Wesley Spectrum Services Foundation

“The foundation's endowment consists of various investment funds established primarily for support of the foundation's mission. Its endowment includes donor-restricted endowment funds as required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the foundation to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. The trustees of the foundation have elected to be governed by the commonwealth of pennsylvania's act 141 (act 141). Act 141 is a total return policy that allows a nonprofit to choose to treat a percentage of the average market value of the endowment's permanently restricted investments as income each year. However, the long-term preservation of the real value of the assets must be taken into consideration when the board elects the amount. On an annual basis, the board, in writing, must elect a spending rate of between 2% and 7% in accordance with act 141. The foundation annually transfers 5% of the previous three years' market value average of the endowment fund. This percentage is applied to a three-year average market value of the investments at june 30th of the previous year. The foundation classifies as permanently restricted net assets the original and subsequent value of gifts donated to the permanent endowment. In accordance with act 141, the foundation has adopted a written investment policy, of which a section specifically relates to the endowment fund. The foundation considers the following factors in making a determination to set a spending rate: 1) protecting the corpus of the endowment fund; 2) preserving the spending power of the assets; 3) obtaining maximum investment return with reasonable risk & operational consideration; 4) complying with applicable laws.”

“The organization's entities are exempt from federal income tax under section 501(c)(3) of the internal revenue code. Accordingly, no provision for income taxes is recorded in these consolidated financial statements. The organization accounts for uncertainty in income taxes using a recognition threshold of more-likely-than-not to be sustained upon examination by the appropriate taxing authority. Measurement of the tax uncertainty occurs if the recognition threshold is met. Management determined that there were no tax uncertainties that met the recognition threshold in 2018.”