12. ENDOWMENT The Foundation’s endowment consists of two separate investment funds established for welding education, research and other charitable purposes. Its endowment includes donor restricted and board designated endowment funds. As required by U.S. GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. The State of Florida adopted the Florida Uniform Prudent Management of Institutional Funds Act (“FUPMIFA”). The Foundation has interpreted the FUPMIFA as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds, absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by FUPMIFA. In accordance with the FUPMIFA, the Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) The duration and preservation of the fund (2) The purposes of the Foundation and the donor-restricted endowment fund (3) General economic conditions (4) The possible effect of inflation and deflation (5) The expected total return from income and the appreciation of investments (6) Other resources of the Foundation (7) The investment policies of the Foundation. For the year ended December 31, 2015, the Foundation has elected not to add appreciation for cost of living or other spending policies to its permanently restricted endowment for inflation and other economic conditions. Summary of endowment net assets at December 31, 2015: Temporarily Permanently Unrestricted Restricted Restricted Total Donor restricted endowment funds $ 2,151,350 $ 10,743,130 $ 1,032,969 $ 13,927,449 Board restricted endowment funds 23,096,543 5,342,247 5,803,184 34,241,974 Total endowment net assets $ 25,247,893 $ 16,085,377 $ 6,836,153 $ 48,169,423 Change in endowment net assets at December 31, 2015: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets, beginning $ 26,729,938 $ 10,299,591 $ 7,947,786 $ 44,977,315 Contributions and transfers 811,216 5,835,375 (1,111,633) 5,534,958 Interest and dividends 1,691,840 90,748 - 1,782,588 Net investment income (2,498,987) 330,266 - (2,168,721) Released from restriction and appropriated for expenditure (1,486,114) (470,603) - (1,956,717) Endowment net assets, ending $ 25,247,893 $ 16,085,377 $ 6,836,153 $ 48,169,423 JUNE 2016 / WELDING JOURNAL 55 AMERICAN WELDING SOCIETY, INC., AND AWS FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 2015
Welding Journal | June 2016
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