COMMUNITY FOUNDATION FOR KINGSTON & AREA FINANCIAL ...€¦ · (14,727) 419,987 475,375 880,635 400,160 9,035 (12,356) 8,414 (8,334) 2,031 (179,041) (31,658) Net change in non-cash

COMMUNITY FOUNDATION FOR KINGSTON & AREA

FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2016

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COMMUNITY FOUNDATION FOR KINGSTON & AREA

TABLE OF CONTENTS

AS AT DECEMBER 31, 2016

INDEPENDENT AUDITOR’S REPORT

FINANCIAL STATEMENTS

Statement of Financial Position

Statement of Revenues and Expenditures and Fund Balances

Statement of Cash Flows

Notes to Financial Statements

3

4

5

6-17

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WILKINSON Integrity, Knowledge, Solutions

INDEPENDENT AUDITOR’S REPORT

To the Members ofCommunity Foundation for Kingston & Area

Report on the Financial StatementsWe have audited the accompanying financial statements of Community Foundation for Kingston & Area,which comprise the statement of financial position as at December 31, 2016, and the statements ofrevenues and expenditures, and cash flows for the year ended December 31, 2016, and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with Canadian accounting standards for not-for-profit organizations and for such internalcontrol as management determines is necessary to enable the preparation of financial statements that arcfree from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these fmancial statements based on our audits. Weconducted our audits in accordance with Canadian generally accepted auditing standards. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable 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 inthe f’mancial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’s internal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour qualified audit opinion.

Basis for Qualified Opinion

In common with many charitable organizations, Community Foundation for Kingston & Area derivesrevenues from donations, the completeness of which is not susceptible to satisfactory audit verification.Accordingly, our verification of these revenues was limited to the amounts recorded in the records ofCommunity Foundation for Kingston & Area and we were not able to determine whether, as at and forthe years ended December 31, 2016 and December 31, 2015, any adjustments might be necessary todonations revenues, excess of revenues over expenditure, assets and fund balances.

WILKINSON & COMPANY LLP - CHARTERED ACCOUNTANTS

Telephone 613-634-5581 ¯ Toll Free 1-866-692-0055 ¯ Fax 613-634-5585785 Midpark Drive, Suite 201, Kingston, Ontario K7M 7G3 ¯ www.wilkinson.net

WILKINSON Integrity, Knowledge, Solutions

Qualified OpinionIn our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinionparagraph above, the financial statements present fairly, in all material respects, the financial position ofCommunity Foundation for Kingston & Area as at December 3 I, 2016, and the results of its operationsand its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

KINGSTON, CanadaApril 25, 2017

Chartered Professional AccountantsLicensed Public Accountants

WILKINSON & COMPANY LLP - CHARTERED ACCOUNTANTSTelephone 613-634-5581 ¯ Toll Free 1-866-692-0055 ¯ Fax 613-634-5585

785 Midpark Drive, Suite 201, Kingston, Ontario K7M 7G3 * www.wilkinson.net

COMMUNITY FOUNDATION FOR KINGSTON & AREASTATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2016

ASSETS

Operating Restricted Endowment Fund 2016 2015Fund Fund Fund Total Total

$ $ $ $ $

CURRENTCash - Note 3 58,076 247,627 971,520 1,277,223 2,300,588HST receivable 11,446 11,446 20,481Other accounts receivable 7,500Prepaid expenses 914Investments - Note 4 2,948,719 12,837,398 15,786,117 14,562,489Due ibm Restricted Fund 97.I29

166,651 3,196,346 13,808,918 17,074,786 16,891,972

LIABILITIESCURRENT

Accounts payable and accrued charges 20,830 247,627 268,457 328,248Due to Operatinl~ Fund 97,129

20,830 344,756 268,457 328,248

TRUST FUND LIABILITY - Note 6 164,870 164,870 802.90020,830 509,626 433,327 1,131.148

NET ASSETSUNRESTRICTED 145,821 145,821 160,548INTERNALLY RESTRICTED - Note 7 65,000 257,236 322,236 252,236EXTERNALLY RESTRICTED 2,621,720 13,551,682 16,173,402 15,348,040

145,821 2,686,720 13,808,918 16,641,459 15,760,824

APPROVED ON BEHALF OF THE BOARD

Z

166,651 3,196,346 13,808,918 17,074,786 16,891,972

The accompanying notes form an integral part of these financial statements

COMMUNITY FOUNDATION FOR KINGSTON & AREASTATEMENT OF REVENUE AND EXPENDITURES AND FUND BALANCES

FOR THE YEAR ENDED DECEMBER 31, 2016

Operating Fund Restricted Fund Endowment Fund Total2016 2015 2016 2015 2016 2015 2016 2015

S $ $ $ $ $ $ $REVENUESDonations 95,776 87,106 217,765 382,389 494,598 335,689 808,139 805,184Special fundraising event - Note 8 268,59[ 268,591Other fimdraising events 7,420 5,873 7,420 5,873Investment income 81,944 41,913 1,186,269 379,233 1,268,213 421,146Administration fee 224,125 223,406 224,125 223,406Miscellaneous 4,274 550 8,016 2,001 12,290 2,551Vital Si~ts 13,500 7,000 13,500 7,000

427,039 634,439 1,412,050 763,623 494,598 335,689 2,333,687 1,733,751

EXPENDITURESAdministration and investment feeAmortization of capital assets - Note 5Bank and credit card feesFundraising eventsGrantsGrant project expendituresInformation technologyInsuranceLife insurance premimns - Note 10MarketingMeetings and promotionsMembership feesMiscellaneousOfficeProfessional feesPublications and printingRentWages, benefits and consulting fees

Vital S~,ns

54 171 232,024 232,910 232,078 233,08 I9,122 9,122

1,716 4,4ll 1,716 4,4118~295 5,241 8,295 5,241

784~498 730,588 784,498 730,5882,199 2,479 2,199 2,479

16,274 12,002 16,274 12,0024,565 4,968 4,565 4,968

38,975 38,975 38,975 38,9752,248 8,091 2,248 8,0912,625 6,539 2,625 6,5395,425 4,866 5,425 4,8664,614 783 4,614 783

18,045 13,884 18,045 t3,88414,818 10,401 14,818 10,4019,142 9,764 9,142 9,764

38,725 36,216 38,725 36,216205,670 200,141 205,670 200,141

12,236 11,161 17,236 I 1,16 ~

385,626 379,215 1,016,522 963,498 1,402,148 1,342,713

EXCESS OF REVENUES OVER EXPENDITURES(EXPENDITURES OVER REVENUES) FOR YEAR 41,413 255,224 395,528 (199,875) 494,598 335,689 931,539

~FUND BALANCES, BEGINNING OF YEAR

t"*TRANSFER TO TRUST FUND LIABILITY - Note 6

~INTERFUND TRANSFERS - Note 13

~FUND BALANCES, END OF YEAR

160,548 108.441 2,266,733 2,282,743 13,333,543 12,978,602 15,760,824

(904) (50,000) (50,904)

~6,!40~ ~0~..117) 25,363 ~865 30,777 19,252

145~21 160,548 2~86,720 2,266,733 I~808,918 I3,333,543 16o641,459


391,038

15,369,786

15,760,824

COMMUNITY FOUNDATION FOR KINGSTON & AREASTATEMENT OF CASH FLOWS


OPERATING ACTIVITIESExcess of revenues over expenditures for yearAdjustment for items which do not affect cash

Amortization of capital assetsTransfer to (from) trust fund liabilityInterfund transfer

Operating Restricted Endowment 2016 2015Fund Fund Fund Total Total

$ $ $ $ $

41,413 395,528 494,598 931,539 391,038

9,122(904) (50,000) (50,904) 0

(56,140) 25,363 30,777 0(14,727) 419,987 475,375 880,635 400,160

9,035 (12,356)8,414 (8,334)2,031 (179,041)

(31,658)

Net change in non-cash working capital balances related to operationsHST Recoverable 9,035Other accounts receivable 8,414Accounts payable and accrued charges (61,822) (59,791)Due to (from) other funds 31,658Trust fund liability (638,030) (638,030) 47,958

CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES (26,905) (248,207) 475,375 200,263 248,387

INVESTING ACTIVITIES(Increase) decrease in investments 186,385 (1,410,013) (1,223,628) 494,384

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITEIS 186,385 (1,410,013) (1,223,628) 494,384

INCREASE (DECREASE) IN CASH AND EQUIVALENTS FOR YEAR (26,905) (61,822) (934,638) (1,023,365) 742,771CASH AND EQUIVALENTS - BEGINNING OF YEAR 84,981 309,449 1,906,158 2,300,588 1,557,817

CASH AND EQUIVALENTS - END OF YEAR 58,076 247,627 971,520 1,277,223 2,300,588

REPRESENTED BY:Cash 58,076 247,627 971,520 1,277,223 2,300,588


COMMUNITY FOUNDATION FOR KEN’GSTON & AREANOTES TO FINANCIAL STATEMENTS


1. ORGANIZATION AND NATURE OF FINANCIAL STATEMENTS

The Community Foundation for Kingston & Area (the "Foundation") was incorporated on March 24,1995 without share capital under the Canada Corporations Act. The Foundation pools charitablegifts, which are invested in perpetuity. The income earned on these funds is used to encouragecommunity development in areas such as arts and culture, health and social services, education andenvironmental initiatives.

The Foundation is a registered charity and is classified as a public foundation under Subsection149.1 (1) of the Income Tax Act (Canada) ("the Act"). As such, the Foundation is exempt fromincome taxes and able to issue donation receipts for income tax purposes. In order to maintain itsstatus as a public foundation registered under the Act, the Foundation must meet certain requirementswithin the Act. In the opinion of management, these requirements have been met.

In 2014 the Foundation applied for and received its Certificate of Continuance under the Canada Not-for-profit Corporations Act (Date of Continuance 2014-07-28).

2. ACCOUNTING POLICIES

Outlined below are those accounting policies adopted by the Foundation considered to be particularlysignificant:

(a) Basis of Accounting

These financial statements are prepared in accordance with Canadian accounting standards fornot-for-profit organizations.

(b) Fund Accounting

The Foundation follows the restricted fund method for accounting for contributions. TheFoundation ensures, as part of its fiduciary responsibilities, that all funds received with arestricted purpose are expended for that purpose.

For financial reporting purposes, the accounts have been classified into the following funds:

The Endowment Fund reports sources that are required to be maintained by the Foundation on apermanent basis.

The Restricted Fund reports resources that are available to be used for purposes specified by thedonor and do not form part of the Endowment Fund.

The Operating Fund reports resources available for the Foundation’s general operating activities.These activities include fund development, grant making, community leadership projects, andphilanthropic services to the community. The general costs of supporting these activities arereported as expenditures in the Operating Fund.

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COMMUNITY FOUNDATION FOR KINGSTON & AREANOTES TO FINANCIAL STATEMENTS


2. ACCOUNTING POLICIES (Cont’d)

(c) Accounting Estimates

The preparation of financial statements in conformity with Canadian accounting standards fornot-for-profit organizations requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements and the reported amounts of revenues and expenses during thereporting period. Significant items subject to such estimates and assumptions include valuationof accounts receivables and investments, and the estimated useful life of capital assets. Actualresults could differ from those estimates.

(d) Capital Assets

Capital assets are recorded at cost and amortized over their useful lives. Amortization based onthe estimated useful life of the asset is calculated as follows:

Asset Basis Rate

Leasehold improvements Straight-line Over 5 yearsOffice equipment Declining balance 20%Computer equipment Declining balance 30%Software Declining balance 30%

Capital grams or donations received for the purchase of capital assets are deferred and amortizedon the same basis as the capital asset acquired.

In the year of acquisition, amortization is calculated on capital assets at half-rates.

(e) Investments

The investments of the Foundation are recorded at market values. Investment income includesdividends, interest, realized gains (losses) and the net change in unrealized gains (losses) for theyear.

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2. ACCOUNTING POLICH~S (Cont’d)

(f) Revenue Recognition

Donor-restricted contributions for endowment purposes are recognized as revenue in theEndowment Fund. Other donor-restricted contributions are recognized as revenue in either theRestricted Fund or the Operating Fund depending on the nature of the restriction. Donor-restricted contributions to the Restricted Fund include those intended to be paid out to qualifiedgrantees, either: in the current period ("Flow Through"); or over a medium-term time horizon andafter earning investment income (under the Foundation’s "Enhanced Spending" option).Unrestricted contributions are recognized as revenue in the Operating Fund. Contributions arerecognized as revenue when received, except where amounts are received for specific long-termprojects. In these cases, contributions are deferred and recorded as revenue when the relatedexpenditures are recorded. Primary sources of contributions recognized as revenue during theyear are donations, fundraising events, sponsorships, grants, investment income andadministration fees.

Investment income is recorded as follows:

(i) The Restricted Fund reports investment income earned on resources of the Endowment Fundor Restricted Fund that must be spent on donor-restricted activities.

(ii) The Operating Fund reports investment income earned on the assets of the OperatingEndowment Fund, which supports the Foundation’s operations on a continuing basis.

Investment income includes dividend and interest income and realized and unrealized investmentgains and losses.

Donations specifically earmarked for facilitating the Foundation’s operations in the short-run andadministrative fees charged to all endowment and restricted funds, are also reported in theOperating Fund.

(g) Financial Instrument Measurement

The Foundation initially measures its financial assets and financial liabilities at fair value. Itsubsequently measures all its financial assets and financial liabilities, with the exception ofinvestments and trust fund liabilities, at amortized cost. Investments and trust fund liabilitiescontinue to be measured at fair value.

The financial assets subsequently measured at amortized cost include cash and accountsreceivables. The financial liabilities measured at amortized cost include accounts payable andaccrued liabilities.

(h) Contributed Services

Volunteers contribute a substantial number of hours each year to assist the Foundation in carryingout its activities. Because of the difficulty of determining the fair value, contributions of suchservices are not recognized in the financial statements.

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o ACCOUNTING POLICIES (Cont’d)

(i) Foreign Currency Translation

Foreign currency accounts are translated into Canadian dollars as follows:

At the transaction date, each asset, liability, revenue and expense is translated into Canadiandollars by the use of the exchange rate in effect at that date. At the year-end date, monetaryassets and liabilities are translated into Canadian dollars by using the exchange rate in effect atthat date. The resulting foreign exchange gains and losses are included in income and expensesin the current period.

(j) Income Taxes

The corporation is exempt from paying income taxes, as it is a registered charity.

(k) Cash and Equivalents

Cash and equivalents consist of cash on deposit.

o CASH

The Foundation holds bank accounts at two credit unions and two investment dealers. The accountsearn interest from 0.0% - 1.5%.

The Foundation holds U.S. currency totaling CAN$218,123 (2015 - $6,862) with an investmentdealer.

4. INVESTMENTS

Investments for the Endowment Fund, Restricted Fund and Operating Fund are pooled andinvestment income is allocated to these funds on a prorated basis based on monthly market value.

The Foundation holds U.S. investments totaling CAN$6,166,542 (2015 - $5,975,254) with aninvestment dealer.

2016 2015$ $

Fixed incomeEquities, mutual and segregated funds

4,983,143 4,940,48010,802,974 9,622,009

15,786,117 14,562,489

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5. CAPITAL ASSETS

In 2015 the Foundation expensed the full amounts of the carrying costs of its capital assets, to betterreflect their fair values.

Cost

2016Accumulatedamortization

Computer equipment 23,944 23,944Leasehold improvements 23,930 23,930Office equipment 20,671 20,671Software 43,727 43,727

112,272 112,272

Cost less accumulated amortization $ NIL

2015Accumulated

Cost amortization

$ $

23,944 23,94423,930 23,93020,671 20,67143,727 43,727

112,272 112,272

$ NIL

During the year, no capital assets were purchased.

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6. TRUST FUND LIABILITY

2016 2015$

United Way of Kingston, Frontenac, Lennox and AddingtonCataraqui Conservation FoundationSeniors Association Kingston RegionRotary Club of Kingston

0 697,20132,532 30,69979,477 75,00052,861 0

164,870 802,900

Trust fund liabilities are a result of the following agreements:

On February 7, 2002, the United Way of Kingston, Frontenac, Lennox and Addington ("UnitedWay") and the Community Foundation for Kingston & Area entered into endowment managed fundagreement. This agreement was updated in November 2010 and renewed in December 2013. Thisagreement specifies that the Foundation will manage and disburse the funds contributed by the UnitedWay in accordance with the terms specified by the United Way and the requirements as set out by theCanada Revenue Agency. In accordance with the Managed Fund agreement with the United Waydated December 13, 2013 the United Way decided not to renew the managed fund agreement andrequested that all amounts in the Managed Fund be returned to the United Way so they could managethe funds internally. In 2016, the balance of this fund ($735,808) was repaid to the United Way.

In 2012, funds held in trust for the Cataraqui Conservation Foundation were transferred to the trustfund liability in accordance with a previous agreement with the Community Foundation for Kingston& Area.

In 2015, the Seniors Association Kingston Region ("Seniors Association") and the CommunityFoundation for Kingston & Area entered into a managed fund agreement. This agreement specifiesthat the Foundation will manage and disburse the funds contributed by Seniors Association inaccordance with the terms specified by Seniors Association and the requirements as set out by theCanada Revenue Agency.

In 2016 the Rotary Club of Kingston ("the Rotary Club") requested the Foundation accept theirnewest fund as a managed fund. Prior to the signing of the fund agreement, this fund had beenrecorded as an endowment fund in these financial statements. In discussions with the Rotary Club,the Foundation concluded that the wishes of the original donor of the funds would have been toestablish it as a managed fund. As a result, during 2016 the balance of this fund ($50,904) wastransferred from endowment capital ($50,000) and restricted fund ($904) to trust fund liabilities.

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7. INTERNALLY RESTRICTED FUNDS

During the 2001 and 2010 fiscal years, the Foundation internally restricted bequests of $165,570 and$66,666 respectively. Both restrictions were allocated equally between the Community Fund and theOperating Endowment Fund, each of which are considered Endowment Funds in these financialstatements.

In addition, in its 2015 fiscal year, the Foundation internally restricted an amount of $20,000 from itsoperating surplus for the purposes of relocating, renovating or designing office space in preparationof the lease on its offices expiring in 2018. As this restriction does not represent a permanentendowment, these funds are considered to be part of the Restricted Fund balances in these financialstatements.

During its 2016 fiscal year, the Foundation has internally restricted amounts of $25,000, $25,000 and$20,000 from its accumulated operating surplus as transfers to its Operating Endowment Fund, theSmart & Caring Community Fund (an enhanced spending Restricted Fund), and for future expensesrelating to the expiry of the Foundation’s lease (Restricted Fund).

The accumulated transfers are as follows:

Internally Restricted Net Assets - Beginning of yearCurrent year internally restricted amountsInte_rnally R..e~tric_ted Net Assets - End of ~¢ear

Res~i~ed EndowmentFund Fund Total

$ $ $20,000 232,236 252,23645,000 25,000 70,00065,000 257,236 322,236

These internally restricted amounts are not available for unrestricted purposes without the approval ofthe Board of Directors.

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8. SPECIAL FUNDRAISING EVENTS

Special fundraising events are significant one-time events not intended to be held regularly, and areseparated out from other fundraising events for comparative purposes. On May 2, 2015, theFoundation held a special fundraising event ("Jaiihouse Rock"). The stated purpose of the event wasto raise funds for the Foundation’s new Smart & Caring Community Fund and to launch theFoundation’s Smart & Caring campaign. Net proceeds were accordingly transferred to the Smart &Caring Community Fund. Revenue and expenses for the event are as follows:

2015$

RevenuesExpensesNet revenues earned from special fundraising eventLess revenues receipted in 2014Net revenues in 2015

346,021(42,430)303,591(35,000)268,591

o GRANTS

The Foundation incurs expenditures on an annual basis in the form of grants to qualified donees. Thefunds received for granting purposes are derived from two sources. The first source is throughinvestment income earned on the Foundation’s endowed capital. The second source is through giftsreceived from donors, whereby the donor has designated that the amount of the gift, less an agreedupon administrative fee, is to be directed to an agency or agencies specified by the donor (providedthat the agency is a ’qualified donee’). The latter are referred to as ’flow-through’ grants.

In 2016, total grant expenditures were $784,498 (2015 - $730,588).

10. LIFE INSURANCE POLICIES

The Foundation is the assignee and owner of eight separate life insurance policies (2015 - 10)providing for death benefits totaling $1,569,260 (2015 - $1,576,220). During the year, theFoundation was the recipient of death benefits pursuant to two separate life insurance policies whichamounted to $6,975 and have been recorded as donations in these financial statements.

No value related to the ownership of these policies is included in these financial statements. Annualongoing costs of maintaining the policies are generally funded by the original donors each year,however the Foundation has ultimate responsibility for continuing payments to maintain the policiesin the future. During the year, payments of $38,975 were received from donors and paid to maintainthe policies.

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11. FINANCIAL INSTRUMENTS

The fair values of cash, other accounts receivable and accounts payable and accrued charges, areequivalent to their respective carrying values given the short-term nature of the accounts.

Investments are measured at fair value on the statement of financial position as quoted by theFoundation’s investment brokers.

Unless otherwise noted, it is management’s opinion that the Foundation is not exposed to significantinterest, currency or credit risks arising from these financial instruments.

As a result of holding financial instruments, the Foundation is exposed to investment risk, marketrisk, and interest rate risk.

In 2015 the Foundation launched a microloan program ("First Capital Community Development LoanProgram"). As a result of this program, the Foundation is exposed to some credit risk.

The following is a description of those risks and how the Foundation manages its exposure to them.The Foundation’s risk management has not changed from the prior year.

Investment risk

Risk management relates to the understanding and active management of risks associated with allareas of the business and the associated operating environment. Investments are primarily exposed tointerest rate and market risk.

The Foundation mitigates these risks with an investment policy designed to limit exposure andconcentration while achieving optimal return within reasonable risk tolerances.

Market and interest rate risk

The risks associated with the investments are the risks associated with the securities in which thefunds are invested. The value of equity securities changes with stock market conditions, which areaffected by general economic and market conditions. The value of securities will vary withdevelopments within the specific companies or governments which issue the securities. The value offixed income securities will generally rise if interest rates fall and fall if interest rates rise. Changesin interest rates may also affect the value of equity securities.

Credit risk

The risk associated with the microloan program is the risk of borrowers defaulting on loan paymentsthat have been guaranteed by the Foundation. In the event of a loan default, the lender is entitled toclaim the full amount of the outstanding loan from the Foundation. The Foundation mitigates thisrisk by: limiting its exposure only to the amount of funds in its First Capital CommunityDevelopment Loan Program (currently $78,261); conducting credit checks before guaranteeing aloan; maintaining a Due Diligence Committee to review, approve and follow up with loan applicants;maintaining procedures guiding the loan approval process; and reserving the right to pursuecollections on defaulted loans.

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12. COMMITMENTS

In December 2001, the Foundation entered into an agreement to lease 1,208 square feet of officespace from Landont Limited for $14,496 per annum plus common costs. The lease expires onJanuary 31, 2018. Minimum annual lease payments for the next 3 years, excluding common costs,are as follows:

20172018

$

14,4961,208

15,704

In February, 2015 the Foundation entered into an agreement with MicroEdge LLC to renew asoftware license for three years at a total cost of U SD $15,239. Anticipated remaining license costsfor the remaining years are as follows (converted to Canadian currency):

2017

$

10,700

10,700

¯ ~,, ,~WILKINSON~



13. FUND TRANSFERS

During the year, the following fund transfers took place:

In 2011, the Foundation’s Board of Directors approved an annual transfer between the OperatingFund and the Operating Endowment Fund. Significant volatility in the markets had resulted in largefluctuations in investment income being earned by the Operating Endowment Fund. To stabilize thetransfer of investment income to operations, the Board agreed to transfer between the OperatingEndowment Fund and operations, on an annual basis, the amount equal to the difference between theincome earned on the Operating Endowment Funds and the three year average rate of returnmultiplied by the balance of the Operating Endowment Fund at January 1 of each year. In 2016,$6,012 was transferred from the Operating Endowment Fund to the Operating Fund.

Periodically, donors of Flow-Through Funds request that grant amounts be made to the Foundation’soperations or to Endowment Funds held by the Foundation. During 2016, Donors of Flow-ThroughFunds requested the transfer of $3,334 to the Operating Fund and $10,291 to Endowment Funds.

During 2016 the Foundation became aware that actual expenses associated with the transfer of fundsand the introduction of its microloan program exceeded estimates by an amount of $4,514. Under theterms of the original fund agreement, the amount of $4,514 was transferred from the EndowmentFund to the Operating Fund to pay for these expenses.

Summary of transfers in 2016:Operating Restricted Endowment

Fund Fund Fund

Transfer from Operating Endowment Fund 6,012 (6,012)

Flow-through to Operating FundFlow-through to Endowment FundInternal restriction of operating surplus (Note 7)Endowment Fund to Operating Fund

3,334 (3,334)(10,291) 10,291

(70,000) 45,000 25,0004,514 (4,514)

Net transfers (56,140) 25,363 30,777

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COMMUNITY FOUNDATION FOR KENGSTON & AREANOTES TO FINANCIAL STATEMENTS


14. CAPITAL DISCLOSURE

The Foundation defines its capital as the amounts included in its fund balances.

The Foundation manages its capital in accordance with its Investment policy.

The Foundation’s objective when managing capital is to safeguard its ability to sustain itself as agoing concern so that it can continue to provide the appropriate level of benefits and services to itsbeneficiaries and stakeholders.

A portion of the Foundation’s capital is restricted in that the Foundation is required to meet certainrequirements to utilize its externally and internally restricted fund balances. The Foundation hasinternal control procedures to ensure that the restrictions are met prior to the utilization of theseresources and has been in compliance with these restrictions throughout the year.

WILKINSON~

Documents

COMMUNITY FOUNDATION FOR KINGSTON & AREA FINANCIAL ...€¦ · (14,727) 419,987 475,375 880,635 400,160 9,035 (12,356) 8,414 (8,334) 2,031 (179,041) (31,658) Net change in non-cash