BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
TABLE OF CONTENTS Page INDEPENDENT AUDITOR S REPORT 1-2 BASIC FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Statements of Functional Expenses 6-7 Notes to Basic Financial Statements 8-12
2 Victory Drive, Suite 230 D, Liberty, MO 64068 P: (816) 679-1331 F: (816) 817-1030 INDEPENDENT AUDITOR S REPORT To the Board of Directors Gift of Life, Inc. Overland Park, Kansas Report on the Financial Statements I have audited the accompanying financial statements of Gift of Life, Inc., a non-profit organization, which comprise the statements of financial position as of December 31, 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audits 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 consolidated 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 1
effectiveness of the entity s internal control. Accordingly, I 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gift of Life, Inc. as of December 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Kenney D. Hales Kenney D, Hales, CPA, PC Liberty, Missouri June 27, 2016 2
STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2015 AND 2014 ASSETS 2015 2014 Current assets: Cash and cash equivalents $ 22,817 $ 55,843 Investments with Community Foundation 184,393 162,559 Promises receivable - 6,541 Prepaid expenses 4,864 2,627 Total current assets 212,074 227,570 Capital assets Capital assets, net 2,375 1,883 Total capital assets 2,375 1,883 Other assets Intangible assets 8,992 11,445 Deposit 1,351 1,351 Total other assets 10,343 12,797 Total assets $ 224,792 $ 242,249 LIABILITIES AND NET ASSETS Liabilities: Accounts payable $ 8,684 $ 9,994 Total liabilities 8,684 9,994 Net assets: Temporarily restricted - 6,541 Unrestricted 216,108 225,714 Total net assets 216,108 232,255 Total liabilities and net assets $ 224,792 $ 242,249 The accompanying notes are an integral part of these financial statements. 3
STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 2015 2014 Revenues and gains: Fundraising events $ 171,342 $ 155,965 Contributions and grants 119,233 135,598 Donated services 39,684 40,887 Lifesavers rally 17,150 18,400 Investment income 6,626 6,171 Unrealized gain (loss) (13,395) 1,786 Total revenues and gains 340,640 358,807 Net assets released from purpose restrictions 6,541 (6,541) Total revenues, gains and losses and net assets released from purpose restrictions 347,181 352,266 Expenses: Program 287,247 264,830 Management and general 16,955 15,527 Fundraising 52,585 49,972 Total expenses 356,787 330,329 Increase (decrease) in unrestricted net assets (9,606) 21,937 Changes in temporarily restricted assets: Net assets released from purpose restrictions (6,541) 6,541 Change in temporarily restricted net assets (6,541) 6,541 Increase (decrease) in net assets (16,147) 28,478 Net assets, beginning of period 232,255 203,777 Net assets, end of period $ 216,108 $ 232,255 The accompanying notes are an integral part of these financial statements. 4
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 2015 2014 Cash flows from operating activities: Change in net assets $ (16,147) $ 28,478 Adjustments to reconcile decrease in net assets to net assets provided by (used in) operating activities: Depreciation and amortization 4,179 2,528 Change in promises receivable 6,541 6,541 Change in prepaid expenses (2,237) 1,756 Change in accounts payable (1,310) 8,344 Net cash provided (used) by operating activities (8,974) 47,647 Cash flows from investing activities: Purchases of intangible assets - (12,262) Proceeds from investments 8,032 1,786 Invested contributions (95,500) (30,000) Purchase of investments (1,584) (25,819) Transfer to operating account 65,000 42,000 Net cash used in investing activities (24,052) (24,295) Net increase (decrease) in cash and cash equivalents (33,026) 23,352 Cash and cash equivalents, beginning of year 55,843 32,491 Cash and cash equivalents, end of year $ 22,817 $ 55,843 The accompanying notes are an integral part of these financial statements. 5
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2015 (With 2014 Memorandum Totals) 2014 Management 2015 Memorandum Program and General Fundraising Total Total Accounting fees $ 3,374 $ 310 $ 194 $ 3,878 $ 4,243 Administrative fees 1,647 151 95 1,893 1,716 Amoritzation 2,134 196 123 2,453 817 Bank Charges 1,908 954 954 3,816 3,225 Computer support 2,179 200 125 2,504 2,954 Depreciation 1,502 138 86 1,726 1,711 Donated services 11,879-27,718 39,597 40,887 Dues and subscriptions 605 55 35 695 210 Entertainment and food 30,298-10,099 40,397 30,299 Fees and licenses 53 5 3 61 40 Insurance 2,869 264 165 3,298 3,274 Meeting expense 1,502 138 86 1,726 1,320 Newsletter 2,951-328 3,279 3,483 Payroll processing fees 1,283 118 74 1,475 1,408 Payroll taxes 10,420 580 580 11,580 11,617 Postage and printing 4,285 394 246 4,925 5,750 Professional fees 4,089 376 235 4,700 4,755 Rent 19,292 1,072 1,071 21,435 17,486 Salaries 136,229 7,568 7,568 151,365 151,859 Supplies 37,481 3,446 2,155 43,082 24,301 Telephone 3,884 357 223 4,464 4,591 Travel 6,110 562 351 7,023 12,898 Volunteers 1,273 71 71 1,415 1,485 TOTAL $ 287,247 $ 16,955 $ 52,585 $ 356,787 $ 330,329 The accompanying notes are an integral part of these financial statements. 6
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2014 Management 2014 Program and General Fundraising Total Accounting fees $ 3,691 $ 340 $ 212 $ 4,243 Administrative fees 1,493 137 86 1,716 Amoritzation 711 65 41 817 Bank Charges 1,613 806 806 3,225 Computer support 2,570 236 148 2,954 Depreciation 1,489 137 85 1,711 Donated services 12,266-28,621 40,887 Dues and subscriptions 183 17 10 210 Entertainment and food 22,724-7,575 30,299 Fees and licenses 35 3 2 40 Insurance 2,848 262 164 3,274 Meeting expense 1,148 106 66 1,320 Newsletter 3,135-348 3,483 Payroll processing fees 1,225 113 70 1,408 Payroll taxes 10,455 581 581 11,617 Postage and printing 5,002 460 288 5,750 Professional fees 4,137 380 238 4,755 Rent 15,738 874 874 17,486 Salaries 136,673 7,593 7,593 151,859 Supplies 21,142 1,944 1,215 24,301 Telephone 3,994 367 230 4,591 Travel 11,221 1,032 645 12,898 Volunteers 1,337 74 74 1,485 TOTAL $ 264,830 $ 15,527 $ 49,972 $ 330,329 The accompanying notes are an integral part of these financial statements. 7
NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Nature of Activities Gift of Life, Inc. (the Organization ) is a not-for-profit organization created on January 29, 1998 with a mission to educate the public regarding the life value of organ donation and to increase the number of organ donors. The Organization provides the following services in the greater Kansas City area: Life Savers Program This classroom-based program informs students of the various aspects of organ donation and encourages them to let their wishes be known to their families. In the 2014-2015 and 2013-2014 school years, 522 and 517 presentations were made to a total of 23,472 and 23,892 students and their families, respectively. The Life Savers program is also available as an all-school assembly or for larger groups. A response rate is tracked for the classroom program to determine how many actually discussed organ donation with their families. For the 2014-2015 and 2013-2014 school years, that rate was 47% and 48%, respectively. Life Mentor Program The Organization trains volunteer organ transplant recipients, recipient and donor family members and living donors to provide encouragement and support to those waiting for a life-saving transplant. Mentors and Mentees are matched based on their demographic and transplant profiles and the relationship continues through the first year post-transplant. Mentees are referred to a Life Mentors Program Manager from the four Kansas City area transplant hospitals, The University of Kansas Hospital, Saint Luke s Hospital, The Transplant Institute at Research Medical Center and Children s Mercy Hospital. At December 31, 2015 and 2014, there were a total of 60 and 88 open cases, respectively. B. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. C. Financial Statement Presentation The Organization follows FASB ASC-958-205, Financial Statements for Not-for- Profit Organizations. Under this standard, the Society is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restrict net assets. 8
NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Cash and Cash Equivalents For purposes of the statements of cash flows, Gift of Life, Inc considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. E. Investments Investments in equity securities are reported at fair value in the statements of financial position. Realized and unrealized gains and losses are recognized in the statements of activities. Return on investments, including current interest and dividends, is included as changes in unrestricted net assets in the statements of financial activities. F. Contributions The Organization derives its revenue from foundations as well as individual and corporate supporters plus its fundraising event, Go-See-Do. The Life Saver s rally also provides funds to be used by the Organization. Contributions, including unconditional promises to give, are recorded when they are received. All contributions are available for unrestricted use unless specifically restricted by the donor or grantor. Conditional promises to give are recognized when the conditions upon which they depend are substantially met. Unconditional promises to give due within twelve months are recorded at their net realizable value. Unconditional promises to give not expected to be collected within twelve months are recorded at their net realizable value discounted to their present value. G. Management 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. H. Income Tax Status The Organization is a not-for-profit organization that is exempt from income taxes under Internal Revenue Code Section 501 (c)(3). It has also been classified as an entity that is not a private foundation within the meaning of Section 509 (a) and qualifies to receive tax-deductible contributions as provided by Section 170 (b) (1) (A) (vi). 9
NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) I. Capitalization and Depreciation Capital costs with an estimated life in excess of one year are capitalized. Depreciation or amortization of such items is computed on the straight-line method over the estimated useful lives of the assets generally as follows: Furniture and fixtures Intangible assets Equipment 5 years 5 years 3-7 years J. Functional Allocation of Expenses The costs of providing the program and supporting activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among the program and supporting activities benefited. K. Fair Value Measurements The Organization uses FASB ASC 820-10, Fair Value Measurements, which provides a framework for measuring fair value under generally accepted accounting principles. This measure applies to all financial instruments being measured and reported on a fair value basis. NOTE 2 - CAPITAL ASSETS Capital assets are summarized by major classifications as follows: 2015 2014 Furniture and fixtures $ 8,794 $ 8,794 Computer and equipment 8,526 6,633 Software 1,745 1,419 Phone system 3,774 3,774 Subtotal 22,839 20,620 Less accumulated depreciation (20,464) (18,737) Net capital assets $ 2,375 $ 1,883 10
NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3 INTANGIBLE ASSETS Intangible assets at December 31, 2015 and 2014 consisted of the following: 2015 2014 Software development Life Savers $ 4,963 $ 4,963 Software development - Website 12,262 12,262 Subtotal 17,225 17,225 Less accumulated amortization (8,233) (5,780) $ 8,992 $ 11,445 NOTE 4 DONATED SERVICES The Organization reports the fair value of donated services to be recognized if the services received that either (a) create or enhance a nonfinancial asset or (b) require specialized skills, are provided by persons possessing those skills, and would need to be purchased if they were not donated. Donated services for 2015 and 2014 consisted of $39,597 and $40,887, respectively. NOTE 5 CONCENTRATION OF RISK The Organization maintains its checking account at Missouri Bank. The balance of this account is insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2015 and 2014, there were no uninsured balances. The Organization receives a large portion of its revenues from its major fundraising event, Go See Do. In the years ended December 31, 2015 and 2014, this event accounted for 42% and 40%, respectively, of total revenues received during each year. NOTE 6 LEASE COMMITMENTS Gift of Life, Inc. has a new, three-year operating lease agreement for its office space which became effective on June 1, 2015. The base monthly rental expenses for the 1,274 square footage ranges from $1,335 to $1,805 with a cost per square foot ranges from $12.57 to $17.00. Annual rent expenses for the years ended December 31, 2015 and 2014 were $21,435 and $17,486, respectively. Future minimum lease payments required under the lease for 2016 and 2017 are $21,525 and $9,024, respectively. 11
NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7 PREPAID EXPENSES Prepaid expenses consist of prepaid board and commercial liability insurance premiums as well as software and fundraising event expenses paid in the current year but for the subsequent year. NOTE 8 SUBSEQUENT EVENTS The Organization has evaluated subsequent events through June 28, 2016, the date which the financial statements were available to be issued. All liabilities outstanding at December 31, 2015 and 2014 were paid in full within sixty days after the year end. 12