keep a child alive financial statements year ended december 31, 2014...

KEEP A CHILD ALIVE

FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2014(WITH SUMMARIZED TOTALS FOR THE YEAR

ENDED DECEMBER 31, 2013)

AND

INDEPENDENT AUDITORS’ REPORT

KEEP A CHILD ALIVE

TABLE OF CONTENTS

Page

Independent Auditors’ Report 1

Financial Statements

Statements of Financial Position 3

Statements of Activities and Changes in Net Assets 4

Statements of Functional Expenses 5

Statements of Cash Flows 6

Notes to Financial Statements 7

KEEP A CHILD ALIVE

STATEMENTS OF FINANCIAL POSITION

2014 2013

ASSETS

Current assetsCash and cash equivalents 794,646$ 375,410$

Contributions receivable, net of allowance of $30,000 in 2014 325,308 745,701

Unconditional promises to give 1,250,666 1,574,333

Prepaid expenses 22,371 27,677

Total current assets 2,392,991 2,723,121

Property and equipment - at cost, less accumulated depreciation 20,176 13,304

Long-term unconditional promises to give - 666,667

Other assets 19,499 14,327

2,432,666$ 3,417,419$

LIABILITIES AND NET ASSETS

Current liabilitiesAccounts payable and accrued expenses 6,516$ 40,275$

Commitments

NET ASSETSUnrestricted 482,696 33,057

Board designated 285,710 381,586

768,406 414,643

Temporarily restricted 1,657,744 2,962,501

2,426,150 3,377,144

2,432,666$ 3,417,419$

December 31,

See notes to financial statements. 3

KEEP A CHILD ALIVE

STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS

Temporarily SummarizedUnrestricted Restricted Total 2013

Support and revenuesSpecial events 2,421,789$ -$ 2,421,789$ 4,640,372$ Less - direct costs of event (731,236) - (731,236) (1,050,212)

1,690,553 - 1,690,553 3,590,160

Contributions 828,984 1,213,597 2,042,581 2,285,985 Merchandise sales 10,448 - 10,448 9,045 Other income 5,200 - 5,200 10,240

2,535,185 1,213,597 3,748,782 5,895,430

Net assets released from restrictionSatisfaction of program restrictions 2,518,354 (2,518,354) - -

5,053,539 (1,304,757) 3,748,782 5,895,430

ExpensesProgram services 4,046,965 - 4,046,965 3,353,420 Management and general 266,148 - 266,148 277,163 Fundraising costs 372,499 - 372,499 357,758

4,685,612 - 4,685,612 3,988,341

Cost of merchandise sales 4,835 - 4,835 2,805 Termination benefit 9,329 - 9,329 148,216

4,699,776 - 4,699,776 4,139,362

Change in net assets before the 353,763 (1,304,757) (950,994) 1,756,068 effect of in-kind donations

In-kind donations - revenue 351,239 - 351,239 743,001 In-kind donations - expense (351,239) - (351,239) (743,001)

Change in net assets 353,763 (1,304,757) (950,994) 1,756,068

Net assets, beginning of year 414,643 2,962,501 3,377,144 1,621,076 Net assets, end of year 768,406$ 1,657,744$ 2,426,150$ 3,377,144$

Year Ended December 31, 2014

See notes to financial statements.4

KEEP A CHILD ALIVE

STATEMENTS OF FUNCTIONAL EXPENSES

Program Management Fundraising Summarized

Services and General Costs Total 2013

Grants 2,253,206$ -$ -$ 2,253,206$ 1,889,892$

Salaries and wages 743,874 123,183 209,740 1,076,797 1,041,383

Employee benefits 205,784 34,079 58,022 297,885 266,854

Professional fees 11,477 9,535 11,102 32,114 53,410

Telephone 13,885 3,333 3,082 20,300 23,404

Postage 2,586 1,167 368 4,121 6,776

Office expense 5,823 6,004 2,224 14,051 29,279

Occupancy 66,523 27,230 8,315 102,068 94,214

Site visit expense 73,523 - - 73,523 67,197

Printing 1,215 325 270 1,810 7,547

Consulting fees 310,587 2,679 25,799 339,065 207,970

Insurance 11,296 794 1,350 13,440 11,109

Marketing and promotion 161,506 - - 161,506 61,721

Travel and related expenses 60,870 1,659 4,504 67,033 42,321

Outside services 44,505 10,312 30,347 85,164 89,845

Miscellaneous 30,069 12,324 13,742 56,135 57,834

Information technology 46,607 1,710 1,820 50,137 30,789

Depreciation 3,629 1,814 1,814 7,257 6,796

Bad debt expense - 30,000 - 30,000 -

4,046,965$ 266,148$ 372,499$ 4,685,612$ 3,988,341$

Year Ended December 31, 2014


KEEP A CHILD ALIVE

STATEMENTS OF CASH FLOWS

2014 2013

Cash flows from operating activitiesChange in net assets (950,994)$ 1,756,068$

Adjustments to reconcile change in net assets to

net cash provided by (used in) operating activities

Depreciation 7,257 6,796

Loss on retirement of fixed assets 225 -

Allowance for doubtful accounts 30,000 -

Changes in assets and liabilities

Accounts receivable 390,393 102,367

Prepaid expenses 5,306 747

Unconditional promises to give 990,334 (2,000,000)

Other assets (5,172) -

Accounts payable and accrued expenses (33,759) (164,389)

Net cash provided by (used in) operating activities 433,590 (298,411)

Cash flows from investing activitiesAcquisition of property and equipment (14,354) (6,664)

Net increase (decrease) in cash and cash equivalents 419,236 (305,075)

Cash and cash equivalents, beginning of year 375,410 680,485

Cash and cash equivalents, end of year 794,646$ 375,410$

Non cash investing activitiesRetired fully depreciated property and equipment 31,413$ -$

Year Ended December 31,


KEEP A CHILD ALIVE

NOTES TO FINANCIAL STATEMENTS

7

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of ActivitiesKeep a Child Alive (“the Organization”) believes that every person has the right to health care and deserves a future. The Organization provides funding and administrative support to encourage innovative, community-led responses that increase access to life-saving HIV care and treatment, nutritious food, and loving support for children and families living with and affected by HIV in Kenya, Rwanda, South Africa, Uganda, and India. The Organization monitors sites to determine that grant terms are being met. With Alicia Keys as Global Ambassador, the Organization uses its voice to raise awareness, mobilize people to take action, and rally resources in the global response to HIV.

Videos documenting progress and growth of the life-saving work of the community based organizations in Sub-Saharan Africa and India are made possible by generous donations of editing services and support to the Organization’s public education mission.

Basis of Accounting and PresentationThe accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets and support and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions.

Unrestricted net assets consist of assets, public support and revenues which are available and used for operations and programs. Contributions are considered available for unrestricted use unless specifically restricted by the donor.

Unrestricted board designated net assets is a limit imposed by the Board of Directors representing grants approved as of December 31, 2014 and 2013 to be disbursed in the first quarter of 2015and 2014, respectively.

Temporarily restricted net assets include funds with donor-imposed restrictions which permit the Organization to expend the assets as specified either by the passage of time or by actions of the Organization.

Comparative Financial InformationThe financial statements include certain 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 accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended December 31, 2013 from which the summarized information was derived.

KEEP A CHILD ALIVE


8

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of EstimatesManagement uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Cash EquivalentsCash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations. For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents include all money market accounts.

Contributions ReceivableContributions receivable are stated at the amount management expects to collect. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to the allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance and a credit to contributionsreceivable. During the year ended December 31, 2014 an allowance for doubtful accounts of $30,000 was established.

Promises to GiveContributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional and are included in temporarily restricted net assets.

DepreciationProperty and equipment are stated at cost at the date of acquisition or fair value at the date of donation. The Organization capitalizes all fixed assets over $1,000 with an estimated useful life greater than one year. Maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight line method over the estimated useful lives as follows:

Furniture and fixtures 5 to 7 yearsComputer equipment 5 to 7 years

Functional Allocation of ExpensesThe costs of providing the various programs and other activities of the Organization have been summarized on a functional basis in the statement of activities and include certain costs that have been allocated among the programs and supporting services benefited.

KEEP A CHILD ALIVE


9

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue RecognitionAll contributions are generally available for unrestricted use in the year received unless specifically restricted by the donor. Restricted contracts and contributions whose restrictions are met in the same reporting period are shown as unrestricted.

Contributions of cash and other assets are reported as temporarily restricted support if they are received with donor-imposed restrictions that limit the use of the donated assets. When a donor restriction expires, that is when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Donated Services and MaterialsDonated services are recognized as in-kind donations if the services create or enhance nonfinancial assets or require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization.

Donated non-cash assets including services and materials are reflected as in-kind donation revenue and expense at their estimated fair values upon the date of receipt.

Income TaxesThe Organization is exempt from Federal and State income taxes under Internal Revenue code Section 501(c)(3), and is classified as a publicly supported organization as described in Section 509(a).

Subsequent EventsThese financial statements were approved by management and available for issuance on July 30, 2015. Management has evaluated subsequent events through this date.

2 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:December 31,

2014 2013Furniture and fixtures $ 11,971 $ 14,283Office equipment 29,578 44,325Accumulated depreciation (21,373) (45,304)

$ 20,176 $ 13,304

KEEP A CHILD ALIVE


10

3 - UNCONDITIONAL PROMISES TO GIVE

Unconditional promises to give are due as follows:

December 31,2014 2013

Less than one year $ 1,250,666 $ 1,574,333One to five years - 666,667

$ 1,250,666 $ 2,241,000

Unconditional promises to give, from three donors and two donors in 2014 and 2013,respectively, will be received in a future period and are reflected as temporarily restricted contributions accordingly. Management expects to collect these amounts prior to the end of 2015.

4 - CONCENTRATIONS

Major DonorsThe Organization received contributions from two donors that approximate 15% and 13% of the Organization’s total revenue or $1,045,000 in 2014. Additionally, amounts due from three donors represented 47%, 16% and 15% of the total receivable balance (unconditional promises to give and accounts receivable) at December 31, 2014.

The Organization received contributions from one donor that approximates 34% of the Organization’s total revenue or $2,000,000 in 2013. Additionally, amounts due from two donors represented 67% and 12% of the total receivable balance (unconditional promises to give and accounts receivable) at December 31, 2013.

KEEP A CHILD ALIVE


11

4 - CONCENTRATIONS (Continued)

GrantsThe Organization disbursed grants to approved program sites, which reflects funding for support services and direct expenses for the individual program sites as follows:

December 31,2014 2013

The Blue Roof Clinic South Africa $ 379,768 $ 432,638WE-ACTx for Hope Rwanda 228,066 225,605Alive Medical Services Uganda 923,459 795,027Family Care Clinic Kenya 54,700 50,500Bobbi Bear South Africa 89,573 67,116Ikageng Itireteng Aids Ministry South Africa 89,321 69,480Sahara Centre for Residential Care India 336,571 201,428Prayas India 44,461 14,178Zoe Life South Africa 17,652 -Saahasse India 75,711 33,920Other Various 13,924 -

$ 2,253,206 $ 1,889,892

Grants disbursed to four (4) approved program sites in 2014 and in 2013 individually exceeded 10% of total grants made in each year aggregating 83% and 88% of total grants in 2014 and 2013, respectively.

5 - RELATED PARTIES

The Executive Director of the Organization is also a board member of an affiliate, Keep A Child Alive, South Africa (“KCA-SA”) which operates the Blue Roof Clinic in South Africa (See Note 4, Concentrations, Grants).

During the years ended December 31, 2014 and 2013, the Organization received the proceeds of a grant for KCA-SA from the Stephen Lewis Foundation totaling $92,577 and $101,319, respectively. The grant was recorded on the Organization’s books as contribution revenue and a corresponding program grant.

A board member is the president and CEO of a company that donated in-kind editing services totaling $200,000 for the year ended December 31, 2013. No services were donated in 2014.

A board member is a partner in a company that donated in-kind advertising services totaling $95,000 and $275,000 for the years ended December 31, 2014 and 2013, respectively.

KEEP A CHILD ALIVE


12

6 - RETIREMENT PLANS

The Organization has a 401(k) profit sharing plan for all full-time employees who have attained the age of 18 and completed three months of service. The Organization made matching contributions to the plan totaling $30,973 and $22,444 for the years ended December 31, 2014 and 2013, respectively.

7 - COMMITMENTS

The Organization leases its administrative offices in New York City under an operating lease expiring December 2020. The lease contains stated increases payable over the lease term.

Future minimum lease payments under the lease are as follows:

Year EndingDecember 31,

2015 $ 108,8422016 112,1042017 115,4712018 118,9352019 122,503Thereafter 126,178

$ 704,033

Rent expense for the years ended December 31, 2014 and 2013 totaled $70,210 and $62,976, respectively.

GrantsThe Board of Directors has designated unrestricted net assets to fund the first quarter 2015 and 2014 budgets for approved treatment sites totaling $285,710 and $381,586, respectively.

Line of CreditThe Organization has a $750,000 line of credit. Interest is payable at the bank’s adjusted LIBOR rate plus 3.00% (6.75% as of December 31, 2014). The line is renewable September 2015. Thereis no outstanding balance under the line as of December 31, 2014.

KEEP A CHILD ALIVE


13

8 - TEMPORARILY RESTRICTED NET ASSETS

The following summarizes the changes in temporarily restricted net assets for the years ended December 31, 2014 and 2013:

Balance, January 1,

2014 Contributions

Satisfaction of Program

Restriction

Balance,December 31,

2014

Program services-site expenses $ 281,119 $ 898,597 $ (869,251) $ 310,465Time restricted 388,280 65,000 (356,667) 96,613

Public education program - “KCA with Alicia Keys” documentary 52,102 - (52,102) -

Unconditional promises to give 2,241,000 250,000 (1,240,334) 1,250,666

$ 2,962,501 $ 1,213,597 $ (2,518,354) $ 1,657,744

Balance, January 1,

2013Special Events Contributions

Satisfaction of Program Restriction

Balance,December 31,

2013Program services-site expenses $ 300,027 $ - $ 605,447 $ (624,355) $ 281,119Time restricted 88,333 - 515,000 (215,053) 388,280Public education program -

“KCA with Alicia Keys” documentary 54,098 - - (1,996) 52,102

Unconditional promises to give 241,000 2,000,000 - - 2,241,000$ 683,458 $ 2,000,000 $ 1,120,447 $ (841,404) $ 2,962,501

KEEP A CHILD ALIVE


14

9 - IN-KIND DONATIONS

The fair value of donated services and materials included as contributions in the financial statements and the corresponding cost classification are as follows:

December 31, 2014Program Management

Services and General Fundraising Total

Editing services $ 25,000 $ - $ 80,000 $ 105,000Venue, food and beverages - - 52,910 52,910Campaign/advertising 95,000 - - 95,000Miscellaneous goods and

services 51,589 23,370 23,370 98,329$ 171,589 $ 23,370 $ 156,280 $ 351,239

December 31, 2013Program Management

Services and General Fundraising Total

Editing services $ - $ - $ 230,000 $ 230,000Venue, food and beverages - - 111,410 111,410Campaign/advertising 275,000 - - 275,000Miscellaneous goods and

services 63,295 31,648 31,648 126,591$ 338,295 $ 31,648 $ 373,058 $ 743,001

Editing services were provided to create video montages for special events.

There are numerous well-known celebrities who donate considerable time and resources to promote and publicize the Organization’s mission. They are integral to promoting the mission of the Organization; however, no amounts have been reflected in the statements for these services in as much as no objective basis is available to measure the value of such services.

10 - SPECIAL EVENTS

The Organization holds various fundraising events. For the years ended December 31, 2014 and 2013, revenues from the Black Ball event represented approximately 50% and 54%, respectively, of the Organization’s total revenues.

keep a child alive financial statements year ended december 31, 2014...

Documents