YWCA Metropolitan Phoenix

“During June 2014 and 2015, the Organization received certain contributions restricted to the Dana Campbell-Saylor Leadership Endowment fund. The endowment donations have been permanently restricted by various donors. The earnings on these funds are temporarily restricted until appropriated or expended by the board. As required by generally accepted accounting principles, net assets associated with the endowment funds, including funds designated by the board of directors to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. The board of directors of the Organization has interpreted the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) as requiring the preservation of the fair value of the original donation as of the donation date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Conservancy classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the organization in a manner consistent with the standard 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) The duration and preservation of the fund (2) The purposes of the Organization 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 Organization (7) The investment policies of the Organization The Organization 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. Under this policy the endowment assets are invested in a manner that is intended to produce results while assuming a moderate level of investment risk. The Organizations spending and investment policies work together to achieve this objective. The Organizations annual appropriations are at the discretion of the Board unless specific instructions were provided by the endowment donors. The current spending policy is 4% to 5% of the annual market value of the endowment, as determined annually by the Board. In the event the current market value of the endowment is less than the historical gift value, spending will continue at 4% to 5% of the market value, unless donor agreements do not permit spending in this circumstance or as otherwise determined by the Board. For the year ended June 30, 2014 , there were no investment earnings related to the endowment and, accordingly, no investment earning were available to be appropriated for expenditure by the Board. From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or UPMIFA requires the Organization to retain as a fund of perpetual duration. As of June 30, 2015, the Organization had sufficient funds allocated to the endowment.”

“The organization qualifies as a tax-exempt organization under 501(c)(3) of the internal revenue code and, therefore, there is no provision for income taxes. In addition, the organization qualifies for the charitable deduction under section 170 of the code and has been classified as an organization that is not a private foundation. Income determined to be unrelated business taxable income (ubti) would be taxable.the organization has adopted accounting for uncertainty in income taxes. This standard clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return, including issues relating to financial statement recognition and measurement. This standard provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is "more-likely-than-not" to be sustained if the position were to be challended by a taxing authority. The standard also provides guidance on measurement, classification, interest and penalties, and disclosure. The tax years ended 2012, 2013 and 2014 are still open to audit for both federal and state purposes. The organization has processes presently in place to ensure the maintenance of its tax-exempt status; its group exemption; to identify and report unrelated income; to determine its filing and tax obligations in jurisdictions for which it has nexus; and to identify and evaluate other matters that may be considered tax positions. The organization has determined there is no impact on the accompanying financial statements related to the adoption of this standard.”