RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2011
Certified Public Accountants | 280 Kenneth Drive, Suite 100 | Rochester, New York 14623 | 585.427.8900 | EFPRotenberg.com
INDEPENDENT AUDITORS’ REPORT
Board of Directors
Ronald McDonald House Charities
of Rochester NY, Inc.
Rochester, New York
We have audited the accompanying balance sheet of Ronald McDonald House Charities of Rochester NY, Inc. (a
not-for-profit corporation) as of December 31, 2011, and the related statements of activities, functional expenses
and cash flows for the year then ended. These financial statements are the responsibility of the Organization’s
management. Our responsibility is to express an opinion on these financial statements based on our audit. The
financial statements of Ronald McDonald House Charities of Rochester NY, Inc. as of December 31, 2010, were
audited by other auditors whose report dated April 20, 2011, expressed an unqualified opinion on those statements.
The prior year summarized comparative information has been derived from the Organization’s 2010 financial
statements. As discussed in Note 13 to the financial statements, the Organization has adjusted its 2010 financial
statements for a revaluation of in-kind donations for the year ended 2010. The other auditors reported on the
financial statements before this revision.
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
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the financial
position of Ronald McDonald House Charities of Rochester NY, Inc. as of December 31, 2011, and the changes in
its net assets and its cash flows for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
We have also audited the adjustments to the 2010 financial statements as described in Note 13. In our opinion,
such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply
any procedures to Ronald McDonald House Charities of Rochester NY, Inc.’s 2010 financial statements other than
with respect to the adjustments, and, accordingly, we do not express as opinion on any other form of assurance on
the 2010 financial statements as a whole.
EFP Rotenberg, LLP
Rochester, New York
April 27, 2012
RONALD MCDONALD HOUSE CHARITIES OF ROCHESTER NY, INC.
Balance Sheets
December 31, 2011 and 2010
2011
2010
ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable
Pledges and contributions receivable
Prepaid expenses and other assets
Total current assets
$
490,559
8,000
66,610
22,573
587,742
$
372,588
5,998
123,516
29,306
531,408
Property and Equipment - Net
1,707,350
1,722,784
Other Assets
Long-term investments
Long-term pledges receivable
Long-term prepaid expenses
Total other assets
7,087,011
22,796
7,109,807
7,342,734
10,000
26,558
7,379,292
Total Assets
$ 9,404,899
$
9,633,484
$
$
68,576
20,171
1,092
89,839
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable and accrued expenses
Deferred revenue
Due to RMHC (Global Office)
Capital lease obligation - current portion
Total current liabilities
Long-Term Liabilities
Capital lease obligation - net of current portion
Due to RMHC (Global Office)
Total long-term liabilities
Total Liabilities
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted
Total net assets
Total Liabilities and Net Assets
63,998
12,168
32,978
5,558
114,702
15,392
15,392
38,759
38,759
130,094
128,598
7,502,749
819,371
952,685
9,274,805
7,697,705
854,496
952,685
9,504,886
$ 9,404,899
The accompanying notes are an integral part of these financial statements.
-2-
$
9,633,484
RONALD MCDONALD HOUSE CHARITIES OF ROCHESTER NY, INC
Statement of Activities
For the Year Ended December 31, 2011
(With Comparative Totals for the Year Ended December 31, 2010)
Support and Revenue
Support
Public support from special events
Less - direct expenses for special events
Individual contributions
Foundation and business contributions
McDonald's revenue
United Way/CFC/SEFA contributions
In-kind donations
Net assets released from restriction
Investment income available for operations
Revenue
Room rental
Interest and dividend income
Rental income
Other income
Total support and revenue
Expenses
Program services
Supporting services
General and administrative
Fundraising
Total expenses
Excess of Revenues Over Expenses
(Expenses Over Revenues) from Operations
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
600,474
(46,711)
203,349
48,711
140,875
85,535
115,965
243,355
162,523
35,792
168,663
(243,355)
65,878
-
Restated
2010
Total
2011
Total
$
600,474
(46,711)
239,141
217,374
140,875
85,535
115,965
228,401
$
529,910
(44,724)
217,142
163,917
149,215
74,289
212,617
218,638
57,855
2,702
6,866
4,902
1,626,401
26,978
-
57,855
2,702
6,866
4,902
1,653,379
45,870
12,633
7,143
5,072
1,591,722
1,287,462
-
-
1,287,462
1,246,590
127,536
212,739
1,627,737
-
-
127,536
212,739
1,627,737
95,235
188,472
1,530,297
26,978
-
25,642
61,425
(1,336)
Other Income, Expenses, Gains and (Losses)
Interest and dividend income
Investment expenses
Net gain (loss) on investments
Investment income available for operations
Total other income, expenses, gains and (losses)
130,781
(33,586)
(119,658)
(162,523)
(184,986)
44,773
(10,032)
(39,600)
(65,878)
(70,737)
-
175,554
(43,618)
(159,258)
(228,401)
(255,723)
180,607
(43,421)
612,117
(218,638)
530,665
Excess of Revenues Over Expenses
(Expenses Over Revenues)
(186,322)
(43,759)
-
(230,081)
592,090
8,634
-
(35,125)
-
Reclassification of Net Assets
Change in Net Assets
Net Assets - Beginning
Net Assets - Ending
(8,634)
(194,956)
7,697,705
$ 7,502,749
854,496
$
819,371
$
(230,081)
592,090
952,685
9,504,886
8,912,796
952,685
$ 9,274,805
$ 9,504,886
The accompanying notes are an integral part of these financial statements.
-3-
RONALD MCDONALD HOUSE CHARITIES OF ROCHESTER NY, INC.
Statement of Functional Expenses
For the Year Ended December 31, 2011
(With Comparative Totals for the Year Ended December 31, 2010)
Program Services
Operations
Grant-Making
Salaries and wages
Employee benefits and payroll taxes
Total personnel costs
$
$
Advertising
Depreciation
Development
Facilities
Family and guest
Fundraising
Grant making
Insurance
Miscellaneous
Office expense
Postage and printing
Professional fees
Travel and seminars
Volunteer
Total expenses
67,177
188,160
6,340
84,647
57,122
1,617
23,690
2,945
26,944
1,809
2,982
2,919
6,668
$ 1,041,845
455,672
113,153
568,825
$
20,232
5,024
25,256
220,361
245,617
Totals
Supporting Services
Total
$
$
475,904
118,177
594,081
67,177
188,160
6,340
84,647
57,122
1,617
220,361
23,690
2,945
26,944
1,809
2,982
2,919
6,668
1,287,462
General and
Administrative
Fundraising
$
$
$
40,544
10,068
50,612
645
4,601
3,582
2,427
3,594
13,104
45,995
2,976
127,536
$
The accompanying notes are an integral part of these financial statements.
-4-
51,617
12,817
64,434
1,640
119,609
860
301
20,696
5,199
212,739
Restated
2010
2011
$
$
568,065
141,062
709,127
67,822
192,761
11,562
84,647
57,122
121,226
220,361
26,117
7,399
40,349
22,505
54,176
5,895
6,668
1,627,737
$
$
578,222
132,057
710,279
81,396
174,420
28,761
99,216
41,402
88,744
187,107
26,100
1,045
27,163
35,352
17,561
4,225
7,526
1,530,297
RONALD MCDONALD HOUSE CHARITIES OF ROCHESTER NY, INC.
Statements of Cash Flows
For the Years Ended December 31, 2011 and 2010
2011
Cash Flows from Operating Activities
Change in net assets
Adjustments
Permanently restricted contributions
Depreciation
Net (gain) loss on investments
Donated, land, building and equipment
Changes in assets and liabilities
Accounts receivable
Pledge and contributions receivable
Prepaid expenses and other assets
Accounts payable and accrued expenses
Deferred revenue
Contribution payable
Due to RMHC (Global Office)
Net cash flows from operating activities
$
Cash Flows from Investing Activities
Sale of investments
Purchase of investments
Purchase of property and equipment
Net cash flows from investing activities
Cash Flows from Financing Activities
Proceeds from pledges and contributions
Payments of capital lease obligation
Proceeds from permanently restricted contributions
Net cash flows from investing activities
(230,081)
2010
$
592,090
192,761
159,258
-
(1,000)
174,420
(612,117)
(58,919)
(2,002)
(2,520)
10,495
(4,578)
(8,003)
(6,873)
108,457
(1,088)
(51,071)
(1,792)
17,098
9,671
(23,585)
38,759
82,466
2,361,189
(2,264,724)
(155,096)
(58,631)
2,979,554
(3,486,928)
(43,515)
(550,889)
69,426
(1,281)
68,145
50,300
1,000
51,300
Net Change in Cash and Cash Equivalents
117,971
(417,123)
Cash and Cash Equivalents - Beginning
372,588
789,711
Cash and Cash Equivalents - Ending
$
490,559
The accompanying notes are an integral part of these financial statements.
-5-
$
372,588
RONALD MCDONALD HOUSE CHARTIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Note 1.
Summary of Significant Accounting Policies and Nature of the Organization
Nature of the Organization - Ronald McDonald House Charities of Rochester NY, Inc. (the
“Organization”) reaches out to the community to promote the health and well-being of children and their
families by providing a home-away-from-home for families whose children are receiving medical
treatment and by supporting other programs that help children. The Ronald McDonald House (the
“House”) is a 20-bedroom facility that provides temporary lodging to families of seriously ill children which
is the cornerstone program of the Organization. In January 2005, the Organization opened an additional
facility, a seven-bedroom “House Within the Hospital”, at the Golisano Children’s Hospital at the
University of Rochester Medical Center, for families of critically ill or injured children receiving treatment
at the hospital. To its broader mission of lifting children and families to a better tomorrow, the
Organization also makes grants to organizations that improve the health outcomes of children in the
Greater Rochester community. Funds for these grants come from donations, including special
promotions held by local McDonald’s franchises, special designed fundraising activities, matching grants
from the National Chapter of the Ronald McDonald House and investment activities. The Organization
manages its funds to support its grants and programs at the House and the House Within the Hospital, at
times accumulating funds from year to year for large grants whereby the Board of Directors considers it
prudent to do so.
Method of Accounting - The Organization’s financial statements are prepared on the accrual basis of
accounting. Net assets, revenues, and expenses are classified based on the existence or absence of
donor-imposed restrictions. The Organization uses the following classifications of net assets:
Unrestricted Net Assets - Unrestricted net assets represent resources that are
generally available for support of the Organization’s activities. Unrestricted net assets
include resources that the Board of Directors may choose to use for designated
purposes, and resources whose use is limited by agreement between the Organization
and an outside party other than a donor or grantor.
Temporarily Restricted Net Assets - Temporarily restricted net assets are those
whose use has been restricted by donors to a specific time period or purpose including
investment earnings on permanently restricted net assets. When a donor restriction
expires, that is, when a stipulated time restriction ends or purpose restriction is
accomplished, temporarily restricted net assets are reclassified to unrestricted net
assets and reported in the statements of operations as net assets released from
restrictions. This amount also includes the unexpired portion of the land lease where
the House’s facility is constructed.
Permanently Restricted Net Assets - Permanently restricted net assets have been
restricted by donors to be maintained by the Organization in perpetuity. Income
derived from endowment investments is utilized in accordance with donor restrictions
and the New York Prudent Management of Institutional Funds Act (NYPMIFA).
Estimates - The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents - Cash and cash equivalents include time deposits, certificates of deposit,
and all highly liquid debt instruments with original maturities of three months or less. For the purposes of
the statements of cash flows, cash and cash equivalents exclude amounts maintained in investment
portfolios. The Organization maintains cash and cash equivalents at financial institutions which
periodically may exceed federally insured limits.
-6-
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Pledges and Contributions Receivable - Pledges and contributions receivable represent amounts due
to the Organization under the terms of unconditional promises to give. Long-term pledges are
discounted to their present value. At December 31, 2011, all pledges receivable are expected to be
collected during the next year. Management has determined that the pledges receivable are fully
collectible; therefore, no allowance for uncollectible accounts is considered necessary at December 31,
2011.
Property and Equipment - Property and equipment are recorded at costs if purchased or at fair market
value if donated. Major additions with a cost over $1,000 and an estimated useful life of more than 1 year
are capitalized by the Organization while expenditures for repairs and maintenance of a relatively minor
nature are expensed. Property and equipment and are depreciated using the straight-line method over
their estimated useful lives. Upon retirement or disposal of an asset, cost and related accumulated
depreciation are eliminated and any gain or loss is included in operations. Depreciation terms are as
follows:
Building and improvements
Furniture and equipment
Vehicles
5 - 30 Years
5 - 7 Years
5 Years
Revenue Recognition - Revenue is recorded when earned or due. Contributions are recorded when
received or when an unconditional promise to give has been established.
Advertising - Advertising costs are expensed as incurred.
Functional Expenses - The cost of providing the various programs and other activities have been
summarized on the functional basis in the statement of functional expenses. Accordingly, certain costs
have been allocated among the programs and supporting services provided.
Excess of Revenues Over Expenses (Expenses Over Revenues) - The statements of activities
include excess of revenues over expenses (expenses over revenues). Included in excess of revenues
over expenses (expenses over revenues) are realized gains and losses on investments, dividends,
interest and other similar investment income, and other than temporary impairment losses. Changes in
unrestricted net assets which are excluded from excess of revenues over expenses, consistent with
industry practice, include unrealized gains and losses on investments other than trading securities,
permanent transfers of assets to and from affiliates for other than goods and services, and contributions
of long-lived assets (including assets acquired using contributions which by donor restriction were to be
used for the purposes of acquiring such assets).
Income Taxes - The Organization is exempt from federal income tax under Section 501(c)(3) of the Internal
Revenue Code. However, income from certain activities not directly related to the Organization's taxexempt purpose may be subject to taxation as unrelated business income.
In accordance with ASC 740-10-50, Accounting for Uncertainty in Income Taxes, the Organization
recognizes the tax benefits from uncertain tax positions only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities. Management believes that the
Organization is currently operating in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, no liability for unrecognized tax benefits has been included on the
Organization's financial statements. The exempt Organization's informational returns are subject to audit
by various taxing authorities and its open audit periods are 2008 through 2010.
Subsequent Events - In accordance with ASC 855-10, the Organization evaluated subsequent events
through April 27, 2012, the date these financial statements were available to be issued.
-7-
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Note 2.
Investments
The Organization has determined the fair value of investments through the application of ASC 820, which
places assets into one of three levels. Financial assets valued using level 1 inputs are based on
unadjusted quoted market prices within active markets. Financial assets valued using level 2 inputs are
based primarily on quoted prices for similar assets in active or inactive markets. Financial assets using
level 3 inputs are primarily valued using management’s analysis about the assumptions market
participants would utilize in pricing the asset. Valuation techniques utilized to determine fair value are
consistently applied.
Investments consisted of the following at December 31:
Total 2011
Cash and cash equivalents
Mutual funds
Common stocks
U.S. Government obligations
U.S. Treasuries
Corporate bonds
Municipal bonds
Federal agency mortgage backed securities
International bonds
CMO / asset backed securities
Total
$
$
50,945
3,399,119
1,330,525
37,174
349,202
1,319,815
65,859
404,525
21,958
107,889
7,087,011
$
$
Total 2010
Cash and cash equivalents
Mutual funds
Common stocks
U.S. Government obligations
U.S. Treasuries
Corporate bonds
Municipal bonds
Federal agency mortgage backed securities
International bonds
CMO / asset backed securities
Total
$
$
-8-
49,926
3,277,951
1,494,709
91,360
236,323
1,469,106
61,164
520,880
20,719
120,596
7,342,734
$
$
Quoted
Prices in
Active
Market as:
Significant
Other
Observable
Inputs:
Level 1
Level 2
50,945
3,399,119
1,330,525
37,174
349,202
404,525
5,571,490
$
$
1,319,815
65,859
21,958
107,889
1,515,521
Quoted
Prices in
Active
Market as:
Significant
Other
Observable
Inputs:
Level 1
Level 2
49,926
3,277,951
1,494,709
91,360
236,323
520,880
5,671,149
$
$
1,469,106
61,164
20,719
120,596
1,671,585
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Earnings on investments consisted of the following at December 31:
2011
Interest and dividends
Unrealized gains (losses)
Realized gains
Note 3.
$
$
$
175,554
(240,985)
81,727
2010
$
$
$
180,607
600,681
11,436
Endowment
The Organization’s investment assets consist of both donor-restricted and board designated funds. As
required by generally accepted accounting principles, net assets associated with funds that are donorrestricted against expenditure on a current basis are classified and reported as endowment funds.
Interpretation of Relevant Law - The Board of Directors of the Organization has interpreted the New
York Prudent Management of Institutional Funds Act (NYPMIFA) as requiring the preservation of the fair
value of the original gift as of the gift date of the donor-restricted endowment funds, absent explicit donor
stipulations to the contrary. As a result of this interpretation, the Organization classified as permanently
restricted net assets (a) permanent endowments, (b) the original value of subsequent gifts to the
permanent endowment, and (c) accumulations to the permanent endowment made in accordance with
the direction of the applicable donor gift instrument at the time of the accumulation is added to the fund.
Absent explicit donor stipulations to the contrary, the remaining portion of the donor-restricted
endowment fund that is not classified in permanently restricted net assets is classified as temporarily
restricted net assets until those amounts are appropriated for expenditure by the Organization in a
manner consistent with the standard of prudence prescribed by NYPMIFA.
In accordance with NYPMIFA, the Organization considers the following factors in making a determination
to appropriate or accumulate endowment funds:
1.
2.
3.
4.
5.
6.
7.
The duration and preservation of the fund,
The purposes of the Organization and the fund,
General economic conditions,
The possible effect of inflation and deflation,
The expected total return from income and the appreciation of investments in the fund,
Other resources of the Organization,
Where appropriate and circumstances would otherwise warrant, alternatives to expenditure of the
fund, giving due consideration to the effect that such alternatives may have on the Organization, and
8. The investment policies of the Organization.
The Organization has adopted additional investment and spending policies that apply to both endowment
and board-designated investment funds.
Transitional Effect of NYPMIFA - NYPMIFA applies to endowment funds existing on or established
after its effective date of September 17, 2010. The Board of Directors has determined that substantially
all of the Organization’s permanently restricted net investment assets fall within the definition of
endowment funds under NYPMIFA. Based on the Organization’s interpretation of NYPMIFA, the
Organization has reclassified endowment fund balances of $530,949 from unrestricted net assets to
temporarily restricted net assets as of December 31, 2009.
-9-
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Endowment composition by type for the year ended December 31, 2011 follows:
Temporarily
Restricted
Unrestricted
Donor-restricted endowment fund $
Board-designated endowment fund
Total endowment net assets
$
5,457,296
5,457,296
$
$
677,030
677,030
Permanently
Restricted
$
$
952,685
952,685
Total
$ 1,629,715
5,457,296
$ 7,087,011
Endowment composition by type for the year ended December 31, 2010 follows:
Unrestricted
Donor-restricted endowment fund $
Board-designated endowment fund
Total endowment net assets
$
5,708,160
5,708,160
Temporarily
Restricted
$
$
681,889
681,889
Permanently
Restricted
$
$
952,685
952,685
Total
$ 1,634,574
5,708,160
$ 7,342,734
Endowment activity as of and for the year ended December 31, 2011 follows:
Unrestricted
Endowment net assets - beginning $ 5,708,160
Investment income
97,195
Net depreciation
(119,658)
Amounts appropriated
for expenditure
(162,523)
Endowment net assets - ending
$ 5,523,174
Temporarily
Restricted
$
$
681,889
34,741
(39,600)
(65,878)
611,152
Permanently
Restricted
$
$
Total
952,685
-
$ 7,342,734
131,936
(159,258)
952,685
(228,401)
$ 7,087,011
Endowment activity as of and for the year ended December 31, 2010 follows:
Unrestricted
Endowment net assets - beginning $
Contributions
Investment income
Net appreciation
Endowment net assets - ending
$
4,809,797
300,000
123,824
474,539
5,708,160
- 10 -
Temporarily
Restricted
$
$
530,949
13,362
137,578
681,889
Permanently
Restricted
$
$
951,685
1,000
952,685
Total
$ 6,292,431
301,000
137,186
612,117
$ 7,342,734
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Return Objectives and Risk Parameters - The Organization has adopted investment and spending
policies, approved by its Board of Directors, for investment assets that attempt to provide a predictable
stream of funding for programs supported by these investments while also maintaining the purchasing
power of those assets over the long-term. Accordingly, the investment process seeks to achieve an after
cost total real rate of return, including investment income as well as capital appreciation, which exceeds
annual distributions with acceptable levels of risk. Specifically, the investment return objective is to earn
an average annual total rate of return, net of fees, which meets or exceeds composite benchmarks over a
tailing one-year, three-year, five-year and inception to date market period for each asset class in the
portfolio. The composite benchmark is calculated as a weighted average of the individual benchmarks
identified for each asset class, weighted in accordance with the target allocation to each class in the
portfolio.
Investment assets are invested in a diversified asset mix, which includes equity securities and fixed
income that is intended to result in a consistent inflations-protected rate of return that has sufficient
liquidity to make an annual distribution of 4%, while producing accumulation in absolute terms and
maintaining purchasing power against inflation over the long term. Investment risk is measured in term of
the total investment fund. In establishing the targeted asset allocation for the various asset classes,
historical and expected rates of return and correlation amount returns are analyzed to achieve a
combination of classes designated to maximize returns while minimizing volatility.
Spending Policy and How the Investment Objectives Relate to Spending Policy - The Organization
allows appropriation from its investment funds (both endowment and board-designated) in each year of
4% of a rolling 20-quarter average of their combined market values, with a floor of 3% of their current
combined market values and ceiling of 5.5% of such values. The amount thus potentially available to be
appropriated is calculated annually as of September 30 each year, with 25% of this calculated annual
amount considered available in each quarter during the following calendar year. However, this potential
appropriation is actually taken for a given quarter only if (and to the extent that) operating cash and cash
equivalent balances outside of the investment funds fall short of 25% of annual budgeted operating
expenses for the quarter. Should donor-imposed or other legal restrictions ever be inconsistent with this
policy, the legal restrictions are given precedence. In establishing this policy, the Organization
considered the investment and spending factors identified above.
Note 4.
Property and Equipment
Property and equipment consisted of the following at December 31:
2011
Building and improvements
Furniture and equipment
Vehicles
Land
Sub-total
Less, accumulated depreciation
Property and equipment - net
$
$
- 11 -
3,800,764
553,379
13,423
7,297
4,374,863
(2,667,513)
1,707,350
2010
$
$
3,746,289
430,528
13,423
7,297
4,197,537
(2,474,753)
1,722,784
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Note 5.
Temporarily Restricted Net Assets
Temporarily restricted net assets are required by donors to be held for a specific purpose and consisted
of the following at December 31:
2011
House Within the Hospital Operations
and improvements
Land lease
Time restrictions
Unappropriated endowment earnings
Other
Total
Note 6.
$
$
10,000
22,795
37,790
677,030
71,756
819,371
2010
$
$
70,000
26,557
29,401
681,889
46,649
854,496
Permanently Restricted Net Assets
Permanently restricted net assets are held to generate income for various purposes and consisted of the
following at December 31:
2011
Kroc endowment
Other endowment
Total
Note 7.
$
$
504,225
448,460
952,685
2010
$
$
504,225
448,460
952,685
In-Kind Donations
In-kind donations consist primarily of materials and supplies for operations of the House and the free use
of space for the annual Household & Antiques Sale. These amounts are reflected in the accompanying
financial statements at their fair values as contributions and expenses as of their date of receipt. Total inkind donations were $115,965 for the year ended December 31, 2011, which were comprised of $69,893
for general House operations, $32,788 for special events activities, and $13,284 for an in-kind grant from
RMHC Global. Total in-kind donations were $212,617 for the year ended December 31, 2010, which
were comprised of $163,460 for general House operations, $35,873 for special events activities, and
$13,284 for an in-kind grant from RHMC Global.
The in-kind donations received included free use of retail/warehouse space for the Household & Antiques
Sale valued at $32,373 for the years ended December 31, 2011 and 2010. The Organization leased a
portion of the retail/warehouse space at a cost of $20,000 and $13,159 for the years ended
December 31, 2011 and 2010, respectively.
The Organization also receives donated services that do not meet the criteria for recording as revenue
and expense under accounting principles generally accepted in the United States of America. Hundreds
of individuals volunteer their time and services to help support the staff and guests of the Organization.
The volunteers provide housekeeping, office assistance, gardening, repair, maintenance and solicitation
of in-kind goods for the House and the House Within the Hospital. These volunteers also assist with
special events such as the annual Household & Antiques Sale. Approximately 700 volunteers donated
46,784 and 46,198 hours for the years ended December 31, 2011 and 2010, respectively, which
dramatically reduces the need to hire staff to complete the aforementioned activities. In accordance with
accounting principles generally accepted in the United States of America, no amounts have been
reflected in the accompanying statements for these donated (volunteer) services.
- 12 -
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Note 8.
Related Parties
The National Ronald McDonald House requires that 25% of all revenue that the Organization earns from
national promotions held at area Ronald McDonald Restaurants be remitted to them in support of
national charitable programs. These remittances totaled $25,080 and $28,506 for the years ended
December 31, 2011 and 2010, respectively.
In 2010, all of the donation canisters were replaced at the McDonald’s Restaurants. RMHC Global
advanced the funds to cover the cost of the replacement canisters. Twenty-five percent of this advance
was a grant; the remaining 75% is to be paid back over a three-year period. In each of the years ending
2011 and 2010, RMHC Global forgave $13,284 of this advance as an in-kind grant. As of December 31,
2011, amounts due to RMHC were $32,978 which included the 2011 fourth quarter remittance totaling
$7,139.
Note 9.
Employee Retirement Plan
The Organization adopted a retirement plan (the “Plan”) for the benefit of its employees during 2004. The
Plan covers all employees who have three or more months of service. The Organization makes
discretionary contributions to the Plan. Employer contributions were $14,210 and $11,181 for the years
ended December 31, 2011 and 2010, respectively.
Note 10. Commitments
The Organization leases the land underlying the House under a ground lease which extends until
August 31, 2016 and provides for one 15-year renewal period. The ground lease requires annual
payments of $1. The estimated net present fair market value of this ground lease is recorded both as a
temporarily restricted contribution and as a prepaid expense. The ground lease requires that the
premises be maintained to operate exclusively as a Ronald McDonald House. Upon expiration or
termination of the ground lease for any reason, the lessor is required to pay the Organization the fair
market value of the building and other improvements.
The Organization leases telephone equipment under a capital lease. The imputed interest necessary to
reduce the net minimum lease payments to present value is considered immaterial. Future minimum
lease payments for the years succeeding December 31, 2011 are as follows:
2012
2013
2014
2015
Total
$
$
5,558
5,558
5,558
4,276
20,950
Note 11. Supplemental Cash Flow Information
2011
2010
Noncash Investing and Financing Transactions:
Acquisition of property and equipment:
Cost of property and equipment
Capital lease obligation
Donation of property and equipment
$
$
- 13 -
22,231
(22,231)
-
$
$
58,919
(58,919)
-
RONALD MCDONALD HOUSE CHARITIES
OF ROCHESTER NY, INC.
Notes to Financial Statements
Note 12. Reclassifications
Certain reclassifications have been made to the financial statements for the year ended December 31,
2010. These reclassifications are for comparative purposes only and have no effect on change in net
assets as originally reported.
Note 13. Restatement
The Organization restated in-kind revenue and related expenses to properly reflect the valuation of inkind contributions for the year ended December 31, 2010. The effect of this restatement was to decrease
total support and revenue by $379,313 and to decrease total expenses by $379,313. The restatement
had no impact on net assets, as originally reported.
- 14 -