ,750 Donated services 370, ,705 Investment loss (18,304) - - (18,304) Federal grant revenue 1,977, ,977,364 Special event/benefit 1,438, ,438,942 Net assets released from restriction 4,463,615 (4,438,615) (25,000) - Total revenue, support and gains 24,875,470 1,480,610 (25,000) 26,331,080 Total program expenses 22,884, ,884,824 Supporting expenses: Management and general 3,165, ,165,570 Fund-raising expenses 2,161, ,161,862 Total supporting expenses 5,327, ,327,432 Total expenses 28,212, ,212,256 Change in net assets (3,336,786) 1,480,610 (25,000) (1,881,176) Net assets, beginning of year 3,619,597 4,589,280 5,842,335 14,051,212 Net assets, end of year $ 282,811 $ 6,069,890 $ 5,817,335 $ 12,170,036 The accompanying notes are an integral part of these financial statements.

8 Points of Light Foundation 6 Statements of functional expenses For the year ended September 30, 2015 Program Expenses Management and General Fund-raising Total Supporting Expenses Total Salaries and benefits $ 8,599,168 $ 2,306,765 $ 1,208,485 $ 3,515,250 $ 12,114,418 Professional services 2,378, ,083 93, ,001 2,764,542 Travel, and convening and training 1,597,070 68, , ,201 1,817,271 Media, printing and publications 603,160 8,174 26,988 35, ,322 Occupancy 500,568 83,888 36, , ,532 Program grants 6,358,401 31,500 5,182 36,682 6,395,083 Postage and shipping 136,611 1,632 1,186 2, ,429 Telecommunications 196,664 28,531 13,790 42, ,985 Equipment rental 45,689 33,599-33,599 79,288 Program and office supplies 57,791 28,671 8,010 36,681 94,472 Depreciation and amortization 614,154 14,015-14, ,169 Other expenses 356, ,165 3, , ,799 Total expenses $ 21,444,312 $ 3,204,231 $ 1,548,767 $ 4,752,998 $ 26,197,310 The accompanying notes are an integral part of these financial statements.

9 Points of Light Foundation 7 Statements of functional expenses (cont d) For the year ended September 30, 2014 Program Expenses Management and General Fund-raising Total Supporting Expenses Total Salaries and benefits $ 8,689,054 $ 1,902,278 $ 1,742,584 $ 3,644,862 $ 12,333,916 Professional services 4,055, , , ,817 4,624,756 Travel, and convening and training 1,903,327 64, , ,818 2,151,145 Media, printing and publications 709,828 9,388 11,410 20, ,626 Occupancy 491,250 65,625 35, , ,611 Program grants 5,660,307 35, ,800 5,697,107 Postage and shipping 95,194 2,564 9,516 12, ,274 Telecommunications 163,042 28,043 15,329 43, ,414 Equipment rental 100,085 32,068 2,382 34, ,535 Program and office supplies 136,002 15,705 11,714 27, ,421 Depreciation and amortization 732,321 14,017-14, ,338 Other expenses 148, ,146 3, , ,113 Total expenses $ 22,884,824 $ 3,165,570 $ 2,161,862 $ 5,327,432 $ 28,212,256 The accompanying notes are an integral part of these financial statements.

10 Points of Light Foundation 8 Statements of cash flows For the years ended September Cash flows from operating activities: Change in net assets $ (1,058,385) $ (1,881,176) Adjustments to reconcile change in net assets to net cash (used in) provided by operating activities: Depreciation and amortization 628, ,338 Net realized and unrealized loss on investments 405,978 37,441 Contributions donated for long-term investment (310,385) - Non-cash rental income to affiliate (44,819) (42,011) Change in operating assets and liabilities: Change in contributions receivable (648,774) 4,546,476 Change in federal grants receivable 221,699 (107,955) Change in prepaid expenses and other assets (950,153) 271,972 Change in accounts payable and accrued expenses (721,649) 20,926 Change in deferred revenue 89, ,040 Net cash (used in) provided by operating activities (2,388,593) 4,342,051 Cash flows from investing activities: Purchases of property and equipment (139,896) (418,026) Purchases of investments (3,752,944) (5,444,997) Proceeds from sales of investments 1,359,797 5,445,899 Net cash (used in) investing activities (2,533,043) (417,124) Cash flows from financing activities: Contributions donated for long-term investment 310,385 - Repayments on loans and line of credit (68,964) (209,884) Net cash provided by (used in) financing activities 241,421 (209,884) Net change in cash and cash equivalents (4,680,215) 3,715,043 Cash and cash equivalents, beginning of year 7,401,103 3,686,060 Cash and cash equivalents, end of year $ 2,720,888 $ 7,401,103 Supplemental disclosure of cash flow information-cash paid for interest $ 73,753 $ 86,126 Supplemental disclosure of non-cash transactions: Purchases of property and equipment included in accounts payable $ - $ 61,597 The accompanying notes are an integral part of these financial statements.

11 Points of Light Foundation 9 Notes to financial statements 1 Organization Points of Light Foundation (Points of Light) organized on May 21, 1990 is a national, not-for-profit organization incorporated under the laws of the state of Delaware. Points of Light works to increase the number of volunteers in the world and the impact of the work they do. Funds for Points of Light s operations are raised primarily through contributions from private donors, grants from the U.S. government, sponsorships, conference registration, software sales, sale of recognition items and membership dues. Points of Light mobilizes millions of people through direct outreach, through its 250 affiliates in 29 countries around the world, and through partnerships with corporate, faith and nonprofit organizations. Points of Light brings the power of volunteers to bear on a wide range of issues, from hunger to veteran support, education to emergency preparedness. In 2015, Points of Light made grants to the field totaling $6.4 million or 24% of the organization s overall budget. Points of Light manages signature events, programs and projects for national days of service. Points of Light s annual Conference on Volunteering and Service is the world s largest gathering of volunteer service leaders, bringing together nonprofit, corporate and government leaders each year to learn, exchange ideas and develop volunteer-driven solutions to 21st-century challenges. Points of Light recognizes the contributions of volunteers. The Daily Point of Light Award, established by President George H.W. Bush during his presidency, honors individuals and groups improving their communities. To this day, President Bush still signs every award. Another award, the President s Volunteer Service Award, encourages and recognizes citizens for their commitment to ongoing volunteer service and civic engagement. Points of Light harnesses the power of National Service as a solution for community issues. Through public private partnerships, groups of National Service members support Veterans, educate individuals and support student attendance. Points of Light works with companies to find innovative ways to engage their employees and customers in volunteer service; encourages companies to deploy their greatest resource their employees time and talents to help solve pressing social problems. Points of Light also works to support youth. By partnering with teachers, parents, schools, community organizations and businesses. Points of Light s youth service enterprise, generationon gives kids the tools and resources they need to volunteer and make their mark on the world. 2 Summary of Significant Accounting Policies Basis of Accounting The financial statements of Points of Light are prepared on the accrual basis of accounting.

12 Points of Light Foundation 10 Basis of Presentation To ensure observance of limitations and restrictions placed on the use of resources available to Points of Light, resources are classified for accounting and financial reporting purposes into categories established according to their nature and purposes. Points of Light classifies net assets into three categories as follows: Unrestricted net assets - All contributions are considered to be available for unrestricted use unless specifically restricted by the donor or by law. Temporarily restricted net assets Temporarily restricted net assets are contributions with temporary, donorimposed time or purpose restrictions. Temporarily restricted net assets become unrestricted when the time restrictions expire or the contributions are used for their restricted purposes, at which time they are reported in the statements of activities as net assets released from restrictions. Permanently restricted net assets - Permanently restricted net assets represent endowments to be held in perpetuity. Investment income from both temporarily and permanently restricted net assets is recorded as unrestricted income unless otherwise restricted by the donor. Revenue is reported as increases in unrestricted net assets unless use of the related assets is limited by donorimposed restrictions or time restrictions. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions are satisfied in the fiscal year in which the contributions are recognized. Revenue is recorded based on expenses incurred for exchange contracts. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets. Contributions are recognized as revenue in the period received or upon the receipt of an unconditional promise to give. Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value at the date the donation is received, stock contributions are immediately liquidated upon receipt and the cash value is recorded. Contributions, including unconditional promises to give, that are expected to be collected within one year are recognized as revenue in the period received and reported at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows, utilizing discount rates commensurate with the associated risk. The discounts on those amounts are computed using risk-adjusted interest rates applicable to the years in which the promises are received. Amortization of discounts is recorded as additional contribution revenue in accordance with donor-imposed restrictions in the accompanying statements of activities. An allowance for uncollectible contributions receivable is provided based upon management s judgment, including such factors as the age of the receivable, creditworthiness of parties, historical collection experience, type of contribution, and nature of fund-raising activity. Corporate exchange revenue results from the obligation of the organization to provide either goods or services, such as corporate activation and corporate consulting, to the provider of the funds in exchange for the funds received. Generated revenue includes income from the sale of goods or services such as conference registrations, software sales, recognition items and affiliate dues. Points of Light s endowment is subject to the general provisions of the Uniform Prudent Management of Institutional Funds Act (UPMIFA). Under the provisions of this state law, the board may appropriate expenditures of underwater endowment funds as is deemed prudent for the uses and purposes for which an endowment fund is established. Points of Light has applied accounting principles generally accepted in the United States of America when allocating investment gains to the net asset classes for financial statement purposes.

13 Points of Light Foundation 11 Points of Light has interpreted UPMIFA as requiring the preservation of the historic value (corpus) of the donorrestricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, Points of Light classifies as permanently restricted net assets (1) the original value of gifts donated to the permanent endowment, (2) the original value of subsequent gifts to the permanent endowment, and (3) 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. If the endowment assets earn investment returns beyond the amount necessary to maintain the endowment assets historic value, which excess is available for appropriation and, therefore, classified as temporarily restricted net assets until appropriated by Points of Light for expenditure. Points of Light currently records the investment returns on the specific-purpose endowment funds in temporarily restricted net assets and makes those earnings available for expenditure for the donorrestricted purpose. In accordance with the Act, Points of Light 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 donor-restricted endowment fund; (3) General economic conditions; (4) The possible effect of inflation or deflation; (5) The expected total return from income and the appreciation of investments; (6) Other resources of Points of Light; (7) The investment policies of Points of Light. Fair Value of Financial Instruments Points of Light s financial instruments include cash and cash equivalents, investments, contributions and federal receivables, accounts payable, and loan and note payable. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. There is a three-tier fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and Points of Light s assumptions (unobservable inputs). Fair value measurements are classified under the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Pricing inputs other than level 1 which are either directly or indirectly observable. Level 3: Unobservable pricing inputs developed using Points of Light s estimates and assumptions, which reflect those that market participants would use in pricing an asset or liability. While Points of Light recognizes the fair value of each of its assets, the entity uses the net asset value (NAV) practical expedient as applicable for reporting purposes in the investment footnotes. The NAV practical expedient includes equity and fixed income investments since Points of Light has the ability to redeem these investments with the investee at net asset value (NAV) per share at measurement date. These investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. (See Note 4) The determination of where an asset or liability falls in the hierarchy requires significant judgment. Points of Light evaluates its hierarchy disclosures each reporting period and based on various factors, it is possible that an asset or liability may be classified differently from period to period. However, Points of Light expects that changes in classifications between different levels will be rare.

14 Points of Light Foundation 12 The carrying amounts of cash and cash equivalents, short term contribution receivables, federal receivables, and accounts payable approximate fair value because of the relative terms and short maturity of these financial instruments. The carrying value of long term contributions receivable, which were initially recorded at the present value of the future payments, approximates fair value. The carrying value of loans and notes payable approximates fair value since the interest rates for that debt is equal to what Points of Light could obtain currently. Cash and Cash Equivalents Points of Light considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents as of September 30, 2015 and 2014 were invested in money market accounts and savings accounts. Points of Light has deposits at financial institutions that exceed the amount of available Federal insurance coverage. Points of Light mitigates this risk by depositing and investing cash with major financial institutions. Points of Light has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Federal Grants Receivable Federal grant awards are recognized as revenue as expenses are incurred for purposes specified by the grantor. Expenses incurred in advance of cash received from grantors are shown as federal grants receivable. Investments Investments are reported at fair value. The net realized and unrealized gains (losses) on investments are reflected in the statements of activities as investment income (loss). Investment expenses are reported as a reduction of investment income (loss). Donated Materials and Services Points of Light received donated services during the years ended September 30, 2015 and 2014 of $516,524 and $370,705, respectively of which $461,524 and $317,969 is included in program expenses and $55,000 and $52,736 in management and general expenses for the years ended September 30, 2015 and 2014, respectively. Property and Equipment Property and equipment are recorded at cost. Property and equipment are depreciated on a straight-line basis over the estimated useful lives. On October 5, 2011, Points of Light purchased a building and land from Hands on Atlanta (HOA) comprised of a building and approximately acres located at 600 Means St. NW in Atlanta. Previously, Points of Light had leased the building from HOA. Following the purchase, HOA immediately signed a 25-year lease agreement. Pursuant to the terms of this agreement, the total purchase price of $3,925,000 consisted of $2,125,000 of note payable due over 25 years along with $1,800,000 cash. See Note 5 for payment terms on the note payable and Note 10 for additional information on the permanently restricted contribution received in this transaction.

15 Points of Light Foundation 13 Expenditures for property and equipment in excess of $5,000 are capitalized. Property and equipment consisted of the following: September 30 Estimated useful lives Land N/A $ 973,107 $ 973,107 Building and building improvements 25 years 3,067,259 3,067,259 Furniture and equipment 3-7 years 82,799 82,799 Computer and software 3-5 years 2,680,886 2,585,625 Leasehold improvements Lesser of 10 years or lease term 1,032, ,027 Property and equipment, gross 7,836,710 7,696,817 Less: accumulated depreciation (3,810,030) (3,181,864) Property and equipment, net $ 4,026,680 $ 4,514,953 Depreciation and amortization expense for the years ended September 30, 2015 and 2014 were $628,169 and $746,338, respectively. Leasehold Improvements and Deferred Rent Points of Light entered into a three year sublease agreement on February 17, 2012 with Federation of Protestant Welfare Agencies, Inc. for premises located in 281 Park Avenue South, New York, New York The lease agreement is for three years with initial payments of $13,200 per month and concluded in the current fiscal year. Points of Light entered into a sublease agreement effective February 1, 2013 with SRI Seven K Street LLC for premises located at 1625 K Street Washington DC The lease agreement is for a period of five years and three months with initial payments of $16,946 per month which escalate to $19,173 per month by the end of the lease. Points of Light entered into a five year lease agreement on February 1, 2015 with Crystal Properties, LLC for premises located in 580 Broadway, New York, New York The lease agreement is for five years with initial payments of $19,250 per month which escalate to $21,456 per month by the end of the lease. For the offices, the cost of the build out and rent abatement along with scheduled rent increases was amortized ratably over the life of the lease. Accordingly, Points of Light recorded leasehold improvements and deferred rent in its statements of financial position. The asset and liability are being amortized over the life of the lease consistent with the terms of the lease. Deferred Revenues Deferred revenue includes prepayments on some long term contracts, conference revenue and training fees. Revenue on long term contracts is recognized as expenses are incurred. Training fees are recognized in the period in which the training is rendered to fulfil the contractual obligation. Use of 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 amounts reported in these financial statements and accompanying disclosures. Although these estimates are based on management s best knowledge of current events and actions that Points of Light may undertake in the future, actual results may be different from the estimates. Significant items subject to such estimates and assumptions include but are not limited to, carrying amount of property and equipment and allowances and discounts for contributions receivables. Actual results could differ from those estimates. Income Tax Status Points of Light has received a determination letter from the Internal Revenue Service (the IRS) stating that it qualifies for exemption from federal income taxes as a nonprofit organization under Section 501(c)(3) of the Internal Revenue Code (the IRC). In addition, the IRS has determined that Points of Light is not a private foundation under Section 509(a) of the IRC.

16 Points of Light Foundation 14 Points of Light evaluates its uncertain tax positions using the provisions of FASB ASC Topic 740 Income Taxes. Points of Light follows the criterion that an individual tax position has to meet some or all of the benefits of that position to be recognized in Points of Light s financial statements. Tax years open to examination by tax authorities under the statute of limitations include fiscal 2012 through Points of Light has a policy to record interest and penalties (if any) related to income tax matters in income tax expense. Points of Light has applied the more likely than not criterion to all the tax positions for which the statute of limitations remain open and has determined that the tax positions satisfy such criterion and that no provision for income taxes is required for the years ended September 30, 2015 or Recently Implemented Accounting Standards In May 2015, FASB issued Accounting Standard Update (ASU) No , Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (ASU ). This ASU eliminates the requirement to categorize investments in the fair value hierarchy if their fair value is measured at NAV per share (or its equivalent) using the practical expedient as discussed in FASB Subtopic In fiscal 2015, Points of Light elected to early adopt the provisions of ASU and applied retrospective application to all prior periods presented in the notes to the financial statements (See Note 4). Reclassification Certain reclassifications have made to the prior years financial statements to conform to current year presentation. These reclassifications had no effect on previously reported changes in net assets or net assets. Subsequent Events Management has evaluated all events or transactions that occurred after September 30, 2015 through February 11, 2016, the date the financial statements are available for issuance, for potential recognition or disclosure in the financial statements. 3 Contributions Receivable Contributions receivable are summarized below: September Amounts due in: Less than one year $ 1,809,704 $ 1,851,600 One to five years 791, ,000 Less: present value discount (78,694) (70,944) Less: allowance for doubtful accounts (191,837) (542,934) Total $ 2,330,496 $ 1,681,722 Estimated future cash flows to be received after one year were discounted at rates of 4% which incorporates a risk factor for collectability.

17 Points of Light Foundation 15 4 Investments Investments are recorded at fair value and are composed of the following: Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs NAV Practical Asset Category (Level 1) (Level 2) (Level 3) Expedient Total Equity Investments $ 3,787,918 $ - $ - $ 2,376,365 $ 6,164,283 Fixed Income Investments 431, ,765,965 2,197,511 Money Market and Cash and Cash Equivalents 372, ,012 Total assets measured at fair value $ 4,591,476 $ - $ - $ 4,142,330 $ 8,733,806 Quoted Prices in Active Markets for Significant Observable Inputs Significant Unobservable Inputs Identical Assets NAV Practical Asset Category (Level 1) (Level 2) (Level 3) Expedient Total Equity Investments $ 2,469,341 $ - $ - $ 1,685,113 $ 4,154,454 Mutual funds 362, ,790 Fixed Income Investments 214, ,324 1,143,586 Money Market and Cash and Cash Equivalents 1,085, ,085,807 Total assets measured at fair value $ 4,132,200 $ - $ - $ 2,614,437 $ 6,746,637 Investment loss consisted of the following: For the years ended September Interest and dividends $ 108,780 $ 19,137 Unrealized losses, net (366,050) (33,493) Realized losses, net (39,928) (3,948) Total $ (297,198) $ (18,304) 5 Loan and Note Payable On October 5, 2011 Points of Light entered into a loan agreement with a bank to borrow $1,800,000 to finance the $3,925,000 purchase of a building and land from Hands on Atlanta (HOA) (an affiliated entity). The $1,800,000 bank loan is collateralized by the acquired land and building and bears interest at a fixed rate. Monthly principal and interest payments on the loan are based on a 20 year amortization schedule and a balloon payment for the balance at the end of 10 years (2021). On December 20, 2013 Points of Light executed an amendment to the promissory note dated October 6, 2011 with an original principal amount of $1,800,000 with an initial rate of 5.99% which was lowered to 4.99%. Points of Light is required to adhere to various covenants under the bank loan. Additionally, Points of Light signed a 25-year lease agreement with HOA beginning on October 5, In lieu of paying cash to HOA, for the remaining $2,125,000 of the purchase price, Points of Light and HOA agreed to treat the remainder as a note payable for prepaid rent on the 25-year lease agreement. The note payable represents the present value of the rent due over the course of the lease, discounted at 6%. If Points of Light sells the building, the note payable for the present value of the remainder of the prepaid rent would be due to HOA.

18 Points of Light Foundation 16 As part of the transaction HOA transferred its interest in a $750,000 endowment to Points of Light. The earnings on this endowment are restricted to be used for major maintenance on this building. On May 20, 2015 Points of Light entered into a Line of Credit arrangement with a bank for maximum borrowings of $1,000,000. The line of credit bears interest at 1 Month LIBOR plus 2.75% and all money held with the bank has been pledged as collateral. Points of Light is required to adhere to various covenants under the bank loan. The line of credit matures on May 15, 2016 and no amounts were outstanding at September 30, Subsequent to September 30, 2015 points of light drew down $1,000,000 against the available portion of the line of credit. Points of Light was in compliance with all debt covenants as of September 30, 2015 and 2014 or had received waivers of non-compliance. Future maturities of the loan and note payable are as follows: HOA Note Payable Bank Loan Total For the year ending September 30: 2016 $ 47,578 $ 74,765 $ 122, ,515 81, , ,660 85, , ,944 89, , ,753 89, ,114 Thereafter 1,697,396 1,005,239 2,702,635 Total $ 1,966,846 $ 1,425,858 $ 3,392,704 6 Related-Party Transactions Points of Light receives contributions from donor organizations that have representatives on the Points of Light Board of Directors and from Board members themselves. Points of Light received $235,342 and $1,420,622 in contributions from such related parties during the years ended September 30, 2015 and 2014, respectively. The contributions receivable for these related parties were $30,833 and $127,000 as of September 30, 2015 and 2014, respectively. 7 Savings Plan and Retirement Plan Points of Light provides a 403(b) savings plan (the Plan) for all employees. Under the Plan, Points of Light matches 50% of employee contributions to the Plan up to a maximum of 3.5% of each employee s annual compensation, as defined by the Plan agreement and can make up to 3.5% discretionary contribution. Points of Light paid $244,348 and $218,872 in the form of matching contributions to the Plan during the years ended September 30, 2015 and 2014, respectively, and made no discretionary contribution during those same periods.

19 Points of Light Foundation 17 8 Commitments and Contingencies Operating Leases Points of Light has a lease agreement for office space in Washington, DC which expires in May Points of Light entered into a lease agreement for office space in New York in February 2015 which expires January Rent expense for 2015 and 2014 was $440,040 and $398,126, respectively. Future minimum lease payments are as follows: Amount For the year ending September 30: 2016 $ 450, , , , ,739 Total $ 1,694,799 9 Temporarily Restricted Net Assets Temporarily restricted net assets were available for the following programs of Points of Light: September Time restrictions $ 395,125 $ 388,718 Purpose restrictions: Program activities 8,105,746 5,681,172 Total $ 8,500,871 $ 6,069,890 Net assets were released from temporary donor restrictions by incurring expenses satisfying the restricted purposes, by the occurrence of other events specified by donors or by the passage of time, as follows: For the years ended September Time restrictions $ 5,106 $ 1,304,312 Purpose restrictions: Program activities 4,275,814 3,134,303 Total $ 4,280,920 $ 4,438, Permanently Restricted Net Assets Permanently restricted net assets are invested in perpetuity, the income from which is expendable to support: September General operations $ 5,352,720 $ 5,067,335 Building maintenance 750, ,000 $ 6,102,720 $ 5,817,335 In October 2011, Point of Light purchased 600 Means Street from HandsOn Atlanta (HOA), an affiliate. With the purchase of 600 Means Street, there was a $750,000 endowment that came to Points of Light from HOA, where the interest can be used to cover major maintenance of the property. Points of Light has recorded the corpus of the gift as permanently restricted.

20 Points of Light Foundation 18 Endowment Net Assets Endowment net asset composition by type of fund: Temporarily Permanently September 30, 2015 Unrestricted Restricted Restricted Total Donor-restricted endowment funds $ (555,861) $ - $ 6,102,720 $ 5,546,859 Total endowment funds $ (555,861) $ - $ 6,102,720 $ 5,546,859 Temporarily Permanently September 30, 2014 Unrestricted Restricted Restricted Total Donor-restricted endowment funds $ (407,979) $ - $ 5,817,335 $ 5,409,356 Total endowment funds $ (407,979) $ - $ 5,817,335 $ 5,409,356 In accordance with UPMIFA, endowments have been preserved at the historic value, and any decreases in fair value that result from unfavorable market fluctuations reduce temporarily restricted net assets if gains have previously been reported as temporarily restricted net assets, and once reduced to zero, then as a reduction in unrestricted net assets. At September 30, 2015 and 2014, the balance of endowment funds were $555,861 and $407,979 lower than the donor funds. Permanently restricted contributions are not reduced by losses related to specific investment funds. Changes in endowment net assets: Temporarily Permanently For the two years ended September 30, 2015 Unrestricted Restricted Restricted Total Endowment net assets, September 30, 2013 $ (358,970) $ - $ 5,842,335 $ 5,483,365 Investment loss (net of fees paid) (49,009) - - (49,009) Appropriation of endowment assets for expenditure - - (25,000) (25,000) Endowment net assets, September 30, 2014 (407,979) - 5,817,335 5,409,356 Investment loss (net of fees paid) (147,882) - - (147,882) Appropriation of endowment assets for expenditure - - (25,000) (25,000) Gifted permanent net assets , ,385 Endowment net assets, September 30, 2015 $ (555,861) $ - $ 6,102,720 $ 5,546,859