Arca Foundation

“The foundation acts as custoidan for client funds held.”

“Endowment funds are held by albuquerque community foundation and new mexico community foundation, both unrelated organizations. Endowment funds are designated by donors to be held in perpetuity for arca or designated by the board of directors of arca, a related organization. On an annual basis the board may elect to withdraw up to 5% of the average market value, based on the previous 12 quarter (3yrs) average balance of the permanently restricted endowment fund earnings. The withdrawls are to only be used for arca and if arca were not to exist the funds would be provided to organizations that provde direct and supporting services to people with developmental disabilities. The board may choose to make future contributions to the fund.”

“All entities of arca are non-profit corporations and qualify as tax-exempt organizations under section 501(c)(3) of the internal revenue code and are classified as other than a private foundation. As such, their normal activities not directly related to arca's tax exempt purpose is subject to taxation as unrelated business income. There was no unrelated business income for the periods ended june 30, 2016 and 2015. In 2006, the financial accounting standards board (fasb) issued authoritative guidance relating to the accounting for the uncertainty in income taxes. This pronouncement was amended in 2009 to include non-profit entities, which was effective for arca for the year ended june 30, 2010. The guidance clarifies the accounting for uncertainty in income taxes recognized in an organization's financial statements in accordance with gaap. The guidance also requires the evaluation of tax positions taken or expected to be taken in the course of preparing arca's information returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. In addition, guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition was also provided. As of june 30, 2016, arca performed a review of its material tax positions in accordance with recognition and measurement standards established by gaap. As a result of this review, arca qualified as a tax exempt organization under section 501 (c)(3) of the irc and had no unrecorded income derived from unrelated business activities and did not identify any entity level tax positions that would not meet the more-likely-than-not threshold. Arca files information tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, arca is subject to examination by federal, state and local jurisdictions, where applicable. As of june 30, 2016, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year ended june 30, 2013 and forward. Arca would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. There was no such interest or penalties recorded for the years ended june 30, 2016 and 2015.”