Ozark Trails Council Boy Scouts of America #306

“Most of the endowment fund income is unrestricted and used for general operating purposes. Restricted funds are used per the restrictions.”

“The council is a not-for-profit organization that is exempt from federal income taxes under section 501(c)(3) of the internal revenue code and comparable state law as a charitable organization whereby only unrelated business income, as defined by section 509(a)(1) of the code, is subject to federal income tax. The council currently has no unrelated business income. Accordingly, no provision for income taxes has been recorded. The council assesses whether it is more likely than not that a tax position will be sustained upon examination of the technical merits or the position, assuming the taxing authority has full knowledge of all information. If the tax position does not meet the more likely than not recognition threshold, the benefit of the tax position is not recognized in the financial statements. The council does not believe there are any material uncertain tax positions and, accordingly, it will not recognize any liability for unrecognized tax benefits. For the years ended december 31, 2019 and 2018, there were no interest or penalties recorded in its financial statements. The councils forms 990, return of organization exempt from income taxes for the years ending december 31, 2018, 2017 and 2016, are subject to examination by the irs, generally three years after they were filed.”

“The councils endowment includes both donor-restricted endowment and funds designated by the board of directors to function as endowments. As required by u.s. Gaap, net assets associated with endowment funds, including funds designated by the board of trustees to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of relevant law the council is subject to the state prudent management of institutional funds act (spmifa) and, thus, classifies amountsin its donor-restricted endowment funds as net assets with donor restrictions because those net assets are time restricted until the board of directors appropriates such amounts for expenditure. Most of those net assets also are subject to purpose restrictions that must be met before reclassifying those net assets to net assets without donor restrictions. The councils board of directors has interpreted spmifa as not requiring the maintenance of purchasing power of the original gift amount contributed to an endowment fund, unless a donor stipulates the contrary. As a result of this interpretation, when reviewing its donor-restricted endowment funds, the council considers a fund to be underwater if the fair value of the fund is less than the sum of (a) the original value of initial and subsequent gift amounts donated to the fund and (b) any accumulations to the fund that are required to be maintained in perpetuity in accordance with the direction of the applicable donor gift instrument. The council has interpreted spmifa to permit spending from underwater funds in accordance with the prudent measures required under the law. Additionally, in accordance with spmifa, the council considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: 1. The duration and preservation of the fund 2. The purposes of the council and the donor-restricted endowment fund 3. General economic conditions 4. The possible effect of inflation and deflation 5. The expected total return from income and the appreciation of investments 6. Other resources of the council 7. The investment policies of the council return objectives and risk parameters the council has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor- restricted funds that the council must hold in perpetuity or for a donor- specified period as well as board-designated funds. Strategies employed for achieving objectives to satisfy its long-term rate-of-return objectives, the council relies on a total return strategy in which investment returns are achieved through capital appreciation (realized and unrealized) and current yield (interest and dividends). The council targets a diverse asset allocation that places greater emphasis on equity-based investments, (70%) to achieve its longterm return objectives within prudent risk constraints.”