Financial Statements and Report of Independent
Certified Public Accountants
University of Nevada, Reno Foundation
June 30, 2009
Contents
Page
Report of Independent Certified Public Accountants
3
Management’s Discussion and Analysis
5
Basic Financial Statements
Balance Sheet
11
Statement of Support and Revenue, Expenses and Changes in Fund Net Assets
12
Statement of Cash Flows
13
Notes to Financial Statements
15
Supplemental Information
Unrestricted Fund – Alumni and University Program Expenses
25
Unrestricted Fund – Administrative and Fundraising Expenses
26
Audit  Tax  Advisory
Report of Independent Certified Public Accountants
Board of Trustees
University of Nevada, Reno Foundation
Grant Thornton LLP
100 W Liberty Street, Suite 770
Reno, NV 89501-1965
T 775.786.1520
F 775.786.7091
www.GrantThornton.com
We have audited the accompanying balance sheet of the University of Nevada, Reno Foundation (the
“Foundation”) as of June 30, 2009, and the related statements of support and revenue, expenses and changes in
fund net assets, and cash flows for the year then ended. These basic financial statements are the responsibility of
the Foundation’s management. Our responsibility is to express an opinion on these basic financial statements based
on our audit. The prior year summarized comparative information has been derived from the Foundation’s 2008
financial statements, and in our report dated September 9, 2008, we expressed an unqualified opinion on the
respective basic financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America as
established by the Auditing Standards Board of the American Institute of Certified Public Accountants. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial
position of the University of Nevada, Reno Foundation as of June 30, 2009, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles generally accepted in the United States
of America.
The Management’s Discussion and Analysis on pages 5 through 9 is not a required part of the basic financial
statements but is supplemental information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplemental information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that comprise the
Foundation’s basic financial statements. The accompanying supplementary information listed in the table of
contents is presented for purposes of additional analysis and is not a required part of the basic financial statements.
The supplemental information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Reno, Nevada
September 15, 2009
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
MANAGEMENT’S DISCUSSION AND ANALYSIS
University of Nevada, Reno Foundation
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended June 30, 2009
This section of the University of Nevada, Reno Foundation’s (“the Foundation”) annual financial report
presents our discussion and analysis of the financial performance of the Foundation for the fiscal year ended
June 30, 2009. This discussion and analysis has been prepared by management along with the accompanying
financial statements and footnotes and should be read in conjunction with the accompanying financial
statements and footnotes.
Reporting Entity
The University of Nevada, Reno Foundation is a nonprofit corporation whose mission is to facilitate the
solicitation and management of gift revenues and endowments on behalf of the University of Nevada
(University). The Foundation was established by the Nevada System of Higher Education (“NSHE”), who is
the sole owner of the Foundation. Additionally, the appointment to the Foundation Board of Trustees is the
responsibility of the NSHE. As such, the Foundation is considered to be a component of both the
University and NSHE. Transactions with the University relate primarily to the disbursement of gift funds to
the University and receipt of support from the University to fund administrative expenses of the Foundation.
Financial Statements
The basic financial statements of the Foundation are the Balance Sheet; Statement of Support and Revenue,
Expenses and Changes in Fund Net Assets; and the Statement of Cash Flows. The Balance Sheet presents
the financial position of the Foundation as of June 30, 2009. The Statement of Support and Revenue,
Expenses and Changes in Fund Net Assets summarizes the Foundation’s financial activity for the year ended
June 30, 2009. The Statement of Cash Flows reflects the effects on cash that result from the Foundation’s
operating activities, investing activities, and capital and non-capital financing activities for the year ended
June 30, 2009. The following schedules are prepared from the Foundation’s basic financial statements.
Balance Sheet
This statement is presented with three major categories; assets, liabilities and fund net assets. The assets are
classified between current and non-current. The current assets include cash and cash equivalents,
investments, accounts receivable, prepaid expenses and deposits, accrued interest receivable and the current
portion of pledges, and current portion of notes receivable. The non-current assets include investments,
pledges receivable, net of allowance for doubtful accounts, notes receivable, real property held for
investment, residual interests in irrevocable trusts, other assets and equipment, less accumulated depreciation.
Liabilities are also classified between current and non-current. Current liabilities include the amount due to
the University and accounts payable. Non-current liabilities consist of unearned revenue.
Total assets decreased by $19.4 million during the year ended June 30, 2009. This change in total assets is due
primarily to an $18.9 million decrease in the investments, a $6.2 million decrease in cash, and a $5.1 million
increase in pledge receivables.
5
University of Nevada, Reno Foundation
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended June 30, 2009
Balance Sheet – Continued
Gross pledges receivable increased by $5.8 million as a result of fundraising activities in connection with the
construction of the new Medical Education Building. This was off-set by a $0.7 million allowance for
uncollectable pledges that was recorded in the current year due to the current economic climate. Notes
receivable increased by $1.0 million due to a loan to the University of Nevada for construction of the
Davidson Math and Science Center. Current liabilities increased by $0.8 million which was largely due to
amounts owed to the University at the end of the year. Fund net assets decreased by $19.9 million for the
year ended June 30, 2009. The following is a comparison of the balance sheet at June 30, 2009 and 2008.
Balance Sheet
2009
2008
$112,014,023
17,160,638
$138,620,359
9,936,124
Total assets
$129,174,661
$148,556,483
Liabilities
Current liabilities
Non-current liabilities
$ 3,851,614
2,418,832
$ 3,040,289
2,668,543
6,270,446
5,708,832
Fund net assets
Invested in capital assets
Unrestricted
Restricted – expendable
Endowment – nonexpendable
17,768
8,202,345
37,488,599
77,195,503
21,283
7,598,024
35,605,611
99,622,733
Total fund net assets
122,904,215
142,847,651
$129,174,661
$148,556,483
Assets
Current assets
Non-current assets
Total liabilities
Total liabilities and fund net assets
6
University of Nevada, Reno Foundation
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended June 30, 2009
Fund Net Assets
Total fund net assets were $122.9 million at June 30, 2009, of which $8.2 million is available for the
unrestricted purposes of the Foundation. Included in unrestricted net assets are Quasi Endowment and other
designated funds of $5.3 million. The Quasi Endowment is a board directed endowment which the board
has set aside for designated purposes; it is not a donor designated endowment.
Financial Analysis of Fund Net Assets
2009
Invested in capital assets
Unrestricted
Undesignated
Quasi Endowment and other
Restricted - expendable
Endowment - nonexpendable
$
Total fund net assets
17,768
2008
$
21,283
2,899,976
5,302,369
37,488,599
77,195,503
2,357,390
5,240,634
35,605,611
99,622,733
$122,904,215
$142,847,651
Statement of Support and Revenue, Expenses and Changes in Fund Net Assets
This statement reflects the results of the Foundation’s operations on fund net assets for the year ended
June 30, 2009. The statement is broken down into three categories: Operating Support and Revenue,
Operating Expenses and Investment Income (Loss).
Operating support and revenue include donor contributions, university support and special events and other
income. These revenues decreased from the prior year by $14.7 million. Donor contributions decreased by
$14.6 million when compared to the prior year. This decrease is due primarily to extensive fundraising
activities and donor contributions in connection with the construction of the Davidson Math and Science
Center in the prior year. University support increased by 9% due to having vacant positions filled and special
events and other income decreased by 28% due to a decrease in souvenir sales and event revenue in the
schools and colleges.
Investment income (loss) decreased by $23.9 million. The net decrease in the fair market value of the
investments for the year was $29.9 million. As a result, the fair market value of the investments at June 30,
2009 was less than the cost by $12.3 million.
Operating expenses consist of alumni programs, capital projects, university programs, university scholarships,
and administrative and fundraising expenses and decreased by $16.2 million for the year ended June 30, 2009
when compared to prior year. Capital projects accounted for $15.4 million of the decrease in operating
expenses. Expenses for alumni programs, administrative and fundraising decreased slightly, while
scholarships increased slightly over the previous year.
7
University of Nevada, Reno Foundation
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended June 30, 2009
Statement of Support and Revenue, Expenses and Changes in Fund Net Assets - Continued
The following is a comparison of the results of operations for the years ended June 30:
Results of Operations
2009
2008
$17,358,635
2,213,239
758,714
$31,965,934
2,036,867
1,058,606
6,190,141
2,083,011
26,520,729
37,144,418
Investment income
Interest and dividend income
Realized gain on sale, net
Unrealized loss
Management fees
Redemption and consultation fees
2,143,717
2,043,378
(29,915,724)
2,372,243
(222,735)
3,770,832
6,229,952
(10,129,479)
678,128
(190,995)
Investment income (loss)
(23,579,121)
358,438
2,941,608
37,502,856
294,188
6,627,705
10,317,085
2,453,849
1,594,233
1,597,984
374,464
22,035,410
11,013,857
2,414,086
1,512,895
1,730,210
22,885,044
39,080,922
$(19,943,436)
($1,578,066)
Revenues
Donor contributions
University support
Special events and other income
Additional to permanent and term
endowments
Total non-investment revenue
Total revenues
Expenses
Alumni programs
Capital projects
University programs
University scholarships
Administrative
Fundraising
Total expenses
Net change in fund net assets
8
University of Nevada, Reno Foundation
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended June 30, 2009
Economic Factors
The Foundation’s primary sources of revenue are donor contributions, university support and investment
income. Comparing fiscal years ended June 30, 2009 to June 30, 2008, donor contributions decreased by
46%. The majority of this decrease was due to the fundraising activities and donor contributions for the new
Davidson Math and Science building in the previous year. Investment income declined during the current
year due primarily to a decrease in market value of the Foundation’s investments from June 30, 2008 to
June 30, 2009 in the amount of $29.9 million. Additionally, the Foundation sold off investments to transfer
construction funds to the university. As stated in last year’s audited financial statements, the economic
condition has had a negative impact on our donor contributions and endowments as well as our investment
income for the year ended June 30, 2009. Based on existing economic conditions, the Board of Trustees has
prepared the next fiscal year’s budget based upon conservative estimates of revenues in addition to reducing
expenses.
Requests for Information
This report is designed to provide a general overview of the University of Nevada, Reno Foundation’s
finances for all interested parties. For additional information or questions concerning the information
contained in this report, please call (775) 784-1587.
9
BASIC FINANCIAL STATEMENTS
University of Nevada, Reno Foundation
BALANCE SHEET
June 30, 2009
(With comparative totals as of June 30, 2008)
ASSETS
Total
2008
Total
3,314,217
73,335,838
5,355
398,000
2,405
77,055,815
$ 14,660,908
94,073,506
520,852
31,407
38,872
2,514,716
173,762
112,014,023
$ 20,869,987
114,343,299
655,684
8,415
8,452
2,556,106
178,416
138,620,359
1,878,256
10,899,623
1,000,000
377,234
402,265
213,602
110,035
2,365
2,028,405
45,900
1,878,256
11,009,658
1,002,365
380,734
2,430,670
441,187
471,030
5,865,296
4,489
408,240
2,781,561
384,225
17,768
202,953
14,770,980
2,186,705
17,768
17,160,638
21,283
9,936,124
$ 8,488,985
$ 41,443,156
$ 79,242,520
$ 129,174,661
$ 148,556,483
$
124,595
20,477
145,072
$ 3,660,084
27,846
3,687,930
$
$
$
123,800
268,872
266,627
3,954,557
2,028,405
2,047,017
2,418,832
6,270,446
2,668,543
5,708,832
17,768
8,202,345
8,220,113
37,488,599
37,488,599
77,195,503
77,195,503
17,768
8,202,345
37,488,599
77,195,503
122,904,215
21,283
7,598,024
35,605,611
99,622,733
142,847,651
$ 8,488,985
$ 41,443,156
$ 79,242,520
$ 129,174,661
$ 148,556,483
Unrestricted
Restricted
$ 4,261,385
3,418,718
369,648
31,407
33,517
171,357
8,286,032
$ 7,085,306
17,318,950
151,204
2,116,716
26,672,176
3,500
181,685
2009
Endowment
CURRENT ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Prepaid expenses and deposits
Accrued interest receivable
Current portion of pledges receivable, net
Current portion of notes receivable
Total current assets
$
NON-CURRENT ASSETS
Investments
Pledges receivable, net
Notes receivable
Real property, held for investment
Residual interest-irrevocable trusts
Other
Equipment, at cost, less accumulated
depreciation of $12,923
Total non-current assets
Total assets
LIABILITIES AND FUND NET ASSETS
CURRENT LIABILITIES
Due to University of Nevada
Accounts payable
Total current liabilities
18,612
18,612
3,784,679
66,935
3,851,614
3,015,469
24,820
3,040,289
NON-CURRENT LIABILITIES
Unearned revenue
Total liabilities
FUND NET ASSETS
Investment in capital assets
Unrestricted
Restricted - expendable
Restricted - nonexpendable
Total fund net assets
Total liabilities and fund net assets
The accompanying notes are an integral part of this statement.
11
University of Nevada, Reno Foundation
STATEMENT OF SUPPORT AND REVENUE, EXPENSES
AND CHANGES IN FUND NET ASSETS
Year ended June 30, 2009
(With comparative totals for the year ended June 30, 2008)
Unrestricted
Operating support and revenue
Donor contributions
University support
Special events and other income
2008
Total
-
$ 17,358,635
2,213,239
758,714
$ 31,965,934
2,036,867
1,058,606
$ 17,018,492
579,272
2,732,824
17,597,764
-
20,330,588
35,061,407
294,188
66,090
-
6,627,705
10,250,995
2,453,849
-
294,188
6,627,705
10,317,085
2,453,849
374,464
22,035,410
11,013,857
2,414,086
360,278
19,332,549
-
19,692,827
35,837,817
1,594,233
1,597,984
-
-
1,594,233
1,597,984
1,512,895
1,730,210
Total administrative and fundraising expenses
3,192,217
-
-
3,192,217
3,243,105
Total operating expenses
3,552,495
19,332,549
-
22,885,044
39,080,922
(819,671)
(1,734,785)
-
(2,554,456)
(4,019,515)
1,421,809
(685,221)
(24,315,709)
(23,579,121)
358,438
-
-
6,190,141
6,190,141
2,083,011
17,227
(18,559)
4,471,634
(168,640)
(4,488,861)
187,199
-
-
(1,332)
4,302,994
(4,301,662)
-
-
600,806
1,882,988
(22,427,230)
(19,943,436)
(1,578,066)
7,619,307
35,605,611
99,622,733
142,847,651
144,425,717
$ 8,220,113
$ 37,488,599
$ 77,195,503
$ 122,904,215
$ 142,847,651
Operating expenses
Program expenses
Alumni programs
Capital projects
University programs
University scholarships
Total program expenses
Administrative and fundraising expenses
Administrative
Fundraising
OPERATING INCOME (LOSS)
Investment income (loss)
Additions to permanent and term endowments
Transfers between funds
Distribution of expendable endowment
Other
Total transfers between funds
NET CHANGE IN FUND NET ASSETS
Fund net assets at beginning of year
Fund net assets at end of year
The accompanying notes are an integral part of this statement.
12
$
Total
340,143
2,213,239
179,442
Total operating support and revenue
$
2009
Endowment
Restricted
University of Nevada, Reno Foundation
STATEMENT OF CASH FLOWS
For the year ended June 30, 2009
(With comparative totals for the year ended June 30, 2008)
Unrestricted
Cash flows from operating activities:
Donor contributions
University support
Special events and other income
Cash paid to University
Cash paid to employees for services
Cash paid to suppliers
2008
Total
-
$ 12,176,595
2,186,895
758,714
(18,654,211)
(2,526,453)
(640,095)
$ 27,762,036
1,864,793
1,059,100
(34,614,729)
(2,422,267)
(894,853)
$ 11,835,646
579,272
(17,669,936)
17,470
(1,461,007)
(5,237,548)
-
(6,698,555)
(7,245,920)
(1,332)
4,302,994
6,059,198
(4,301,662)
6,059,198
-
4,388,099
-
(1,332)
4,302,994
1,757,536
6,059,198
4,388,099
(9,148)
-
-
(9,148)
(19,539)
(9,148)
-
-
(9,148)
(19,539)
2,923,129
17,663,918
(18,063,288)
5,298
-
365,593
168,039
(2,435,969)
1,050,000
(2,050,000)
1,046,692
8,939,338
(15,174,804)
1,480
-
4,335,414
26,771,295
(35,674,061)
1,056,778
(2,050,000)
4,467,240
37,638,879
12,500
(41,313,993)
5,200
(6,250)
Net cash provided by (used in) investing activities
2,529,057
(2,902,337)
(5,187,294)
(5,560,574)
803,576
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
1,057,570
(3,836,891)
(3,429,758)
(6,209,079)
(2,073,784)
3,203,815
10,922,197
6,743,975
20,869,987
22,943,771
$ 4,261,385
$ 7,085,306
$ 3,314,217
$ 14,660,908
$ 20,869,987
Cash flows from non-capital financing activities:
Additions to permanent and term endowments
Transfer between funds
Net cash provided by (used in) non-capital financing
activities
Cash flows from capital and related financing activities:
Purchase of equipment
Net cash used in capital and related financing
activities
Cash flows from investing activities:
Investment income
Proceeds from sale of investments
Proceeds from sale of real estate
Purchase of investments
Payments received from notes receivable
Issuance of note receivable
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
13
$
Total
340,949
2,186,895
179,442
(984,275)
(2,526,453)
(657,565)
Net cash used in operating activities
$
2009
Endowment
Restricted
University of Nevada, Reno Foundation
STATEMENT OF CASH FLOWS - CONTINUED
For the year ended June 30, 2009
(With comparative totals for the year ended June 30, 2008)
Unrestricted
Reconciliation of operating loss to net cash provided by
(used in) operating activities:
Operating loss
Adjustments to reconcile operating loss to net cash
provided by (used in) operating activities:
Depreciation
Gifts of stocks and bonds
Changes in:
Accounts receivable
Accrued interest
Pledges receivable
Prepaid expenses and deposits
Residual interest - irrevocable trust
Other assets
Due to University of Nevada
Accounts payable
Unearned revenue
Net cash used in operating activities
Non-cash
Increase in cash surrender value of life insurance
The accompanying notes are an integral part of this statement.
$
Restricted
2009
Endowment
2008
Total
-
$ (2,554,456)
$ (4,019,515)
(819,671)
$ (1,734,785)
12,662
(1,958)
(56,046)
-
12,662
(58,004)
10,023
(2,715,079)
(26,344)
(22,992)
(640,633)
18,529
19,400
161,176
(5,014,921)
(11,062)
1,409,843
17,470
(9,223)
-
134,832
(5,014,921)
(22,992)
(11,062)
769,210
35,999
10,177
(480,211)
(8,452)
(1,283,984)
20,419
(99,936)
127,947
1,216,195
(4,027)
(9,300)
$ (1,461,007)
$ (5,237,548)
$
-
$ (6,698,555)
$ (7,245,920)
$
$
$
-
$
$
-
14
11,062
$
Total
11,062
10,804
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The University of Nevada, Reno Foundation (the “Foundation”) is a nonprofit corporation. The
Foundation’s mission is to serve as an innovative, flexible and efficient organization to facilitate the
solicitation and management of gifts, grants, bequests and other revenues for the benefit of the
University of Nevada or any organizations that are affiliated with the University of Nevada and are
exempt from Federal income taxation.
The Foundation is considered a component unit and will be included in the basic financial statements of
the Nevada System of Higher Education.
A summary of the Foundation’s significant accounting policies applied in the preparation of the
accompanying financial statements follows.
1.
Financial Reporting
The financial statements of the Foundation have been prepared in accordance with generally accepted
accounting principles (“GAAP”) as applied to governmental units. The Governmental Accounting
Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. GASB Statement No. 20 requires the Foundation to apply
all applicable GASB pronouncements and, unless they conflict with or contradict GASB
pronouncements, all Financial Accounting Standards Board (FASB) Statements and Interpretations,
Accounting Principles Board Opinions, and Accounting Research Bulletins issued on or before
November 30, 1989. As permitted by the Statement, the Foundation has elected not to apply FASB
pronouncements issued after that date.
Since the Foundation’s funds are considered to be enterprise funds for financial reporting purposes, the
Foundation follows the accrual basis of accounting, wherein revenues are recorded as earned and
expenses are recorded as incurred.
In order to ensure observance of limitations and restrictions placed on the use of resources available to
the Foundation, its accounts are maintained in accordance with the principles of fund accounting.
Resources for various purposes are classified for accounting and reporting purposes into funds
established according to their nature and purpose. Separate accounts are maintained for each fund.
Accordingly, all financial transactions have been recorded and reported by fund group as follows:
Unrestricted Fund - Represents funds that are not restricted and are available for the general operations
and programs of the Foundation.
Restricted Fund - Represents funds that are restricted by the donor and may only be utilized in accordance
with purposes established by such donors. These funds are primarily restricted for scholarships and
University programs.
Endowment Fund - Represents funds that are subject to restrictions of gift instruments requiring that the
principal be invested and only the income be utilized for their established purposes. Endowments are
primarily restricted for scholarships and University programs.
15
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.
- Continued
Financial Reporting – Continued
Because Endowment investment funds include funds derived originally from permanently restricted
gifts, the management of these funds is subject to Nevada law (NRS 164.640), The Uniform Prudent
Management of Institutional Funds. The Board of Trustees has a separate Investment Committee that
reviews the performance and makes recommendations on the investments.
The Foundation has adopted an investment policy that establishes an annual spendable objective, which
is to provide funds for operating and capital expenses, and is calculated as 6% of the average market
value of assets over the 12-quarter period ending on September 30 of each previous year. Earnings in
excess of 6% are reinvested into the corpus. The spending objective is to be met through the use of
interest, dividends, and, to the extent appropriate, accumulated capital gains and corpus. As of June 30,
2009, the Foundation has calculated the current spending objective and has distributed all expendable
endowment funds accordingly. The expendable endowment is presented as a transfer between funds on
the Statement of Support and Revenue, Expenses and Changes in Fund Net Assets.
2.
Recognition of Support and Revenue
Donations, gifts and pledges received are recognized as income when all eligibility requirements are met,
provided that the promise is verifiable, the resources are measurable and the collection is probable.
Pledges receivable are recorded at net present value using the appropriate discount rate. Pledges are
examined on an annual basis to determine their collectiblity based upon the Foundation’s collection
history; an allowance is recorded for amounts where collection is uncertain. Contributions received are
recorded as unrestricted, restricted or endowed support depending on the existence and/or nature of
any donor restrictions.
3.
Cash and Cash Equivalents
The Foundation considers all highly liquid short-term interest bearing investments purchased with an
original maturity of three months or less and money market funds to be cash equivalents. Cash from all
accounts are pooled for investment purposes.
4.
Investments
Investments in equity and debt securities with readily determinable fair values are stated at fair value. In
such cases, fair value is determined based on quoted market prices. Investments in the Commonfund
that do not have readily available market values are stated at fair value as reported by the Investment
Manager. These investments include a diverse range of vehicles, including private equity, real estate and
commodity funds. The valuation of these investments is based on the most recent value provided by
the Investment Manager, usually with a June 30 “as of” date. To evaluate the overall reasonableness of
the valuation carrying value, management obtains and considers the audited financial statements of such
investments. Management believes this method provides a reasonable estimate of fair value. However,
the recorded value may differ from the market value had a readily available market existed for such
investments, and those differences could be material.
Investments are stated at fair value, and realized and unrealized gains and losses are reflected in the
Statement of Support and Revenue, Expenses and Changes in Fund Net Assets. The cost of securities
sold is based on the average cost and/or first-in, first-out basis of all the shares of each security held at
the time of sales.
16
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
5.
- Continued
Depreciation
Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations
over their estimated service lives on a straight-line basis.
6.
Income Taxes
The Foundation is a nonprofit corporation, exempt from income tax under Internal Revenue Code
Section 501(c)(3), qualified for the charitable contribution deduction. Accordingly, no liability for
Federal income taxes has been provided in the financial statements.
7.
Donated Assets and Services
Donated assets are reflected as contributions in the accompanying statements at their estimated fair
market value at date of receipt. No amount for donated services has been reflected in the Foundation’s
financial statements, since no objective basis is available to measure the value of such services.
Nevertheless, a substantial number of volunteers have donated significant amounts of their time to the
Foundation’s program services and its fundraising efforts.
8.
Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles,
management is required to make estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates. Significant accounting estimates made by management include the amount
of pledges receivable, the amount of expendable endowment income, and the fair value of investments.
9.
Comparative Information
The basic financial statements and the notes to the financial statements include certain prior-year
summarized comparative information in total, but not by fund. 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 Foundation’s basic financial
statements for the year ended June 30, 2008 from which the summarized information was derived.
17
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE B - CASH AND INVESTMENTS
Cash and cash equivalents at June 30 consists of:
2009
Cash
Money market funds
Commonfund
Certificates of deposit
Treasury bills and notes
2008
$ 351,320
304,440
13,405,185
599,963
$ 1,449,445
18,361,953
130,000
928,589
$14,660,908
$20,869,987
The fair value of investments at June 30 are as follows:
2009
Equity Investments
Commonfund Bond
Commonfund Equity
Commonfund Intermediate
Commonfund Capital Partners
Commonfund Realty Investors
Commonfund Global Distressed
Commonfund International Commodities
Certificates of Deposit
Law Debenture
U.S. Government Securities
$
2008
390,036
22,665,815
47,559,432
2,389,938
2,063,409
4,459,365
1,498,528
4,027,402
4,895,427
1,015,125
4,987,285
$
$95,951,762
503,090
24,947,333
62,624,579
3,622,913
2,035,809
5,303,067
1,490,821
6,920,871
2,449,928
4,915,918
$114,814,329
At June 30, 2009, the Foundation investments had the following maturities:
Investment Maturities (in Years)
Less
than 1
1–5
6 – 10
Fair
Value
Equity investments
Open ended mutual funds
Certificates of deposit
U.S. Government securities
$
390,036
85,679,014
4,895,427
4,987,285
$95,951,762
18
$
390,036
85,679,014
3,017,171
4,987,285
$94,073,506
$
1,878,256
-
$1,878,256
$
-
$ -0-
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE B - CASH AND INVESTMENTS
- Continued
The Foundation’s investment policy for cash and cash equivalents is to exercise sufficient due diligence
to minimize investing cash and cash equivalents in instruments that will lack liquidity. The Foundation,
through its Investment Managers, may invest in high quality commercial paper, repurchase agreements,
Treasury Bills, certificates of deposit, internal loans, and money market funds to provide income,
liquidity for expense payments and preservation of the investment’s principal value. Commercial paper
must be rated at least A1 or P-1 (by Moody’s or S&P). No more than 5% of the Fund’s total market
value may be invested in the obligations of a single issuer, with the exception of the United States
Government and its agencies.
Investments are recorded in the following funds at June 30:
2009
Unrestricted Fund
Restricted Fund
Endowment Fund
2008
$ 3,418,718
19,197,206
73,335,838
$ 4,552,226
17,842,983
92,419,120
$95,951,762
$114,814,329
The cumulative net depreciation (costs in excess of fair market value) of investments at June 30 is as
follows:
2009
Unrestricted Fund
Restricted Fund
Endowment Fund
2008
($1,191,760)
(989,369)
(27,734,595)
($520,732)
(368,065)
(9,240,682)
($29,915,724)
($10,129,479)
Investment Risk Factors
There are many factors that can affect the fair value of investments. Some factors, such as credit risk
and concentrations of credit risk may affect fixed income securities, which are particularly sensitive to
credit risks and changes in interest rates. The Investment Committee of the Foundation has policies
regarding acceptable levels of risk. The Committee meets quarterly to review the investments.
Significant amounts of the investments are held with the Commonfund which also has policies regarding
acceptable levels of risk.
19
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE B - CASH AND INVESTMENTS
- Continued
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an organization’s
investment in a single issuer.
The Foundation restricts investment of cash and cash equivalents and investments to financial
institutions with high credit standing and The Commonfund, a nonprofit membership corporation
operated by and for its member colleges, universities and independent schools. The Foundation
currently purchases certificates of deposit of less than two hundred fifty thousand dollars per bank or
institution. Commercial paper is limited to a maximum of 10% of the total cash available. The
Foundation has not experienced any losses in such accounts and believes it is not exposed to any
significant credit risk on cash and cash equivalents and investments.
Credit Risk
Fixed income securities are subject to credit risk, which is the chance an issuer or other counterparty to
an investment will not fulfill its obligations. It is the policy of the Foundation to manage its credit risk
by limiting its fixed income securities to obligations of the U.S. Government, which are not considered
to have credit risk, and to pooled fixed income funds with the Commonfund. The Commonfund is
unrated by recognized statistical rating organizations.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the
Foundation’s current policy limits the maturities of U.S. Treasury instruments and certificates of deposit
to no more than 90 days out unless the rate justifies the return and the current liquidity requirements are
met.
Foreign Currency Risk
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an
investment or a deposit. Foreign investments are managed by the Commonfund who has policies in
place to address foreign currency risk.
Custodial Credit Risk – Deposits
In the case of deposits, this is the risk that in the event of a bank failure, the Foundation’s deposits
exceed FDIC limits and as a result may not be returned to the Foundation. All cash deposits are
primarily on deposit with two financial institutions and several investment companies. The Foundation
does not have a deposit policy for custodial credit risk. As of June 30, 2009, the Foundation’s bank
balance was $13,297,600. Of this balance, $661,796 was covered by depository insurance and/or
collateralized and $12,044,648 is held by the Commonfund Government Securities Fund and subject to
their investment policies. The remaining $591,156 was subject to custodial credit risk and as a result was
uninsured at June 30, 2009.
20
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE B - CASH AND INVESTMENTS
- Continued
Custodial Credit Risk – Investments
For an investment, this is the risk that, in the event of the failure of the counterparty, the Foundation
will not be able to recover the value of its investments or collateral securities that are in the possession
of an outside party. Investments consist primarily of open-end mutual funds through a single custodian.
Debt and equity securities other than open-end mutual funds are uncollateralized.
NOTE C - UNEARNED REVENUE
Unearned revenue primarily represents assets held in irrevocable trusts of which the Foundation is the
residual beneficiary. The support and revenue from these irrevocable trusts will be recognized when the
Foundation receives its residual interest in the trusts. Distributions to beneficiaries of these irrevocable
trusts are made based on rates set forth in the trust documents. Upon death of the income beneficiaries,
the trusts will be distributed, and the Foundation will receive its residual interest in the trusts. The assets
held in the irrevocable trusts are recorded at fair value. Unearned revenue at June 30 is comprised of:
Residual Interest in Trust
Royalties and Special Events
2009
2008
$2,295,032
123,800
$2,564,143
104,400
$2,418,832
$2,668,543
NOTE D - RELATED PARTY TRANSACTIONS
The University of Nevada provided the Foundation with administrative and support services for the
years ended June 30, 2009 and 2008 in the amounts of $2,213,239 and $2,036,867, respectively. The
Foundation expended $19,398,639 and $35,463,353 for capital projects, programs and scholarships for
the University of Nevada for the years ended June 30, 2009 and 2008, respectively. Amounts due to the
University of Nevada at June 30, 2009 and 2008 are $3,784,679 and $3,015,469, respectively.
The Foundation received $1,464,656 and $678,128 from the Nevada System of Higher Education during
the years ended June 30, 2009 and 2008, respectively, for the management fees related to endowments
held on the Foundation’s behalf. These amounts are included in investment income on the Statement of
Support and Revenue, Expenses and Changes in Net Assets.
21
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE E - PLEDGES RECEIVABLE
Pledges receivable are recorded as revenue at the pledge date. The net present value is calculated based
upon the pledge date, the Internal Revenue Service Applicable Federal Rates (AFR) and the pledge
payment schedule. The AFR varies from 3.2% to 8.0% depending on the term or duration of the
pledge. Pledges receivable at June 30 consist of the following:
2009
Athletics
College of Liberal Arts
College of Agriculture, Biotech
College of Business
College of Education
College of Engineering
College of Science
Library
Scholarships
School of Journalism
School of Medicine
Other
Present value discount
Net pledges receivable
Less: Current maturities
Less: Allowance for uncollectable pledges
22
2008
$ 233,000
115,000
43,467
389,438
482,327
2,010,494
650,457
300,373
601,681
14,082,826
18,909,063
(4,674,244)
14,234,819
(2,514,716)
(710,445)
$ 395,595
122,071
10,252
62,025
437,500
102,681
1,983,187
1,184,580
378,810
744,107
4,063,626
5,000
9,489,434
(1,068,032)
8,421,402
(2,556,106)
-
$11,009,658
$5,865,296
University of Nevada, Reno Foundation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2009
NOTE F - NOTES RECEIVABLE
Notes receivable as of June 30 consist of the following:
2009
2008
Installment note receivable, secured by a first deed of
trust, monthly payments of $1,391, including interest at
6.5%, maturing November 2009.
$ 171,357
$176,655
Note receivable with the University of Nevada with the
principal balance reduced by pledge payments due on the
Davidson Math and Science Center, including interest at
1% in excess of the Commonfund money market rate,
maturing June 30, 2016.
1,000,000
-
Installment note receivable, secured by a first deed of
trust, monthly payments of $190, including interest at
6.0%, maturing June 2011.
Less current maturities
23
4,770
1,176,127
(173,762)
6,250
182,905
(178,416)
$1,002,365
$ 4,489
SUPPLEMENTAL INFORMATION
University of Nevada, Reno Foundation
UNRESTRICTED FUND
ALUMNI AND UNIVERSITY PROGRAM EXPENSES
Year ended June 30, 2009
(With comparative totals for the year ended June 30, 2008)
2009
Alumni programs
Alumni College
Homecoming
Membership Fund
Miscellaneous
Outreach
Pack Tracks
Senior Scholar Dinner
Staff and Office Expense
$
Total alumni programs
University programs
Faculty and Staff Enrichment
Tibbitts Memorial Distinguished
Teacher Award
Total university programs
Total alumni and university
program expenses
25
6,869
59,875
44,243
16,586
100,660
16,604
29,679
19,672
2008
$
8,536
56,145
63,630
36,923
137,002
11,201
22,751
38,276
294,188
374,464
58,590
25,802
7,500
7,500
66,090
33,302
$ 360,278
$ 407,766
University of Nevada, Reno Foundation
UNRESTRICTED FUND
ADMINISTRATIVE AND FUNDRAISING EXPENSES
Year ended June 30, 2009
(With comparative totals for the year ended June 30, 2008)
2009
Fundraising
Total
2008
Total
883,504
225,496
1,109,000
$ 1,081,683
335,770
1,417,453
$ 1,965,187
561,266
2,526,453
$ 1,899,064
523,203
2,422,267
51,460
2,400
5,282
4,109
10,799
7,015
2,956
43,301
12,980
21,222
21,718
23,602
4,050
53,681
175,769
5,631
15,220
4,332
19,706
485,233
7,706
127
6,442
43,931
1,594
19,780
72
5,726
6,528
14,730
4,048
15,145
37,288
8,140
1,299
7,975
180,531
51,460
10,106
5,409
10,551
54,730
7,015
4,550
63,081
12,980
21,294
27,444
30,130
18,780
57,729
190,914
42,919
23,360
5,631
27,681
665,764
44,383
2,217
8,654
29,591
86,939
10,023
6,432
58,692
10,005
18,364
29,618
48,863
17,384
110,747
163,396
2,496
88,378
21,231
16,178
47,247
820,838
$ 1,594,233
$ 1,597,984
$ 3,192,217
$ 3,243,105
Administrative
Payroll and related expenses
Salaries and wages
Fringe benefits
Operating
Accounting fees
Advertising
Appreciation, gifts and sponsorships
Books, periodicals and subscriptions
Contract services
Depreciation expense
Dues and memberships
Equipment maintenance expense
Insurance, taxes and licenses
Legal fees
Meeting and hosting expense
Office expense
Photography
Postage and freight
Printing and duplicating
Recruitment costs
Special event and meeting supplies
Telephone
Training and registration fees
Travel expense
Total administrative and
fundraising expenses
$
26