BETTER GOVERNMENT ASSOCIATION, INC. imm cial statements for the years ended December 31, 2013 and 2012 BETTER GOVERNMENT ASSOCIATION, INC. TABLE OF CONTENTS Page INDEPENDENT REPORT .. 1-2 FINANCIAL STATEMENTS Statements of Financial Position .. 3-4 Statements of Activities .. 5?6 Statements of Functional Expenses .. 7-8 Statements of Cash Flows ..9 Notes to Financial Statements .. 10-17 SSQG Certified Public Accountants and Advisers INDEPENDENT REPORT Des Plaines Office 1665 Elk BOUIevard To the Board of Directors of Des Flames: 50015 Better Government Association, Inc. 847-824-4000 Chicago, Illinois fax: 847-824-4012 I We have audited the accompanymg ?nanmal statements of Better Government Association, Inc. (an Illinois nonpro?t corporation), which comprise the statements of ?nancial position as of December 31, 2013 and 2012, and the related statements of activities, functional expenses and cash ?ows for the years then ended, and the related notes to the ?nancial statements. Management?s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these ?nancial 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 ?nancial statements that are free from material misstatement, whether due to fraud or error. Auditors? Responsibility Our responsibility is to express an opinion on these ?nancial 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 audit to obtain reasonable assurance about whether the ?nancial statements are free from material misstatement. Providing the services that An audit involves performing procedures to obtain audit evidence about the bring solutions amounts and disclosures in the ?nancial statements. The procedures selected depend on the auditors? judgment, including the assessment of the risks of material misstatement of the ?nancial 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 ?nancial 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 signi?cant accounting estimates made by management, as well as evaluating the overall presentation of the ?nancial statements. Mambo! oi the AICPA Registered with the PCAOB Founding [number oi LEA Global SSQG We believe that the audit evidence we have obtained is suf?cient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the ?nancial statements referred to above present fairly, in all material reSpects, the financial position of Better Government Association, Inc. as of December 31, 2013 and 2012, and the changes in its net assets and its cash ?ows for the years then ended in accordance with accounting principles generally accepted in the United States of America. (Siding. June 10, 2014 BETTER GOVERNMENT ASSOCIATION, INC. STATEMENTS OF FINANCIAL POSITION DECEMBER 31, 2013 2012 AS SETS CURRENT ASSETS Cash 8 1,182,109 1,275,218 Investments 808,524 21,486 Pledges receivable 230,355 300,000 Prepaid expenses 24,288 51,187 2,245,276 1,647,891 PROPERTY AND EQUIPMENT, net Computers 28,768 32,425 Furniture and equipment 26,196 32,041 Leasehold improvements 2,949 3,686 57,913 68,152 OTHER ASSETS Pledges receivables, long term 162,322 - Security deposit 6,391 6,391 Software, net of amortization of $8,892 and $8,616 in 2013 and 2012, respectively - 276 Website, net of amortization of $128,555 and $122,555 in 2013 and 2012, reSpectively 20,000 26,000 188,713 32,667 TOTAL ASSETS 2,491,902 1,748,710 See accompanying notes to the ?nancial statements. -3- BETTER GOVERNMENT ASSOCIATION, INC. STATEMENTS OF FINANCIAL POSITION LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Accrued liabilities Deferred rent TOTAL LIABILITES NET ASSETS Unrestricted Temporarily restricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS DECEMBER 31, 2013 2012 30,056 23,222 2,899 15,676 28,588 31,228 61,543 70,126 1,989,544 1,370,446 440,815 308,138 2,430,359 1,678,584 2,491,902 1,748,710 See accompanying notes to the ?nancial statements. BETTER GOVERNMENT ASSOCIATION, INC. STATEMENT OF ACTIVITIES REVENUES AND OTHER SUPPORT Public support: Contributions Contribution in kind Membership dues Special events revenue Total public support Other revenues: Miscellaneous Total other revenues Investment income: Realized gain Unrealized gain Dividend income Interest income Total investment income Total revenues Released from restrictions TOTAL REVENUES AND OTHER SUPPORT OPERATING EXPENSES Program Management and general Fundraising Total operating expenses CHANGE IN NET ASSETS NET ASSETS, beginning ofyear NET ASSETS, end of year FOR THE YEAR ENDED DECEMBER 31, 2013 Temporarily Unrestricted Restricted Total 8 1,556,013 432,677 1,988,690 550,134 - 550,134 996,428 - 996,428 3,102,575 432,677 3,535,252 10,600 - 10,600 10,600 - 10,600 402 - 402 735 - 735 7,982 - 7,982 127 - 127 9,246 - 9,246 3,122,421 432,677 3,555,098 300,000 (300,000) - 3,422,421 132,677 3,555,098 2,055,439 2,055,439 326,621 - 326,621 421,263 - 421,263 2,803,323 - 2,803,323 619,098 132,677 751,775 1,370,446 308,138 1,678,584 1,989,544 440,815 2,430,359 See accompanying notes to the ?nancial statements. -5- BETTER GOVERNMENT ASSOCIATION, INC. STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2012 Temporarily Unrestricted Restricted Total REVENUES AND OTHER SUPPORT Public support: Contributions 1,570,283 300,000 1,870,283 Contribution in kind 541,946 - 541,946 Membership dues 13,430 - 13,430 Special events revenue 685,953 - 685,953 Total public support 2,811,612 300,000 3,111,612 Other revenues: Miscellaneous 3,650 - 3,650 Total other revenues 3,650 - 3,650 Investment income: Realized gain - - - Unrealized gain - - - Dividend income - - Interest income 463 - 463 Total investment income 463 - 463 Total revenues 2,815,725 300,000 3,1 15,725 Released from restrictions 294,151 (294,151) TOTAL REVENUES AND OTHER SUPPORT 3,109,876 5,849 3,115,725 OPERATING EXPENSES Program 1,831,212 - 1,831,212 Management and general 317,391 - 317,391 Fundraising 398,770 - 398,770 Total operating expenses 2,547,373 - 2,547,373 CHANGE IN NET ASSETS 562,503 5,849 568,352 NET ASSETS, beginning of year 807,943 302,289 1,1 10,232 NET ASSETS, end of year 1,370,446 308,138 1,678,584 See accompanying notes to the ?nancial statements. -6- BETTER GOVERNMENT ASSOCIATION, INC. STATEMENT OF FUNCTIONAL EXPENSES Salaries and wages Employee bene?ts Payroll taxes Accounting Conference and meetings Depreciation and amortization Dues and subscriptions Equipment rental Fundraising Insurance Investigative Legal Marketing Postage Policy and government affairs Rent Special events Supplies Telephone Training and development Travel Utilities Watchdog training unit Website Total functional expenses Investigative Policies Advocate PROGRAM Citizen Watchdog FOR THE YEAR ENDED DECEMBER 31, 2013 Civic Engagement Total Management and General SUPPORT Fundraising Total Organization Total 587,783 97,907 45,212 29,974 1,311 8,363 3,524 12,871 40,598 253,133 171,373 841 36,722 11,431 9,680 1,629 84 2,410 49,020 1,363,866 100,692 21,320 9,845 8,519 373 2,914 3,235 3,658 1 1,539 48,708 232 70,458 10,437 3,249 2,751 466 950 685 26,925 5 326,956 8 26,285 8,318 3,841 2,037 89 1,268 136 875 2,760 1 1,649 56 2,496 777 658 261 57 164 3,565 20,250 85,542 117,071 17,441 8,054 4,388 192 1,864 3,192 1,884 5,943 25,086 54,080 120 5,375 1 ,6 73 7,747 1 ,743 199 353 22,670 279,075 -7- 831,831 144,986 66,952 44,918 1,965 14,409 10,087 19,288 60,840 253,133 256,816 54,080 1,249 70,458 55,030 17,130 20,836 4,099 1,290 3,612 3,565 1 18,865 5 2,055,439 See accompalmng notes to the?nancial statements. 8 148,431 45,804 21,153 9,173 401 2,330 605 3,939 12,425 52,446 250 11,238 3,495 2,962 106 1,093 738 10,032 326,621 3 91,944 12,780 5,901 2,767 121 1,303 916 1,188 27,711 3,748 15,821 76 3,390 227,660 1,304 1,079 3,253 799 223 19,279 5 421,263 240,375 58,584 27,054 1 1,940 522 3,633 1,521 5,127 27,71 1 16,173 68,267 326 14,628 227,660 4,799 4,041 3,359 1,892 961 29,31 1 747,884 1,072,206 203,570 94,006 56,858 2,487 18,042 1 1,608 24,415 27,71 1 77,013 253,133 325,083 54,080 1,575 70,458 69,658 227,660 21,929 24,877 7,458 3,182 4,573 3,565 148,176 2,803,323 BETTER GOVERNMENT ASSOCIATION, INC. STATEMENT OF FUNCTIONAL EXPENSES Salaries and wages Employee bene?ts Payroll taxes Accounting Conference and meetings Depreciation and amortization Dues and subscriptions Equipment rental Fundraising Insurance Investigative Legal Marketing Postage Policy and govemement affairs Rent Special events Supplies Telephone Training and development Travel Utilities Watchdog training unit Website Total functional expenses Investigative Policies Advocate PROGRAM Citizen Watchdog FOR THE YEAR ENDED DECEMBER 31, 2012 Civic Engagement Total Management and General SUPPORT Fundraising Total Organization Total 537,872 1 17,314 44,044 27,303 518 23,637 1,554 12,602 16,223 58,426 280,373 1,556 990 35,546 10,463 10,664 102 787 1,752 9,140 1,190,866 5 124,01 1 21,376 8,026 6,143 1 17 9,486 2,293 2,836 3,650 63,088 350 223 28,708 7,998 2,268 2,604 23 769 394 4,3 62 288,725 3 34.935 8,274 3,106 1,587 30 6,439 77 733 943 16,298 90 58 2,066 588 605 6 411 102 4,824 3,333 84,505 See accompanying notes to the ?nancial statements. 121,022 21,645 8,126 5,991 1 14 9,384 1,617 2,777 3,560 61,518 8,247 233 7,799 2,624 5,805 972 970 384 4,328 267,1 16 .3- 817,840 168,609 63,302 41,024 779 48,946 5,541 18,948 24,376 58,426 421,277 10,243 1,504 28,708 53,409 15,943 19,678 1,103 2,937 2,632 4,824 21,163 1,831,212 143,756 31,919 1 1,984 8,074 153 5,400 393 3,727 4,798 82,914 460 293 10,512 2,978 3,075 30 4,403 518 2,004 317,391 86,154 16,048 6,025 4,407 84 2,947 3,795 2,034 18,862 2,619 45,255 251 1,801 5,737 189,870 2,734 2,162 16 5,01 1 283 2,675 398.770 229,910 47,967 18,009 12,481 237 8,347 4,188 5,761 18,862 7,417 128,169 711 2,094 16,249 189,870 5,712 5,237 46 9,414 801 4,679 716,161 1,047,750 216,576 81,31 1 53,505 1,016 57,293 9,729 24,709 18,862 31,793 58,426 549,446 10,954 3,598 28,708 69,658 189,870 21,655 24,915 1,149 12,351 3,433 4,824 25,842 2,547,373 BETTER GOVERNMENT ASSOCIATION, INC. STATEMENTS OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization Deferred rent Donation of stock Realized gain on sale of investments Unrealized gain on investments (Increase) decrease in: Pledges receivable Prepaid expenses Increase (decrease) in: Accounts payable Accrued liabilities NET CASH PROVIDED BY OPERATING ACTIVITES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Purchase of other assets Purchase of investments Proceeds on sale of investments NET CASH USED IN INVESTING ACTIVITIES NET (DECREASE) INCREASE IN CASH CASH, beginning of year CASH, end of year FOR THE YEARS ENDED DECEMBER 31, 2013 2012 751,775 568,352 18,042 57,293 (2,640) 8,010 (227) (21,486) (402) - (735) - (92,677) 2,289 26,899 (21,219) 6,834 5,704 (12,777) (3,775) 694,092 595,168 (1,527) (5,694) - (25,000) (807,562) 21,888 - (787,201) (30,694) (93,109) 564,474 1,275,218 710,744 1,182,109 1,275,218 See accompanying notes to the ?nancial statements. -9- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE A Summary of signi?cant accounting policies Nature of activities Better Government Association, Inc. (the Organization) works to ?ght waste, corruption and inef?ciency in government by using investigative journalism techniques, litigation, and public policy studies to expose problems, inform citizens about the operations of their government and lay the groundwork for substantive legislative and administrative reforms. The Organization received 56% and 60% of its total revenues for the years ended December 31, 2013 and 2012, respectively, from contributions. Basis of presentation The accompanying ?nancial statements are prepared in accordance with accounting principles generally accepted in the United States of America as recommended in the American Institute of Certi?ed Public Accountants? Audit and Accounting Guide for Not-for-Pro?t Organizations. The net assets of the Organization are classi?ed as follows: Unrestricted, which represent the portion of expendable net assets that are available for operations. Temporarily Restricted, which represent the portion of net assets that were restricted due to a time restraint or for a speci?c use and available for expenditure when needed for those respective purposes. Upon satisfaction of the restriction, a reclassi?cation is made to unrestricted net assets. Use of estimates The process of preparing ?nancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the ?nancial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Allowance for doubtful accounts The Organization recognizes an allowance for losses on pledges receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of speci?c identi?able customer accounts considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized as program expense. As of December 31, 2013 and 2012, management has determined that no allowance for doubtful accounts is deemed necessary. -10- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE A Summary of signi?cant accounting policies, continued Property and equipment Property and equipment are carried at cost if purchased or fair value if contributed. Depreciation is computed on the straight-line method over 3-10 years for computers, 5-10 years for furniture and equipment, and 5 years for leasehold improvements. The Organization follows the practice of capitalizing all expenditures for ?xed assets in excess of $1,000. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on disposition is credited or charged to operations. Other assets Computer software costs are being amortized using the straight-line method over 3 years. Amortization expense was $276 and $2,964 for the years ended December 31, 2013 and 2012, respectively. Website development costs are being amortized using the straight-line method over 4 years. Amortization expense was $6,000 and $43,018 for the years ended December 31, 2013 and 2012, respectively. Amortization expense for the next ?ve years is expected to be as follows: 2014 6,000 2015 6,000 2016 5,500 201 7 2,500 Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassi?ed to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Subsequent events Subsequent events were evaluated through June 10, 2014, which is the date the ?nancial statements were available to be issued. -11- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - Summary of signi?cant accounting policies, continued Income taxes The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code, except for net income derived from unrelated business activities. In addition, the Organization quali?es for the charitable contribution deduction under Section 170(b)(1)(A) and has been classi?ed as an organization other than a private foundation under IRC Section 509(a). The Organization?s income tax ?lings are subject to audit by various taxing authorities. The Organization?s open audit periods are 2010 through the current year. In evaluating the Organization?s activities, management believes its position of tax?exempt status is based on current facts and circumstances and there have been no uncertain positions taken related to recording income taxes. In the opinion of management there are no activities unrelated to the purpose of the Organization and therefore no tax is to be recognized. It is the policy of the Organization to include in management and general expenses penalties and interest assessed by income taxing authorities. There are no penalties or interest from taxing authorities included in management and general expenses for the years ended December 31, 2013 and 2012. Functional allocation of expenses In the statements of functional expenses, the expenses are charged directly to program, management and general or fundraising categories based upon speci?c identi?cation where possible. Additionally, certain costs have been allocated among the program and supporting services bene?ted, based on direct charges or appropriate methods determined by management. These costs include among others, salaries and related taxes and employee bene?ts, conferences and meetings, dues and subscriptions, insurance, occupancy costs, telephone, supplies, professional fees, and website expenses. NOTE Fair value measurements Financial Accounting Standards Board (FASB) Accounting Standards Codi?cation (ASC) 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework 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 the fair value hierarchy under FASB ASC 820 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 Organization has the ability to access. -12- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE Fair value measurements, continued 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 speci?ed (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 signi?cant to the fair value measurement. 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 signi?cant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Fair values for mutual funds are determined by reference to quoted market prices and other relevant information generated by market transactions. Fair values of assets measured on a recurring basis were as follows: Assets Mutual funds: Short-term bond Fair Value Measurements at December 31, 2013 Level 1 Level 2 Level 3 Total I 9'3 I Fair values of assets measured on a recurring basis were as follows: Assets Equities: Basic Materials Financial Total Equities Fair Value Measurements at December 31, 2012 Level 1 Level 2 Level 3 Total 9,804 - - 9,804 1 1.682 - - 1 1.682 21;4?? - - 21.486 .13- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE Concentration of credit risk The Organization maintains its cash at several ?nancial institutions. All deposit accounts at Federal Deposit Insurance Corporation (FDIC) insured institutions are insured up to $250,000. At times during the year, the Organization?s bank balances may have exceeded the federally insured limits; however, it has not experienced any losses with respect to its bank balances in excess of government provided 1nsurance. The Organization maintains reserve cash at a brokerage ?rm. This account is insured by the Securities Investor Protection Corporation up to $500,000 including a maximum of $250,000 for claims for cash and additional coverage is provided by the brokerage ?rm. At December 31, 2013 and 2012, the Organization has no uninsured cash investment balances at brokerage ?rms. NOTE Pledges receivable The Organization has received long?term pledges to contribute to the Organization. These amounts are classi?ed as temporarily restricted until received. The total amount of the pledges receivable as of December 31, 2013 and 2012 was $392,677 and $300,000, respectively. Pledges receivable as of December 31, 2013 were as follows: Receivables in less than one year 230,355 Receivables in one to ?ve years 165,000 395,355 Less discounts to net present value (2,678) Net pledges receivable i 322,677 Promises to give due in more than one year are discounted at 1.65%. As of December 31, 2013, two donors accounted for 83% of pledges receivable. As of December 31, 2012, one donor accounted for 100% of pledges receivable. NOTE Property and equipment The costs of the Organization?s property and equipment as of December 31 were as follows: 291.31 Computers 63,198 61,671 Furniture and equipment 92,789 92,789 Leasehold improvements 4,669 4,669 160,656 159,129 Less accumulated depreciation [102,743] (90,977) g?,152 -14- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE Property and equipment, continued Depreciation expense for the years ended December 31, 2013 and 2012 was $11,766 and $11,310, respectively. NOTE Conditional promises to give During 2011, the Organization received a pledge from The Richard H. Driehaus Charitable Lead Trust. The pledge was a matching grant up to $1 million and is a $1 to $1 matching grant conditional upon the Organization meeting the required amounts each year. The Organization has up to four years to meet the match, but they are allowed to match within three years if possible. The grant is for general operations. During the years ended December 31, 2013 and 2012, the Organization met the match of $300,000. NOTE Temporarily restricted net assets The following items were temporarily restricted as of December 31 due to either use or time restrictions: 2013 2 12 Support for strategic plan 119,351 - Support for investigator 8,138 8,13 8 Support for operational costs 313,326 300 000 440,81; 308,138 The following items were released from time andr?or donor restrictions during the years ended December 31, 2013 and 2012 by incurring expenses satisfying the restricted purpose or by occurrence of other events speci?ed by the donors as follows: lg Support for website costs - 25,000 Support for operational costs 300,000 269,151 %2 4 151 NOTE Contributions in kind Donations of services are recorded if they create or enhance a non-?nancial asset or are specialized skills that would be purchased if they were not donated. During the years ended December 31, 2013 and 2012, the Organization received donated legal, consulting, and website deve10pment services valued at $550,134 and $541,946, respectively. The donation of legal services is received from a law ?rm in which a board member is employed. BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE I Lease obligation and rental expense Effective August 15, 2011, the Organization entered into a lease agreement for of?ce space located in Chicago, Illinois for the period August 15, 2011 through January 31, 2018 with base rent in the amount of $5,750, which increases annually. In addition, the Organization leases of?ce equipment with an expiration date of February 28, 2015. These leases are being accounted for as operating leases. Rental expense on all leases for the years ended December 31, 2013 and 2012 was $74,155 and $73,614, respectively. Generally accepted accounting principles require that rent be recorded on a straight-line basis over the life of the current lease. Rent expense for the years ended December 31, 2013 and 2012 was increased by $2,640 and $8,010, respectively, to re?ect rent expense on a straight?line basis. An aggregate difference of $28,588 and $31,228 at December 31, 2013 and 2012, respectively, has been recorded on the statement of ?nancial position as deferred rent (liability) relating to the difference between actual rent payments and the amount which would have been paid if payments were made on the straight-line basis. The estimated future minimum rental and lease obligation for the succeeding years under non-cancelable operating leases in effect as of December 31, 2013 are as follows: Year ended December 31, 2014 77,492 2015 76,465 2016 77,700 2017 79,500 2018 (expiring in January) 6,650 $7,897 The Organization is also liable for its proportionate share of increases, if any, of the landlord?s total cost for operation of the building. -16- BETTER GOVERNMENT ASSOCIATION, INC. NOTES TO FINANCIAL STATEMENTS NOTE - Special events Revenues and expenses from special events are shown at the gross amounts in the statements of activities. Gross revenue and expense for each event for the years ended December 31 was as follows: 2013 2012 Revenue Expense Net Revenue Expense Net Annual Bene?t 904,880 170,568 734,312 595,988 143,322 452,666 Spring Luncheon 62,200 40,495 21,705 55,135 32,818 22,317 Other events 29.348 16.597 12,751 34,830 13,730 21,100 226,42? ,5 221,669 $5,253 496,083 NOTE Litigation In the normal course of business, the Organization is involved in disputes related to certain investigation projects. Management believes that the resolution of these matters will not have a material effect on the Organization?s ?nancial position or change in net assets. NOTE Retirement plans During the year ended December 31, 2010, the Organization established a de?ned contribution plan under Internal Revenue Service Code Section 401(k). There is no minimum contribution requirement for participants and contributions are subject to maximum amount limitation under current tax law. During the years ended December 31, 2013 and 2012, the Organization made a discretionary match of $17,501 and $17,432, respectively. -17-