Mount Tamalpais School

“The school 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 school must hold in perpetuity or for donor-specified periods. The school's current investment policy calls for target asset allocation of 60% equities and 40% bonds. The performance of these investments is measured against established equity and fixed income indices to provide for the a) preservation of capital, b) current income, and c) long-term growth of capital and income. To satisfy its long-term rate-of-return objectives, the school relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The school targets a diversified asset allocation intended to achieve its long-term return objectives within prudent risk constraints. The school policy allows for the annual distribution of up to 5% of the last three years' market average valuations; however, the school is currently not making distributions as it seeks to increase the balance of its endowments to $5 million. In establishing this policy, the school considered the long-term expected return on its endowment. Accordingly, over the long term, the school expects the current spending policy to allow its endowment to grow at an average real rate of return (adjusted for inflation) of greater than 5% annually. This is consistent with the school's objective to maintain the purchasing power of the endowment assets held in perpetuity or for a specified term as well as to provide additional real growth through new gifts and investment return. Actual returns in any given year may vary from the school's long-term goals.”

“The school is a qualified organization exempt from federal and state income taxes under section 501(c)(3) of the internal revenue code and section 23701d of the california revenue and taxation code, respectively. The school has adopted the accounting standard on accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return and requires the affirmative evaluation that is more-likely-than-not, based on the technical merits of a tax position, that an organization is entitled to economic benefits resulting from tax positions taken in income tax returns. For tax exempt entities, favorable tax status itself is deemed to be an uncertainty, as events could potentially occur to jeopardize their tax-exempt status. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. This standard also requires organizations to disclose additional quantitative and qualitative information in their financial statements about uncertain tax positions. The school's evaluation on june 30, 2014, revealed no tax positions that would have a material impact on the financial statements. The 2010 through 2013 tax years remain subject to examination by the internal revenue service. In addition, the 2009 through 2013 tax years remain subject to examination by the california franchise tax board. The school does not believe that any reasonably possible changes will occur within the next twelve months that will have a material impact on the financial statements.”