Gay, Lesbian, Bisexual, Transgender Historical Society

Transcription

1 Gay, Lesbian, Bisexual, Transgender Historical Society Financial Statements & Independent Auditor s Report for the Year Ended

2 TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT...1 FINANCIAL STATEMENTS...2 Statement of Financial Position...4 Statement of Activities and Changes in Net Assets...5 Statement of Functional Expenses...6 Statement of Cash Flows...7 Notes to Financial Statements...8

3 Independent Auditor's Report To the Board of Directors Gay, Lesbian, Bisexual, Transgender Historical Society San Francisco, California We have audited the accompanying financial statements of the Gay, Lesbian, Bisexual, Transgender Historical Society (a nonprofit organization), which comprise the statement of financial position as of, the related statements of activities and changes in net assets, functional expenses, and cash flows for the year 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 audit. We conducted our audit 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 of 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 an assessment of the risks of the 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. 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 the Gay, Lesbian, Bisexual, Transgender Historical Society as of, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the organization s December 31, 2016, financial statements and our report dated January 19, 2018, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2016, is consistent, in all material respects, with the audited financial statements from which it has been derived. A Professional Accountancy Corporation July 20, 2018

4 Statement of Financial Position with Comparative Totals for December 31, 2016 ASSETS 12/31/ /31/2016 Total (Note 2) Current Assets: Cash $ 239,796 $ 124,090 Investments (Note 3) 21,279 20,274 Grants & contributions receivable 353,690 85,486 Accounts receivable 100,927 75,110 Prepaid expenses 2,562 2,374 Inventory 9,533 5,261 Total current assets 727, ,595 Deposits 32,028 32,002 Property & equipment, net of accumulated depreciation (Note 4) 66,130 10,032 Collections (Note 2) - - TOTAL ASSETS $ 825,945 $ 354,629 LIABILITIES & NET ASSETS Current Liabilities: Accounts payable $ 29,323 $ 11,160 Accrued vacation pay 8,434 7,642 Government grant advance - 11,575 Total current assets 37,757 30,377 Deferred rent 26,144 11,978 TOTAL LIABILITIES 63,901 42,355 Net Assets Unrestricted 334, ,675 Temporarily restricted (Note 5) 427,530 99,599 TOTAL NET ASSETS 762, ,274 TOTAL LIABILITIES & NET ASSETS $ 825,945 $ 354,629 See accompanying notes to financial statements and independent auditor's report

5 Statement of Activities and Changes in Net Assets for the Year Ended with Comparative Totals for the Year Ended December 31, Temporarily 2017 Total Unrestricted Restricted Total (Note 2) Support & Revenue: Government grants/contracts $ 363,378 $ 363,378 $ 182,565 Foundation & corporate grants 108,888 $ 30, , ,248 Contributions 189,636 15, , ,036 Bequests 14, , ,030 25,000 Net assets released from restriction: Satisfaction of donor restrictions 117,635 (117,635) - - In-kind support (Note 2) 27,245 27,245 24,646 Special events 55,224 55,224 45,611 Admission fees 69,504 69,504 63,759 Royalties 89,999 89,999 81,394 Sales, net (Note 6) 33,155 33,155 26,160 Other 8,771 8,771 8,138 Total support & revenue 1,077, ,931 1,405, ,557 Expenses: Program services 761, , ,471 General & administrative 80,146 80,146 66,778 Fundraising 114, ,217 92,088 Total expenses 955, , ,337 CHANGE IN NET ASSETS 121, , , ,220 NET ASSETS, January 1 212,675 99, ,274 91,054 NET ASSETS, December 31 $ 334,514 $ 427,530 $ 762,044 $ 312,274 See accompanying notes to financial statements and independent auditor's report

6 Statement of Functional Expenses for the Year Ended with Comparative Totals for the Year Ended December 31, Program General & 2017 Total Services Administrative Fundraising Total (Note 2) Salaries $ 172,428 $ 21,834 $ 30,192 $ 224,454 $ 160,874 Employee benefits & payroll taxes 29,519 7,614 7,239 44,372 37,199 Contractors - & professional services 217,147 34,944 26, , ,906 Advertising & promotion 3, ,750 5,052 Office expenses 38,907 2,110 5,925 46,942 38,359 Occupancy 257,981 11,076 11, , ,923 Travel 5, ,792 2,685 Refreshments & catering 4, ,232 4,703 Insurance 5, ,090 7,116 Special event production ,083 29,083 20,950 Bank fees 4, ,489 7,792 Depreciation 14, ,378 3,384 Moving expenses ,006 42,123 Other expenses 6, ,959 9,348 6,271 Total $ 761,263 $ 80,146 $ 114,217 $ 955,626 $ 749,337 See accompanying notes to financial statements and independent auditor's report

7 Statement of Cash Flows for the Year Ended with Comparative Totals for the Year Ended December 31, (Note 2) Cash flows from operating activities: Change in net assets $ 449,770 $ 221,220 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation expense 14,378 3,384 Donated securities received (40,225) (20,246) Contributions received as forgiven debt - (12,500) Recognition of deferred rent liability 14,166 11,978 Other changes in assets and liabilities: (Increase) decrease in grants receivable (268,204) (29,768) (Increase) decrease in accounts receivable (25,817) (56,177) (Increase) decrease in other current assets (4,460) (4,576) (Increase) decrease in deposits (26) (23,201) Increase (decrease) in accounts payable 18,163 (3,514) Increase (decrease) in accrued vacation 792 4,680 Increase (decrease) in government grant advance (11,575) (15,191) Cash provided (used) by operating activities: 146,962 76,089 Cash flows from investing activities: Purchases of capital assets (70,476) (7,961) Liquidation of investments 39,220 21,369 Cash provided (used) by investing activities: (31,256) 13,408 Cash flows from financing activities: Payments made on related party loans - (10,000) Cash provided (used) by financing activities: - (10,000) Cash provided (used) during year 115,706 79,497 Cash balance, beginning of year 124,090 44,593 Cash balance, end of year $ 239,796 $ 124,090 See accompanying notes to financial statements and independent auditor's report

8 Notes to Financial Statements 1. The Society Nature of Activities The Gay, Lesbian, Bisexual, Transgender Historical Society (the Society) is a nonprofit organization that collects, preserves and interprets the history of GLBT people and the communities that support them. Founded in 1985, the Society is recognized internationally as a leader in the field of GLBT public history. The Society collects historically important archival material, oral histories, and ephemera, and produces exhibits and programs. Funding Major funding is received through government contracts, foundation grants and individual donations. This is supplemented with program revenue consisting of admission fees, sales of mission-related materials, and royalties. 2. Summary of Significant Accounting Policies Basis of Accounting The accompanying financial statements are prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America. Under the accrual basis of accounting, support is recognized when it is awarded, revenue is recognized when it is earned and realizable, and expenses are recognized when they are incurred. Basis of Presentation Net assets, revenues, expenses, gains, and losses are classified based upon the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Society and changes therein are classified and reported as follows: Unrestricted net assets, which includes resources not subject to donor-imposed restrictions. Temporarily restricted net assets, which includes resources subject to donor-imposed stipulations that may or will be met either by actions of the Society and/or the passage of time. Permanently restricted net assets, which includes resources subject to donor-imposed restrictions that they be maintained permanently by the Society. The Society does not currently have any permanently restricted net assets. Accounting for Restricted Support The Society 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. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. If restricted donations are made and restrictions satisfied during the same fiscal year, activity is reported as unrestricted in the statement of activity. If restrictions are not satisfied at fiscal-year-end, donations are recorded as temporarily restricted

9 Notes to Financial Statements The Society reports gifts of fixed assets as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those assets must be maintained, the Society reports expirations of donor restrictions when the donated or acquired assets are placed in service. Cash & Equivalents Cash consists primarily of funds held in a bank checking account. Investments Investments currently consist of corporate stock donated to the Organization and not yet liquidated as of year-end. It is recorded at fair value based on unadjusted quoted prices for identical assets in active markets that are accessible at the measurement date (level 1 inputs as defined by generally accepted accounting principles). Accounts Receivable Accounts receivable consist primarily of royalties owed to the Organization as of the balance sheet date, but not paid to the Organization until the subsequent year. Grants & Contributions Receivable Receivables from government contracts are reported at the amount management expects to collect on balances outstanding at year-end. Other amounts are recorded based on formal, written promises received from donors. Since all amounts are deemed fully collectible within one year, no allowance for bad debt or present value discount has been recorded. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables, and accounts payable approximate fair value because of the short maturity of these instruments. Property & Equipment Property and equipment, consisting of office furnishings, equipment and leasehold improvements, are stated at cost. Purchases of property and equipment exceeding $500 are capitalized. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets, which is five years. Collections Archival collections consist of personal papers, organizational records (correspondence, diaries, manuscripts, other documents, photos, film, and videotape), periodicals, and ephemera relating to gay and lesbian history. In accordance with FASB ASC 958, the Society has elected not to capitalize its collections. Archival materials are typically donated to the Society and these donations are not recognized as contributions in the accompanying financial statements. Purchases of archival materials are recognized as expense during the year of purchase. As of, the cumulative cost of purchased archival materials was approximately $33,851. No archival materials were purchased during

10 Notes to Financial Statements Deferred Rent The Society s facility operating lease contains a staggered rent schedule whereby the monthly rent payment increases by 3% each year. In accordance with generally accepted accounting principles, the cost of the lease is recorded on a straight-line basis so that rent expense is spread evenly over the course of the term. The cumulative difference between the amount of rent paid to date and the amount of expense recognized is recorded as a deferred rent liability. Sponsored Projects From time to time, the Society serves as fiscal sponsor for various unincorporated groups and individuals whose charitable purpose is aligned with the Society s mission. Because the Society maintains legal and financial control over these projects, they are considered activities of the Society and reflected in the accompanying financial statements. In-kind Services Donated skilled and professional level services, consisting of archivists and other trained museum professionals, are recognized in the financial statements as revenue and expense. Such services are valued at the rate which the Society would have to pay for them had they not been performed on a volunteer basis. Functional Expenses The Society allocates its expenses on a functional basis among its various programs and support services. Expenses that can be identified with a specific program or support service are allocated directly. Personnel expenses and other shared facility costs are allocated to functions based on the estimated relative amount of staff time spent on each function. Income Taxes As a public charity, the Society is exempt from income taxes except on activities unrelated to its mission. As management believes that all the Society s activities are directly related to its mission, no provision has been made for income tax expense. The Society s federal Return of Organization Exempt from Income Tax (Form 990) filings for the tax years ending in 2015 through 2017 are subject to examination by the Internal Revenue Service, generally for three years after they were filed. The Society s California Exempt Organization Annual Information Return (Form 199) filings for the tax years ending in 2014 through 2017 are subject to examination by the Franchise Tax Board, generally for four years after they were filed. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Prior Year Totals Prior year totals are presented for comparative purposes only. For a full presentation of 2016, please refer to the prior year financial statements. Certain amounts in the 2016 financial statements have been reclassified to conform to the 2017 presentation

11 Notes to Financial Statements 3. Investments Fair Value Disclosures The Organization values its investments on a recurring basis in accordance with FASB ASC #820, which establishes a fair value framework in accordance with generally accepted accounting principles. ASC #820 clarifies the definition of fair value, taking the position that fair value is the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the valuation date. There are three defined levels in the fair value hierarchy: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and are unobservable (i.e. supported by little or no market activity). Fair value of assets measured on a recurring basis at consist of: Restriction Significant Restriction Quoted Prices Other Significant Restriction in Active Observable Unobservable Restriction Markets Inputs Inputs Restriction Fair Value (Level 1) (Level 2) (Level 3) Capital stock Thermo Fisher (TMO) $19,748 $19,748 Other 1,531 1,531 Total $21,279 $21, Property & Equipment Fixed assets are stated at cost, as follows: Furnishings & equipment $81,858 Leasehold improvements 47, ,217 Less: Accumulated depreciation (63,087) Fixed Assets, net $66,

12 Notes to Financial Statements 5. Temporarily Restricted Net Assets As of, the balance of temporarily restricted net assets consisted of consisted of contributions restricted for the following: Archive program $400,000 Sponsored projects 12,530 Bay Area Reporter project 10,000 Other activities 5,000 Total $427, Sales Gift shop sales $33,365 Books & periodicals 10,601 Gross sales 43,966 Less: cost of goods sold (10,811) Total $33, Operating Leases The Society rents its facility in downtown San Francisco under a 7-year operating lease that expires in Under the terms of the lease, the initial monthly base rent is set at $15,840 and increases 3% each year. The Society is also responsible for its pro rata share of increases in building expenses. The Society rents museum space for $4,500 per month under an operating lease that expires in 2020 but is cancellable by the Society if it provides the landlord with nine months notice. In addition, a copier is leased for $195 per month under a five-year agreement expiring in As of, future minimum lease payments are as follows: 2018 $202, , , , , ,636 Total $1,144,

13 Notes to Financial Statements 8. Contingencies, Risks & Uncertainties Bequest The balance of grants and contributions receivable includes an outstanding bequest distribution of approximately $250,000. Although the Society is entitled to receive this distribution, the trustee of the estate has indicated that there may be a reduction due to insufficient assets of the underlying estate. The amount of any potential reduction cannot be estimated at this time, but is not expected to be material. Funding Source Requirements The Society receives funding that is restricted for specific programs and projects. If such restrictions are not met in accordance with the funding source agreement, there is the possibility that amounts would have to be returned to the funding source. It is management's opinion that all restrictions and conditions have been met for grants and contributions that have been either recorded as unrestricted or for which donor restrictions have been released. Investment Risk The Society s investments in marketable securities are uninsured and subject to fluctuations in fair value. 9. Subsequent Events Financial Statement Preparation In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through July 20, 2018, the date the financial statements were available to be issued