TRIDENT TECHNICAL COLLEGE FOUNDATION, INC. FINANCIAL ...

TRIDENT TECHNICAL COLLEGE FOUNDATION, INC.

FINANCIAL REPORT

JUNE 30, 2015

James B. Bagwell, III - Chair John W. Molony - Finance/Audit ChairCarolyn D. Hunter - Vice Chair Charles F. Baarcke, Jr. - Investment ChairAndrea D. Limehouse - Treasurer William E. Craver, III - Immediate Past ChairRobert O. Collins, Jr. - Development Chair Clara C. Varga-Gonzales - Wine Event ChairCharles S. Carmody - Nominating Chair Rew A. Godow, Jr. - TTC Pro-Am ChairDavid T. Ginn - Strategic Advocacy - Chair Robert F. Clair, Jr. - Alumni Relations ChairM. Wayne Phillips - Program Admin. Chair George J. Bullwinkel, III, Esq. - Governance Chair

Grier Allen Harold W. JonesElizabeth Bamberg B. Thomas KaysPamela J. Browning Mark A. LattanzioThomas G. Buist, Jr Michael G. LeatherwoodMichael P. Bunker Anthony J. MarkRandy L. Byerly James W. MartinJames W. Cantey, III Karen A. McMillanDwayne R. Cartwright John M. MitchellRussell B. Corbin Bruce D. MurdyRichard A. Day Myriam G. OwensDavid L. Dunlap Robert W. Pearce, Jr.Shelly S. Eicher Anthony H. PopeRichard D. Elliott Steve R. PriceCarol S. Etheridge Geoffrey L. SchulerWilliam A. Finn Kenneth T. SeegerForrest W. Foshee Lanneau H. SieglingTodd Gallati Nancy C. SnowdenWilliam A. Hall, Sr. Susan M. StevensLarry C. Hargrove Randall C. Stoney, Jr.Karen Harvey Catherine L. StuhrWilliam S. Helmly Stuart D. WhitesideWilliam C. Hudson Peter B. WoodhullLeonard L. Hutchison, III David B. Yarborough, Jr.Ann Irvin L. Kai Yeh

A.J. Batla James C. MurrayC. Ronald Coward Herman B. Speissegger, Jr. Richard K. Gregory Samuel SteinbergA.L. Hutchinson, Jr. David B. Yarborough, Sr.Thomas A. Mayberry

EXECUTIVE COMMITTEE

TRUSTEES

BOARD OF TRUSTEES

EMERITUS


FINANCIAL REPORT

JUNE 30, 2015

CONTENTS Page No.

INDEPENDENT AUDITORS’ REPORT 1 FINANCIAL STATEMENTS Statements of Financial Position 2 Statements of Activities 3 Statements of Cash Flows 4 NOTES TO FINANCIAL STATEMENTS 5 - 19

2015 2014

Cash and cash equivalents $ 625,619 $ 388,782

Unconditional promises to give, net 1,974,462 2,638,977

Prepaid expenses 12,046 3,591 Other receivables - -

Investments (at fair value) 6,942,595 6,546,936

Cash value of life insurance 12,093 10,462

Total Assets $ 9,566,815 $ 9,588,748

LIABILITIES

Accounts payable and accrued expenses $ 232,154 $ 139,633

Deferred revenue 65,000 57,650

Annuity payable 10,030 14,343

Total Liabilities 307,184 211,626

NET ASSETS

Unrestricted 3,134,239 3,022,061

Temporarily restricted 4,151,817 4,090,708

Permanently restricted 1,973,575 2,264,353

Total Net Assets 9,259,631 9,377,122

Total Liabilities and Net Assets $ 9,566,815 $ 9,588,748

June 30,


STATEMENTS OF FINANCIAL POSITION

ASSETS

LIABILITIES AND NET ASSETS

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

2

Temporarily Permanently Temporarily Permanently

Unrestricted Restricted Restricted Total Unrestricted Restricted Restricted Total

SUPPORT AND REVENUE

Contributions $ 288,855 $ 653,079 $ 114,795 $ 1,056,729 $ 125,254 $ 674,421 $ 59,663 $ 859,338

Grants - 209,999 - 209,999 - 97,335 - 97,335

Interest and dividends, net 99,572 37,355 66,921 203,848 61,863 26,756 51,348 139,967

Net realized and unrealized gain

on investments (150,100) (54,272) (104,395) (308,767) 314,603 131,165 224,615 670,383

Wine and golf event revenue, net of

$128,525 and $101,150 for direct benefits

to donors in 2015 and 2014, respectively 422,025 - - 422,025 312,985 - - 312,985Change in donor funding deficiency

Change in value of split

interest agreement - - - - - (3,220) - (3,220)

Subtotal 660,352 846,161 77,321 1,583,834 814,705 926,457 335,626 2,076,788

Net assets released from restrictions:

Transfer of funds (167,334) 535,433 (368,099) - (18,105) 289,569 (271,464) -

Program restrictions satisfied 1,320,485 (1,320,485) - - 1,033,078 (1,033,078) - -

Total Support and Revenue 1,813,503 61,109 (290,778) 1,583,834 1,829,678 182,948 64,162 2,076,788

EXPENSES

Program services:

Support of Trident Technical College 1,492,714 - - 1,492,714 1,234,244 - - 1,234,244

Supporting services:

Management and general 161,229 - - 161,229 122,440 - - 122,440

Fundraising expenses 47,382 - - 47,382 32,016 - - 32,016

Total Expenses 1,701,325 - - 1,701,325 1,388,700 - - 1,388,700

Change in Net Assets 112,178 61,109 (290,778) (117,491) 440,978 182,948 64,162 688,088

Net assets, beginning of year 3,022,061 4,090,708 2,264,353 9,377,122 2,581,083 3,907,760 2,200,191 8,689,034

NET ASSETS, END OF YEAR $ 3,134,239 $ 4,151,817 $ 1,973,575 $ 9,259,631 $ 3,022,061 $ 4,090,708 $ 2,264,353 $ 9,377,122


STATEMENTS OF ACTIVITIES

For the years ended June 30,2015 2014

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

3

For the years ended June 30,

2015 2014

OPERATING ACTIVITIES

Increase (decrease) in net assets $ (117,491) $ 688,088

Adjustments to reconcile change in net assets to net cash

used for operating activities:

Bad debt 12,760 2,652

Net realized and unrealized (gain) loss on investments 308,767 (670,383)

Reinvestment of interest and dividends (203,848) (139,967)

Change in discount - unconditional promises to give (34,281) (62,844)

Change in value of split interest agreement 0 999

Contributions permanently restricted for endowments (114,795) (59,663)

Changes in values of accrued and deferred amounts

Unconditional promises to give 698,796 922,218

Prepaid expenses (8,455) 14,223 Other receivables - -

Cash value of life insurance (1,631) -

Accounts payable and accrued expenses 92,521 (1,290)

Deferred revenue 7,350 (114,645)

Net cash provided by (used in) operating activities 639,693 579,388

INVESTING ACTIVITIES

Proceeds from sale of investments 1,425,034 3,494,987

Purchases of investments (1,938,122) (4,243,361)

Net cash used in investing activities (513,088) (748,374)

FINANCING ACTIVITIES

Contributions permanently restricted for endowments 114,795 59,663

Payments of annuity obligations (4,563) (4,563)

Net cash provided by financing activities 110,232 55,100

Net increase (decrease) in cash and cash equivalents 236,837 (113,886)

Cash and cash equivalents, beginning of year 388,782 502,668

CASH AND CASH EQUIVALENTS, END OF YEAR $ 625,619 $ 388,782

SUPPLEMENTAL DISCLOSURES

Noncash investing and financing activities

Unrealized gains (loss) $ (294,667) $ 596,608

Assets donated for use $ - $ -

Interest paid $ - $ -

Taxes paid $ - $ -


STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of theses financial statements.

4

TRIDENT TECHNICAL COLLEGE FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2015 AND 2014

5

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities Trident Technical College Foundation, Inc. (the “Foundation”), a component unit of Trident Technical College (the “College”) was incorporated in July 1975 under the laws of South Carolina as an educational and charitable foundation. The mission of the Foundation is to advocate and raise funds for the College to support the region’s economy. The assets of the Foundation total $9,566,815 and $9,588,748 and the various program services providing support to the College totaled $1,492,714 and $1,234,244 for the years ended June 30, 2015 and 2014. If the Foundation is dissolved, its net assets shall be distributed exclusively to other charitable organizations, which qualify under the provisions of section 501(c) (3) of the Internal Revenue Code, as shall be determined by the Board of Trustees. The Foundation is supported principally through contributions from individuals and corporations, grants and earnings on investments. Programs and Services The programs and services of the Foundation include, but are not limited to, financial support through scholarships, grants, awards, stipends and other forms of aid to students and/or staff and faculty of the College. Additional details on some of the key programs follow: Student Scholarships The Trident Technical College Foundation made 321 and 321 scholarship awards totaling $346,804 and $308,471 in the years ended June 30, 2015 and 2014 respectively. Scholarships help offset the cost of tuition, fees, books, childcare and transportation for eligible students. The scholarship funds, supported by individuals, businesses and other foundations, are competitive and based on criteria established by the donors and the Foundation. As of June 30, 2015, the Foundation administers a total of 111 scholarship funds, 22 of which are permanently restricted. Tuition Assistance/Credit Course Reimbursement Programs The TTC Foundation provides financial support, up to an annually budgeted amount, for full-time permanent employees of the college to take credit or continuing education courses at TTC or other accredited institutions of higher education. All programs are based on availability of funds. For the fiscal years ended June 30, 2015 and 2014, $49,612 and $48,678 were awarded as part of these professional development programs. The TTC Foundation will pay for tuition and required books for up to four semester credit hours per term for any TTC course for which an employee is qualified and up to $500 per fiscal year for any TTC Continuing Education Course for which an employee is qualified. Credit Course Assistance will reimburse full-time permanent employees $200 per course (based on successful completion and grade of A or B) at an outside institution for tuition, books and fees. An employee may receive up to $1,000 during a single fiscal year for reimbursement of a maximum of five courses. All programs require supervisor and Vice President approval.



6

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Mini-Grants The mini-grant program provides funds to faculty and staff for equipment, materials and special resources to enhance student success. Priority is given to request that directly impact student learning in the classroom. The program is designed to enhance the learning experience of TTC students while bridging the gap between instructional needs and departmental budget constraints. The Foundation Board determines the annual allocation for mini-grant awards. Individual awards cannot exceed $1,600 and are awarded based on a competitive application process. Sources of financial support for the mini-grant program include the foundation’s annual campaign, trustee campaign, employee campaign and investment returns. For the fiscal years ended June 30, 2015 and 2014 a total of $109,929 and $123,676 were awarded in mini-grant support from the Foundation and College. Student Emergency Grant Fund The Student Emergency Grant fund was created to assist students in good standing who experience an unforeseen financial emergency which would otherwise prevent them from continuing to attend Trident Technical College. The grant funds are not designed to be a consistent supplement to a student’s financial aid or to repeatedly sustain students between refund checks. The requests must be urgent in nature. In order to qualify for emergency grant funding a student must meet all eligibility requirements and receive a majority vote of approval from the selection committee, which is made up of faculty, staff and foundation trustee representatives. The maximum grant amount per student is $500 per semester and shall not typically be awarded to the same student in consecutive semesters. There is a lifetime maximum of $1,000 per student. For the fiscal years ended June 30, 2015 and 2014, $15,281 and $14,430 were awarded in student emergency fund assistance from the Foundation. Awards & Prizes The TTC Foundation provides a variety of awards and prizes designed to celebrate outstanding achievement, innovation and leadership among TTC students, faculty and staff. For the fiscal years ended June 30, 2015 and 2014, $8,900 and $600 in awards and prizes were provided from the Foundation.

Basis of Accounting The financial statements have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities. Basis of Presentation In accordance with ASC 958, the Foundation 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. Cash and Cash Equivalents The Foundation considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents, except cash temporarily held in its long-term investment portfolio. Unconditional Promises to Give Unconditional promises to give are recognized as revenues when the donor commits to give. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional.



7

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Allowance for Doubtful Accounts The Foundation uses the allowance method to account for uncollectible promises to give. Management estimates the allowance based on the aging and knowledge of individual outstanding balances as well as past experience. Investments Investments consist of marketable mutual funds which are carried at fair market value. Donated investments are recorded as contributions at their fair market value on the date of gift. Unrealized gains and losses are included in the change in net assets in the accompanying Statements of Activities. Investment Pools The Foundation maintains master investment accounts for its individual accounts. Realized and unrealized gains and losses and income from securities in the master investment accounts are allocated periodically to the individual accounts based on the relationship of the market value of each individual account to the total market value of the master investment accounts, as adjusted for additions to or deductions from those accounts. Endowment Funds In 2009, the Foundation adopted Endowments of Not-for-Profit Organizations requiring more stringent guidelines on prudent management of endowment funds. During the year ended June 30, 2009, South Carolina adopted the State Prudent Management of Institutional Funds Act (SPMIFA). The Board of Trustees of the Foundation has interpreted SPMIFA 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 Foundation classifies as permanently restricted net assets (a) the original value of the gifts donated to the permanent endowment, (b) the original value of the 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 the accumulation is added to the fund. 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 Foundation in a manner consistent with the standard of prudence prescribed by SPMIFA. In accordance with SPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) the duration and preservation of the fund (2) the purposes of the Foundation and the donor-restricted endowment fund (3) general economic conditions (4) the possible effect of inflation and deflation (5) the expected total return from income and the appreciation of investments (6) other resources of the Foundation (7) the investment policies of the Foundation Return Objectives and Risk Parameters The Foundation has adopted investment and spending policies for endowment assets that attempt to maximize returns within reasonable and prudent levels of risk while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Foundation must hold in perpetuity or for a donor-specified period as well as board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of the S&P 500 index or similar established broad market measures of return on investments. Overall, the Foundation expects the annual average rate of return to meet or exceed the spending policy of 4%.



8

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Foundation targets a diversified asset allocation that places an emphasis on equity-based investments and bond funds to achieve its long-term return objectives within prudent risk constraints.

Spending Policy and How the Investment Objectives Relate to Spending Policy The Foundation has a policy of appropriating for distribution each year four percent of its endowment fund's rolling average fair value over the five years preceding the fiscal year in which the distribution is planned. In establishing this policy, the Foundation considered the long-term expected return on its endowment. Accordingly, over the long term, the Foundation expects the current spending policy to allow its endowment to grow at an average of five to eight percent annually. This is consistent with the Foundation's objective to seek long-term growth of capital to maintain the purchasing power of the investment assets in perpetuity and to meet the needs of the Foundation's distribution policy.

Fair Value of Financial Instruments Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 is effective for the Foundation’s financial assets and liabilities for the years June 30, 2015 and 2014. The estimated fair value amounts for specific groups of financial instruments are presented within the footnotes. Accounts receivable and accounts payable are stated at cost, which approximates fair value, due to their short term to maturity. Equipment and Depreciation Property and equipment purchased by the Foundation for use by Trident Technical College is donated to the college for insurance and control purposes. These items are recorded as expenditures at the time of purchase. The Foundation had no property and equipment as of June 30, 2015 and 2014. Revenue Recognition Contributions are recognized as revenue when they are received or unconditionally pledged. Grant and special event revenues are recognized when they are earned. Unearned grant revenue is recorded as a deferred liability until the terms of the grant have been met and the grant is received or reasonably expected to be received. Special event revenue is recorded as a deferred liability until the event is held. All revenues received are recorded as unrestricted, temporarily restricted or permanently restricted support, depending on the existence and/or nature of any donor or grantor restrictions. Donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statements of Activities as net assets released from restrictions. It is the Foundation’s policy to record restricted contributions received and released in the same year as unrestricted support.



9

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Non-Cash Donations Donations of property and equipment are recorded as contributions at their estimated fair value at the date of donation. Such donations are reported as increases in unrestricted net assets unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the Foundation reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Foundation reclassifies temporarily restricted net assets to unrestricted net assets at that time. Donated services are recognized as contributions at their estimated fair value in accordance with ASC 958-605, if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Foundation. The Foundation benefits from the work of many volunteers, but their services did not meet the required criteria to be recorded. Accordingly, no donated services were recorded for the years ended June 30, 2015 and 2014. Income Tax Status The Foundation is exempt from income tax under Section 501(c) (3) of the Internal Revenue Code. The Foundation has been classified by the Internal Revenue Service as an organization other than a private foundation. The Foundation is a not-for-profit Foundation that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and comparable state law as a charitable Foundation whereby only unrelated business income, as defined by Section 509(a)(1) of the Code is subject to federal income tax. The Foundation currently has no unrelated business income. The Foundation does not believe there are any material uncertain tax positions and, accordingly, it will not recognize any liability for unrecognized tax benefits. For the years ended June 30, 2015 and 2014, there were no interest or penalties recorded or included in the financial statements. The Foundation is no longer subject to federal and state income tax examinations for the years prior to 2011. Expense Allocation The costs of providing the various programs and other activities have been summarized on a functional basis in the Statements of Activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. See Note 11 for functional expense allocation. Risks and Uncertainties The Foundation may invest in securities with contractual cash flows, such as asset backed securities, collateralized mortgage obligations and commercial mortgage backed securities, including securities backed by subprime mortgage loans. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate value, delinquencies or defaults, or both, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates. Use of Estimates The preparation of financial statements 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant uses of estimates include estimating the future liability of payments to annuitants under agreements with donors, the present value of future promises to give, allowance for bad debts and functional expense allocations.



10

NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation adopted in the current year financial statements. Net assets and changes in net assets are unaffected by these reclassifications. Subsequent Events In preparing these financial statements, the Foundation has evaluated events and transactions for potential recognition or disclosure through August 13, 2015 the date the financial statements were available to be issued. NOTE 2 - UNCONDITIONAL PROMISES TO GIVE, NET Unconditional promises to give at June 30 are as follows:

2015 2014

Receivable in less than one year $ 115,664 $ 753,651 Receivable in one to five years 1,494,529 1,620,338 Receivable in more than five years 565,000 500,000

Total unconditional promises to give 2,175,193 2,873,989Less: Discount to net present value (200,731) (235,012)

Net Unconditional Promises to Give $ 1,974,462 $ 2,638,977

Discount to net present value was calculated using the interest rate of 3.25% for June 30, 2015 and 2014, respectively. Bad debts for the years ended June 30, 2015 and 2014 were $12,760 and $2,652, respectively.



11

NOTE 3 - INVESTMENTS Investments held by the Foundation are in various accounts at a national brokerage firm. Investment fees are netted against investment income. The following schedule summarizes the investment return in the statements of activities for the years ended June 30:

2015 2014

Beginning Investment Balance $ 6,546,936 $ 4,988,299Interest and dividends 239,262 169,562 Management fees (34,828) (31,206) Net realized gains (14,100) 73,800 Net unrealized gains (losses) (294,667) 596,481 Interfund transfers 499,992 750,000

Ending Investment Balance $ 6,942,595 $ 6,546,936

An investment fee is charged for management services. The total investment fees for fiscal years ended June 30, 2015 and 2014 were $34,828 and $31,206, respectively. Interest and dividend revenue is reported net of these investment fees. Investments are comprised of the following at June 30:

Fair Value Cost Fair Value Cost

Money Market $ 128,549 $ 128,549 $ 357,934 $ 357,934 Fixed Income

Domestic mutual funds 1,162,221 1,196,745 1,050,392 1,039,744 International mutual funds 433,591 451,972 442,571 433,939

EquitiesDomestic mutual funds 2,551,895 1,870,136 2,278,765 1,630,358 International mutual funds 1,864,039 1,849,876 1,600,189 1,428,009

Real assets funds 802,300 826,640 817,085 743,802

Total Investments $ 6,942,595 $ 6,323,918 $ 6,546,936 $ 5,633,786

2015 2014

Investment maturities for the above are as follows:

2015 20143 months - 1 year $ 128,549 $ 357,934 Fixed income mutual funds 1,595,812 1,492,963 Equities mutual funds 4,415,934 3,878,954 Real estate funds 802,300 817,085 Total investments $ 6,942,595 $ 6,546,936



12

NOTE 4 - SUMMARY OF FAIR VALUE EXPOSURE The Foundation adopted Fair Value Measurements which provides a framework for measuring and disclosing fair value under generally accepted accounting principles. Fair Value Measurements requires disclosures about the fair value of assets and liabilities recognized in the statement of financial position in periods subsequent to initial recognition, whether the measurements are made on a recurring basis (for example, available-for-sale investment securities) or on a nonrecurring basis (for example, impaired loans). Fair Value Measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair Value Measurements also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Foundation performs an analysis of the assets and liabilities that are subject to Fair Value Measurements. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Unconditional promises to give, net, cash value of life insurance and annuities payable carrying amounts approximate current fair value. Investment carrying amounts of all marketable equity investments and debt securities are based upon quoted market values. Annuities payable are liabilities carried at actuarially determined present values which approximate current fair value.



13

NOTE 4 - SUMMARY OF FAIR VALUE EXPOSURE - Continued The tables below present the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy at June 30:

Total Level 1 Level 2 Level 3

Unconditional promises to give, net $ 1,974,462 $ - $ - $ 1,974,462Money Market 128,549 128,549 - - Fixed Income

Domestic mutual funds 1,162,221 - 1,162,221 - International mutual funds 433,591 - 433,591 -

1,595,812 - 1,595,812 - Equities

Domestic mutual funds 2,551,895 2,551,895 - - International mutual funds 1,864,039 1,864,039 - -

4,415,934 4,415,934 - - Real Assets Funds 802,300 802,300 - - Cash Value of Life Insurance 12,093 - 12,093 - Annuities Payable (10,030) - - (10,030)

Total Fair Value of Financial Instruments $ 8,919,120 $ 5,346,783 $ 1,607,905 $ 1,964,432

2015

Total Level 1 Level 2 Level 3

Unconditional promises to give, net $ 2,638,977 $ - $ - $ 2,638,977Money Market 357,934 357,934 - - Fixed Income

Domestic mutual funds 1,050,392 - 1,050,392 - International mutual funds 442,571 - 442,571 -

1,492,963 - 1,492,963 - Equities

Domestic mutual funds 2,278,765 2,278,765 - - International mutual funds 1,600,189 1,600,189 - -

3,878,954 3,878,954 - - Real Assets Funds 817,085 817,085 - - Cash Value of Life Insurance 10,462 - 10,462 - Annuities Payable (14,343) - - (14,343)

Total Fair Value of Financial Instruments $ 9,182,032 $ 5,053,973 $ 1,503,425 $ 2,624,634

2014



14

NOTE 4 - SUMMARY OF FAIR VALUE EXPOSURE - Continued For assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period, reconciliation is required for the beginning and ending balances. Reconciliation is required to be shown separately for each major category of assets and liabilities, except for derivative assets and liabilities, which may be presented net. The table below presents a reconciliation of beginning and ending asset and liability balances measured at fair value on a recurring basis as Level 3 at June 30:

Unconditional Promises to

Give, netAnnuity Payable

Unconditional Promises to

Give, netAnnuity Payable

Beginning Balance: $ 2,638,977 $ (14,343) $ 3,498,351 $ (15,342) Included in earnings (or changes in net assets) (664,515) 4,313 (858,159) 4,313 Transfers in (out) of Level 3 - - (1,215) (3,414)

Ending Balance: $ 1,974,462 $ (10,030) $ 2,638,977 $ (14,443)

Level 32015 2014

Transfers out of Level 3 are due to unconditional promise to give payments and annuity payments made by the donors and the Foundation.

NOTE 5 - ENDOWMENTS The Foundation’s endowments consist of individual funds established for a variety of purposes. Its endowments include permanent endowments and term endowments on a cash basis. There are no funds designated by the Board of Trustees to function as endowments. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor or SPMIFA requires the Foundation to retain as a fund of perpetual duration, In accordance with generally accepted accounting principles; deficiencies of this nature are reported in unrestricted net assets. The cumulative deficiencies were $-0- as of June 30, 2015 and 2014, respectively. The temporarily restricted net assets portion of perpetual endowment funds has purpose restrictions for academic scholarships and grants and other academic purposes as stipulated by donors. Permanently restricted net assets consist of the portion of perpetual endowment funds that are required to be retained permanently either by explicit donor stipulation or by SPMIFA.



15

NOTE 5 - ENDOWMENTS - Continued

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Endowment Net Assets, Beginning of Year $ - $ 2,811,171 $ 1,771,516 $ 4,582,687

Investment return:Investment income, net - 37,355 66,921 104,276 Realized gains and losses - (1,444) (2,953) (4,397) Unrealized gains and losses - (52,828) (101,442) (154,270)

Total investment return - (16,917) (37,474) (54,391)

Contributions, net cash basis - 1,191,256 114,795 1,306,051 Transfers (567,448) 535,433 32,015 - Release of restrictions 1,320,485 (1,320,485) - - Board approved withdrawals, net (753,037) - - (753,037)

- 406,204 146,810 553,014

Endowment Net Assets, End of Year $ - $ 3,200,458 $ 1,880,852 $ 5,081,310

2015

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Endowment Net Assets, Beginning of Year $ - $ 2,211,134 $ 1,824,095 $ 4,035,229

Investment return:Investment income, net - 23,553 51,348 74,901 Realized gains and losses - 14,402 24,582 38,984 Unrealized gains and losses - 116,763 200,033 316,796

Total investment return - 154,718 275,963 430,681

Contributions, net cash basis - 1,188,923 57,730 1,246,653 Transfers 96,798 289,474 (386,272) - Release of restrictions 1,033,078 (1,033,078) - - Board approved withdrawals, net (1,129,876) - - (1,129,876)

- 445,319 (328,542) 116,777

Endowment Net Assets, End of Year $ - $ 2,811,171 $ 1,771,516 $ 4,582,687

2014



16

NOTE 6- TEMPORARILY RESTRICTED NET ASSETS The Foundation has temporarily restricted net assets available for the following purpose and time restrictions at June 30:

2015 2014

Purpose Restrictions:Scholarships and grants $ 3,460,682 $ 3,032,403 Equipment and technology 689,929 1,056,941

Time Restrictions:Net Annuity 1,206 1,364

Ending Temporarily Restricted Net Assets $ 4,151,817 $ 4,090,708

NOTE 7 - PERMANENTLY RESTRICTED NET ASSETS The Foundation has permanently restricted net assets available for the following purpose restrictions at June 30:

2015 2014

Purpose restrictions:

Scholarships $ 1,973,575 $ 2,264,353

Ending Permanently Restricted Net Assets $ 1,973,575 $ 2,264,353

NOTE 8 - CONCENTRATION OF CREDIT RISK The Foundation maintains its cash accounts at First Citizens Bank of South Carolina, N.A. The cash in these accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 at June 30, 2015 and 2014. At June 30, 2015 and 2014, total cash held by the bank was $625,619 and $395,171 of which $375,619 and $145,171 respectively was unsecured.

Cash (money market fund) in an investment account is held in safekeeping at Wells Fargo (the Firm). The cash in this account is held on the trust department of Wells Fargo and is not insured by the Securities Investor Protection Corporation (SIPC) or FDIC coverage. The Firm is insured under the enterprise-wide insurance programs of Wells Fargo & Company. These programs include coverage with Superior Guaranty Insurance Company under fidelity bond and errors and omissions policies. These policies each have limitations of $100 million per occurrence. At June 30, 2015 and 2014, the total cash held by the Firm for the Foundation was $128,549 and $358,194, respectively.

In summary, there are three categories of credit risk that apply to the Foundation's cash balance:

1. Insured by the FDIC up to $250,000 of interest bearing balances 2. Collateralized with securities held by the Foundation's bank, pledged for the benefit of the Foundation or 3. Uninsured



17

NOTE 8 - CONCENTRATION OF CREDIT RISK - Continued Balances held in each category are as follows at June 30:

Cash per Cash HeldBanks by Others Total

Total cash in all accounts $ 625,619 $ 128,549 $ 754,168 Portion insured by FDIC & other protection (250,000) (128,549) (378,549)

Uninsured Cash Balances $ 375,619 $ - $ 375,619

Cash per Cash HeldBanks by Others Total

Total cash in all accounts $ 395,171 $ 358,194 $ 753,365 Portion insured by FDIC & other protection (250,000) (358,194) (608,194)

Uninsured Cash Balances $ 145,171 $ - $ 145,171

2015

2014

The Foundation is also subject to concentration of credit risk related to its contributions since most donors are in the coastal South Carolina area. This risk is limited due to the large number of contributors comprising the Foundation's contributor base. NOTE 9 - COOPERATIVE AGREEMENT

In December 2012, the Foundation entered into a revised cooperative agreement with the College signed by the Chairman of the College's governing board and the Chairman of the Foundation's board. This agreement can be terminated by either party with a six month written notice. The Foundation has agreed to pay the College $50,000 for office space, personnel and other related expenses, with annual adjustments. Rent and salary reimbursements were $51,409 and $50,000, respectively, in the years ended June 30, 2015 and 2014, respectively. Under Note 11, functional expense allocation schedule includes $25,704 and $25,000 of the salary reimbursement in fundraising, $15,423 and $15,000 in management and general and $10,282 and $10,000 in program services for the years ended June 30, 2015 and 2014, respectively. The rental expense is included in management and general for both years. The Foundation provides a stipend to supplement the salary of the President of the College. In fiscal years ended 2015 and 2014, the $71,800 and $65,000 stipends were included in program services.



18

NOTE 9 - COOPERATIVE AGREEMENT- Continued

The agreement is intended to preserve the status of the Foundation as an independent contractor and does not create any agency relationship between the Foundation and the College. The Foundation concluded a capital campaign during the year ended June 30, 2013 with the goal of raising funds for the College. Donors restricted the funds for scholarship and equipment and technology. The Foundation plans to pay a total of $2,000,000 for Virtual Desktop Infrastructure (VDI) to the TTC over a five year period as the pledges are received. There have been three $400,000 payments made in May 2015, 2014 and 2013. NOTE 10 - RELATED PARTY TRANSACTIONS The Foundation received $308,602 and $257,077 in contributions and pledge payments from members of its Board of Trustees for years ended June 30, 2015 and 2014, respectively. The outstanding balance of promises to give from its Board members at June 30, 2015 and 2014 was $1,074,743 and $1,278,066, respectively. The Board of Trustees participates in the annual wine event which is not included in the above totals. At June 30, 2015 and 2014, the Foundation owed the College $220,758 and $121,896, respectively, as reimbursement for grant funds paid by the College on behalf of the Foundation. These amounts are included in accounts payable, grants payable and accrued expenses in the statements of financial positions. Several Board of Trustee members provide supplies and services to the Culinary Institute of Charleston at or below market rates.

Continued on next page



19

NOTE 11 - FUNCTIONAL EXPENSE ALLOCATION Program services include various types of support to the College. Management and general expenses include those expenses that are not identifiable with any other specific function but provide for the overall support and direction of the Foundation. For the years ended June 30, 2015 and 2014, expenses were allocated as follows:

Program Management Fund-Service and General raising Total

Scholarships and grants $ 517,517 $ - $ - $ 517,517 Other program expenses 885,032 - - 885,032 Director/officer liability insurance - 5,531 - 5,531 Stipend 71,880 - - 71,880 Salary reimbursement 10,282 15,423 25,704 51,409 President's meeting - 3,644 - 3,644 Professional services - 81,813 - 81,813 Other expenses - 43,874 21,678 65,552 Bank charges - 9,735 - 9,735 Lobbying expenses 8,003 - - 8,003 Meals and meeting expenses - 1,209 - 1,209

Total Expenses $ 1,492,714 $ 161,229 $ 47,382 $ 1,701,325

2015

Program Management Fund-Service and General raising Total

Scholarships and grants $ 376,003 $ - $ - $ 376,003Professional development 55,434 - - 55,434Other program expenses 715,435 - - 715,435Director/officer liability insurance - 4,979 - 4,979Stipend 70,370 - - 70,370Salary reimbursement 10,000 15,000 25,000 50,000President's meeting - 1,295 - 1,295Professional services - 77,185 - 77,185Other expenses - 12,232 7,016 19,248Bank charges - 10,259 - 10,259Lobbying expenses 7,002 - - 7,002Meals and meeting expenses - 1,490 - 1,490

Total Expenses $ 1,234,244 $ 122,440 $ 32,016 $ 1,388,700

2014

TRIDENT TECHNICAL COLLEGE FOUNDATION, INC. FINANCIAL ...

Documents

Transcript of TRIDENT TECHNICAL COLLEGE FOUNDATION, INC. FINANCIAL ...