Audited Financial Statements - Ronald McDonald House ... · RONALD McDONALD HOUSE CHARITIES OF ....

Audited Financial Statements

Years Ended December 31, 2018 and 2017

RONALD McDONALD HOUSE CHARITIES OF

SOUTHERN WEST VIRGINIA, INC.


TABLE OF CONTENTS Pages Independent Auditor’s Report 1-2 Statement of Financial Position 3 Statement of Activities and Change in Net Assets 4 Statement of Cash Flows 5 Statement of Functional Expenses 6-7 Notes to the Financial Statements 8-20

INDEPENDENT AUDITOR’S REPORT To the Board of Directors Ronald McDonald House Charities of Southern West Virginia, Inc. Charleston, West Virginia We have audited the accompanying financial statements of Ronald McDonald House Charities of Southern West Virginia, Inc. (the Corporation), which comprise the statement of financial position as of December 31, 2018 and 2017, and the related statements of activities, cash flows, and functional expenses 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. Auditor’s 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 from 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 auditor’s 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.

2 Auditor’s Responsibility (continued) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 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 Southern West Virginia, Inc. as of December 31, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

July 19, 2019 Charleston, West Virginia

3 RONALD McDONALD HOUSE CHARITIES OF


STATEMENT OF FINANCIAL POSITION

December 31, 2018 and 2017

2018 2017

ASSETS

Current Assets:Cash 1,863,819$ 1,806,438$ Accounts receivable - 19,525 Net capital lease receiveable, current portion 7,859 7,556 Net pledges receivable, current portion 286,135 369,846

Total current assets 2,157,813 2,203,365

Investments - fair value 3,893,977 4,068,866 Property and equipment, net 3,559,003 3,669,847 Net capital lease receivable, less current portion 147,085 155,561 Net pledges receivable, less current portion 415,083 640,040

Total assets 10,172,961$ 10,737,679$

LIABILITIES AND NET ASSETS

Current Liablilties:Accounts payable 13,640$ 5,098$ Related party payable - Huntington RMH - 19,121 Accrued and withheld liabilities 3,234 3,675 Current maturities of mortgage payable 330,828 318,766

Total current liabilities 347,702 346,660

Mortgage payable, net of current maturities 2,238,948 2,568,347

Total Libilities 2,586,650 2,915,007

Net Assets:Without donor restriction 3,156,360 2,989,972 With donor restriction

Purpose restrictions 3,913,951 4,316,700Perpetual restrictions 516,000 516,000

Total net assets with donor restictions 4,429,951 4,832,700 Total net assets 7,586,311 7,822,672

Total liabilities and net assets 10,172,961$ 10,737,679$

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



STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS


2018 2017Changes in net assets without donor restriction:

Revenues, gains, and support:House revenues 32,810$ 46,780$ Contributions 249,367 76,374 Investment income, net of fees 20,245 14,771 Net unrealized and realized (loss) gain on

investments (40,444) 78,747 Special events, less benefits of $49,119 in 2018

and $45,095 in 2017. 128,332 145,735 Total revenues, gains and support without donor restriciton 390,310 362,407

Net assets released from restriction:Satisfaction of program restrictions 529,650 692,822

Total revenues, gains, and support 919,960 1,055,229

Expenses:Program services:

House operations 538,582 460,066

Support services:Management and general 109,197 112,333 Fundraising 105,793 90,830

Total support services 214,990 203,163 Total functional expenses 753,572 663,229

Unallocated payments to RMHC, Inc. - 40,140 Total expenses 753,572 703,369 Increase in net assets without donor restriction 166,388 351,860

Changes in net assets with donor restriction:Contributions 276,520 208,362 Investment income, net of fees 54,225 45,436 Net unrealized and realized gain (loss) on investments (203,844) 403,242 Net assets released from restriction (529,650) (692,822)

Decrease in net assets with donor restriction (402,749) (35,782)

Change in total net assets (236,361) 316,078

Net assets, beginning of year 7,822,672 7,506,594 Net assets, end of year 7,586,311$ 7,822,672$




STATEMENT OF CASH FLOWS


2018 2017Cash flows from operating activities:

Change in net assets (236,361)$ 316,078$ Adjustments to reconcile increase (decrease) in net

assets to net cash provided by operating activities:Depreciation 114,964 114,900 Net unrealized and realized loss (gain) on

investments 244,288 (481,989) (Increase) decrease in:

Accounts receivable 19,525 1,082 Capital lease receivable 8,173 7,859 Pledges receivable 308,668 540,033

Increase (decrease) in:Related party payable - Huntington RMH (19,121) (53,283) Accounts payable 8,542 (4,492) Accrued and withheld liabilities (441) 450

Net cash provided by operating activities 448,237 440,638

Cash flows from investing activities:Changes in investments - cash and cash equivalents (170,445) 375,935 Proceeds from sales and maturities of investments 771,875 32,736 Purchases of investments (670,829) (335,210) Purchases of equipment and capital improvements (4,120) (9,411)

Net cash used in investing activities (73,519) 64,050

Cash flows from financing activities:Principal payments on debt (317,337) (487,857)

Net cash used in financing activities (317,337) (487,857)

Increase in cash 57,381 16,831

Cash, beginning of year 1,806,438 1,789,607

Cash, end of year 1,863,819$ 1,806,438$

SUPPLEMENTAL DISCLOSURE OF CASH FLOWINFORMATION:

Cash paid during the year for interest 103,450$ 120,666$ The accompanying notes are an integral part of these financial statements.

RONALD McDONALD HOUSE CHARITIES OF


STATEMENT OF FUNCTIONAL EXPENSES

Year Ended December 31, 2018

Program Services Supporting ServicesHouse Management Fund

Operations and General Raising Total Total

Salaries and wages 117,181$ 67,838$ 67,525$ 135,363$ 252,544$ Employee benefits 12,422 7,087 7,087 14,174 26,596 Payroll taxes 12,386 7,270 7,270 14,540 26,926 Utilities 42,014 - - - 42,014 Repairs and maintenance 10,806 - - - 10,806 Occupancy 8,500 - - - 8,500 Landscaping 35 - - - 35 Insurance 11,612 - - - 11,612 Travel 425 213 212 425 850 Supplies 3,152 2,579 - 2,579 5,731 Postage 554 600 - 600 1,154 Cleaning - - - - - Hospitality 2,052 1,026 1,026 2,052 4,104 Printing expense 117 - - - 117 Furnishings 2,454 - - - 2,454 Professional fees 46,722 10,670 22,673 33,343 80,065 Depreciation 114,964 - - - 114,964 Interest 103,450 - - - 103,450 Dues and subscriptions - 2,815 - 2,815 2,815 Advertising 39,349 7,199 - 7,199 46,548 Miscellaneous 10,387 1,900 - 1,900 12,287

Total functional expenses 538,582$ 109,197$ 105,793$ 214,990$ 753,572$


6

RONALD McDONALD HOUSE CHARITIES OF SOUTHERN WEST VIRGINIA, INC.

STATEMENT OF FUNCTIONAL EXPENSES

Year Ended December 31, 2017

Program Services Supporting Services

House Management FundOperations and General Raising Total Total

Salaries and wages 115,394$ 75,008$ 59,468$ 134,476$ 249,870$ Employee benefits 10,238 6,677 5,342 12,019 22,257 Payroll taxes 11,375 7,418 5,935 13,353 24,728 Utilities 42,372 - - - 42,372 Repairs and maintenance 5,049 - - - 5,049 Occupancy 8,500 - - - 8,500 Landscaping 500 - - - 500 Insurance 5,320 - - - 5,320 Travel 171 86 85 171 342 Supplies 7,963 6,515 - 6,515 14,478 Postage 884 958 - 958 1,842 Cleaning - - - - - Hospitality 1,085 543 543 1,086 2,171 Printing expense 446 - - - 446 Furnishings 5,637 - - - 5,637 Professional fees - 9,156 19,457 28,613 28,613 Depreciation 114,900 - - - 114,900 Interest 120,666 - - - 120,666 Dues and subscriptions - 4,222 - 4,222 4,222 Advertising 3,109 569 - 569 3,678 Miscellaneous 6,457 1,181 - 1,181 7,638

Total functional expenses 460,066$ 112,333$ 90,830$ 203,163$ 663,229$ The accompanying notes are an integral part of these financial statements.

7



NOTES TO FINANCIAL STATEMENTS

December 31, 2018 and 2017 1 –DESCRIPTION OF ORGANIZATION Organization

Ronald McDonald House Charities of Southern West Virginia, Inc. (the Corporation) was established in 1983 as a nonstock corporation under the laws of the State of West Virginia, and is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code. The Corporation’s primary purpose is to provide a home and other assistance for families of children with cancer, leukemia and other illnesses who are receiving treatment at area hospitals and health care facilities in Southern West Virginia. Also, the Corporation, through a grant committee, directs the disbursement of canister collections through grants to eligible organizations established by guidelines from the national Ronald McDonald House Charities.

2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Corporation and changes therein are classified and reported as follows: Without donor restrictions

Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. The governing board has designated, from net assets without donor restrictions, net assets for an operating reserve and board-designated endowment. With donor restriction Net assets subject to donor- (or certain grantor-) imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both.



NOTES TO FINANCIAL STATEMENTS (Continued)


2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents For purposes of the statements of cash flows, the Corporation considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. Promises to Give Contributions are recognized when the donor makes a promise to give to the Corporation that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. The Corporation uses the allowance method to determine uncollectible promises receivable. The allowance is based on prior years' experience and management's analysis of specific promises made. Management has determined that no allowance is necessary at December 31, 2018 and 2017.

Investments

Investments in marketable securities with readily determinable fair values and all investments in debt securities are carried at fair values. Investment income or loss (including realized and unrealized gains and losses on investments, interest, and dividends) is included in support, revenue and gains unless the income or loss is restricted by donor or law. The company invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statement of financial position.

Property and Equipment

Property and equipment are stated at cost or, in case of donated assets, at fair value on the date of donation. Major purchases and improvements are capitalized while repairs and maintenance are expensed as incurred. The Corporation capitalizes items costing $1,000 or more with a minimum useful life of three (3) years. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, which range from 3 to 40 years.





2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value Measurement

Accounting Standards Codification 820 “Fair Value Measurements” was issued in order to establish a single definition of fair value and a framework for measuring fair value in accordance with generally accepted accounting principles (GAAP) that is intended to result in increased consistency and comparability in fair value measurements. Accounting Standards Codification 820 also expands disclosures about fair value measurements and applies whenever other authoritative literature requires certain assets and liabilities to be measured at fair value but does not expand the use of fair value.

“Fair Value Measurement” establishes a fair value hierarchy that prioritizes inputs to valuation techniques to measure fair value. This hierarchy consists of three broad levels: quoted prices in active markets for identical assets or liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3).

Revenue Recognition

Substantially all of the Corporation’s revenue and support is derived from room rentals, individual contributions, fundraisers, and investment income. Contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Receivables are recorded when formal notification of intent to appropriate or contribute funds is received by the Corporation.

Functional Allocation of Expenses

The costs of providing the various services and programs have been summarized on a functional basis in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited based on informal timekeeping of the Corporation’s employees. Income Taxes

The Corporation operates as an organization other than a private foundation and is exempt from income taxes under section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been made. The Corporation’s Department of the Treasury information returns are subject to examination, generally for three years after the date filed.






Contributed Items and Services

Items contributed to the Corporation are recognized at their fair value at the date of the gift. Means for determining fair value may range from recognized reliable industry sources to certified appraisers. Unpaid volunteers and service providers have made time and service contributions to the Corporation during 2018 and 2017. The value of contributed time and service is not reflected in the accompanying financial statements since it is not susceptible to objective measurement or valuation. The Corporation leases land from a hospital at an annual rate of $1. This fixed-term lease of fifty (50) years has annual lease payments below market value. Recognition of the value of the lease at December 31, 2018 and 2017 is $154,944 and $163,117, respectively, and is presented as capital lease receivable. The Corporation recognizes $8,500 annually as rent expense. Use of 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 reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates used in preparation of these financial statements include, pledge receivables, functional expense allocation and depreciation expense. Consequently, fluctuation of amounts in the near term are more likely and the difference could be significant. Advertising Expense

The Corporation expenses advertising and marketing costs the first time the advertising or marketing takes place. Reclassifications Certain 2017 balances have been reclassified to conform with 2018 presentation. The reclassifications have no effect on the change in net assets previously reported for the year ended December 31, 2017.






New Accounting Pronouncements On February 25, 2016, the Financial Accounting Standards Board (FASB) issued Leases (Topic: 842): Leases (ASU 2016-02). The objective of ASU 2016-02 is to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The core principle of ASU 2016-02 is the recognition of an asset and a liability for leases with a term in excess of 12 months. The effective date for these pronouncements is for fiscal years beginning after December 15, 2019, and interim periods with fiscal years beginning after December 15, 2020. Early adoption of this pronouncement is permitted.

Management is currently evaluating the impact this pronouncement will have on the Corporation’s financial statements and has elected not to early implement at this time. On August 18, 2016, the FASB issued Accounting Standards Update No. 2016-14, Not-for Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. The amendments of this ASU change presentation and disclosure requirements for not-for-profit entities to provide more relevant information about their resources (and the changes in those resources) to donors, granters, creditors, and other users. The amendments include qualitative and quantitative requirements in the financial statement presentation and disclosures regarding net asset classes, investment return, expenses, liquidity and availability of resources and presentation of operating cash flows. For the years ended December 31, 2018 and 2017, the Corporation implemented the provisions of ASU 2016-14.

3 – LIQUIDITY AND AVAILABILITY

Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the balance sheet date, comprise the following:

2018 2017

Cash and cash equivalents 1,863,819$ 1,806,438$ Operating investments 710,955 706,373 Accounts receivable 286,135 389,371

2,860,909$ 2,902,182$

As part of the Corporation’s liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities and other obligations become due.





4 – INVESTMENTS

Investments are stated at fair value based on quoted market prices and are summarized as follows as of December 31, 2018 and 2017:

FairValue Cost

Cash and cash equivalents 380,651$ 380,651$ Fixed income 448,831 446,470 Common stock 955,987 530,602 Preferred stock 34,785 37,188 Mutual funds 169,815 174,984 Exchange traded funds 1,886,555 1,263,464 Real estate investment trust 17,353 7,962

3,893,977$ 2,841,321$

FairValue Cost

Cash and cash equivalents 210,206$ 210,206$ Fixed income 78,825 74,955 Common stock 1,244,657 635,256 Preferred stock 60,564 49,074 Mutual funds 247,546 256,984 Exchange traded funds 2,211,125 1,315,329 Real estate investment trust 15,943 7,985

4,068,866$ 2,549,789$

December 31, 2018

December 31, 2017





4 – INVESTMENTS (Continued)

The following schedule summarizes unrestricted and temporarily restricted investment appreciation during the years ended December 31, 2018 and 2017:

Dividends and interest 98,222$ 81,909$ Net realized and unrealized

gain (loss) on investments (244,288) 481,989 Total (146,066) 563,898

Less custodial fees (23,752) (21,702)

Investment appreciation (169,818)$ 542,196$

5 – FAIR VALUE MEASUREMENTS

The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the entity has the ability access. Level 2 – Inputs to the valuation methodology include:

• quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive

markets; • inputs other than quoted prices that are observable for the asset

or liability; • inputs that are derived principally from or corroborated by

observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.





5 – FAIR VALUE MEASUREMENTS (Continued)

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value.

Corporate bonds and government bonds (Fixed Income): Valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Common and Preferred Stock: Valued at the closing price reported in the active market where the individual securities are traded. Mutual Funds, Exchange Traded Funds, and Real Estate Investment Trust (REIT): Valued based on the net asset value (NAV) per shares, without further adjustment. Net asset value is based upon the fair value of the underlying investments.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following is a summary of the levels within the fair value hierarchy in which the Corporation invests.

2018 2017

Level 1 - Quoted prices 990,772$ 1,305,221$ Level 2 - Other significant observable inputs 448,831 78,825 Level 3 - Significant unobservable inputs - -

1,439,603 1,384,046 Investments measured at net asset value 2,073,723 2,474,614 Cash and cash equivalents 380,651 210,206

3,893,977$ 4,068,866$





6 – CREDIT RISK

Financial instruments which potentially expose the Corporation to significant concentrations of credit risk consist of cash, investments, and pledges and accounts receivable.

At December 31, 2018, approximately 84% of cash and cash equivalents were deposited with a single financial institution. At December 31, 2017, approximately 85% of cash and cash equivalents were deposited with a single financial institution. At December 31, 2018 and 2017, the Corporation had cash balances that exceeded the Federal Depository Insurance Corporation. However, management believes that the financial institutions are financially sound and do not present a significant risk to the Corporation.

7 – RELATED PARTY TRANSACTIONS

The Corporation maintained a program that ended in 2017 to provide grants to non-profit organizations focused on helping children. The program was co-sponsored by the national Ronald McDonald House Charities (National), and requires 25% of all store canister collections to be remitted to National for further grant-making. During 2018 and 2017, the Corporation paid National $0 and $40,140, respectively, from collections $0 and $5,098, respectively, remained payable at year-end.

During 2009, a similar program was begun, which also ended in 2017, whereby the Huntington House and Charleston House were splitting 50% each, Canister Collections at McDonald’s restaurants that are members of the Tri-State Cooperative. A bank account owned by the Corporation acted as the clearing account for donations, operating expenses and proceeds to the respective House’s grant accounts, for grant-making. During 2018 total collections were $0. The total collections were approximately $153,000 for 2017, with operating costs totaling approximately $4,000. As of December 31, 2018 and 2017, the Corporation has a payable of $0 and $19,121, respectively, to the Huntington House.





8 – PROPERTY AND EQUIPMENT Property and equipment consists of the following:

2018 2017

Building and improvements 3,678,337 3,676,626$ Furniture, fixtures, and equipment 132,422 132,422 Vehicles 26,869 24,460

3,837,628 3,833,508 Accumulated depreciation (278,625) (163,661)

3,559,003$ 3,669,847$

9 – LEASE

The Corporation leases land from a hospital under a 50-year lease agreement which began in 2015 and calls for annual lease payments of $1 which is below the fair market value. The fair market value of the lease was estimated at $425,000, which was recognized as a contribution receivable and temporarily restricted contribution. During the years ended December 31, 2018 and 2017, a release of the temporarily restricted contribution was recognized in the amount of $8,500, each year. The unamortized discount to net present value is recognized as temporarily restricted contribution income in the year amortized. The discount rate applied in determining the net present value was 4%. Details of the discounted capital lease receivable are as follows:

2018 2017

Capital lease receivable 391,000$ 399,500$ Unamortized discount to net present value (236,056) (236,383) Net capital lease receivable 154,944 163,117 Less current portion (7,859) (7,556)

Net long term capital lease receivable 147,085$ 155,561$





9 – LEASE (continued)

Minimum future fair market rental values from the date of gift of lease payments as of December 31, 2018 are as follows:

Years Ending December 31,

2019 7,859$ 2020 7,556 2021 7,266 2022 6,986 2023 6,718

Thereafter 118,546

154,931$

10 –NET ASSETS WITH DONOR RESTRICTION

Net assets with donor restriction are restricted for the following purposes:

2018 2017

Subject to expenditure for specified purpose:Programs, operations, and activities of Ronald 2,207,117$ 2,372,237$

McDonald HouseBridging love building hearts campaign 1,110,578 1,380,864 Grant making to organizations meeting guidelines of

the national Ronald McDonald House Charities 596,256 563,599 3,913,951 4,316,700

Net assets restricted to investment in perpetuity 516,000 516,000

4,429,951$ 4,832,700$





11 – PLEDGES RECEIVABLE

Details of unconditional pledges receivable at December 31, 2018 and 2017 are as follows:

2018 2017

Unconditional pledges receivable 755,982$ 1,100,425$ Discount to net present value (54,764) (90,539)

Net pledges receivable 701,218$ 1,009,886$

Receivables expected to be collected in less than one year 286,135$ 369,846$ Receivables expected to be collected in one to five years 415,083 640,040

Net pledges receivable 701,218$ 1,009,886$

Pledges are discounted to net present value using a discount rate of 4%.

At December 31, 2018 and 2017, approximately 91% and 89%, respectively, of pledges receivable are from four (4) entities. Pledges receivable includes $45,000 and $59,000, respectively, from entities affiliated with the Corporation.

12 – MORTGAGE PAYABLE

Mortgage payable consist of the following at December 31, 2018 and 2017:

2018

2,569,776$

Less current portion (330,828)

2,238,948$

Mortgage payable to a financial institution, secured by the building, bearing interest at 3.72%, payable in monthly principal and interest installments of $35,064 and maturity March 1, 2022.





12 – MORTGAGE PAYABLE (continued)

Total estimated maturities of the mortgage payable at December 31, 2018, are as follows:

2019 330,828$ 2020 343,347 2021 356,340 2022 1,539,261

2,569,776$

13 – SUBSEQUENT EVENTS

The Corporation’s management has evaluated events and transactions occurring after December 31, 2018 through the date of the Auditor’s Report, which is the date the financial statements were available to be issued. No significant events were noted requiring adjustments to or disclosure in the financial statements.

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