Menlo School

“The school's endowment consists of approximately 85 individual funds established for a variety of purposes. Its endowment includes both donor-restricted endowment funds and funds designated by the board of trustees to function as endowments. The school has thirty-six menlo venture capital endowment funds that invest primarily in other domestic venture capital partnerships and new and emerging companies. 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. The board of trustees considers board designated endowment funds to be assets functioning as endowments, net of associated liabilities. The board of trustees has interpreted california's enacted version of the uniform prudent management of institutional funds act of 2006 ("upmifa") as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the school classifies as net assets with donor restrictions to be held in perpetuity (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 as net assets with donor restrictions to be held in perpetuity, is classified as expendable net assets with restrictions until those amounts are appropriated for expenditure by the school in a manner consistent with the standard of prudence prescribed by upmifa. In accordance with upmifa, the school 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 school 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 school. (7) the investment policies of the school. The school has adopted an investment and spending policy for its regular endowment and term endowment assets that attempts to provide a predictable stream of funding to programs supported by its endowments 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 as well as board designated funds. Under this policy, as approved by the board of trustees, the school has an objective to invest the regular endowment so that, at appropriate levels of risk, it provides a payout of 4% of the fair market value of the previous 12 quarters to the operating budget of the school while growing the corpus so as to meet or exceed the rate of inflation and cover the expenses necessary to manage it. The returns from the menlo school educators fund, subject to meeting certain criteria, will be used to fund bonuses for faculty and staff. The term endowment distribution policy is to distribute funds as needed to support the students or programs the funds have been assigned to. 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 school to retain as a fund of perpetual duration. The school has a policy that permits spending from underwater endowment funds depending on the degree to which the fund is underwater, unless otherwise precluded by donor intent or relevant laws and regulations. There were no such deficiencies”

“The school is a qualified organization exempt from federal and state income taxes under secton 501(c)(3) of the internal revenue code (irc) and section 23701d of the california revenue and taxation code, respectively. U.s. Gaap requires management to evaluate the tax positions taken and recognize a tax liability (or asset) if the school has taken an uncertain tax position that more-likely-than-not would not be sustained upon examination by taxing authorities. Management evaluated the school's tax positions and concluded that that it maintained its tax-exempt status and had taken no uncertain tax positions that would require adjustment to the financial statements. Therefore, no provision or liability for unknown income taxes has been included in the financial statements. The school's tax returns are subject to examination by federal and state taxing authorities; however, there are no examinations in progress nor are there any pending.”

“Rounding -1,435. Unrelated business income 60,889. Financial aid and scholarships (netted against tuition) 7,645,000.”

“Financial aid and scholarships (netted against tuition) 7,645,000. Rounding”