friends committee on national legislation fcnl education fund

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015

TABLE OF CONTENTS

PAGE #

INDEPENDENT AUDITORS’ REPORT CONSOLIDATED FINANCIAL STATEMENTS Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses Notes to the Financial Statements SUPPLEMENTARY INFORMATION Independent Auditors’ Report on Additional Information

2

S

—

4 5 6 7 21

22

FRIENDS COMMITTEE ON NATIONAL LEGISLATION Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses

23 24 25 26

FCNL EDUCATION FUND Statement Statement Statement Statement

27 28 29 30

of of of of

Financial Position Activities Cash Flows Functional Expenses

FRHEDMAN & ASSOCHATES, P.C. CERTIFIED PUBLIC ACCOUNTANTS

401 NORTH WASHINGTON STREET, SUITE 330 ROCKVILLE, MARYLAND 20850 PHONE: 301-279-8900 FAX: 240-268-6906

www.friedcpa.com

Executive Committee and Board Friends Committee on National Legislation FCNL Education Fund 245 Second Street, NE Washington, DC 20002 Independent Auditors’ Report Dear Board Members: We have audited the accompanying consolidated financial statements of Friends Committee on National Legislation and the FCNL Education Fund (nonprofit organizations), which comprise the consolidated statement of financial position as of June 30, 2015 and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated 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 consolidated financial statements are free of 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 consolidated 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 consolidated 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 consolidated financial statements. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS / MARYLAND ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS

2

Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Friends Committee on National Legislation and the FCNL Education Fund as of June 30, 2015 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. Correction of Error As discussed in Note 21 to the consolidated financial statements, certain errors relating to expenses incurred on two grants awarded to the Friends Committee on National Legislation were erroneously reported on the financial statements of the FCNL Education Fund, were discovered by management during the current year. Accordingly, amounts reported as Due to/From FCNL Education Fund, Inc. and Net Assets have been restated to correct the error. Our opinion is not modified with respect to that matter. Other-Matters Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The schedule of functional expenses on Page 7 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Associates, P.C. Certified Public Accountants Rockville, MD September 22, 2015

3

FRIENDS COb~ITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND CONSOLIDATED STATEMENT OF FINANCIAL POSITION JUNE 30, 2015

TEMPORARILY RESTRICTED FUNDS

UNRESTRICTED FUNDS ASSETS Current Assets Cash and Cash Equivalents $ Investments (Note 2) (Note 18) Unconditional Promises to Give, Net (Note 8) Beneficial Interest in Split Interest Agreement (Note 15) Accrued Interest Receivable Employee Advance & Other Receivables Due to/(from) Other Funds Insurance — Cash Value Prepaid Expenses Total Current Assets $ Other Assets Cash & Cash Equivalents $ Investments (Note 2) (Note 18) Investments in Split—Interest Agreements (Note 3) (Note 18) Unconditional Promises to Give, Net (Note 8) Deposits Property and Equipment, Net (Note 4) Total Other Assets TOTAL ASSETS LIABILITIES AND NET ASSETS LIABILITIES Current Liabilities Accounts Payable Accrued Vacation Security Deposits Held Liability to Life Beneficiary Loans and Notes Payable (Note 5) Total Current Liabilities

$

2,178,533 2,846,644

1,291,435 2,631,727

34,453

846,673

244,907 22,283

965

4,076 112,033) 27,994 88, 811 5,335,668

PERMANENTLY RESTRICTED FUNDS

$

TOTAL FUNDS

$

—

3,469,968 5,478,371

147,477

1,028,603

—

244, 907 23,248 4,076

114,566

2,533)

___________

—

$

4,885,366

$

144,944

$

$

643,059 2,060,697

$

584,077 1,634,051

$

—

6,053,215

1,317,136

27,994 88, 811 10,365,978 1,227,136 3,694,748 7,370,351

1,049,015

235,263

1,284,278 11,502 5,209,062

11,502 5,209, 062

$11,273,779

$

5,069,907

$

2,453,391

$

18,797,077

$16,609,447

$

9,955,273

$

2,598.335

$

29,163,055

$

$

$

73,064 90,520 4,196 3,069 270,768 441,617

73,064 90,520 4,196

$

—

270,768 438,548

— —

—

3,069

—

$

—

—

$

—

— —

$

3,069

$

—

$

$

364,805

$

—

$

Long—Term Liabilities Pooled Income: Discount for Future Interest Annuity Payment Liability Trust Payment Liability Loans and Notes Payable (Note 5) Total Long—Term Liabilities TOTAL LIABILITIES

$ 441,258 2,761,527 3,200,075

$ $

687,278 690,347

$ $

NET ASSETS

$13,409,372

$

9,264,926

$

$16,609,447

$

9,955,273

$

(Note 6,

7 and 13)

TOTAL LIABILITIES AND NET ASSETS

2,320,269 322,473

$ $

$ $

364,805 2,320,269 322,473 541,258 3,448,805 3,890,422

2,598,335

$

25,272,633

2,598,335

$

29,163,055

— —

The accompanying notes are an integral part of these financial statements.

4

FRIENDS COMMITTEE ON NATIONAL LEGISLP~TION FCNL EDUCATION FUND CONSOLIDATED STATEMENT OF ACTIVITIES JUNE 30, 2015

UNRESTRICTED

TEMPORARILY RESTRICTED

PERMANENTLY RESTRICTED

TOTAL

FUNDS

FUNDS

FUNDS

FUNDS & OTHER SUPPORT Contributions Bequests Rental Loss, net of Rental Expense Annual Meeting Registration Other Income Net Investment Income (Note 2) Net Assets Released from Restrictions — Satisfaction of Program Restrictions Net Assets Released from Restrictions — Endowment Income

REVENUE

$ (

TOTAL REVENUE & OTHER SUPPORT EXPENSES Program Administration Development Total Expenses CHANGE IN NET ASSETS FROM OPERATIONS OTHER CHANGES IN NET ASSETS Contributions to Planned Giving Adjustments for Changes in Planned Giving Agreements Net Investment Income

$

2,752,689 1,835,134 46,220) 106,804 5,745 13,584

2,580,005 363,061

$

5,649,715 2,198,195

(

—

46,220) 106,804 5,745 92,438

— —

—

78,854

1,171,334

(

1,171,334)

171,276

(

171,276)

—

$

6,010,346

$

$

2,977,762 680,999 1,457,516

$

$

5,116,277

$

$

894,069

$

1,679,310

$

317,021

$

36,900

$

9,733

$

96,698

(

$

317,021

1,679,310

—

$

317,021

$

8,006,677

$

—

$

2,977,762 680,999 1,457,516

$

5,116,277

$

2,890,400

—

209,634) 423,527

—

$

170,470

—

$

143,331

(

39,164) 423,527

—

TOTAL CHANGES IN NET ASSETS

$

1,144,862

$

1,859,513

$

413,719

$

3,418,094

NET ASSETS - BEGINNING AS PREVIOUSLY REPORTED

$12,207,184

$

7,462,739

$

2,184,616

$

21,854,539

57,326

($

NET ASSETS — BEGINNING AS RESTATED

$12,264,510

$

7,405,413

$

2,184,616

$

21,854,539

NET ASSETS

$13,409,372

$

9,264,926

$

2,598,335

$

25,272,633

ADJUSTMENT

(Note 21>

—

END OF YEAR

$

57,326)

$

—

$

—

The accompanying notes are an integral part of these financial statements.

5

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND CONSOLIDATED STATEMENT OF CASH FLOWS JUNE 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES: Increase (Decrease) in Net Assets Adjustment to Reconcile Change in Net Assets to Net Cash Provided By/(Used in) Operating Activities: Depreciation and Amortization Unrealized (Gain) /Loss on Investments Realized (Gain) /Loss on Investments Changes in Assets and Liabilities: (Increase) /Decrease in: Receivables: Beneficial interest in Split—Interest Agreement — FTC Unconditional Promises to Give, Net Grants and Other Receivables Accrued Investment Income Insurance — Cash Value Prepaid Expenses Deposits Outside Split Interest Agreement Increase! (Decrease) in: Accounts Payable & Accrued Expenses Security Deposits Held

$

244,740 50,484 455,298)

$

61,833 1,056,041) 13,235) 1,868) 409) 29,480) 11,502) 11,575

/

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Fixed Assets Contributed Stocks Proceeds from Sale of Investments Purchase of Investments

/

($

INCREASE / (DECREASE) CASH EQUIVALENTS

$

2,184,984

($

2,789,973)

($

182,958)

($

787,947)

(USED IN)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from / payments on: Loans and Notes Payable Annuities/Trusts, Net

/

1,233,110)

125,320) 624,250) 8,528,211 10,568,614)

INVESTING ACTIVITIES

NET CASH PROVIDED BY FINANCING ACTIVITIES

($ (USED IN)

OPERATING ACTIVITIES

NET CASH PROVIDED BY

3,418,094

35,909) 2,000

TOTAL ADJUSTMENTS

NET CASH PROVIDED BY

$

($

86,135) 96,823)

(USED IN)

IN CASH AND

CASH AND CASH EQUIVALENTS

—

BEGINNING

$

5,485,051

CASH AND CASH EQUIVALENTS

-

ENDING

$

4,697,104

$

534

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Expense

The accompanying notes are an integral part of these financial statements.

6

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES JUNE 30, 2015

ADMINISTRATIVE

PROGR2~M EXPENSES Salaries Employee Benefits

DEVEL OPEMENT

TOTAL

$

1,412,565 332,955

$

392,585 82,793

$

522,681 131,651

$

2,327,831 547,399

$

1,745,520

$

475,378

$

654,332

$

2,875,230

Advertising Insurance Interest List Rental Expense Meetings and Travel Occupancy Supplies, Licenses and Miscellaneous Expenses Postage Printing Professional Fees Web Design and Maintenance Dues, Memberships and Subscriptions Telephone

$

5,808 3,250

$

2,164 1,082 534

$

3,466 1,006

$

8,727 106,587 101,108

11,438 5,338 534 8,727 589,848 449,415

43,448 96,214 178,986 252,589 890

102,552 142,977 313,728 494,192 37,583

3,693 6,470

42,841 41,874

TOTAL EXPENSES

$

Total Salaries and Employee Benefits

—

454,020 273,331

29,241 74,976

36,541 44,294 134,742 182,118 36,693

22,563 2,469

30,567 20,878

8,581 4,526

2,977,762

—

—

—

59,485 —

$

680,999

$

1,457,516

$

5,116,277

The accompanying notes are an integral part of these financial statements.

7

FRIENDS CObdMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTE S TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING:

The accompanying consolidated financial statement of Friends Committee on National Legislation (FCNL) and FCNL Education Fund (Ed Fund) has been prepared on the accrual basis of accounting and accordingly reflects all significant receivables, payables, and other liabilities. BASIS OF PRESENTATION:

Financial statement presentation follows the recommendations of the FASB ASC 958-205 (formerly the Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-For-Profit Organizations) . Under FASB 958-205, the Organization 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 restricted net assets. In addition, the Organization is required to present a statement of cash flows. CASH AND CASH EQUIVALENTS: For purposes of the Statement of Cash Flows, the unrestricted highly liquid investments with an initial less to be cash equivalents.

Organization considers all maturity of three months or

PRINCIPLES OF CONSOLIDATION:

The accompanying financial statements reflect the consolidated financial statements of Friends Committee on National Legislation (FCNL) and FCNL Education Fund (Ed Fund) Members of the FCNL Executive Committee serve on the ED Fund’s Board of Directors. FCNL and the Ed Fund share common facilities and personnel. Material inter— organization transactions and balances have been eliminated. CONTRIBUTIONS: DONOR-IMPOSED RESTRICTIONS:

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the reporting period in which the revenue is recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the Statement of Activities as net assets released from restrictions. ESTIMATES: Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

8

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND FINANCIAL POLICIES

(continued):

EXPENSE ALLOCATION:

The costs of providing various programs and other activities have been summarized on a functional basis in the Statement of Activities and in the Statement of Functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefitted. INCOME TAX STATUS:

The Friends Committee on National Legislation is a not-for-profit organization defined under Section 501(c) (4) of the Internal Revenue Code as determined in an exemption letter dated September 10, 1946. The FCNL Education Fund is a not-for-profit organization defined under Section 501(c) (3) of the Internal Revenue Code as determined in an exemption letter dated October 1, 1982. INVESTMENTS: The Organizations carry investments in marketable securities with readily determinable fair values and all investments in debt securities at their fair values in the Consolidated Statement of Financial Position. Unrealized gains and losses are included in the change in net assets in the accompanying Consolidated Statement of Activities. Investment income and gains restricted by donors are reported as increases in unrestricted net assets if the restrictions are met (either a stipulated time period ends or a purpose restriction is accomplished) in the reporting period in which the income and gains are recognized. Investment expenses are netted against investment income. NATURE OF ACTIVITIES:

The Friend Committee on National Legislation’s programs bring concerns and values of the Religious Society of Friends to bear on public policy in our nation’s capitol. The FCNL Education Fund operates a broad outreach and education program with members of the Religious Society of Friends and other citizens, which conducts analysis and research on issues of concern to Friends, including peace, social justice, human rights and the environment. PROPERTY,

EQUIPMENT AND DEPRECIATION:

The Friends Committee on National Legislation and the FCNL Education Fund capitalize all expenditures for property and equipment in excess of $2,500. Purchased property and equipment are recorded at cost. Donated property and equipment are carried at the approximate fair value at the date of donation. Depreciation is computed using the straight—line method based on the following estimated useful lives: Years

Building & Improvements Computer & Software Equipment & Furniture

30 5 5-10

Expenditures for maintenance and repairs are charged to expense as incurred.

9

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNI EDUCATION FUND NOTE S TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1-SUNM~RY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND FINANCIAL POLICIES

(continued):

PROMISES TO GIVE:

Unconditional promises to give are recognized as revenues in the period received and as assets, decreases of liabilities, or expenses depending on the form of benefits received. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional.

FAIR VALUE INSTRUMENTS: The Organization adopted FASB ASC 820-10 as amended on July 1, 2008. The effective date of FASB ASC 820-10 with respect to the fair value measurement and disclosure of financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, is January 1, 2009. FASB ASC 820—10 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under FASB ASC 820-10 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 on the measurement date. Valuation techniques used to measure fair value under FASB ASC 820-10 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. ENDOWMENTS: In August 2008, the Financial Accounting Standards Board issued FASB Staff Position No FAS 117—1, “Endowments of Not—for—Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds” (FSP FAS 117-1) . FSP FAS 117-1 provides guidance on the net asset classification of donor-restricted endowment funds for a nonprofit organization that is subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) . FSP FAS 117-1 also requires additional disclosures about an organization’s endowment funds (both donor-restricted endowment funds and board-designated endowment funds) whether or not the organization is subject to UPMIFA. The District of Columbia enacted UPMIFA, the provisions of which apply to endowment funds new and existing. The Organization has adopted FSP FAS 117—1. The Organization, on the advice of legal counsel, has determined that the majority of the Organization’s permanently restricted net assets meet the definition of endowment funds under UPMIFA.

10

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNI EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 2 — INVESTMENTS: Investments at June 30,

2015 are summarized as follows: REALIZED GAINS! (LOSSES) 2015

MARKET VALUE 06/30/15 FCNI EDUCATION FUND: Common Stock: Reserves Building Fund: General Capital Campaign: Friend in Washington Undesignated

UNREALIZED GAINS! (LOSSES) 2015

INTEREST DIVIDENDS 2015

8,374 4,933

($ C

57,530 903,942

55 3,295

( (

148) 8,921)

437 26,260

$1,766,670 1,108,333

$

$

22,673) 13,357)

66,742 39,318

Youth Involvement Endowment: General Capital Campaign

60,182

400

(

1,083)

3,189

2,779,644 610,809

12,505 1,802

( (

33,854) 4,878)

99,657 14,360

Total Investments FCNL Education Fund

$7,287,110

$

31,364

($

84,914)

$1,081,298

($

($

25,998)

FRIENDS COMMITTEE ON NATIONAL LEGISLATION: Co~on Stock: Reserves Capital Campaign: Undesignated Youth Involvement Endowment: General Capital Campaign

501,740 —

1,205)

C C

171) 14)

( (

$

249,963

$

3,693) 296)

13,679 1,943 156

183,735 119,236

4,510 617

Total Investments FRIENDS COMMITTEE ON NATIONAL LEGISLATION

$1,886,009

($

Total Investments

$9,173,119

$

Current Assets: Other Assets:

$5,478,371 3,694,748

Total Investments

$9,173,119

1,390) 29,974

11

($

29,987)

$

20,905

($

114,901)

$

270,868

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 3

-

INVESTMENTS

-

SPLIT-INTEREST AGREEMENTS:

CHARITABLE REMAINDER TRUSTS:

Charitable remainder trusts are arrangements in which donors establish and fund trusts with specified distributions to be made to designated beneficiaries over the trusts’ term. Upon termination of each trust, FCNL Education Fund receives the assets remaining in the trust. FCNL Education Fund may ultimately have unrestricted use of these assets, or the donors may place permanent or temporary restrictions on their use. The present value of the estimated future payments for the year ended June 30, 2015 is calculated using a discount rate of 2.2% and applicable mortality tables. CHARITABLE GIFT ANNUITIES: Charitable gift annuities are arrangements between donors and FCNL Education Fund in which the donors contribute assets to the Organization in exchange for promises by FCNL Education Fund to pay a fixed amount for a specified period of time to the donors or individuals designated by the donors. The present value of the estimated future payments for the year ended June 30, 2015 is calculated using a discount rate of 2.2% and applicable mortality tables. The contribution revenue received for the year ended June 30, 2015 from charitable gift annuities was $59,628. POOLED INCOME FUND: FCNL Education Fund has established a pooled income fund. This fund is divided into units and donors are assigned a specific number of units based on the proportion of the fair value of their contributions to the total fair value of the pooled income fund on the date of the donor’s entry to the pooled fund. Until a donor’s death, the donor is paid the actual income earned on the donor’s assigned units. Upon the donor’s death, the value of the units is available to the FCNL Education Fund for its unrestricted use. The present value of the estimated future payments for the year ended June 30, 2015 is calculated using a discount rate of 3.377% and applicable mortality tables. The contribution revenue received for the year ended June 30, 2015 from charitable gift annuities was $83,703.

Split—Interest Agreements at June 30,

2015 are summarized as follows: REALIZED GAINS/ (LOSSES) 2015

MARKET VALUE

06/30/15 FCNI EDUCATION FUND Common Stocks: Pooled Income Annuities Trusts Total Split-Interest Agreements

$

757,683

$

6,053,215 559,453

$7,370,351

GAINS! (LOSSES) 2015

21,926 334,033 87,130

$

UNREALIZED

443,089

12

$

—

INTEREST AND DIVIDENDS 2015

$

74,922

(

10,505)

$

64,417

4,549 74,798

7,210

$

86,557

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 4 - PROPERTY AND EQUIPMENT: Property and Equipment at June 30,

2015 are summarized as follows:

Cost Land Building & Improvements Furniture & Equipment Total Property and Equipment

$

589,933

Accumulated Depreciation

$

6,448,527 708,261

$

7,746,721

$

—

1,915,780 621,879

$

2,537,659

Depreciation Expense

Net

$

589,933 4,532,747 86,382

$

5,209,062

$

210,066 34,674

244,740

NOTE 5 - LOANS AND NOTES PAYABLE: The Organization’s obligations under notes payable consist of the following: Friends Committee on National Legislation Short-Term: Non—interest bearing, unsecured, Mortgage Payable — BB&T Bank

$

demand notes

demand notes

demand notes

TOTAL MORTGAGE PAYABLE: On October 1, 2011, the and obtained a mortgage $768,000. The mortgage payments of $7,778 with balance at June 30, 2015

196,728 74,040

$

196,728 74,040

270,768

$

270,768

—

$

$

—

$

$

—

$

441,258

Sub—total

Total: Non-interest bearing, unsecured, Mortgage Payable — BB&T Bank

Total

$

—

Sub—total Long-Term: Non—interest bearing, unsecured, Mortgage Payable — BB&T Bank

—

FCNL Education Fund

441,258

$

—

$

441,258

$

441,258

$

—

$

196,728 515,298

$

196,728 515,298

$

—

$

712,026

$

712,026

Organization purchased an adjacent property at 205 C Street from BB&T Bank on the property. The principal amount is bears a fixed interest rate of 3.95% and is due in monthly a final payment due on September 22, 2021. The outstanding was $515,298.

13

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 6 - TEMPORARILY RESTRICTED NET ASSETS: The Organization has temporarily restricted net assets $9,264,926. The components of which are as follows:

Building Fund Trusts Pooled Income Native American Program ARCA Foundation Colombe Foundation Humanity United Open Society Fund Ploughshares Foundation Other Capital Campaign Donor—Restricted Endowment Income Total Temporarily Restricted Net Assets

$

FCNL Education Fund 1,421,614 475,352 306, 107

at

June

Friends Committee on National Legislation $

30,

2015

Total

$ 1,421,614 475,352 306, 107

2,500 68,389 86,099

1,288,744 178,276

2,500 68,389 198,864 70, 833 94, 812 4, 500 4,027,672 2,594,283

1,747,930

$ 9,264,926

112,765 70,833 94, 812

4,500 2,738,928 2,416,007

$ 7,516,996

totaling

$

NOTE 7 - PERMANENTLY RESTRICTED NET ASSETS: The Organization has permanently restricted net assets at June 30, 2015 totaling $2,598,335. These amounts represent endowments, the components of which are follows:

FCNL Education Fund 0 Intern Freeman Intern Builders of a Better World Levering Fund Lepke Intern Endowment Native American Youth Involvement Capital Campaign: Laura Wilcox Fund Capital Campaign: Youth Involvement Capital Campaign: Friend in Washington Capital Campaign: Sustain Lobbying General Endowment Total Permanently Restricted Net Assets

$

463,006 260, 431 58,485 20, 011 104,784 14,292 5,000 257, 604 629, 978 40,000

Friends Committee on National Legislation

$

$ 2,070,637

14

$

190,449 46,480 28, 372 69, 092 80, 331

463,006 280, 431 58,485 41,855 104,784 85,422 5,000 448,053 676,458 68, 372 69,092 297,377

527,698

$ 2,598,335

20,000 21,844 71, 130

217,046

$

Total

as

FRIENDS CONMITTEE ON NATIONAL LEGISLATION FCNI EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATE~NTS JUNE 30, 2015 NOTE 8 - UNCONDITIONAL / CONDITIONAL PROMISES TO GIVE: The Organization has unconditional promises to give $2,312,881 which is made up of the following:

$ 1,875,388

Unconditional Promises to Give Before Unamortized discount Less: Unamortized Discount at 3% Subtotal Less: Allowance for Uncollectible Net Unconditional Promises to Give

$ 1,875,388 (

111,582)

June

30,

2015

Friends Committee on National Legislation

FCNL Education Fund Unconditional Promises for Future Periods

at

$

576,536

$

576,536 27,461)

(

totaling

Total

$

2,451,924

$

2,451,924 139,043)

(

$ 1,763,806

$

549,075

$

2,312,881

$ 1,763,806

$

549,075

$

2,312,881

Amounts due in: Less than one year One to five years Total

$

1,028,603 1,284,278

$

2,312,881

In addition, the Organization received the following conditional promises to give that are not recognized as assets in the Consolidated Statement of Financial Position. One—half interest in charitable remainder unitrust agreement, of which American Friends Service Committee serves as trustee

$

100,000

One-sixth interest in charitable remainder unitrust agreement which is administered by the Mennonite Mutual Aid Trust Company

23,750

$

Total

123,750

NOTE 9 - EMPLOYEE BENEFIT PLAN: The Organization has a tax deferred annuity plan for its employees. Participation by the employees in the plan is voluntary. The Organization contributes 10% of the employee’s salaries for all employees who have completed one year of service. During the year ended June 30,

2015,

the Organization’s total contributions were:

Friends Committee on National Legislation FCNL Education Fund Total

15

$

47,225 108,643

$

155,868

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 10

-

DESCRIPTION OF PROGRAM A1~D SUPPORTING SERVICES:

PROGRAM

-

GENERAL:

Program work includes background research, development of documents and publications, and informing members of Congress, the Executive Branch, the news media and the public on policy issues within the FCNL Statement of Legislative Policy, and related work on these issues within coalitions of like-minded groups. The Organization maintains the only full—time advocacy program on Native American issues within the non-Indian religious community, which works in consultation with tribes and the inter-religious community to support sovereignty, self-determination and treaty rights of Native peoples. The Organization’s fieldwork includes building and supporting nationwide grassroots network of like-minded people, and FCNL Contacts in over 650 local Friends Meetings. The Organization produces a bi-monthly suggestions for distribution to over community organizations, maintains a action tools, and produces educational

newsletter of timely issue analysis and action 20,000 people, Friends meetings, churches and Website containing issue analysis and citizen reports.

The Organization holds an annual formal governance meeting of representatives from 25 Friends yearly meetings and organizations nationwide to approve a budget, name an Executive Committee, and establish legislative policies and priorities. Programs seek: a world free of war and the threat of war, a society with equity and justice for all, a community in which every person’s potential may be fulfilled, and an earth restored. ADMINISTRATION: Includes supervision and organizational support such as budget accounting, computer technology, human resources and building management.

preparation,

DEVELOPMENT: Includes donor relations and fund-raising, through direct mail, personal visitation, grants, planned giving (bequests, etc.), and gifts to endowment. Includes program interpretation materials and activities to inform Friends and the public about the work and programs of the organization. PLANT & EQUIPMENT: Includes fixed assets of the building, costs of utilities, maintenance, etc. NOTE 11

—

computers

and office

equipment,

and occupancy

INCOME TAXES

In June 2006, the Financial Accounting Standards Board (FASB) released FASB ASC 74010, Income Taxes, that provides guidance for reporting uncertainty in income taxes. For the year ended June 30, 2015, the Organization has documented its consideration of FASB ASC 740-10 and determined that no material uncertain tax positions qualify for either recognition or disclosure in the financial statements. The Organization’s federal Exempt Organization Tax Returns (Form 990) for 2012, 2013 and 2014 are subject to examination by the IRS, generally for three years after they are filed. 16

FRIENDS CONMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 12 - INVESTMENT EXPENSES: The Organization’s investment expenses were netted against its investment income. investment expenses are as follows: Investment Expense Friends Committee on National Legislation FCNL Education Fund Total Investment Expense

$

19,092 128,666

$

147,758

The

NOTE 13 - UNRESTRICTED NET ASSETS: The unrestricted net assets of the Organizations consist of the following:

Education Fund

Friends Committee on National Legislation

$ 1,975,275

$ 2,109,280

FCNL

General Plant & Equipment Annuities Total Unrestricted Net Assets

5,209,062 4,115,755

$11,300,092

Total

$ 4,084,555 5,209,062 4,115,755

$ 2,109,280

$13,409,372

NOTE 14 - CONCENTRATION OF CREDIT RISK The Organization maintains several bank accounts. Accounts at an institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The cash balance exceeded the federally insured limit at two of the Organization’s banking institutions. The excess amount, as of June 30, 2015, totaled $105,855 as follows:

Friends Committee on National Legislation FCNL Education Fund Total

$

4,454 101,401

$

105,855

NOTE 15 - BENEFICIAL INTEREST IN SPLIT-INTEREST AGREEMENT: The FCNL Education Fund was informed of receiving charitable gift annuities. These annuities were initiated and issued by donors through the Friends Fiduciary Corporation. These donors listed the Organization as one of the charitable beneficiaries. The assets contributed by these donors are held and are under the control of the Friends Fiduciary Corporation. Accordingly, the Organization has recognized this beneficial interest in split—interest agreement at its present value of $244,907. The total Beneficial Interest in Split—Interest Agreements receivable at June 30, is as follows: Unrestricted Total 17

$

244,907

$

244,907

2015

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNI EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 16 — DUE TO OTHER FUNDS: The FCNL Education Fund has amounts due to and from unrestricted and temporarily restricted funds. The amount due to unrestricted from temporarily restricted funds represents funds released not yet transferred to the unrestricted accounts. FCNL has amounts due to and from unrestricted, temporarily restricted and permanently restricted funds. The amount due to temporarily restricted from unrestricted funds represents restricted gifts and grants received and not yet transferred to temporarily restricted accounts. The amount due to temporarily restricted from permanently restricted funds represents gift adjustments according to donor intentions for which the funds are not yet transferred NOTE 17 - CONCENTRATION: The Friends Committee on National Legislation received 99% of its operating income from bequests and contributions. The FCNL Education Fund received 92% of its operating income from bequests and contributions. NOTE 18

-

FAIR VALUE MEASUREMENTS:

INVESTMENTS: The fair values of the Organization’s June 30, 2015 are as follows:

investments

Fair Market Value _____________

FCNL EDUCATION FUND: Common Stock: Reserves Building Fund — General Capital Campaign: Friend in Washington Capital Campaign: Undesignated Capital Campaign: Youth Involvement Endowment: General Endowment: Capital Campaign Total Investments

—

measured

FCNL Education Fund

FRIENDS COMMITTEE ON NATIONAL LEGISLATION: Common Stock: Reserves Capital Campaign: Undesignated Capital Campaign: Youth Involvement Endowment: General Endowment: Capital Campaign

on

a

recurring

basis

Quoted Prices in Active Markets for Identical Assets (Level_1)

1,766, 670 1,108,333 57, 530 903, 942 60, 182 2,779,644 _________ 610,809

1,776,670 1,108,333 57,530 903,942 60, 182 2,779,644 _________ 610,809

$7,287,110

$7,287,110

$1,081,298 501,740

$1,081,298 501,740

-

183,735 119,236

183,735 119,236

Total Investments — FRIENDS COMMITTEE ON NATIONAL LEGISLATION

$1,886,009

$1,886,009

Total Investments

$9,173,119

$9J33,119

18

at

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015 INVESTMENTS IN SPLIT-INTEREST AGREEMENTS: The fair values of the Organization’s investments in split—interest agreements measured on a recurring basis at June 30, 2015 are as follows: Quoted Prices in Active Fair Markets for Market Identical Assets Value (Level 1) FCNL EDUCATION FUND Pooled Income Annuities Trusts

$

Total Split—Interest Agreements

$

757,683 6,053,215 559,453

$7,370,351

The fair values of the Organization’s investments agreements are determined by reference to quoted information generated by market transactions.

757,683 6,053,215 559,453

$7,370,351

and investments in split-interest market prices and other relevant

BENEFICIAL INTEREST IN SPLIT-INTEREST AGREEMENTS: Quoted Prices in Active Markets for Identical Assets (Level 1)

Fair Market Value

Significant Other Observable Inputs (Level 2)

FCNL EDUCATION FUND Beneficial Interest in Split Interest Agreements Total Beneficial Interest in Split-Interest Agreements

$

244,907

$

—

$

244,907

$

244,907

$

-

$

244,907

The fair values of the Organization’s beneficial interest in split—interest agreements are determined by calculating the present value of the annuity using published life expectancy tables and a 2.2% discount rate. NOTE 19 - DONOR-DESIGNATED ENDOWMENTS (UPMIFA DC): The Organization’s endowment consists of individual funds established for a variety of purposes. The Organization’s endowment includes donor—restricted funds. The Organization follows the Uniform Prudent Management of Institutional Funds Act (UPMIFA) and its own governing documents. UPMIFA requires the preservation of the fair value of the original gift as of the gift date of the donor restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently restricted net assets the fair value of the gifts donated to the endowment.

19

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015

NOTE 19 - DONOR-DESIGNATED ENDOWMENTS (UPMIFA DC) continued: In the absence of donor restrictions, the net appreciation on the donor-restricted endowment fund is spendable under UPHIFA. These amounts remain in temporarily restricted net assets until they are appropriated for expenditure by the Organization in a manner consistent with the standards of prudence prescribed by UPMIFA. In accordance with UPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: 1. 2. 3. 4. 5. 6.

the duration and preservation of the various funds, the purposes of the donor-restricted endowment funds, general economic conditions, the possible effect of inflation and deflation, expected total return from income and the appreciation of investments, other resources of the Organization, and the Organization’s investment policies.

Harvesting Policy: Endowments are funds for which, by will or donor requirement, the principle is retained by FCNL in perpetuity (permanently restricted net assets) and only income and accruals may be spent on the donor-designated purpose. This account may have several separate named endowments pooled for investment purposes. This account may also contain Executive Committee designated funds acting as an endowment. All interest, dividends, realized and unrealized capital gains on the Endowments account will be retained in this account until harvested. This account will be valued as of June 30 each year, and 5% of the average value of the prior three years will be placed in the annual operating budget for the fiscal year that begins July 1 of that year. The aim is to provide steady yield from the endowment for program while allowing the endowment to keep pace with inflation. In no year will payment be made that would reduce the value of the account below the aggregate value of all donations to the endowment account. If these aims are not realized over time, then the 5% figure will be reconsidered. The amounts harvested for the fiscal year ended June 30,

2015 are as follows: Harvested Amounts

Friends Committee on National Legislation FCNL Education Fund Total Harvested

20

$

16,767 154,509

$

171,276

FRIENDS COMMITTEE ON NATIONAL LEGISLATION FCNL EDUCATION FUND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2015

NOTE 19

—

DONOR-DESIGNATED ENDOWMENTS

A reconciliation of the endowment is as follows:

FCNL EDUCATION FUND: Balance — 07/01/14 Contributions Net Investment Income Amounts Harvested Balance

—

Balance

—

06/30/15

Total Donor-Designated Endowment

beginning

and

ending

balances

of

the

Unrestricted Net Assets

Temporarily Restricted Net Assets

Permanently Restricted Net Assets

$

$

$

—

2,601,869

(Loss) —

06/30/15

FRIENDS COMMITTEE ON NATIONAL LEGISLATION: Balance — 07/01/14 Contributions Net Investment Income Amounts Harvested

(UPMIFA DC) continued:

58,178 154,509)

(

donor-designated

Total Net Assets

1,720,242 350,395

$

4,322,111 350,395 58,178 154,509) 4,576,175

—

(

$

—

$

2,505,538

$

2,070,637

$

$

—

$

214,990

$

464,374 63,324

$

679,364 63,324 5) 16,767)

5) 16,767)

(Loss) —

(

—

(

—

)

( (

$

—

$

198,218

$

527,698

$

725,916

$

—

$

2,703,756

$

2,598,335

$

5,302,091

NOTE 20 — SUBSEQUENT EVENTS: Subsequent events are defined as events or transactions that occur after the balance sheet date through the date that the financial statements are available to be issued. Management has performed an evaluation as of September 22, 2015, the date the financial statements were available to be issued, that there are no subsequent events requiring disclosure. NOTE 21 - ADJUSTMENT: In the prior year, expenses incurred under two restricted grants awarded to FCNL that should have been charged to FCNL were instead charged to the FCNL Education Fund. FCNL temporarily restricted net assets should have been released for these expenses but were not. The expenditures have been transferred to the Friends Committee on National Legislation’s records and temporarily restricted net assets have been corrected.

21

FRIEDMAN & ASSOCIATES, P.C. CERTIFIED PUBLIC ACCOUNTANTS

401 NORTH WASHINGTON STREET, SUITE 330 ROCKVILLE, MARYLAND 20850 PHONE: 301-279-8900 FAX: 240-268-6906 www.friedcpa.com

Executive Committee and Board Friends Committee on National Legislation FCNL Education Fund 245 Second Street, NE Washington, DC 20002 Independent Auditors? Report on Additional Information We have audited the consolidated financial statements of Friends Committee on National Legislation and FCNL Education Fund as of and for the year ended June 30, 2015, and have issued our report thereon dated September 22, 2015, which contained an unmodified opinion on those consolidated financial statements. Our audit was performed for the purpose of forming an opinion on the consolidated financial statements as a whole. The additional information included on pages 23 through 30 is presented for purposes of additional analysis of the consolidated financial statements rather than to present the financial position, results of operations, and cash flows of the individual organizations. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United State of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.

Friedman & Associates, P.C. Certified Public Accountants Rockville, MD September 22, 2015

MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS / MARYLAND ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS

22

FRIENDS COMMITTEE ON NATIONAL LEGISLATION STATEMENT OF FINANCIAL POSITION JUNE 30, 2015

TEMPORARILY RESTRICTED FUNDS

UNRESTRICTED FUNDS ASSETS Current Assets Cash and Cash Equivalents Investments Accrued Investment Income Employee Advances Receivables Unconditional Promises to Give, Net Due to/from Funds Prepaid Expenses Total Current Assets Other Assets Cash and Cash Equivalents Investments Unconditional Promises to Give, Net Deposits Total Other Assets TOTAL ASSETS LIABILITIES AND NET ASSETS LIABILITIES Current Liabilities Accounts Payable and Accrued Expenses Accrued Vacation Due to FCNL Education Fund

$

$

$

1,371,019 1,079,971 1,868 1,151 2,925 4,231 292,798) 52,040 2,220,407

455,806 501,740

PERMANENTLY RESTRICTED FUNDS

$

—

TOTAL FUNDS

$

1,826,825 1,581,711 1,868 1,151 2,925 344,387

— — — —

273, 801 295, 331

66,355 2,533)

52,040 3,810,907

$

1,526,678

$

63,822

$

$

94,355 103,863 123,332

$

182,085 200,435 81,356

$

$

11,502 11,502

$

321,550

$

463,876

$

276,440 304,298 204, 688 11,502 796,928

$

2,231,909

$

1,848,228

$

527,698

$

4,607,835

$

18,208 90,520 13, 901

$

$

—

$

18,208 90,520 114, 199

$

— — —

—

100,298

___________

TOTAL LIABILITIES

$

122,629

$

100,298

$

—

NET ASSETS

$

2,109,280

$

1,747,930

$

527,698

$

4,384,908

TOTAL LIABILITIES AND NET ASSETS

$

2,231,909

$

1,848,228

$

527,698

$

4,607,835

$

222,927

The accompanying notes are an integral part of these financial statements.

23

FRIENDS COMMITTEE ON NATIONAL LEGISLATION STATEMENT OF ACTIVITIES JUNE 30, 2015

TEMPORARILY RESTRICTED FUNDS

UNRESTRICTED FUNDS REVENUE & OTHER SUPPORT Contributions and Grants Bequests Annual Meeting Registration Other Income Net Investment Income Net Assets Released from Restrictions — Satisfaction of Program Restrictions Net Assets Released from Restrictions — Endowment Income

$

$ 1,442,328 881,569 106,804 4,936 29,567)

626,824

PERM~NENTLY RESTRICTED FUNDS

$

2,132,476 881,569 106,804 4,936 29,564)

$

3,096,221

—

3

(

461,374)

16,767

(

16,767)

—

$

2,884,211

$

148,686

$

EXPENSES Program Administration Development

$

1,199,126 216,455 522,359

$

—

$

TOTAL EXPENSES

$

1,937,940

$

—

CHANGE IN NET ASSETS

$

946,271

$

NET ASSETS - BEGINNING AS PREVIOUSLY REPORTED

$

1,163,009

$

ADJUSTMENT

$

NET ASSETS - BEGINNING AS RESTATED

NET ASSETS

END OF YEAR

$

—

TOTAL REVENUE & OTHER SUPPORT

—

63,324 —

461,374

(

63,324

$ 1,199,126 216,455 522,359

— —

$_____

$

1,937,940

148,686

$

63,324

$

1,158,281

1,656,570

$

464,374

)

($

57,326)

$

$

1,163,009

$

1,599,244

$

$

2,109,280

$

1,747,930

$

—

TOTAL FUNDS

$

3,283,953

($

57,326)

464,374

$

3,226,627

527,698

$

4.384,908

The accompanying notes are an integral part of these financial statements.

24

FRIENDS COMMITTEE ON NATIONAL LEGISLATION STATEMENT OF CASH FLOWS JUNE 30, 2015

TOTAL FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Increase (Decrease> in Net Assets Adjustment to Reconcile Change in Net Assets to Net Cash Provided By/(Used in> Operating Activities: Unrealized (Gain)/Loss on Investments Realized (Gain)/Loss on Investments Changes in Assets and Liabilities: (Increase) /Decrease in: Receivables: Due from FCNL Education Fund Unconditional Promises to Give, Net Contribution & Employee Receivables Accrued Investment Income Prepaid Expenses Deposits

$

( ( (

/

INCREASE / (DECREASE) CASH EQUIVALENTS

/

$

1,454,537

$

132,219 944,749>

(

(USED IN)

CASH FLOWS FROM FINANCING ACTIVITIES: Payments on Loans Payable NET CASH PROVIDED BY FINANCING ACTIVITIES

296,256

9,711

(USED IN)

CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from Sale of Investments Purchase of Investments NET CASH PROVIDED BY INVESTING ACTIVITIES

$

258,506 33,379 4,181 1,868> 27,528> 11,502)

TOTAL ADJUSTMENTS

/

1,158,281

29,987 1,390

Increase/ (Decrease) in: Accounts Payable & Accrued Expenses

NET CASH PROVIDED BY OPERATING ACTIVITIES

$

($

($

812,530)

($

10,000)

10,000>

(USED IN)

IN CASH AND

$

632,007

CASH AND CASH EQUIVALENTS

—

BEGINNING

$

1,471,258

CASH AND CASH EQUIVALENTS

—

ENDING

$

2.103,265

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Expense

$

—

The accompanying notes are an integral part of these financial statements.

25

FRIENDS COMMITTEE ON NATIONAL LEGISLATION STATEMENT OF FUNCTIONAL EXPENSES JUNE 30, 2015

~DMINISTRATIVE

PROGR~N EXPENSES Salaries Employee Benefits

DEVEL OPEMENT

TOTAL

$

430,687 96,958

$

111,176 23,902

$

135,106 34,273

$

676,969 155,133

$

527,645

$

135,078

$

169,379

$

832,102

Advertising Insurance List Rental Expense Meetings and Travel Occupancy Supplies, Licenses and Miscellaneous Expenses Postage Printing Professional Fees Web Design and Maintenance Dues, Memberships and Subscriptions Telephone

$

1,492 1,197

$

645 605

$

3,466 333 8,727 15,733 31,193

$

5,603 2,135 8,727 351,131 168,550

TOTAL EXPENSES

$

Total Salaries and Employee Benefits

—

—

319,607 111,970

15,791 25,387

12,134 24,160 59,021 85,632

8,127 868 —

27,977

34,546

—

15,549 6,173

1.199,126

1,432 545

$

216,455

$

17,396 64,951 112,957 93,656

37,657 89,979 171,978 207,265

356

34,902

3,693 519

20,674 7,237

522,359

$

1,937,940

The accompanying notes are an integral part of these financial statements.

26

FCNL EDUCATION FUND STATEMENT OF FINANCIAL POSITION JUNE 30, 2015

UNRESTRICTED

TEMPORARILY RESTRICTED

PERMANENTLY RESTRICTED

TOTAL

FUNDS

FUNDS

FUNDS

FUNDS

ASSETS Current Assets Cash and Cash Equivalents Investments Unconditional Promises to Give, Due (to) from FCNL Due To/From Other Funds Beneficial Interest in Split Interest Agreement Accrued Interest Receivable Insurance — Cash Value Prepaid Expenses Total Current Assets Property and Equipment, Net Total Property & Equipment,

$ Net

Net

Other Assets Cash and Cash Equivalents Investments Investments in Split—Interest Agreements Unconditional Promises to Give, Total Other Assets

$

807,514 1,766,673 30,222 114,259 80,407

$

244, 907 20, 415 27,994 36, 771 3,129,162

$

$ $

5,209,062 5,209,062

$ $

$

835,629 2,129,987 572,872 60) 80, 407)

$

—

3,458,986

81,122 —

548,704 1,956,834

6,053,215

$

TOTAL ASSETS

$14,391,439

$

8,207,343

LIABILITIES AND NET ASSETS LIABI LIT IES Current Liabilities Accounts Payable Security Deposits Held Liability to Life Beneficiary Loans and Notes Payable Total Current Liabilities

$

$

54,856 4,196

$

—

$

$ 270,768 329,820

3,069

401,992 1,433,616

1,643,143 3,896,660 684,216 114,199

$

244, 907 21,380 27,994 36, 771 6,669,270

$ $

5,209,062 5,209,062

$

950,696 3,390,450

$

153, 907 1,989,515

$

7,370,351 1,079,590 12,791,087

$

2,070,637

$

24,669,419

$

54,856 4,196

$ $

3,069 270,768 332,889

$

—

$

81, 122

$ $

1,317,136 925,683 4,748,357

—

$

$

—

___________

6,053,215

$

—

965

—

Net

$

— —

$

— —

$

3,069

$

—

Long-Term Liabilities Pooled Income: Discount for Future Interest Annuity Payment Liability Trust Payment Liability Loans and Notes Payable Total Long-Term Liabilities

364,805

$

441,258 2,761,527

$

687,278

$

$

364,805 2,320,269 322,473 441,258 3,448,805

TOTAL LIABILITIES

$

3,091,347

$

690,347

$

$

3,781,694

NET ASSETS

$11,300,092

$

7,516,996

$

2,070,637

$

20,887,725

TOTAL LIABILITIES AND NET ASSETS

$14,391,439

$

8,207,343

$

2.070,637

$

24,669,419

2,320,269 322,473 —

The accompanying notes are an integral part of these financial statements.

27

FCNL EDUCATION FUND STATEMENT OF ACTIVITIES JUNE 30, 2015

UNRESTRICTED

TEMPORARILY RESTRICTED

PERMANENTLY RESTRICTED

TOTAL

FUNDS

FUNDS

FUNDS

FUNDS

REVENUE & OTHER SUPPORT Contributions and Grants Bequests Rental Loss, net of Rental Expense Other Income Net Investment Income Net Assets Released from Restrictions — Satisfaction of Program Restrictions Net Assets Released from Restrictions — Endowment Income

$

$

1,310,361 953,565 46,220) 809 43,151

1,953,181 363,061

78,851

709,960

(

709, 960)

154,509

(

154,509)

3,126,135

$

EXPENSES Program Administration Development

$

1,778,636 464,544 935, 157

$

—

$

3,178,337

$

—

OTHER CHANGES IN NET ASSETS Contributions to Planned Giving Change in Value of Split—Interest Agreements Net Investment Income

—

3,517,239 1,316,626

(

46,220) 809 122,002

—

$

CHANGE IN NET ASSETS FROM OPERATIONS

$

253,697

—

TOTAL REVENUE & OTHER SUPPORT

Total Expenses

$

—

$

253,697

$

4,910,456

$

—

$

1,778,636 464,544 935, 157

$

—

$

3,178,337

1,530,624

($

52,202)

$

1,530,624

$

253,697

$

1,732,119

$

36,900

$

9,733

$

96,698

$

143,331

209,634) 423, 527

170,470

—

(

39,164) 423, 527

TOTAL CHANGES IN NET ASSETS

$

198,591

$

1,710,827

$

350,395

$

2,259,813

NET ASSETS — BEGINNING AS PREVIOUSLY REPORTED

$11,044,175

$

5,806,169

$

1,720,242

$

18,570,586

ADJUSTMENT

$

57,326

$

$

57,326

$11,101,501

$

5,806,169

$

1,720,242

$

18,627,912

$11,300,092

$

7,516,996

$

2,070,637

$

20,887,725

NET ASSETS

—

BEGINNING AS

RESTATED

NET ASSETS

—

$

END OF YEAR

The accompanying notes are an integral part of these financial statements.

28

FCNL EDUCATION FUND STATEMENT OF CASH FLOWS JUNE 30, 2015 TOTAL FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Change in Net Assets Adjustment to Reconcile Change in Net Assets to Net Cash Provided By/(Used in) Operating Activities: Depreciation and Amortization Unrealized (Gain)/Loss on Investments Realized (Gain)/Loss on Investments Changes in Assets and Liabilities: (Increase) /Decrease in: Receivables: Due from FCNL Beneficial Interest in Split— Interest Agreement — FFC Outside Split-Interest Agreement Unconditional Promises to Give, Net Grants and Other Receivables Insurance — Cash Value Prepaid Expenses Increase! (Decrease) in: Accounts Payable Security Deposits Held

$

/

/

INCREASE / (DECREASE) CASH EQUIVALENTS

/

1,529,366)

$

730,447

61,833 11,575 1,089,420) 17,416) 409) 1,952) 45,620) 2,000

($

125,320) 624,250) 8,395,992 9,623,865)

(USED IN)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from /‘Payments on: Loans and Notes Payable Annuities ! Trusts, Net NET CASH PROVIDED BY FINANCING ACTIVITIES

($

258,506)

(USED IN)

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Fixed Assets Contributed Stocks Proceeds from Sale of Investments Purchase of Investments NET CASH PROVIDED BY INVESTING ACTIVITIES

2,259,813

244,740 20,497 456,688)

TOTAL ADJUSTMENTS NET CASH PROVIDED BY OPERATING ACTIVITIES

$

($

1,977,443)

($

172,958)

($

1,419,954)

76,135) 96,823)

(USED IN)

IN CASH AND

CASH AND CASH EQUIVALENTS

-

BEGINNING

$

4,013,793

CASH AND CASH EQUIVALENTS

-

ENDING

$

2,593,839

$

534

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Expense

The accompanying notes are an integral part of these financial statements.

29

FCNL EDUCATION FUND STATEMENT OF FUNCTIONAL EXPENSES JUNE 30, 2015

ADMINISTRATIVE

PROGRAM EXPENSES Salaries Employee Benefits

DEVEL OPEMENT

TOTAL

$

981,878 235,997

$

281,409 58,891

$

387,575 97,378

$

1,650,862 392,266

$

1,217,875

$

340,300

$

484,953

$

2,043,128

Advertising Insurance Interest Meetings and Travel Occupancy Supplies, Licenses and Miscellaneous Expenses Postage Printing Professional Fees Web Design and Maintenance Dues, Memberships and Subscriptions Telephone

$

4,316 2,053

$

1,519 477 534 13,450 49,589

$

—

$

90,854 69,915

5,835 3,203 534 238,717 280,865

26,052 31,263 66,029 158,933 534

64,895 52,998 141,750 286,927 2,681

TOTAL EXPENSES

$

Total Salaries and Employee Benefits

134,413 161,361 24,407 20,134 75,721 96,486 2,147

—

14,436 1,601 —

31,508

15,018 24,705

1,778,636

673

7,149 3,981

$

464.544

22,167 34,637

—

5,951

$

935,157

$

3,178,337

The accompanying notes are an integral part of these financial statements.

30