RONALD MCDONALD HOUSE
CHARITIES, INC.
Oak Brook, Illinois
FINANCIAL STATEMENTS
December 31, 2012 and 2011
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS’ REPORT...................................................................................... 1
FINANCIAL STATEMENTS
Statements of Financial Position ..................................................................................... 3
Statements of Activities and Changes in Net Assets ....................................................... 4
Statements of Functional Expenses................................................................................ 5
Statements of Cash Flows .............................................................................................. 7
Notes to Financial Statements ........................................................................................ 8
CliftonLarsonAllen LLP
www.cliftonlarsonallen.com
INDEPENDENT AUDITORS’ REPORT
Board of Trustees
Ronald McDonald House Charities, Inc.
Oak Brook, Illinois
Report on the Financial Statements
We have audited the accompanying financial statements of Ronald McDonald House Charities,
Inc. (RMHC) which comprise the statements of financial position as of December 31, 2012 and
2011, and the related statements of activities and changes in net assets, functional expenses,
and cash flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors’
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
An independent member of Nexia International
1
Board of Trustees
Ronald McDonald House Charities, Inc.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of RMHC at December 31, 2012 and 2011, and the changes in its net
assets, functional expenses, and cash flows for the years then ended, in accordance with
accounting principles generally accepted in the United States of America.
a
Oak Brook, Illinois
April 30, 2013
2
RONALD MCDONALD HOUSE CHARITIES, INC.
STATEMENTS OF FINANCIAL POSITION
December 31, 2012 and 2011
ASSETS
Unrestricted
2012
Temporarily
Restricted
Total
Unrestricted
2011
Temporarily
Restricted
Total
(In Thousands)
ASSETS
Cash and cash equivalents
Cash advances to local chapters
Receivables:
Contributions, net
Pledges, net
Split-interest agreements
Other assets
Software, net
Investments
TOTAL ASSETS
$
10,171
680
$
7,166
371
1,519
300
106,715
$
126,922
1,080
-
$
4
3,450
42
2
$
4,578
11,251
680
$
7,170
3,821
42
1,521
300
106,715
$
131,500
12,828
2,615
$
8,093
232
2,137
625
92,046
2,007
-
$
6
1,475
35
2
-
14,835
2,615
8,099
1,707
35
2,139
625
92,046
$
118,576
$
3,525
$
122,101
$
401
7,779
921
$
670
-
$
401
8,449
921
LIABILITIES AND NET ASSETS
LIABILITIES
Accrued expenses and other
Grants payable, net
Intermediary third party liability
$
Total liabilities
$
9,165
NET ASSETS
Unrestricted
117,757
$
126,922
$
-
-
Total net assets
671
671
117,757
Temporarily restricted:
Local RMHC Program Support
Other
Total temporarily restricted
TOTAL LIABILITIES AND NET ASSETS
339
8,181
645
$
339
8,852
645
9,836
9,101
117,757
109,475
413
3,494
3,907
413
3,494
3,907
3,907
121,664
4,578
$
131,500
109,475
$
118,576
9,771
-
-
The accompanying notes are an integral part of the financial statements.
3
670
$
109,475
1,343
1,512
2,855
1,343
1,512
2,855
2,855
112,330
3,525
$
122,101
RONALD MCDONALD HOUSE CHARITIES, INC.
STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS
Years Ended December 31, 2012 and 2011
PUBLIC SUPPORT AND REVENUE
Public support:
Other contributions
Donated goods and services
Total public support
Unrestricted
2012
Temporarily
Restricted
$
$
Revenue:
Gross revenue from special fundraising events
Less direct benefit costs
Net revenue (loss) from special fundraising events
Program service revenue
Other revenue
Total revenue
Net assets released from restrictions
Total public support and revenue
EXPENSES
Grants and program services
Supporting services:
Management and general administration
Fundraising
Total supporting services
Total expenses
INVESTMENT INCOME
Net realized and unrealized gains (losses)
on investments
Interest and dividends
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
$
$
30,357
5,999
36,356
$
30,399
6,478
36,877
$
$
35,475
1,051
36,526
40,285
(1,436)
38,849
28,190
-
28,190
27,525
-
27,525
3,387
3,241
6,628
-
3,387
3,241
6,628
4,002
3,108
7,110
-
4,002
3,108
7,110
34,818
-
34,818
34,635
-
34,635
1,051
1,708
5,650
(1,436)
4,214
-
5,345
2,281
(1,801)
2,899
-
1
2
(1,801)
2,901
7,625
1
7,626
1,098
2
1,100
8,282
1,052
9,334
6,748
109,475
2,855
112,330
102,727
$
3,907
$
121,664
The accompanying notes are an integral part of the financial statements.
4
$
109,475
(2,672)
31,635
6,478
38,113
1,143
(1,174)
(31)
96
105
170
-
117,757
971
(833)
138
453
145
736
2,672
1,236
1,236
Total
(2,373)
5,345
2,280
Total investment income
3,424
3,424
Unrestricted
(In Thousands)
1,143
(1,174)
(31)
96
105
170
2,373
657
CHANGE IN NET ASSETS FROM OPERATIONS
NET ASSETS, END OF YEAR
26,933
5,999
32,932
Total
2011
Temporarily
Restricted
971
(833)
138
453
145
736
-
(1,434)
5,314
4,289
$
2,855
107,016
$
112,330
RONALD MCDONALD HOUSE CHARITIES, INC.
STATEMENT OF FUNCTIONAL EXPENSES
Year Ended December 31, 2012
Grants
Donated
Services
Other Services
and
Professional
Fees
Public
Awareness
Travel,
Meetings,
and
Conventions
Other
Miscellaneous
Office
Expenses
Total
Total
Donated
Expense
Total
Paid by
RMHC
Total
(In Thousands)
GRANTS AND PROGRAM SERVICES
Support of Local RMHC Chapters:
General support for all Local Chapter
programs
Capacity Building Support
Community-focused programs
Ronald McDonald Care Mobile
program
Scholarship programs
Ronald McDonald House program
Ronald McDonald Family Room
program
Total Local RMHC support
$
Other programs:
Health
Well-being
Scholarship program
Total other programs
8,352
232
3,086
$
670
695
9
$
424
2,259
-
$
-
$
388
133
-
$
104
329
-
$
35
111
1
$
9,973
3,759
3,096
$
766
805
10
$
9,207
2,954
3,086
$
9,973
3,759
3,096
1,910
1,330
2,560
48
61
60
63
161
-
-
8
-
6
8
9
5
20
2
2,040
1,580
2,631
55
71
72
1,985
1,509
2,559
2,040
1,580
2,631
299
17,769
44
1,587
2,907
-
529
5
461
2
176
350
23,429
51
1,830
299
21,599
350
23,429
3,883
414
375
4,672
61
11
1
3
6
1
6
-
69
18
3
7
6
3,960
426
375
4,761
87
3,891
408
375
4,674
3,960
426
375
4,761
72
1
-
22,441
1,659
2,908
-
532
468
182
28,190
1,917
26,273
28,190
SUPPORTING SERVICES
Management and general administration
Fundraising
-
1,251
815
245
1,330
1,214
115
512
405
106
368
59
208
3,387
3,241
2,597
931
790
2,310
3,387
3,241
Total supporting services
-
2,066
1,575
1,329
917
474
267
6,628
3,528
3,100
6,628
5,445
$ 29,373
$ 34,818
Total grants and program services
TOTAL EXPENSES
$
22,441
-
-
$
3,725
$
4,483
$
1,329
$
-
-
1,449
$
942
$
The accompanying notes are an integral part of the financial statements.
5
449
$
34,818
-
$
RONALD MCDONALD HOUSE CHARITIES, INC.
STATEMENT OF FUNCTIONAL EXPENSES
Year Ended December 31, 2011
Grants
Donated
Services
Other Services
and
Professional
Fees
Public
Awareness
Travel,
Meetings,
and
Conventions
Other
Miscellaneous
Office
Expenses
Total
Total
Donated
Expense
Total
Paid by
RMHC
Total
(In Thousands)
GRANTS AND PROGRAM SERVICES
Support of Local RMHC Chapters:
General support for all Local Chapter
programs
Capacity Building Support
Community-focused programs
Ronald McDonald Care Mobile
program
Scholarship programs
Ronald McDonald House program
Ronald McDonald Family Room
program
Total Local RMHC support
$
Other programs:
Health
Well-being
Scholarship program
Total other programs
Total grants and program services
8,835
3,571
3,264
$
552
721
17
$
356
1,535
-
$
-
$
323
209
-
$
110
896
-
$
35
114
2
$
10,211
7,046
3,283
$
644
821
19
$
9,567
6,225
3,264
$ 10,211
7,046
3,283
577
1,328
873
50
57
81
103
163
-
-
8
-
7
7
17
2
18
4
747
1,573
975
59
66
101
688
1,507
874
747
1,573
975
268
18,716
41
1,519
2,157
-
540
6
1,043
2
177
317
24,152
49
1,759
268
22,393
317
24,152
2,441
483
375
3,299
27
27
-
-
7
1
7
2
2
1
30
30
60
2,454
484
375
3,313
2,484
514
375
3,373
54
8
9
3
2,484
514
375
3,373
-
-
-
-
22,015
1,573
2,157
-
548
1,052
180
27,525
1,819
25,706
27,525
SUPPORTING SERVICES
Management and general administration
Fundraising
-
1,161
753
216
1,326
2,139
78
313
381
111
353
62
217
4,002
3,108
3,435
849
567
2,259
4,002
3,108
Total supporting services
-
1,914
1,542
2,217
694
464
279
7,110
4,284
2,826
7,110
6,103
$ 28,532
$ 34,635
TOTAL EXPENSES
$
22,015
$
3,487
$
3,699
$
2,217
$
1,242
$
1,516
$
The accompanying notes are an integral part of the financial statements.
6
459
$
34,635
$
RONALD MCDONALD HOUSE CHARITIES, INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2012 and 2011
2012
2011
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile change in net assets to net cash
provided by operating activities:
Net realized and unrealized (gains) losses
on investments
Contributions of common stock
Forgiveness of note payable
Bad debt
Amortization
Effects of changes in operating assets and liabilities:
Cash advances to Local Chapters
Contributions receivable
Pledges receivable
Split-interest agreements
Other assets
Accrued expenses and other
Grants payable
Intermediary third party liability
$
9,334
$
5,314
(5,345)
(37)
318
334
1,801
(22)
(3,400)
342
1,935
611
(2,114)
(7)
618
(62)
403
(276)
6,912
(430)
1,501
3
(434)
220
585
137
5,712
12,529
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments
Proceeds from sale of investments
Purchases of software
(11,179)
1,892
(9)
(12,646)
3,822
(199)
Net cash used in investing activities
(9,296)
(9,023)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
(3,584)
3,506
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
14,835
11,329
Net cash provided by operating activities
CASH AND CASH EQUIVALENTS, END OF YEAR
$
11,251
$
The accompanying notes are an integral part of the financial statements.
7
14,835
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ronald McDonald House Charities, Inc. (RMHC) is an Illinois not-for-profit corporation. RMHC
was incorporated on September 7, 1977. The Internal Revenue Service (IRS) has issued a
ruling stating that RMHC is a Section 501(c)(3) charitable organization and qualifies as a public
charity under Section 509(a)(1) of the Internal Revenue Code (IRC).
The mission of RMHC is to create, find, and support programs that directly improve the health
and well-being of children. RMHC fulfills its mission by creating programs that address targeted
needs and by supporting these programs and other activities conducted by its Local RMHC
Chapters (Chapters) worldwide. In addition, RMHC awards grants to other organizations that
positively impact the health and well-being of children.
The RMHC bylaws allow for solicitation of contributions from the general public. RMHC
contributes to those tax-exempt organizations, which, in the opinion of the board of trustees of
RMHC, are the most appropriate recipients. The bylaws also allow for the operation of a facility
to provide housing and other assistance for ill children (Ronald McDonald Houses).
RMHC’s fiscal year ends on December 31. Significant accounting policies followed by RMHC
are presented below.
Use of Estimates in Preparing Financial Statements
The preparation of financial statements in conformity with generally accepted accounting
principles (GAAP) requires management of RMHC to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Cash Equivalents
Cash equivalents include money market funds and all highly liquid investments with a maturity
date of less than three months from the date of purchase.
RMHC’s cash balances that are maintained in bank accounts may exceed Federal Deposit
Insurance Corporation limits from time-to-time. RMHC has not experienced any losses in such
accounts and management believes that RMHC is not exposed to any significant credit risk on
cash.
Pledges Receivable and Public Support
RMHC has received unconditional promises to give consisting of pledges, bequests, and splitinterest agreements that are recognized as revenue in the period made. Conditional promises
are recorded as revenue when the conditions are met.
Public support is generally recorded at the time of receipt. Donated services and contributions of
securities are recorded at their fair values.
8
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Pledges Receivable and Public Support (continued)
Unconditional promises to give that are expected to be collected within one year are recorded at
net realizable value. Unconditional promises to give that are expected to be collected in future
years are recorded at the present value of their estimated future cash flows. The discounts on
those amounts are computed at the date of the gift using risk-free interest rates applicable to the
years in which the promises are expected to be received. The discount rates used were
between 0.425% to 0.720% in 2012 and 0.542% in 2011. Amortization of the discounts is
included in contribution revenue.
RMHC is the beneficiary under various wills and trust agreements of which the total realizable
amount is not presently determinable. Such amounts are recorded when a will is declared valid
by probate court and the proceeds are measurable.
Software
Software and web development are stated at cost and amortized when placed in service.
Amortization is calculated using the straight-line method over the estimated useful lives of the
assets, generally three years. RMHC capitalizes all acquisitions in excess of $1,000. Ongoing
maintenance contracts are charged to expense when incurred. The balance in software as of
December 31, 2012 and 2011 is as follows:
2012
2011
(In Thousands)
Software and web enhancements
Accumulated amortization
$
1,227
(927)
$
1,218
(593)
Total
$
300
$
625
Investments
RMHC records all investments in equity securities with readily determinable fair values and all
investments in debt securities and commodities at fair value in the Statements of Financial
Position. Realized and unrealized investment gains and losses and income are included in the
Statements of Activities and Changes in Net Assets. Interest and dividend income includes
interest income earned on outstanding cash and cash equivalent balances of $13,000 for 2012
and $11,000 for 2011.
RMHC also has investments of less than 1% in two limited partnerships which are reported at
cost. Capital calls to cover management fees are expensed as incurred.
9
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Net Assets
RMHC reports information regarding its financial position and activities according to three classes
of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted
net assets. Net assets of the two restricted classes are created only by donor-imposed restrictions
on their use. When a restriction expires, that is, when a stipulated time restriction ends or purpose
restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net
assets. All other net assets, including board-designated or appropriated amounts, are unrestricted
and are reported as part of the unrestricted class. RMHC did not have any permanently restricted
net assets for the years ended December 31, 2012 and 2011. The board targets having two to
three years of operating expenses as reserves.
Reclassifications
Certain amounts have been reclassified for the year ended December 31, 2011 to conform with
the presentation for the year ended December 31, 2012.
NOTE 2 - FAIR VALUE MEASUREMENTS
In determining fair value, RMHC uses various valuation approaches within the fair value
measurement framework. Fair value measurements are determined based on the assumptions
that market participants would use in pricing an asset or liability. A hierarchy for inputs is used in
measuring fair value that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when available.
Levels within the hierarchy are based on the reliability of inputs as follows:

Level 1 - Valuations based on unadjusted quoted prices for identical assets or liabilities in
active markets;

Level 2 - Valuations based on quoted prices for similar assets or liabilities or identical assets
or liabilities in less active markets, such as dealer or broker markets; and

Level 3 - Valuations derived from valuation techniques in which one or more significant
inputs or significant value drivers are unobservable, such as pricing models, discounted
cash flow models and similar techniques not based on market, exchange, dealer or brokertraded transactions.
Fair values for Level 1 investments are determined by reference to quoted market prices and
other relevant information generated by market transactions. Fair value of Level 2 investments
are determined by reference to quoted prices for similar assets in less active markets. Fair value
of Level 2 life insurance policies is determined by reference to quoted market transactions for
assets similar to those held. Fair value of Level 3 split-interest agreements is determined by
calculating the present value of future distributions expected to be received using published life
expectancy tables and a discount rate of 1.2% in 2012 and 1.6% in 2011. There has been no
change in valuation techniques from the prior year.
10
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 2 - FAIR VALUE MEASUREMENTS (continued)
Fair values of assets measured on a recurring basis at December 31, 2012 are as follows:
Cost
Fair Value/
Carrying
Value
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Significant
Observable Unobservable
Inputs
Inputs
(Level 2)
(Level 3)
(In Thousands)
Investments
Investments recorded at fair
value:
Mutual bond fund
$
Common stock:
Mutual stock fund
McDonald’s Corporation
8,501
$
8,810
$
5,047
$
3,763
$
-
13,886
2,314
15,183
8,861
9,386
8,861
5,797
-
-
Total common stock
16,200
24,044
18,247
5,797
-
Global balanced asset funds
51,972
61,299
61,299
-
-
Mutual commodity fund
11,282
8,790
8,790
-
-
87,955
102,943
3,772
3,772
91,727
$ 106,715
Total investments
recorded at fair value
Investments not recorded at
fair value:
Private equity
Total investments
$
Other assets recorded at fair
value:
Life insurance policies
Split-interest agreements
Total
$
$
$
93,383
$
9,560
$
-
688
42
$
-
$
688
-
$
-
730
$
-
$
688
$
42
42
Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Split-interest agreements:
Balance, beginning of year
Change in value of split-interest agreements
$
35
7
Balance, end of year
$
42
11
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 2 - FAIR VALUE MEASUREMENTS (continued)
Fair values of assets measured on a recurring basis at December 31, 2011 are as follows:
Cost
Fair Value/
Carrying
Value
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Significant
Observable Unobservable
Inputs
Inputs
(Level 2)
(Level 3)
(In Thousands)
Investments
Investments recorded at fair
value:
Mutual bond fund
$
Common stock:
Mutual stock fund
McDonald’s Corporation
8,019
$
8,161
$
4,613
$
3,548
$
-
12,354
2,314
12,180
10,079
7,390
10,079
4,790
-
-
Total common stock
14,668
22,259
17,469
4,790
-
Global balanced asset funds
46,363
51,467
51,467
-
-
8,586
6,137
6,137
-
-
77,636
88,024
4,022
4,022
Mutual commodity fund
Total investments
recorded at fair value
Investments not recorded at
fair value:
Private equity
Total investments
$
81,658
Other assets recorded at fair
value:
Life insurance policies
Split-interest agreements
Total
$
79,686
$
8,338
$
-
-
$
568
-
$
-
-
$
568
$
$
92,046
$
568
35
$
603
$
$
35
35
Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Split-interest agreements:
Balance, beginning of year
Change in value of split-interest agreements
$
38
(3)
Balance, end of year
$
35
12
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 2 - FAIR VALUE MEASUREMENTS (continued)
RMHC’s portfolio includes investments in entities that calculate market value using net asset
value per share. RMHC has the following investments at December 31:
2012
Private Equity Funds
2011
(In Thousands)
Capital commitment
Unfunded commitments
Fair value
Redemption frequency (if currently eligible)
Redemption notice period
$
$
$
6,000
705
4,811
Ineligible
N/A
$
$
$
6,000
909
4,706
Ineligible
N/A
Private Equity Funds
RMHC invests in two private equity funds that seek long-term capital appreciation by making
mainly equity and equity-related investments in conjunction with privately negotiated transactions.
The investment strategies include management buyout, growth-equity transactions, special equity
situations, and investments acquired in the secondary market. Redemptions are not permitted
during the life of the fund. However, interests may be transferred with the written consent of the
general partner if certain conditions are met. The invested funds are committed for a period of ten
years, set to expire in July 2016. Distributions are generally made when the funds receive income,
but are at the discretion of the general partner. The fair values of the investments in these funds
are based on the net asset values reported by the general partners of the portfolio funds. There
are no plans to sell and no other known restrictions on the ability to sell the investments.
NOTE 3 - GRANTS PAYABLE
Grants payable in future years as of December 31:
2012
2011
(In Thousands)
Amounts due in:
Less than one year
One to five years
$
Total unconditional promises to give
Less unamortized discount
7,030
1,842
$
8,872
(20)
Net grants payable
$
8,852
7,051
1,407
8,458
(9)
$
8,449
The discount rate used for the grants payable is between 0.250% to 0.340% for the year ended
December 31, 2012 and 0.256% to 0.392% for the year ended December 31, 2011.
13
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 3 - GRANTS PAYABLE (continued)
There were $11,233,000 and $16,850,000 in contingent grants at December 31, 2012 and 2011,
respectively. Contingent grants primarily represent a two-year (three-year as of December 31,
2011) initiative to match, if requested, the grant-making activities of the Chapters, provided certain
criteria are met.
NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets are available for the following purposes:
2012
2011
(In Thousands)
Restriction:
Time restricted
Support of Local Ronald McDonald House Charities
Programs (worldwide)
Total temporarily restricted net assets
$
3,494
$
413
$
3,907
1,512
1,343
$
2,855
NOTE 5 - CONTRIBUTIONS
Other Contributions
Included in contributions are proceeds from fundraisers conducted by independent organizations
on behalf of RMHC. For the years ended December 31, 2012 and 2011, independent fundraising
activities totaled $11,833,000 and $12,558,000, respectively. In addition, remittance from the
Chapters derived from fundraising efforts totaled $5,844,000 and $5,757,000, at December 31,
2012 and 2011, respectively.
Donated Goods and Services
RMHC receives support from McDonald’s Corporation consisting of the free use of its facilities,
equipment, materials, and limited services. The free goods and services provided by
McDonald’s Corporation partially defray certain costs that RMHC would otherwise incur for
program service, fundraising, and management and general expenditures. For the years ended
December 31, 2012 and 2011, the total value of the free goods and services provided by
McDonald’s Corporation totaled $4,277,000 and $3,962,000, respectively.
RMHC received additional donated goods and services from other donors for the years ended
December 31, 2012 and 2011 totaling $1,722,000 and $2,516,000, respectively. A portion of
these donated goods and services are included below in Special Fundraising Events.
RMHC also receives donated services from other contributors and volunteers that are not
measurable, and therefore, are excluded from the financial statements.
14
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 5 - CONTRIBUTIONS (continued)
Unconditional Promises
RMHC has received unconditional promises to give, consisting primarily of pledges, bequests,
and split-interest agreements, as of the years ended December 31 as follows:
2012
2011
(In Thousands)
Amounts due in:
Less than one year
One to five years
More than five years
$
Total
Unamortized discount
Allowance for uncollectibles
8,915
2,260
42
$
11,217
(102)
(82)
Net unconditional promises to give
$
11,033
9,114
862
35
10,011
(81)
(89)
$
9,841
Contributions receivable include $5,717,000 and $6,250,000 due from McDonald’s Corporation
at December 31, 2012 and 2011, respectively, for various fundraisers.
Special Fundraising Events
RMHC conducted various special fundraising events that generated $5,649,000 and $5,023,000
in 2012 and 2011, respectively.
Gross revenue from special fundraising events includes the amount paid by the donor for the
stated fair market value of the goods and services received by the donor at the event totaling
$1,143,000 and $971,000 for the years ended December 31, 2012 and 2011, respectively.
Direct benefit costs reflect the actual fair market value of the goods and services received by the
donor. The difference between the gross revenue from special fundraising events and the
corresponding direct benefit costs is due to the need to estimate the fair market value of the
goods and services in advance of the event, rather than subsequent to completion of the event
when the actual fair market value of the goods and services received is finalized.
The difference between the total event proceeds and the gross revenue from special events
totaling $4,506,000 and $4,052,000 in 2012 and 2011, respectively, is included in direct public
support as other contributions in the Statements of Activities and Changes in Net Assets.
15
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 6 - GRANTS AND PROGRAM SERVICES
Support of Local RMHC Chapters

General RMHC, Ronald McDonald House, and Other Program Support
-

Capacity Building Support
-

RMHC developed and continues to support three scholarship programs: RMHC/
HACER, RMHC/ASIA and RMHC/Future Achievers assist graduating high school
seniors of Hispanic, Asian/Pacific Islander, and African American heritage with their first
year of college or university education. RMHC also directly matches scholarships
awarded by U.S. Chapters through these programs.
Ronald McDonald Care Mobile Program
-

RMHC directly matches U.S. Chapter grants made to local children’s organizations,
thereby increasing the availability and scope of services provided to children throughout
the United States.
Scholarship Programs
-

RMHC is committed to strengthening the global system of the Chapters, by providing
“capacity building” grants and programmatic support to help each Chapter achieve a
high level of excellence in management and operations, and to help them effectively and
efficiently fulfill their mission. Activities include, among others: resource development;
sharing best practices to improve all aspects of the organization; strategic planning;
technology upgrades; ongoing training and education of board, staff and volunteers, to
encourage excellence in delivering programs, fundraising and administrative practices;
facilitation of networking opportunities; and developing local fundraising capabilities to
grow resources and meet new and expanding program needs.
Community-Focused Programs
-

RMHC provides expertise in all aspects of the core program operations, other program
development and non-profit management for its Chapters worldwide. Support also
includes general program support grants.
RMHC developed and continues to support mobile pediatric healthcare services to
children in underserved areas in the United States and nine other countries worldwide.
In addition to primary and specialty medical care, health education, and oral health
services, the program links children to other community and social service resources.
Ronald McDonald House Program
-
RMHC provides grants for new and expanding Ronald McDonald House programs. The
Ronald McDonald House is a home away from home for families of ill children while
being treated at nearby hospitals.
16
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 6 - GRANTS AND PROGRAM SERVICES (continued)
Support of Local RMHC Chapters (continued)

Ronald McDonald Family Room Program
-
The Ronald McDonald Family Room program offers a home-like environment within the
walls of the hospital. Ronald McDonald Family Rooms provide families of hospitalized
children with a place to refresh and relax while remaining near their child’s bedside.
Other Programs
RMHC works with other organizations to identify and address the needs of children throughout
the world. These efforts are directed in two areas: improving the health of children, and
addressing the overall well-being of children.
NOTE 7 - INCOME TAXES
The IRS has issued a ruling stating that RMHC is a Section 501(c)(3) charitable organization
and qualifies as a public charity under Section 509(a)(1) of the IRC. As such, it is exempt from
federal income taxation on related income. However, income from certain activities not directly
related to RMHC’s tax-exempt purpose is subject to taxation as unrelated business income.
Income taxes for such unrelated business income were less than $1,000 for the years ended
December 31, 2012 and 2011.
The federal and state tax returns of RMHC for 2009, 2010, and 2011 are subject to examination
by the IRS and state taxing authorities, generally for three years after they were filed. RMHC
has determined that it is not necessary to record a liability for uncertain tax positions as of
December 31, 2012 and 2011.
NOTE 8 - RELATED PARTY TRANSACTIONS
During the year, RMHC dealt with numerous corporations in carrying out the ordinary operations
of the charity. The cost of these goods and services were provided at least as low as would
otherwise have been available. RMHC purchased goods and services totaling $31,000 and
$30,000 during the years ended December 31, 2012 and 2011, respectively, from companies
whose officers and/or directors also serve as officers and directors of RMHC. All goods and
services provided by McDonald’s Corporation in 2012 and 2011 were donated.
17
RONALD MCDONALD HOUSE CHARITIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
NOTE 8 - RELATED PARTY TRANSACTIONS (continued)
RMHC provides ongoing program grants to all of its Chapters around the world. These program
grants are pre-authorized by the Board of RMHC for the benefit of all Chapters. The grants are
available to all Chapters that meet the program parameters; as such, the individual grants do
not require any additional board action. Grants totaling $2,089,000 and $2,719,000, during the
years ended December 31, 2012 and 2011, respectively, were provided to Chapters where
certain members of the RMHC board of trustees also serve as officers and/or directors of the
Chapter.
In the course of fulfilling its mission, RMHC also supports other public charities that maintain
children’s programs. In 2012, two charities received $304,000 in grants where RMHC officers
and directors were also officers and directors of the charities. In 2011, three charities received
$75,000 in grants where RMHC officers and directors were also officers and directors of the
charities. In all cases, the grants made followed the established policies of RMHC, underwent
the same review process, and the parties involved who had relationships were not involved in
the decision making process.
NOTE 9 - CASH FLOW DISCLOSURES
There was no cash paid for interest for the years ended December 31, 2012 and 2011.
There were no non-cash investing or financing transactions for the year ended December 31,
2012. There were no non-cash investing transactions for the year ended December 31, 2011.
During the year ended December 31, 2011, McDonald’s Corporation forgave the $3,400,000
balance of the note payable as a charitable contribution to RMHC. The forgiveness of the note
payable is included in other contributions on the Statements of Activities and Changes in Net
Assets.
NOTE 10 - SUBSEQUENT EVENT DISCLOSURES
Management evaluated subsequent events through April 30, 2013, the date the financial
statements were available to be issued. Events or transactions occurring after December 31,
2012, but prior to April 30, 2013 that provided additional evidence about conditions that existed
at December 31, 2012, have been recognized in the financial statements for the year ended
December 31, 2012. Events or transactions that provided evidence about conditions that did not
exist at December 31, 2012, but arose before the financial statements were available to be
issued have not been recognized in the financial statements for the year ended December 31,
2012. Management has determined that there were no events or transactions which would
require disclosure in the financial statements either individually or in the aggregate for the year
ended December 31, 2012.
This information is an integral part of the accompanying financial statements.
18