P. 1
AIGA Financial Statement FY2013

AIGA Financial Statement FY2013

|Views: 414|Likes:
AIGA publishes its audited financial statement as a commitment to transparency and accountability in governance.
AIGA publishes its audited financial statement as a commitment to transparency and accountability in governance.

More info:

Categories:Types, Presentations
Published by: AIGA, the professional association for design on Mar 11, 2014
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

02/21/2015

pdf

text

original

AMERICAN INSTITUTE OF GRAPHIC ARTS FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 2013 AND 2012 AND INDEPENDENT AUDITORS’

REPORT

AMERICAN INSTITUTE OF GRAPHIC ARTS

TABLE OF CONTENTS Page Independent Auditors’ Report Financial Statements Statements of Financial Position Statement of Activities for the Year Ended September 30, 2013 Statement of Activities for the Year Ended September 30, 2012 Statements of Cash Flows Notes to Financial Statements 3 4 5 6 7 1

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors American Institute of Graphic Arts We have audited the accompanying financial statements of the American Institute of Graphic Arts (“AIGA”) which comprise the statements of financial position as of September 30, 2013 and 2012, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to AIGA’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the AIGA’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

(Continued) 1

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the American Institute of Graphic Arts. as of September 30, 2013 and 2012, and the related statements of activities and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

January 29, 2014

2

AMERICAN INSTITUTE OF GRAPHIC ARTS STATEMENTS OF FINANCIAL POSITION

September 30, 2013 2012 ASSETS Cash and cash equivalents Accounts receivable Prepaid expenses and deposits Investments Property and equipment, net Mortgage financing cost, net $ 364,571 $ 134,970 98,816 94,419 313,376 266,758 2,497,137 2,657,309 2,125,443 2,257,390 38,290 44,106 $ 5,437,633 $ 5,454,952

LIABILITIES AND NET ASSETS Liabilities Line of credit payable Accounts payable and accrued expenses Deferred revenue Loan payable Mortgage payable

$

249,900 $ 249,900 363,690 388,234 2,160,956 1,565,264 48,228 72,979 1,067,951 1,192,931 3,890,725 3,469,308

Net assets Unrestricted Undesignated Board designated

774,377 341,195 1,115,572

1,276,702 340,573 1,617,275

Temporarily restricted Permanently restricted Total net assets

331,336 268,369 100,000 100,000 1,546,908 1,985,644 $ 5,437,633 $ 5,454,952

See notes to financial statements. 3

AMERICAN INSTITUTE OF GRAPHIC ARTS STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2013

Unrestricted Revenues Membership dues Programs Grants and contributions Special events (net of direct donor benefits of $58,960) Investment return Miscellaneous Net assets released from restrictions Total revenue Expenses Program services Management and general Fund raising Total expenses Change in net assets Net assets Beginning of year End of year

Temporarily Permanently Restricted Restricted 67,210 1,257 (5,500) 62,967 $ -

Total $ 2,896,749 1,331,966 129,679 102,240 189,825 172,332 4,822,791

$ 2,896,749 $ 1,331,966 62,469 102,240 188,568 172,332 5,500 4,759,824

-

4,457,268 638,495 165,764 5,261,527 (501,703)

62,967

-

4,457,268 638,495 165,764 5,261,527 (438,736)

1,617,275 $ 1,115,572 $

268,369 331,336 $

100,000 1,985,644 100,000 $ 1,546,908

See notes to financial statements. 4

AMERICAN INSTITUTE OF GRAPHIC ARTS STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2012

Unrestricted Revenues Membership dues Programs Publications Grants and contributions Special events (net of direct donor benefits of $40,710) Investment return Miscellaneous Net assets released from restrictions satisfaction of program restrictions Total revenues Expenses Program services Management and general Fund raising Total expenses Change in net assets Net assets Beginning of year End of year

Temporarily Permanently Restricted Restricted 22,620 1,574 24,194 (33,106) (8,912) $ -

Total $ 3,188,136 2,475,911 122 108,145 90,691 439,840 157,145 6,459,990 6,459,990

$ 3,188,136 $ 2,475,911 122 85,525 90,691 438,266 157,145 6,435,796 33,106 6,468,902

5,025,545 537,136 405,842 5,968,523 500,379

(8,912)

-

5,025,545 537,136 405,842 5,968,523 491,467

1,116,896 $ 1,617,275 $

277,281 268,369 $

100,000 1,494,177 100,000 $ 1,985,644

See notes to financial statements. 5

AMERICAN INSTITUTE OF GRAPHIC ARTS STATEMENTS OF CASH FLOWS

Year Ended September 30, 2013 2012 Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Depreciation and amortization Net realized and unrealized gain on investments Changes in operating assets and liabilities Accounts receivable Prepaid expenses and deposits Accounts payable and accrued expenses Deferred revenue Net cash provided by (used in) operating activities Cash flows from investing activities Proceeds from sale of investments Purchase of investments Acquisition of property and equipment Net cash provided by investing activities Cash flows from financing activities Principal payments on line of credit Proceeds from loan payable Principal payments on loan payable Principal payments on mortgage Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental cash flow disclosure Cash paid for interest $ (438,736) $ 491,467

140,750 (104,379) (4,397) (46,618) (24,544) 595,692 117,768 952,928 (688,377) (2,987) 261,564 (24,751) (124,980) (149,731) 229,601

140,754 (362,788) 118,924 49,507 (236,057) (775,401) (573,594) 1,429,036 (1,301,488) (52,133) 75,415 (77,000) 75,000 (2,021) (116,915) (120,936) (619,115)

$

134,970 754,085 364,571 $ 134,970

$

88,802 $

97,634

See notes to financial statements. 6

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION American Institute of Graphic Arts (“AIGA”), the professional association for design, was founded in 1914. Its mission is to advance design as a professional craft, strategic advantage and vital cultural force. At the national level, we pursue our mission by connecting practitioners, enthusiasts and patrons through regional, national and global events, and by creating and curating content that: • • • • • • • • Advocates for a greater understanding of the value of designers and design in government, business, media and the public Enhances professional development Defines global standards and ethical practices Inspires designers and the public Establishes criteria for design education that meet the needs of the profession Makes powerful tools and resources available and accessible Celebrates and enhances the value of design Mobilizes a global design movement

As of October 1, 2012, AIGA had 22,475 members: 2 Trustees, 35 Design Leaders, 8,030 Sustaining Members, 3,341 Supporters and 11,067 Contributors. AIGA transitioned to a new membership model in August 2012. AIGA had 66 chapters as of October 1, 2012. The accompanying financial statements do not include the financial position or the change in net assets and cash flows of these chapters, each of which is an autonomous corporation organized under the laws of the state in which it is located. AIGA’s revenues are primarily derived from membership dues and various programmatic activities it carries out. AIGA offered the following programs during its 2013 fiscal year: • “Gain: Design for Social Value Conference”, October 9-10, 2012, San Francisco (504 attendees)

7

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION (Continued) • • • • • • “Geographic’s: Design, Education and the Transnational Terrain”, December 13-15, 2012, Honolulu (157 attendees) “Blunt: Explicit and Graphic Design Criticism Now”, April 12-14, 2013, Norfolk (106 attendees) “Bright Lights: The AIGA Awards Gala”, April 19, 2013, New York City (360 attendees) AIGA Leadership Retreat, May 30-June 1, 2013, Philadelphia (327 attendees) “Facilitation: by Design”, June 27-28, 2013, Minneapolis (40 attendees) Business Perspectives for Creative Leaders, July 21-26, 2013, at Yale School of Management (31 attendees)

Deferred revenue and prepaid expenses were recorded for “Head, Heart, Hands: AIGA Design Conference” held in Minneapolis on October 10-12, 2013. Justified: AIGA Design Competition” received 263 entries; 14 were selected for publication on AIGA .org. AIGA offered several webinar series for members during 2012-2013: ● ● ● ● ● ● “Breakthroughs: Where Inspiration and Technology Meet”, three sessions “Ask Aquent”, live Q&A with career experts, seven sessions “Industry Insights”, career development webinars, three sessions “AIGA Voices”, featuring thoughtful and influential designers, 10 sessions “Open AIGA”, about AIGA’s policies and activities, five sessions “AIGA Insights”, what AIGA is doing and why, 12 sessions

8

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION (Continued) Exhibitions in AIGA’s gallery included: ● “Get Out the Vote 2012”, October 3-November 30, 2012 ● “The Lustigs: A Cover Story”, December 10, 2012-February 15, 2013 ● “We the Designers”, March 5-April 5, 2013 ● “AIGA Colorado Presents: Bordo Bello NYC”, April 22-July 2, 2013 ● “Estrada: Sailing through Design”, July 17-October 7, 2013 National sponsors for the year were Adobe Systems, the official sponsor for design solutions; Aquent, the official sponsor for professional development; and Shutterstock, the official sponsor for creative inspiration.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Presentation AIGA’s net assets, revenues, expenses, gains and losses are classified, based on the existence or absence of donor-imposed restrictions, into the following three categories: Unrestricted net assets - Unrestricted net assets represent the portion of expendable funds available for the support of all AIGA’s operations. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met, either by action of AIGA and/or the passage of time. When a restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that must be maintained permanently by AIGA. Generally, the donors of these assets would permit AIGA to use all or part of the income earned on any related investments for general or specific purposes.

9

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations. For purposes of the statement of cash flows, AIGA considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Investments Investments are stated at fair value. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Under GAAP, the three levels of the fair value hierarchy are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that AIGA has the ability to access. Level 2: Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Unobservable inputs that reflect management’s own assumptions.

10

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment Property and equipment are stated at cost or, if donated, at the estimated fair market value of the assets at the date of donation. Costs for repairs and maintenance are charged to expense as incurred. All plant assets, other than land, are depreciated over their estimated useful lives using the straight-line method. Estimated useful lives used to calculate depreciation are as follows: Building and improvements Furniture, fixtures and equipment Computer equipment 30 years 5 years 3 years

Deferred Revenue and Related Expenses Revenue received and expenses paid in the current period for publications, conferences, exhibitions, programs and other events scheduled to take place in the subsequent period are deferred on the statement of financial position. The majority of non-membership deferred revenue and related expenses relate to the national conference which is held in October, subsequent to the fiscal year. Membership dues are allocated to the period to which they relate and are recognized accordingly. Membership dues billed and received in advance are reflected as deferred revenue in the statement of financial position. Donated Materials and Services Donated materials, generally, printing and paper supplies, are estimated at $106,024 and $438,612 for the years ended September 30, 2013 and 2012, respectively. Such donations are recorded in the statement of activities as program revenue, with an offset to program expenses as donors of such items receive commensurate value in return. Volunteer officers and committees which serve without remuneration play an important role in the functioning of AIGA. No amounts have been reflected in the financial statements for such donated services, as they do not meet the criteria for recognition. Functional Allocation of Expenses Expenses have been charged to program or supporting services, either directly when identifiable, or indirectly based on management’s estimation of the services benefited.

11

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes AIGA is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code and is classified as a publicly supported organization as described in Section 509(a). AIGA’s tax filings prior to 2010 are no longer subject to examination by tax authorities. Reclassification Certain 2012 amounts have been reclassified to conform to the 2013 presentation. Subsequent Events These financial statements were approved by management and available for issuance on January 29, 2014. Management has evaluated subsequent events through this date.

3 - PREPAID EXPENSES AND DEPOSITS Prepaid expenses and deposits consisted of the following: September 30, 2013 2012 AIGA Design Conference “Gain: AIGA Business and Design Conference” Other conferences Security deposit Other prepayments $ 187,838 23,910 4,660 96,968 $ 313,376 208,997 12,166 45,595 $ 266,758 $

12

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

4 - INVESTMENTS AND INVESTMENT RETURN AIGA’s investments, which are considered to be Level 1, consisted of the following: September 30, 2013 2012 Common stock Corporate fixed income Mutual funds Short-term deposits $ 1,491,180 233,345 698,816 73,796 $ 2,497,137 $ 1,584,417 332,330 667,574 72,988 $ 2,657,309

The investment return is summarized as follows: Year Ended September 30, 2013 2012 Interest and dividends Net unrealized gain on investments Net realized gain on sale of investments 85,446 19,056 85,323 $ 189,825 $ 77,052 221,777 141,011 $ 439,840 $

AIGA invests in various investment securities in accordance with a board-adopted investment risk strategy. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of financial position.

13

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

5 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following: September 30, 2013 2012 Land Building Building improvements Office machinery and equipment Furniture and fixtures Less - Accumulated depreciation $ 388,800 2,066,035 1,423,995 645,233 303,193 4,827,256 2,701,813 $ 2,125,443 $ 388,800 2,066,035 1,423,995 642,245 303,194 4,824,269 2,566,879 $ 2,257,390

6 - MORTGAGE FINANCING COST Mortgage financing cost, which represents the unamortized balance of expenses incurred associated with the March 2006 refinancing, is amortized over the life of the loan and consisted of the following: September 30, 2013 2012 Legal fees Other Less - Accumulated amortization $ $ 5,073 82,168 87,241 48,951 38,290 $ 5,073 82,168 87,241 43,135 44,106

$

Amortization expense for each of the years ended September 30, 2013 and 2012 was $5,816.

14

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

7 - NOTES PAYABLE, BANK AIGA has a $250,000 line of credit with a bank, payable on demand. Interest is determined based on the prime rate plus 1%. The interest rate at both September 30, 2013 and 2012 was 4.25%. The amount outstanding at September 30, 2013 and 2012 was $249,900. Interest expense for fiscal 2013 and 2012 was $13,478 and $14,086, respectively. AIGA has a term loan agreement with a bank in the amount of $77,000 with principal and interest payments over a 36-month period at a fixed interest rate of $4.25%. The amount outstanding at September 30, 2013 and 2012 was $48,228 and $72,979, respectively. Principal payments of $25,833 and $22,381 are due in fiscal 2014 and 2015, respectively. Interest expense for fiscal 2013 and 2012 was $2,623 and $538, respectively. Both the line of credit and the term loan agreement contain covenants relating to the debt service coverage ratios. The line of credit and term loan agreement were not in compliance with the loan covenant as of September 30, 2013. AIGA received a waiver from the bank for the line of credit and term loan for the year ended September 30, 2013. In June 2013, AIGA obtained a line of credit (“Portfolio Loan Agreement” or “PLA”) with a bank. The amount of the line of credit is based on a percentage of investment assets pledged by AIGA on which the line of credit is secured. At September 30, 2013, the line of credit amounted to $1,500,000. The interest rate is determined by a variable rate (Corresponding PLA Index) plus 3.0%. The interest rate at September 30, 2013 was 3.17%. There was no amount outstanding under this line of credit at September 30, 2013, nor any interest expense incurred under this line of credit in fiscal 2013.

8 - DEFERRED REVENUE Deferred revenue consisted of the following: September 30, 2013 2012 Conferences Membership dues $ 1,121,787 1,039,169 $ 2,160,956 $ 415,988 1,149,276 $ 1,565,264

15

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

9 - MORTGAGE PAYABLE AIGA has a 15-year mortgage loan agreement with Citibank, N.A. for $1,900,000, at a fixed interest rate of 6.69% that matures on April 1, 2020. Future annual principal payments are as follows: Year Ending September 30, 2014 2015 2016 2017 2018 Thereafter $ 133,603 142,820 152,673 163,206 174,466 301,183 $ 1,067,951

Interest expense on the mortgage debt for the years ended September 30, 2013 and 2012 was $75,323 and $83,435, respectively. 10 - AIGA LEGACY CAMPAIGN The AIGA Legacy Campaign is the banner under which a variety of funds have been created to channel charitable gifts toward the challenges facing the profession. The funds to which people giving to the campaign can commit their donations include funds in support of AIGA’s archives and scholarship programs, as well as the AIGA Legacy Fund (for special projects), the Legacy Endowment (to secure the future of AIGA), the Diversity Fund, the Design Writing & Criticism Awards and the AIGA Disaster Relief Fund. Board-designated net assets consisted of the following: September 30, 2013 2012 AIGA Legacy Fund Archives Funds Scholarship Funds Legacy Endowment Diversity Fund Denver Archives $ 105,924 38,007 51,237 44,300 14,577 87,150 $ 341,195 $ 105,924 38,007 50,615 44,300 14,577 87,150 $ 340,573

16

AMERICAN INSTITUTE OF GRAPHIC ARTS NOTES TO FINANCIAL STATEMENTS

11 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following: Program Scholarship Funds Disaster Relief Fund Archives Funds AIGA Legacy Fund Diversity Fund Legacy Endowment Total 12 - PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets are restricted to investments held in perpetuity, the income from which is expendable to support the Henry Wolf AIGA Scholarships. 13 - RETIREMENT PLAN AIGA has a defined contribution retirement plan that covers substantially all full-time employees. Contributions, which are made entirely by AIGA, will vary each year and are determined by the Executive Director, as part of AIGA’s budget, approved annually at the Board of Directors’ meeting. Expense for the years ended September 30, 2013 and 2012 was $4,927 and $65,021 respectively. 14 - RELATED PARTY TRANSACTIONS AIGA provides management and personnel services to AIGA’s New York Chapter. Fees and expenses billed by AIGA were as follows: Year Ended September 30, 2013 2012 Management fees Payroll and related benefits 12,000 138,615 $ 150,615 $ 12,000 161,409 $ 173,409 $ $ September 30, 2013 2012 61,345 9,087 2,758 256,070 975 1,101 $ 331,336 $ 39,562 9,087 1,984 215,660 975 1,101 $ 268,369

17

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->