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Avon Products Foundation, Inc.

Financial Statements

December 31, 2015


Notes to Financial Statements

December 31, 2015

Table of Contents Page Independent Auditors' Report

FINANCIAL STATEMENTS

Statements of Financial Position 3

Statements of Activities 4

Statements of Functional Expenses 5

Statements of Cash Flows 6

Notes to Financial Statements 7-16

PKF O’CONNOR DAVIES, LLP 500 Mamaroneck Avenue, Harrison, NY 10528 I Tel: 914.381.8900 I Fax: 914.381.8910 I www.pkfod.com

PKF O’Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Independent Auditors' Report The Board of Directors Avon Products Foundation, Inc. We have audited the accompanying financial statements of Avon Products Foundation, Inc. (the “Foundation”) which comprise the statement of financial position as of December 31, 2015 and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. 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 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 auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

The Board of Directors Avon Products Foundation, Inc. Page 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avon Products Foundation, Inc. as of December 31, 2015 and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the Avon Products Foundation, Inc.’s December 31, 2014 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 6, 2015. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2014 is consistent, in all material respects, with the audited financial statements from which it has been derived. Emphasis of a Matter As discussed in Note 2 to the financial statements, effective November 1, 2015, the Foundation has transferred the Breast Cancer Programs to Avon Breast Cancer Crusade, LLC, a sponsored project of the New Venture Fund.

May 12, 2016 Harrison, New York

See notes to financial statements 3

2015 2014ASSETSCash and cash equivalents 9,166,500$ 25,081,131$ Investments 3,206,000 5,949,000Pledges receivable, net of allowance for uncollectible pledges of $56,951 and $31,759 61,215 66,596

Other receivables 1,179,128 629,148Prepaid expenses - 241,900Due from Avon Products, Inc. 1,959,743 698,926Due from Avon Breast Cancer Crusade, LLC 1,019,294 - Deferred program costs - 175,522

Equipment, net of accumulated depreciation of $164,872 - 7,637

16,591,880$ 32,849,860$

LIABILITIES AND NET ASSETSLiabilities

Accounts payable and accrued expenses 277,851$ 424,806$ Due to Avon Products, Inc. 7,951 16,189Due to Avon Breast Cancer Crusade, LLC 2,236,000 - Grants payable, net 2,725,000 11,627,831

Total Liabilities 5,246,802 12,068,826

Net AssetsUnrestricted 9,910,973 18,102,133 Temporarily restricted 1,434,105 2,678,901

Total Net Assets 11,345,078 20,781,034

16,591,880$ 32,849,860$


Statements of Financial Position

December 31, 2015(with comparative amounts at December 31, 2014)

See notes to financial statements

4

2014Temporarily

Unrestricted Restricted Total Total

PUBLIC SUPPORT AND REVENUESpecial events income 376,550$ 35,715,570$ 36,092,120$ 33,250,019$ Special event in-kind donations - 210,000 210,000 310,058 Contributions from Avon:

Special Events 3,784,000 - 3,784,000 3,784,000 Breast Cancer Crusade - 2,161,702 2,161,702 2,222,990 Scholarship / Other Programs - 1,221,000 1,221,000 1,221,000 Domestic Violence / Empowerment - 2,069,599 2,069,599 2,551,583 Reforestation - - - 790,712 General Support - Donation 300,000 - 300,000 300,000 General Support - In-Kind 2,410,602 - 2,410,602 3,195,458

Contributions from others 304,994 1,558,021 1,863,015 1,549,046 Pledges - - - 1,622,984 Investment income 142,095 - 142,095 132,059 Net Assets Released from Restrictions:

Satisfaction of purpose restriction 42,557,704 (42,557,704) - - Satisfaction of time restriction 1,622,984 (1,622,984) - -

Total Public Support and Revenue 51,498,929 (1,244,796) 50,254,133 50,929,909

EXPENSESProgram Services

Breast Cancer Crusade 40,546,767 - 40,546,767 29,901,209 Scholarship / Other Programs 1,142,588 - 1,142,588 1,362,938 Domestic Violence / Empowerment 3,154,269 - 3,154,269 3,712,533 Reforestation 1,324 - 1,324 800,435 Emergency Relief Fund (68,746) - (68,746) 12,129

Total Program Expenses 44,776,202 - 44,776,202 35,789,244

Supporting ServicesManagement and general 2,118,381 - 2,118,381 2,068,629 Fundraising 12,795,506 - 12,795,506 14,222,877

Total Supporting Services 14,913,887 - 14,913,887 16,291,506

Total Expenses 59,690,089 - 59,690,089 52,080,750

Change in Net Assets (8,191,160) (1,244,796) (9,435,956) (1,150,841)

NET ASSETSBeginning of year 18,102,133 2,678,901 20,781,034 21,931,875

End of year 9,910,973$ 1,434,105$ 11,345,078$ 20,781,034$

2015


Statements of Activities

Year Ended December 31, 2015(with summarized totals for the year ended December 31, 2014)


Supporting ServicesBreast Scholarship/ Domestic Emergency Management Cancer Other Violence/ Relief and Crusade Programs Empowerment Reforestation Fund Total General Fundraising Total 2015 2014

EXPENSES

Staffing -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Grants 33,534,797 1,024,804 2,717,447 - (68,971) 37,208,077 - - - 37,208,077 22,790,441 Equipment 10,000 - - - - 10,000 2,976 1,257,564 1,260,540 1,270,540 1,225,746 Communications 3,780 - - - - 3,780 38,581 907,829 946,410 950,190 1,037,111 Travel and meals 128,978 - - - - 128,978 4,193 328,924 333,117 462,095 969,801 Supplies 233,940 - - - - 233,940 - 50,147 50,147 284,087 438,585 Facilities - - - - - - - 218,170 218,170 218,170 218,338 Public awareness 3,836,585 - - - - 3,836,585 4,300 4,031,959 4,036,259 7,872,844 11,305,186 Public relations 145,800 - - - - 145,800 - 25,798 25,798 171,598 219,786 Printing 1,405,415 - - - - 1,405,415 - 76,422 76,422 1,481,837 1,429,215 Professional services 125,272 - 7,750 - - 133,022 558,272 3,580,272 4,138,544 4,271,566 5,368,246 Other services 242,752 - - - - 242,752 - 1,580,998 1,580,998 1,823,750 2,451,463 Insurance - - - - - - 35,446 34,097 69,543 69,543 73,306 Taxes and licenses - - - - - - 26,225 268,521 294,746 294,746 343,570 Bank fees - - - - - - 643,315 - 643,315 643,315 627,403 Bad debt expense - - - - - - 39,492 - 39,492 39,492 31,999 Depreciation expense - - - - - - - 7,637 7,637 7,637 45,036

Total Direct Expenses 39,667,319 1,024,804 2,725,197 - (68,971) 43,348,349 1,352,800 12,368,338 13,721,138 57,069,487 48,575,232

Staffing 745,685 92,016 344,824 1,324 - 1,183,849 711,581 179,078 890,659 2,074,508 2,842,219 Communications 5,717 1,101 3,601 - 10 10,429 2,308 1,628 3,936 14,365 3,270 Travel and meals 35,029 6,748 22,063 - 59 63,899 14,141 9,975 24,116 88,015 41,236 Supplies 8,260 1,591 5,202 - 14 15,067 3,334 212,352 215,686 230,753 250,173 Facilities 32,910 6,340 20,728 - 55 60,033 13,286 9,371 22,657 82,690 87,483 Public awareness - - - - - - - - - - 100,000 Public relations 13,628 2,625 8,583 - 23 24,859 5,502 3,881 9,383 34,242 85,149 Other services 1,358 262 855 - 2 2,477 548 387 935 3,412 15,632 Depreciation expense 1,907 367 1,201 - 3 3,478 770 543 1,313 4,791 - Agency labor 34,954 6,734 22,015 - 59 63,762 14,111 9,953 24,064 87,826 80,356

Total In-Kind Expenses 879,448 117,784 429,072 1,324 225 1,427,853 765,581 427,168 1,192,749 2,620,602 3,505,518

Total Expenses 40,546,767$ 1,142,588$ 3,154,269$ 1,324$ (68,746)$ 44,776,202$ 2,118,381$ 12,795,506$ 14,913,887$ 59,690,089$ 52,080,750$

Total

Program Services


Statements of Functional Expense

Year Ended December 31, 2015

(with summarized totals for the year ended December 31, 2014)


2015 2014

CASH FLOW FROM OPERATING ACTIVITIESChange in net assets (9,435,956)$ (1,150,841)$ Adjustments to reconcile change in net assets to

net cash from operating activitiesBad debt expense 39,492 31,999 Depreciation expense 7,637 45,036 Net changes in operating assets and liabilities

Pledges receivable, net (34,111) 2,044 Other receivable (549,980) (367,756) Prepaid expense 241,900 7,056,506 Due from Avon Products, Inc. (1,260,817) (354,891) Due from Avon Breast Cancer Crusade, LLC (1,019,294) - Deferred program costs 175,522 558,475 Accounts payable and accrued expenses (146,955) (26,759) Due to Avon Products, Inc. (8,238) (120,155) Due to Avon Breast Cancer Crusade, LLC 2,236,000 - Grants payable, net (8,902,831) (629,242)

Net Cash from Operating Activities (18,657,631) 5,044,416

CASH FLOW FROM INVESTING ACTIVITIESProceeds from sale of investments 2,743,000 -

Net Change in Cash and Cash Equivalents (15,914,631) 5,044,416

CASH AND CASH EQUIVALENTSBeginning of year 25,081,131 20,036,715

End of year 9,166,500$ 25,081,131$


Statements of Cash Flows

Year Ended December 31, 2015

(with comparative amounts for the year ended December 31, 2014)


Notes to Financial Statements December 31, 2015

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1. Organization

The Avon Products Foundation, Inc. (the “Foundation”) was incorporated in the State of New York in 1955 by Avon Products, Inc. (“Avon”). The fundamental mission of the Foundation since its inception is to promote or aid charitable, scientific, educational, and humanitarian activities, with a special emphasis on those activities that improve the lives of women and their families. In its work to realize those aspirations, its current mission focus is on two causes of great importance to women: eradicating breast cancer and ending domestic and gender violence. It works toward achieving those goals through four complementary strategies: Funding, Convening, Initiating and Educating. The Foundation receives generous financial support to fund its mission initiatives from Avon Products, Inc., through special product sales and direct donations. It also receives generous support for its work from the public — individuals, companies and foundations — through direct donations, sponsorships and special events, including the Avon Walk to End Breast Cancer and other programs. The Foundation also operates small additional programs that advance the Foundation’s fundamental mission to improve the lives of women. Those programs include Avon Representative and employee-eligible scholarships and Avon employee matching gifts, which are all fully funded by Avon Products, Inc. It also raises funds and receives donations from Avon periodically for emergency relief and rehabilitation efforts in times of disasters, with a grant prioritization on organizations providing assistance for women and families who are affected. In 2013 the Foundation began to operate the Avon global reforestation grant program, Healthy Forests, Beautiful World, which is focused on mobilizing women to nurture nature and help reverse deforestation. Programs

The major program activities of the Foundation are as follows:

a. Breast Cancer

The Avon Foundation for Women is committed to improving breast cancer outcomes and reducing disparities in survival rates at the community and national levels. Our strategic grant making reflects: a holistic and place-based approach in high-need areas throughout the United States; a commitment to enabling access to medical advances and support services for breast cancer patients, particularly those from vulnerable populations; and a commitment to investing in research on the prevention, diagnostics, and treatment of breast cancer.

To realize that mission, the Foundation’s current priorities are to invest in programs that ensure: 1. All women have access to timely and high-quality breast cancer prevention

interventions and screenings. 2. All women have access to timely and high-quality breast cancer diagnostics. 3. All women who have been diagnosed with breast cancer have access to timely

and high-quality treatment care and support.



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1. Organization (continued)

a. Breast Cancer (continued) To achieve these objectives, the Foundation will make strategic investments in outstanding nonprofit organizations working with breast cancer populations that support the following areas: Prevention: all women should have access to timely and high-quality breast cancer prevention interventions and screenings. Strategic areas of investment include:

Improve public health messaging on breast cancer risk-reduction strategies Support community-based organizations focused on educating the public Link underserved women to high quality and timely screening services Invest in research on breast cancer prevention

Improved diagnostics: All women have access to timely and high-quality breast cancer diagnostics, Strategic areas of investment include:

Link underserved women to high quality and timely diagnostic services Support hospital-based investments in “patient navigators’ and programs Invest in research on early detection technologies and diagnostics

Diagnosis: All women who have been diagnosed with breast cancer have access to timely and high-quality treatment, care, and support. Strategic areas of investment include:

Increase access to psychosocial and quality-of-life support, including palliative care

Help women navigate the medical, financial, and emotional maze of a diagnosis (e.g., transportation, food, childcare, translation)

Invest in research on new treatments for metastatic breast cancer In addition, Foundation strategies that speak to multiple foundation goals include:

Educate the general public and vulnerable populations to drive and change behavior

Support on a long-term basis world-class institutions that invest in research and improve access for underserved communities

Facilitate city-wide efforts to coordinate community-based organizations and hospitals to improve outcomes and reduce the racial disparity in breast cancer mortality rates that has emerged in many cities

Convene grantees, partners, and researchers to collaborate and share best practices for improved outcomes



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b. Domestic Violence The Avon Foundation is committed to the mission of ending domestic and gender violence. The Avon Foundation Speak Out Against Domestic Violence initiative was launched in the US in 2004 to accelerate progress toward that goal. To realize that mission, the Foundation’s current priorities are: 1. Break the public and private silence that surrounds partner and gender violence

and abuse, and excuses and encourages abusers. 2. Improve and expand successful and impactful victim services for both immediate

crisis care and long term advances to safety, security and the successful interruption of the cycle of violence for victims and families.

3. Identify and launch strategies to prevent family and gender violence and save lives.

To achieve these objectives, Foundation strategies include: FUNDING: Make grants to outstanding nonprofit organizations working to end violence against women and serve victims and their families, with a focus on those that provide education and awareness programs; offer critical support or services for victims and their families; offer education and direction for peer-led programs; design and conduct prevention programs; implement laws to protect victims of violence; train victims to become economically independent; conduct research; and address and reduce dating abuse among young populations. CONVENING: Convene leaders and implement collaborative program approaches to accelerate advances in reducing gender violence. Uniquely among funders, the Avon Foundation facilitates the convening of its grantees, partners and experts to encourage best practices and to design and advance creative solutions and pilots, including conferences for the Avon Foundation-funded Survivor Economic Empowerment Coordinators; collaborating within its Global Partnership to End Violence Against Women to hold global conferences, mentoring programs and training initiatives; and creating impactful forums for presentation of the Global Communications X-Change Awards.



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b. Domestic Violence (continued)

INITIATING: Identify and work with grantees, partners and leaders to launch new work and accelerate the impact of their achievements, including the identification and presentation of new research for the NO MORE Domestic Violence and Sexual Assault coalition; creation of materials to engage more employers and funders on the issue of domestic violence for a White House Council on Women and Girls program; expansion of child trauma counseling pilot to include children in domestic violence shelters and foster children; and expansion of the Domestic Violence Homicide Emergency Response Initiative.

EDUCATING: Increase the public’s awareness and knowledge of the impact of the epidemic of gender violence on women, children, families and whole communities. Lead efforts to expand the public dialogue necessary to change attitudes and reverse the silent acceptance of abuse. Generate public interest and media coverage to remove the stigma and shame experienced by survivors to allow them to create violence-free futures for themselves and their families.

c. Reforestation

A reforestation initiative, Healthy Forests, Beautiful World, was launched as Hello Green Tomorrow by Avon in 2010 to mobilize women to nurture nature and help reverse deforestation. Thanks to the commitment of more than 30 Avon markets globally, millions of dollars have been raised through the sale of special cause products and donated to the World Wildlife Fund for their reforestation projects in Indonesia, and to The Nature Conservancy for their reforestation projects in the Atlantic Rainforest in South America. In 2013 the operation of this initiative was moved to the Foundation.

d. Other Programs

Scholarships The Foundation manages U.S. college scholarship programs for children of Avon associates, Avon independent sales representatives, children and grandchildren of Avon independent sales representatives, and for children residing in and around the Suffern New York school district. It also manages a global scholarship program for the children of Avon Sales Representatives. Matching Gifts The Foundation manages a program that matches specified charitable donations made by Avon employees in the U.S.



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e. Emergency Relief Funds

In the aftermath of periodic specified disasters or emergencies when the Foundation receives designated donations from Avon, or donations resulting from the sale of special designated Avon products, or direct public designated donations made at the product purchase site avon.com, the Foundation will provide grants to selected appropriate nonprofit agencies providing assistance in those specific emergency or crisis situations with a focus on the special needs of women and families.

Examples of Avon Emergency Relief Support 2014 and 2015 – the Foundation donated funds to the Friends of the World Food Program for Typhoon Haiyan relief efforts (Philippines, 2014) and the Nepal Earthquake relief efforts (Nepal 2015). 2013 – the Foundation provided funds to the United Way of Central Oklahoma May Tornadoes Relief Fund for tornado relief efforts and to Rebuilding Together for Hurricane Sandy relief efforts in New York and New Jersey. 2010 – the Foundation donated to relief and rehabilitation efforts in Haiti after the earthquake, as well as to improve breast cancer treatment and to prevent violence against women in the aftermath of the disaster.

2. Transfer of Breast Cancer Program

The Foundation has concluded that it would result in efficiency and further the educational and charitable mission of the Breast Cancer Program to transfer the Breast Cancer Program to New Venture Fund (“NVF”), a 501 (c) (3) public charity with extensive experience in fiscal sponsorships and in managing complex programs. On September 2, 2015, NVF formed Avon Breast Cancer Crusade, LLC (“Crusade”) to support breast cancer research education, outreach, awareness and access to care. On September 11, 2015, the Foundation, NVF and the Crusade entered into a transfer and grant agreement whereby NVF and the Crusade assumed and accepted the role and responsibilities of the Foundation with respect to the Breast Cancer Program and its related activities as of November 1, 2015. The Crusade is managed by a Board of Managers which includes members of the Board of Directors of the Foundation. In connection with this decision, the Foundation has made a grant to the Crusade in the amount of $16,100,000 to carry out those responsibilities. In addition, both the Foundation and Avon have entered into agreements with the Crusade, pledging ongoing support of the Breast Cancer Programs. The Foundation has committed to make an annual grant in the amount of $1,700,000 in 2017 and 2018 if certain key performance indicators are met. The Crusade manages the Breast Cancer Program consistent with the mission and programs outlined in Note 1, section a.



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3. Summary of Significant Accounting Policies

Basis of Presentation The financial statement presentation is in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for nonprofit organizations, which requires the Foundation to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted net assets. There are no permanently restricted net assets.

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 the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents The Foundation considers all highly liquid debt instruments with a maturity of three months or less at the time of purchase, including certificates of deposit, to be cash equivalents. Allowance for Uncollectable Receivables An allowance for uncollectable receivables is estimated based on a combination of write-off history, aging analysis and any specific known troubled accounts. Fair Value of Financial Instruments The Foundation follows U.S. GAAP on Fair Value Measurements and Disclosures which defines fair value and establishes a fair value hierarchy organized into three levels based upon the input assumptions used in pricing assets. Level 1 inputs have the highest reliability and are related to assets with unadjusted quoted prices in active markets. Level 2 inputs relate to assets with other than quoted prices in active markets which may include quoted prices for similar assets or liabilities or other inputs which can be corroborated by observable market data. Level 3 inputs are unobservable inputs and are used to the extent that observable inputs do not exist. Money market mutual funds included in cash equivalents are valued using level 1 inputs see Note 4).

Investments and Investment Income Investments consist of certificates of deposit valued at cost plus accrued interest which approximates fair value and have maturity dates ranging from greater than three months to seven years from the statement of financial position date. Income or losses from investments, including both realized and unrealized gains and losses, are treated as an increase or decrease in unrestricted net assets unless otherwise specified by the donor.



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3. Summary of Significant Accounting Policies (continued)

Public Support and Revenue Unconditional promises to give are recorded as received. Unconditional promises to give due in the next year are reflected as current promises to give and are recorded at their net realizable value. Unconditional promises to give that are due in subsequent years are reflected as long-term promises to give and are discounted to the present value of their net realizable value, using discount rates applicable to the years in which the promises are received. The discount is amortized to contribution income over the discount period. Grants and other contributions of cash and other assets are reported as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or a purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restriction. Grants Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchases if not provided by donation, are recorded at the fair value in the period received. Grants are recorded when a commitment is made and approved by the Board of Directors. Multi-year grants are recorded at present value using a risk adjusted interest rate, which generally approximates the rate of the two year Treasury bill plus 150 basis points. Public Awareness Public awareness and education costs consisted primarily of television, radio, and direct-mail communications, local and national print and point-of-sale materials, and educational pamphlets, interactive, electronic and digital materials. The Foundation expensed public awareness costs as incurred. During the year ended December 31, 2015, public awareness expense was $7,868,545. Functional Allocation of Expenses The costs of providing the various programs and supporting services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services in reasonable ratios determined by management.



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3. Summary of Significant Accounting Policies (Continued)

Tax Status The Foundation is a public charity and is exempt from Federal income taxes pursuant to Section 501 (c) (3) of the Internal Revenue Code. The Foundation recognizes the effects of income tax positions only when they are more likely than not to be sustained. Management has determined that the Foundation has no uncertain tax positions that would require financial statement recognition or disclosure. The Foundation is no longer subject to examinations by the applicable taxing jurisdictions for periods prior to 2012. Subsequent Events Evaluation by Management Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were available to be issued, which date is May 12, 2016.

4. Comparative Data

The financial statements include prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Foundation’s financial statements for the year ended December 31, 2014 from which the summarized information was derived.

5. Concentration Risk

Financial instruments that potentially subject the Foundation to concentration of credit risk consist principally of cash and cash equivalents and investments. The Foundation maintains its cash in bank deposit accounts which, at times, may exceed Federally insured limits. Cash equivalents consist of investments in money market mutual funds held with two money managers the balance of which was $6,209,818 at December 31, 2015. The Foundation monitors this risk on a regular basis. Investments consist of brokered certificates of deposit, all of which were less than federally insured limits. The Foundation has not experienced any losses in such accounts.

6. Other Related Party Transactions

Contributions Avon made a pledge of $11,946,903 to the Foundation in 2015. The Foundation received $9,987,160 of this amount during the year. The balance of $1,959,743 is reflected as a receivable at December 31, 2015. This receivable was subsequently collected in 2016. The Foundation under an administrative services arrangement has outstanding obligations to Avon for expenses of the finance and operations department and other management services amounting to $7,951 as of December 31, 2015.



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6. Other Related Party Transactions (continued)

In-Kind Contributions Avon provides the Foundation with a substantial amount of support including the following:

Staffing 2,074,509$ Travel & meals 88,015 Supplies 5,320 Facilities 82,690 Communications 14,364 Public relations 34,242 Agency labor 87,826 Other 23,636

2,410,602$

The support of $2,410,602 is reflected in the financial statements as contributions and expenses for the year ended December 31, 2015. The Foundation also received valuable voluntary management support from the Board of Directors and numerous associates of Avon Products, Inc. which do not meet the requirements for measurement and recognition in the financial statements.

7. Special Events

Awareness and fundraising programs in 2015 included events such as the Avon 39 comprised of seven weekend awareness and fundraising walks in the United States and the Foundation Awards Reception. In 2015, all special events provided the Foundation with total income of $40,086,120, of which $36,092,120 was from the public $210,000 was from in-kind donations from sponsors and $3,784,000 was from Avon.

8. Joint Costs

The Foundation conducted activities that included direct-mail campaigns and special events. The costs of conducting those activities included a total of $11,856,344 of joint costs. These joint costs were allocated as follows:

Breast Cancer Crusade 6,220,672$ Scholarships/Other Programs 117,784 Domestic Violence 429,072 Reforestation 1,324 Emergency Relief Fund 225 Management and General 765,581 Fundraising 4,321,686

11,856,344$



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9. Leases

The Foundation has various lease agreements with unrelated parties for certain administrative office space. Rent expense for the year ended December 31, 2015 and 2014 was $145,664 and $163,863. Minimum future lease payments to be made for period ended December 31, 2016 is $91,760.

10. Grants Payable

The Foundation has entered into longer-term commitments with certain grant beneficiaries. Payments to these organizations at December 31, 2015 are due within a year.

11. Temporarily Restricted Net Assets Temporarily restricted net assets are available as follows at December 31, 2015:

Purpose RestrictionScholarships/Other Programs 1,357,105$ Emergency Relief 77,000

1,434,105$

* * * * *

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