You are on page 1of 22

CENTRAL NEW YORK COMMUNITY FOUNDATION, INC.

AND SUBSIDIARY Consolidated Financial Statements as of March 31, 2013 Together with Independent Auditors Report

INDEPENDENT AUDITOR'S REPORT June 5, 2013 To the Board of Directors of Central New York Community Foundation, Inc. and Subsidiary: Report on the Financial Statements We have audited the accompanying consolidated financial statements of Central New York Community Foundation, Inc. (a New York State not-for-profit corporation) and its subsidiary, which comprise the consolidated statement of financial position as of March 31, 2013, and the related consolidated statements of activities and change in net assets, and cash flows for the year then ended, and the related notes to the consolidated financial statements. Managements Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 the consolidated 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 consolidated financial statements based on our audit. We conducted our audit 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated 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 entitys 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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
ROCHESTER BUFFALO ALBANY SYRACUSE NYC PERRY GENEVA UTICA
www.bonadio.com

115 Solar Street, Suite 100 Syracuse, New York 13204 p (315) 214-7575 f (315) 471-2128

(Continued)

INDEPENDENT AUDITORS REPORT (Continued) Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Central New York Community Foundation, Inc. and its subsidiary as of March 31, 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Totals We have previously audited the Central New York Community Foundation, Inc. and subsidiary 2012 consolidated financial statements, and we expressed an unmodified audit opinion on those audited consolidated financial statements in our report dated June 14, 2012. In our opinion, the summarized comparative information presented herein as of and for the year ended March 31, 2012 is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

CENTRAL NEW YORK COMMUNITY FOUNDATION, INC. AND SUBSIDIARY


CONSOLIDATED STATEMENT OF FINANCIAL POSITION MARCH 31, 2013 (With Comparative Totals for 2012)

2013 ASSETS Cash and cash equivalents Accounts receivable Pledges receivable Investments Split-interest agreements Perpetual trust held by third party Cash surrender value of life insurance Real estate interests Property and equipment, net Other Total assets LIABILITIES AND NET ASSETS LIABILITIES: Accounts payable and accrued expenses Split-interest agreements Deferred compensation Deferred revenue Grants payable Endowments held for other not-for-profit organizations Note payable Total liabilities NET ASSETS: Unrestricted Designated by the governing board for long-term investments Designated for donor advisement Other unrestricted net assets Total unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets $ $ 19,536 3,228,640 234,972 200,868 1,050,679 2,341,539 3,450,000 10,526,234 $ $ 697,041 1,511,092 1,727,495 126,582,314 6,202,287 521,553 539,014 875,400 5,285,239 50,635 143,992,070 $

2012

861,532 1,257,096 880,110 114,166,037 5,978,153 524,148 513,515 892,517 5,556,436 62,882 130,692,426

34,905 3,216,622 228,202 217,846 1,046,901 1,347,504 3,475,000 9,566,980

50,859,491 30,415,898 9,215,091 90,490,480 35,971,665 7,003,691 133,465,836 143,992,070 $

48,491,560 26,236,342 9,289,249 84,017,151 30,142,590 6,965,705 121,125,446 130,692,426

The accompanying notes are an integral part of these statements. 1

CENTRAL NEW YORK COMMUNITY FOUNDATION, INC. AND SUBSIDIARY


CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED MARCH 31, 2013 (With Comparative Totals for 2012)

2013 Temporarily Restricted Permanently Restricted 2013 Total 2012 Total

Unrestricted PUBLIC SUPPORT AND REVENUE: Public support Donations Change in value of split-interest agreements Revenue Investment income, net Net gain on investments Change in value of real estate interest Administrative management income on endowments held for other not-for-profit organizations Other

6,883,442 83,768

5,193,129 171,288

37,986 -

12,114,557 255,056

7,563,889 (163,821)

1,380,757 6,587,962 9,401 250,489 15,195,819

434,617 2,163,753 (17,117) 8,385 7,954,055 (2,124,980) 5,829,075

37,986 37,986

1,815,374 8,751,715 (17,117) 9,401 258,874 23,187,860 23,187,860

3,147,993 521,271 55,110 7,012 175,585 11,307,039 11,307,039

Net assets released from restrictions Total public support and revenue EXPENSES: Program Grants Program-sponsored initiatives Total program Supporting services Management and general Fundraising Total expenses CHANGE IN NET ASSETS NET ASSETS - beginning of year NET ASSETS - end of year $

2,124,980 17,320,799

8,337,264 1,090,477 9,427,741

8,337,264 1,090,477 9,427,741

6,710,850 1,043,090 7,753,940

622,838 796,891 10,847,470 6,473,329 84,017,151 90,490,480 $

5,829,075 30,142,590 35,971,665 $

37,986 6,965,705 7,003,691 $

622,838 796,891 10,847,470 12,340,390 121,125,446 133,465,836 $

608,768 666,324 9,029,032 2,278,007 118,847,439 121,125,446

The accompanying notes are an integral part of these statements. 2

CENTRAL NEW YORK COMMUNITY FOUNDATION, INC. AND SUBSIDIARY


CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2013 (With Comparative Totals for 2012) 2013 CASH FLOW FROM OPERATING ACTIVITIES: Change in net assets Adjustments to reconcile change in net assets to net cash flow from operating activities: Depreciation Net gain on investments Change in value of split-interest agreements Change in value of perpetual trust held by third party Change in cash surrender value of life insurance Donated stock Permanently restricted donations Real estate interest Changes in: Accounts receivable Pledges receivable Other assets Accounts payable and accrued expenses Deferred compensation Deferred revenue Grants payable Liabilities under split-interest agreements Endowments held for other not-for-profit organizations Net cash flow from operating activities CASH FLOW FROM INVESTING ACTIVITIES: Purchase of property and equipment Proceeds from sales and maturities of investments Purchase of investments Net cash flow from investing activities CASH FLOW FROM FINANCING ACTIVITIES: Permanently restricted donations Payments of notes payable Net cash flow from financing activities CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - beginning of year CASH AND CASH EQUIVALENTS - end of year $ $ 12,340,390 304,321 (8,751,715) (224,134) 2,595 (25,499) (3,000,127) (37,986) 17,117 (253,996) (847,385) 12,247 (15,369) 6,770 (16,978) 3,778 12,018 994,035 520,082 (33,124) 18,156,047 (18,820,482) (697,559) 37,986 (25,000) 12,986 (164,491) 861,532 697,041 $ $ 2012 2,278,007 221,887 (521,271) 549,581 26,279 (18,185) (1,304,863) (84,361) (654,010) 37,063 (31,177) (43,526) (8,085) 217,846 320,127 (377,972) 16,786 624,126 (508,204) 15,123,602 (16,648,997) (2,033,599) (25,000) (25,000) (1,434,473) 2,296,005 861,532

The accompanying notes are an integral part of these statements. 3

CENTRAL NEW YORK COMMUNITY FOUNDATION, INC. AND SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013

1.

THE ORGANIZATION Central New York Community Foundation, Inc. (the Community Foundation) is a not-for-profit, autonomous, publicly supported, philanthropic institution organized and operated primarily as a collection of charitable funds for the long-term benefit of the Central New York area. Its primary service is to receive, manage and disburse charitable funds. CNY Philanthropy Center, LLC was incorporated in New York State to hold real property located at 431 E. Fayette Street in Syracuse, New York. This property is the home of the Community Foundation and a center for philanthropy. The Community Foundation and CNY Philanthropy Center, LLC share certain common board members and management.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The financial statements include the accounts of the Community Foundation and CNY Philanthropy Center, LLC. In accordance with generally accepted accounting principles, all significant intercompany transactions and balances have been eliminated. Financial Reporting The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. Under generally accepted accounting principles (GAAP), not-for-profit organizations are required to report information regarding their financial position and activities according to three classes of net assets: permanently restricted net assets, temporarily restricted net assets and unrestricted net assets.

Permanently restricted net assets consist of the net assets of the Community Foundation that include donor-imposed restrictions that stipulate that resources be maintained permanently. Earnings are to be expended in accordance with donor wishes. Temporarily restricted net assets consist of the net assets of the Community Foundation whose use is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the Community Foundation pursuant to those stipulations. Unrestricted net assets are not subject to donor-imposed stipulations.

Fair Value Measurement GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Community Foundation. Unobservable inputs are inputs that reflect the Community Foundations assumptions about the assumptions that market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. 4

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value Measurement (Continued) The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the Community Foundation has the ability to access. Valuation adjustments are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The following valuation techniques were used to measure fair value of assets as of March 31, 2013 and 2012:

Equity and bond mutual funds - Fair value of mutual funds was based on quoted market prices. Common stock - Fair value of common stock was based on quoted market prices. Common/collective trusts - Fair value of common/collective trusts was valued at the net value of participation units held by the Community Foundation at year end. The value of these units is determined by the trustee based on the current market values of the underlying assets of the fund based on information reported by the investment advisor. Limited partnerships - Fair value of the Community Foundations partnership interests was valued based on the underlying investments within each partnership and the Community Foundations percentage ownership in each partnership. Hedge funds and funds of funds - Fair value of hedge funds and funds of funds was valued based on the underlying investments within each fund and the Community Foundations percentage ownership of the fund. US Treasuries and government agency obligations Fair value of US Treasuries and government agency obligations was based on quoted market prices. Corporate Bonds Fair value of corporate bonds was determined by entering standard inputs into a pricing model. These inputs, listed in order of priority, include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data and industry and economic events.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value Measurement (Continued) Pooled life income fund - Fair value of the pooled life income fund was based on the Community Foundation's percent ownership of the funds assets. The funds assets were valued based on quoted market prices for identical securities. These assets are included in split-interest agreements in the accompanying consolidated statement of financial position.

Split-interest agreements (Charitable remainder unitrusts, charitable remainder annuity trusts, and charitable gift annuities) - Fair value of the split-interest agreements are derived using the present value of the projected fair market value of the Community Foundations interest in charitable remainder unitrusts, charitable remainder annuity trusts and charitable gift annuities using prevailing market rates and IRS published mortality rates. Perpetual trust held by third party - Fair value of the perpetual trust held by third party is based on quoted market prices of the underlying investments.

There were no changes to the valuation techniques during 2013 or 2012. The Community Foundation has financial instruments, which consist of cash and cash equivalents accounts, cash surrender value of life insurance and note payable. The fair values of cash and cash equivalents, and cash surrender value of life insurance equal their carrying values based on the short-term nature of the assets. These assets are considered to be level 1 measurements. Fair value of the note payable is determined to be a level 2 measurement as the fair value is estimated based on actual cash payments required by the note agreement and current interest rates. The estimated fair value of the note payable at March 31, 2013 approximates carrying value. Cash and Cash Equivalents Cash and cash equivalents include bank demand deposit accounts and money market funds, which, at times, may exceed federally insured limits. The Community Foundation has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk with respect to its cash and cash equivalents. The Community Foundation considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Accounts Receivable Accounts receivable mainly consist of amounts outstanding under the terms of three wills. If collection becomes doubtful, an allowance for doubtful accounts will be established or the accounts will be charged to income when that determination is made by management. Unpaid balances remaining after the stated payment terms are considered past due. Recoveries of previously charged off accounts are recorded when received. Management reviews the collectability of accounts receivable annually. The Community Foundation considers accounts receivable to be fully collectible. Pledges Receivable Pledges receivable represent amounts due to the Community Foundation under the terms of unconditional promises to give. The Community Foundation provides an allowance for doubtful pledges based upon managements review of outstanding pledges. No allowance for doubtful pledges was considered necessary at March 31, 2013 or 2012. The difference between the carrying amount and present value of the pledges receivable is not considered material to the accompanying consolidated financial statements and has not been recorded by management.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investments Investments in marketable equity and debt securities with readily determinable market values are recorded at fair value based on quoted market prices. The fair value of other investments for which readily determinable market values do not exist, including hedge funds and limited partnerships, are recorded at fair value as determined by the Community Foundation with the assistance of external investment managers using methods and significant assumptions the Community Foundation considers appropriate based on its understanding of the underlying characteristics of the investments. Investment income (including realized gains and losses on investments, unrealized gains and losses on investments, interest, and dividends) is included in unrestricted income unless restricted by donor or law. The Community Foundation maintains an investment pool for its charitable funds. Realized and unrealized gains and losses from investments are allocated monthly to the individual funds based on the relationship of the market value of each fund to the total market value of the investment pool, as adjusted for additions to or deductions from the pool. 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 and the level of uncertainty related to changes in the fair value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect the amounts reported in the consolidated statements of financial position. Revenue Recognition Contributions are recognized as revenue in the year an unconditional promise to give is received and are recorded at fair value. Contributions are recorded as unrestricted, temporarily or permanently restricted support depending on the nature of the donor-imposed restrictions. When a donor-imposed restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified as unrestricted net assets. Donor-imposed restricted contributions whose restrictions are met within the same year as received are reflected as unrestricted contributions in the accompanying consolidated financial statements. All interest and dividend income from investments is recognized as revenue when earned and is accounted for in accordance with their respective net asset classifications. Split-Interest Agreements The Community Foundation is a beneficiary of various trusts and other split-interest agreements. The Community Foundations beneficial interest is measured at the discounted value of its expected future cash flows and is reported as temporarily restricted net assets. Liabilities are recorded at the present value of future cash flows, using discount rates ranging from 3% to 7%, and are expected to be paid to the designated beneficiary or beneficiaries. At the end of the trust and other split-interest agreements, the remaining assets will become available for the Community Foundations use. Perpetual Trust Held by Third Party The assets held under this agreement are recorded at fair value based on quoted market prices of the underlying investments. Contribution revenue is recognized as permanently restricted support at the present value of the estimated future cash receipts from the trust's assets. Under the terms of the trust, the Community Foundation has the irrevocable right to receive the income earned on the trust's assets in perpetuity; however, the Community Foundation will never receive the assets held in trust.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash Surrender Value of Life Insurance The Community Foundation receives various donations of life insurance, where the Community Foundation is both the owner and the beneficiary of the policies. Life insurance is recorded at cash surrender value and has been provided to the Community Foundation by the insurer. Annual premiums on the policies paid by the donors to the Community Foundation are recorded as donations. Real Estate Interest The Community Foundation has interests parcels of real estate with several other companies, which are recorded at the appraised value net of debt. Property and Equipment Property and equipment is recorded at fair market value at date of donation or at cost if purchased. The Community Foundation capitalizes property and equipment in excess of $500 with a useful life greater than two years. Depreciation expense is calculated using the straightline method over the estimated useful lives of the assets which range from three (3) to 40 years. Donor Restrictions Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donorstipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as net assets released from restrictions in the statements of activities. Gifts-In-Kind Gifts of real property and donations other than cash are recognized at their fair value in the period received. It is the Community Foundations policy to sell gifts of real property and investments immediately. Contributed Services A substantial number of volunteers have made significant contributions of their time to the Community Foundation. The value of this contributed time is not reflected in these consolidated financial statements as it does not meet the criteria for recognition. Grants Grants are recorded as an expense of the Community Foundation when they are approved by the Board of Directors. Wills, Trusts and Estates The Community Foundation is the beneficiary under various will and trust agreements, the total realizable value of which is not presently determinable; therefore, these amounts are not recorded until the donor is deceased and no longer able to change their beneficiary. Endowments Held for Other Not-For-Profit Organizations The Community Foundation accepts funds from, and holds certain assets for the benefit of other not-for-profit organizations. These funds are not considered assets of the Community Foundation and therefore are shown as endowments held for other not-for-profit organizations in the accompanying consolidated statement of financial position.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Funds Designated for Donor Advisement The Community Foundation maintains certain funds that are "designated for donor advisement" as noted on the consolidated statement of financial position within unrestricted net assets (see Note 12). The Community Foundation charges these funds a management fee, which is transferred to the operating fund within other unrestricted net assets. These transfers amounted to $224,690 and $206,309 in 2013 and 2012, respectively. Investment Fees Net investment returns include certain fees paid by the various investment funds to their affiliated investment advisor, transfer agents and others as described in each fund prospectus or other published documents. These fees are deducted prior to allocation of the Community Foundation's investment earnings activity and thus not separately identifiable as an expense. Income Taxes The Community Foundation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (the Code) and has been determined not to be a private foundation under Section 509(a) of the Code. CNY Philanthropy Center, LLC is a single member limited liability company and as such, is a disregarded entity for federal and state income tax purposes. For tax-exempt entities, their tax-exempt status itself is deemed to be an uncertainty, since events could potentially occur to jeopardize their tax-exempt status. As of March 31, 2013 and 2012, the Community Foundation does not have a liability for unrecognized tax benefits. The Community Foundation files income tax returns in the U.S. federal jurisdiction and New York State. The Community Foundation is generally no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2010. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Comparative Information The consolidated financial statements include certain prior-year summarized information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Community Foundations consolidated financial statements for the year ended March 31, 2012, from which the summarized information was derived. Reclassification Certain amounts in the March 31, 2012 consolidated statement of financial position and consolidated statement of activities and changes in net assets have been reclassified to conform to the 2013 presentation.

3.

INVESTMENTS Investments consisted of the following at March 31: 2013 Cash Equity mutual funds Common stock Bond mutual fund Common/collective trusts Limited partnerships Hedge funds and funds of funds U.S. Treasury and governmental agency obligations Corporate bonds $ 568,561 39,258,659 12,891,484 4,236,811 37,226,734 20,907,112 3,923,394 7,569,559 $ 2012 1,167,906 29,389,988 5,977,360 9,680,265 4,036,799 34,393,763 17,644,653 4,525,268 7,350,035

$ 126,582,314

$ 114,166,037

Investment management fees were approximately $453,000 and $481,000 for the years ended March 31, 2013 and 2012, respectively. These fees have been included in investment income in the accompanying consolidated statement of activities and changes in net assets. 4. SPLIT-INTEREST AGREEMENTS Split-interest agreements consisted of the following at March 31: 2013 Asset Charitable remainder trusts Pooled life income fund Charitable gift annuities $ 5,298,334 480,795 423,158 $ 6,202,287 5. PLEDGES RECEIVABLE Pledges receivable are due as follows for the fiscal year ending March 31: 2014 2015 2016 2017 2018 $ 689,734 361,761 295,250 280,750 100,000 Liability $ 2,821,960 197,695 208,985 $ 3,228,640 Asset $ 5,185,245 476,343 316,565 $ 5,978,153 2012 Liability $ 2,841,459 199,855 175,308 $ 3,216,622

$ 1,727,495

10

6.

FAIR VALUE MEASUREMENTS The following are measured at fair value on a recurring basis at March 31, 2013:
Description Equity mutual funds Bond mutual funds Common/collective trust Limited partnerships Hedge funds and funds of funds U.S. Treasury and governmental agency obligations Corporate bonds Total investments Perpetual trust held by third party Split-interest agreements Beneficial interest in split-interest agreements Assets in split-interest agreements Equity mutual funds Bond mutual funds $ Level 1 39,258,659 12,891,484 3,923,394 56,073,537 521,553 $ Level 2 2,237,875 36,268,039 3,926,774 7,569,559 50,002,247 $ Level 3 1,998,936 958,695 16,980,338 19,937,969 $ Total 39,258,659 12,891,484 4,236,811 37,226,734 20,907,112 3,923,394 7,569,559 126,013,753 521,553

967,054 504,331 1,992,938

$ 50,002,247 $

4,730,902 4,730,902 24,668,871

4,730,902 967,054 504,331 6,723,840 $ 132,737,593

Total

58,066,475

The following are measured at fair value on a recurring basis at March 31, 2012:
Description Equity mutual funds Common stock Bond mutual funds Common/collective trust Limited partnerships Hedge funds and funds of funds U.S. Treasury and governmental agency obligations Corporate bonds Total investments Perpetual trust held by third party Split-interest agreements $ Level 1 29,389,988 5,977,360 9,680,265 4,525,268 49,572,881 524,148 524,148 Total $ 50,097,029 $ $ Level 2 2,169,723 33,451,967 1,555,307 7,350,035 44,527,032 44,527,032 $ $ Level 3 1,867,076 941,796 16,089,346 18,898,218 5,978,153 5,978,153 24,876,371 $ Total 29,389,988 5,977,360 9,680,265 4,036,799 34,393,763 17,644,653 4,525,268 7,350,035 112,998,131 524,148 5,978,153 6,502,301 $ 119,500,432

11

6.

FAIR VALUE MEASUREMENTS (Continued) The following is a reconciliation of the beginning and ending balances for the Community Foundations financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Common/ collective trusts $ 1,703,807 51,956 103,356 23,313 (15,356) 1,867,076 $ Limited partnerships 646,217 99,274 196,305 941,796 Hedge funds and funds of funds $17,703,478 15,418 (1,611,968) 18,092 (35,674) 16,089,346 $ Split-interest agreements 6,527,734 (385,760) (163,821) 5,978,153

Description Balance at April 1, 2011 Net gains (losses) on investments Net purchases (sales) Change in value splitinterest agreements Interest and dividends Fees Balance at March 31, 2012 Net gains (losses) on investments Net purchases (sales) Change in value splitinterest agreements Interest and dividends Fees Transfers to level 1 Balance at March 31, 2013

Level 3 total $ 26,581,236 (219,112) (1,312,307) (163,821) 41,405 (51,030) 24,876,371

169,440 (31,881) 6,066 (11,765) $ 1,998,936 $

99,254 (86,449) 4,094 958,695

1,158,992 (268,000) $16,980,338 $

132,150 91,984 (1,471,385) 4,730,902

1,559,836 (386,330) 91,984 10,160 (11,765) (1,471,385) $ 24,668,871

During 2012, the Community Foundation reclassified its assets in split-interest agreements previously held in Level 3 to Level 1 due to a change in managements assessment and clarification of the inputs being used to determine the fair value. The Community Foundation had the following investments that are valued using net asset value at March 31, 2013:
Unfunded Commitments Redemption Frequency (if currently eligible) Redemption Notice Period

Description Common/collective trusts Common/collective trusts liquid Common/collective trusts illiquid Limited partnerships: Limited partnerships liquid Limited partnerships illiquid Hedge funds and funds of funds Hedge funds and funds of funds -liquid Hedge funds and funds of funds -illiquid Total $

Fair Value

2,237,875 1,998,936 36,268,039 958,695

736,345 424,950

Monthly Ineligible Monthly - Annually Ineligible

0 30 days

4 60 days

3,926,774

Monthly 1-3 years Ineligible

45-90 days

16,980,338 62,370,657 $

1,161,295

12

6.

FAIR VALUE MEASUREMENTS (Continued) The Community Foundation had the following investments that are valued using net asset value at March 31, 2012:
Unfunded Commitments Redemption Frequency (if currently eligible) Redemption Notice Period

Description Common/collective trusts Common/collective trusts liquid Common/collective trusts illiquid Limited partnerships: Limited partnerships liquid Limited partnerships illiquid Hedge funds and funds of funds Hedge funds and funds of funds -liquid Hedge funds and funds of funds -illiquid Total $

Fair Value

2,169,723 1,867,076 33,451,967 941,796

880,000 522,600

Monthly Ineligible Monthly - Annually Ineligible

0 30 days

4 60 days

1,555,307

Monthly 1-3 Years Ineligible

45-90 days

16,089,346 56,075,215 $

1,402,600

Common/Collective Trusts The Foundation invests in three common/collective trusts that invest in equity securities of companies operating within one or more global developing markets, domestic and foreign private equity partnerships and collective investment funds. The fair values of these investments have been estimated using the net asset value per share of the investments as provided by the investment managers. Investments in this category for which there is no readily determinable fair value are classified level 3 as the valuation due to the liquidity of the funds. The remaining investments in this category are classified as level 2. One of the investments in this category, valued at $2,237,875, may be redeemed with 0-30 days notice. The remaining two investments in this category, valued at $1,998,936, redemptions are not permitted during the life of the funds. Limited Partnerships The Foundation invests in six limited partnerships that invest in equity securities, debt and debt like securities (both privately and publically traded), secured and unsecured loans, and real estate partnerships. Interests in limited partnerships are based on valuations per share provided by the general partners of the respective partnership as of March 31, 2013, adjusted for cash receipts, cash disbursements, and securities distributions through March 31, 2013. Investments in this category for which there is no readily determinable fair value are classified as level 3 as the valuation is based on significant unobservable inputs. The remaining investments in this category are classified as level 2. One of the limited partnerships, valued at $958,695, is ineligible for redemptions until such time and in such amounts as determined by the General Partners. When the underlying assets are sold, the proceeds, less any incentives due the general Partner, will be distributed to the limited partners. The remaining investments in limited partnerships, valued at $36,268,039, have restrictions on redemption ranging from 4 to 60 business days. There are no other known circumstances under which these investments might be unredeemable.

13

6.

FAIR VALUE MEASUREMENTS (Continued) Hedge Funds and Funds of Funds The Foundation invests in eight hedge funds and funds of funds that pursue multiple strategies to diversify risks and reduce volatility. The fair values of these investments have been estimated using the net asset value per share of the investments as provided by the fund managers. Investments in this category for which there is no readily determinable fair value are classified as level 3 as the valuation due to the liquidity of the funds. The remaining investments in this category are classified as level 2. These funds invest in private, primarily via pooled vehicles, offered by professional investment managers. These investments are subject to an initial lock-up period that prohibits redemption for the first three years after purchase. Redemptions can be made quarterly or annually after the initial lock-up period has lapsed, subject to a 20% gate for the next three years. The redemption restrictions will lapse in December 2014, at which time redemptions are allowed with 60 to 100 days notice. Level 3 Measurements Management determines the fair value measurement valuation policies and procedures, including those for Level 3 recurring measurements. The Community Foundations Board of Directors assesses and approves these policies and procedures. At least annually, Management: (1) determines if the current valuation techniques used in fair value measurements are still appropriate, and (2) evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

7.

REAL ESTATE INTERESTS At March 31, 2013 and 2012, the Community Foundation has a 37% interest in a limited partnership, which has been recorded at the Community Foundation's share of the estimated fair value at March 31, 2013. The estimated value is comparable to the sales price received for partial sale of real estate in the year ended March 31, 2008 and is considered to approximate fair value at March 31, 2013. A 31 acre parcel of land is the partnership's sole asset. Under the terms of the donor agreement, the donor has agreed to contribute up to $20,000 per year for the Community Foundation's share of ordinary carrying costs on the partnership property. The Community Foundations interest in this property amounted to $581,936 at March 31, 2013 and 2012. At March 31, 2013 and 2012 the Community Foundation has a 32% interest in a commercial property held in a limited liability company. This interest has been recorded at the appraised value less an outstanding mortgage on the property, which approximates fair value at March 31, 2013 and 2012. This property has an appraised value of $1,250,000 and the outstanding mortgage had a balance of approximately $433,000 and $381,000 at March 31, 2013 and 2012, respectively. The Community Foundations interest in this property amounted to $264,214 and $281,331 at March 31, 2013 and 2012, respectively. At March 31, 2013 and 2012, the Community Foundation has a 45%, interest in a limited partnership, which has been recorded at the Community Foundation's share of the estimated fair value at year end. The estimated value is based on an appraisal performed on November 1, 2011 and is considered to approximate fair value at March 31, 2013. A .52 acre parcel of land is the partnership's sole asset. The Community Foundations interest in this property amounted to $29,250 at March 31, 2013 and 2012.

14

8.

PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of March 31: 2013 Land Land improvements Furniture and fixtures Buildings $ 253,775 14,251 731,046 5,098,998 6,098,070 Less: Accumulated depreciation (812,831) $ 5,285,239 $ 2012 253,775 14,251 714,590 5,087,798 6,070,414 (513,978) $ 5,556,436

Depreciation expense amounted to $304,321 and $221,887 in 2013 and 2012, respectively. 9. DEFERRED COMPENSATION The Community Foundation has two deferred compensation plans for key employees. The assets of the deferred compensation plans will be distributed at the earlier of termination of employment, retirement at age 70 years or death. The liability for deferred compensation plans amounted to $234,972 and $228,202 in 2013 and 2012, respectively. 10. GRANTS PAYABLE Grants payable consisted of unconditional promises to give to other organizations, which had not been paid as of March 31, 2013. These amounts are payable as follows in the years ending March 31: 2014 2015 2016 2017 $ 842,414 161,046 38,219 9,000 1,050,679

15

11.

NOTE PAYABLE In 2011, the Community Foundation entered into a note payable with a bank. The note requires annual payments of $25,000 plus interest at LIBOR plus 1.6% (1.852% at March 31, 2013) through March 2025. The remaining principal and interest is due on April 1, 2026. This note payable is secured by certain assets of the Community Foundation. Required future principal payments are as follows at March 31: 2013 2014 2015 2016 2017 Thereafter $ 25,000 25,000 25,000 25,000 25,000 3,325,000 3,450,000

Supplemental Cash Flow Information Interest paid during 2013 and 2012 on the note payable was $58,765 and $65,464, respectively.
12. NET ASSETS Included in unrestricted net assets is $30,415,898 and $26,236,342 of donor advised funds at March 31, 2013 and 2012, respectively. Grant recommendations are accepted from the donors or other advisors of these funds, although the Community Foundation retains variance power; therefore, the ultimate discretion of the use of these funds lies with the Board of Directors of the Community Foundation. Thus, such funds represent unrestricted net assets of the Community Foundation. Temporarily restricted net assets consisted of the following at March 31: 2013 Charitable remainder trusts - time restriction Pooled life income fund - time restriction Cash surrender value of life insurance - time restriction Scholarships Field of interest Other $ 2,486,335 283,100 539,014 14,408,636 8,165,021 10,089,559 35,971,665 $ 2012 2,337,973 276,488 513,515 10,924,659 6,499,429 9,590,526 30,142,590

During 2013 and 2012, approximately $2,125,000 and $2,521,000 was released from restriction through the passage of time and satisfaction of donor-restrictions. At March 31, 2013 and 2012, the face value of the donated life insurance policies was approximately $1,189,000 and $1,064,000, respectively.

16

13.

ENDOWMENT FUND The Community Foundations endowment net assets funds consist of the following at March 31, 2013:
Temporarily Restricted $ 3,682,328 3,682,328 $ Permanently Restricted 7,003,691 7,003,691 $

Unrestricted Board designated endowment funds Donor-restricted endowment funds Total endowment funds $ 50,859,491 50,859,491

Total 50,859,491 10,686,019 61,545,510

The Community Foundations endowment net assets funds consist of the following at March 31, 2012:
Temporarily Restricted $ 3,359,962 3,359,962 $ Permanently Restricted 6,965,705 6,965,705 $

Unrestricted Board designated endowment funds Donor-restricted endowment funds Total endowment funds $ 48,491,560 48,491,560

Total 48,491,560 10,325,667 58,817,227

Changes in endowment net assets were as follows:


Temporarily Restricted Permanently Restricted

Unrestricted Endowment net assets, April 1, 2011 Donations Investment income Realized/unrealized gains Other income Grants paid Appropriations Other expenses Administrative fees Endowment net assets, March 31, 2012 Donations Investment income Realized/unrealized gains Other income Grants paid Appropriations Other expenses Administrative fees Endowment net assets, March 31, 2013

Total

49,139,641 $ 95,386 1,634,138 302,392 37,253 (954,982) (591,773) (1,675,218) 504,723

3,262,609 $ 500 95,368 64,895 (63,410) -

7,029,544 $ (63,839) -

59,431,794 32,047 1,729,506 367,287 37,253 (1,018,392) (591,773) (1,675,218) 504,723

48,491,560 $ 217,165 896,118 4,211,276 37,420 (961,612) (813,711) (1,806,503) 587,778

3,359,962 $ 34,000 66,894 300,706 (79,234) -

6,965,705 37,986 -

58,817,227 289,151 963,012 4,511,982 37,420 (1,040,846) (813,711) (1,806,503) 587,778

50,859,491

3,682,328

7,003,691

61,545,510

17

13.

ENDOWMENT FUND (Continued) Interpretation of Relevant Law New York Not-for-Profit Corporation Law was amended to add a new article known as the Prudent Management of Institutional Funds Act, which became effective in September 2010. The Community Foundations Board of Directors has interpreted the applicable provisions of New York Not-for-Profit Corporation Law to mean that the classification of appreciation on endowment gifts, beyond the original gift amount, follows the donors restrictions on the use of the related income. The Community Foundation also observes the Uniform Management of Institutional Funds Act protection of the historic gift value of individual endowment funds. Funds with Deficiencies 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 the relevant state law requires the Community Foundation to retain as a fund of perpetual duration. In accordance with generally accepted accounting principles, deficiencies of this nature are reported in unrestricted net assets. There were no deficiencies reported at March 31, 2013 or 2012, respectively. Return Objectives and Risk Parameters The Community Foundation has adopted investment and spending policies for endowment assets that attempt 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 Community Foundation must hold in perpetuity or for a donor-specified period(s) as well as boarddesignated funds. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to preserve capital, considering the impact of inflation, strive for consistent annual total returns, achieve long-term total returns which meet or exceed inflation, plus spending for operations and grants and earn the highest possible return given the risk tolerance established by the Community Foundation. The Community Foundation expects its endowment funds, over time, to provide an average rate of return of approximately 8% annually. Actual returns in any given year may vary from this amount. Strategies Employed for Achieving Objectives The Community Foundation 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 Community Foundation targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. Endowment Spending Policy and Investment Objectives The Community Foundation uses the total return strategy for endowment fund income. Under this concept, endowment income to be distributed was established at 5%, based upon the average of the market value of the endowment assets accounts. If the total return amount exceeds the actual earnings of the endowment funds in any one year, then the amount needed to fund such excess will first be taken from the accumulated excess earnings from prior years, then from the accumulated net capital gains of endowment funds and, conversely, any undistributed income after the allocation of the total return distribution is added back to the endowment fund balance.

18

14.

PENSION PLAN The Community Foundation sponsors a 401(k) defined contribution employee savings plan (the Plan) covering all full-time employees meeting eligibility requirements. After qualifying service, full-time employees are eligible to receive matching contributions from the Community Foundation. The Community Foundation matches 100% of contributions up to a limit set by the Board of Directors. The Community Foundation's contributions amounted to $86,183 and $83,157 in 2013 and 2012, respectively.

15.

ENDOWMENTS HELD FOR OTHER NOT-FOR-PROFIT ORGANIZATIONS The Community Foundation accepts funds from, and holds funds for the benefit of, other notfor-profit organizations. These funds are not considered assets of the Community Foundation and therefore are shown as Endowments held for other not-for-profit organizations in the accompanying consolidated statement of financial position. Total endowments held for other not-for-profit organizations activity consisted of the following for the years ended March 31: 2013 Contributions Investment activity and other Grants Net change in endowments held for other not-for-profit organizations Endowments held for other not-for-profit organizations beginning of year Endowments held for other not-for-profit organizations end of year $ 878,353 148,444 (32,762) $ 2012 45,349 34,138 (62,701)

994,035

16,786

1,347,504

1,330,718

2,341,539

1,347,504

16.

SUBSEQUENT EVENTS Subsequent events have been evaluated through June 5, 2013, which is the date the consolidated financial statements were available to be issued.

19