SIXTEEN THIRTY FUND FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2014 SIXTEEN THIRTY FUND TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2014 INDEPENDENT AUDITORS’ REPORT 1 FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION 2 STATEMENT OF ACTIVITIES 3 STATEMENT OF FUNCTIONAL EXPENSES 4 STATEMENT OF CASH FLOW 5 NOTES TO FINANCIAL STATEMENTS 6 CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ REPORT Board of Directors Sixteen Thirty Fund Washington, DC We have audited the accompanying financial statements of Sixteen Thirty Fund, which comprise the statement of financial position as of December 31, 2014, 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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sixteen Thirty Fund as of December 31, 2014, 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. a CliftonLarsonAllen LLP Arlington, Virginia December 31, 2015 SIXTEEN THIRTY FUND STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2014 ASSETS Cash Prepaid Expense Software, Net Accumulated Depreciation of $0 Total Assets $ $ 8,826,581 37,500 293,792 9,157,873 LIABILITIES AND NET ASSETS LIABILITIES Related Party Payable Accounts Payable Total Liabilities $ NET ASSETS Unrestricted Temporarily Restricted Total Net Assets 473,871 32,677 506,548 344,367 8,306,958 8,651,325 Total Liabilities and Net Assets $ See accompanying Notes to Financial Statements. 2 9,157,873 SIXTEEN THIRTY FUND STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2014 Temporarily Restricted Unrestricted SUPPORT AND REVENUE Contributions and Grants Donated (in-kind) Professional Services Net Assets Released from Restrictions Total Support and Revenue $ EXPENSES Program Services General and Administration Total Expenses 210,454 11,223,917 11,434,371 11,072,246 18,851 11,091,097 CHANGE IN NET ASSETS $ 16,523,735 (11,223,917) 5,299,818 $ - 16,523,735 210,454 16,734,189 11,072,246 18,851 11,091,097 343,274 5,299,818 5,643,092 1,093 3,007,140 3,008,233 Net Assets - Beginning of Year NET ASSETS - END OF YEAR $ Total 344,367 See accompanying Notes to Financial Statements. 3 $ 8,306,958 $ 8,651,325 SIXTEEN THIRTY FUND STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2014 Program Grants Professional Fees Management Services Legal Fees Accounting Fees Other Expenses Total General and Administrative Total $ 9,719,545 566,917 385,086 379,624 21,074 $ 6,729 7,005 2,182 2,935 $ 9,719,545 573,646 385,086 386,629 2,182 24,009 $ 11,072,246 $ 18,851 $ 11,091,097 See accompanying Notes to Financial Statements. 4 SIXTEEN THIRTY FUND STATEMENT OF CASH FLOW YEAR ENDED DECEMBER 31, 2014 CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Assets Adjustments to Reconcile Change in Net Assets to Net Cash Changes in Current Assets and Liabilities: Accounts Receivable Prepaid Expense Related Party Payable Accounts Payable Net Cash Provided by Operating Activities CASH FLOWS FROM FINANCING ACTIVITIES Purchases of Property & Equipment Net Cash Used in Financing Activities $ 5,643,092 10,000 (37,500) 323,415 32,677 5,971,684 (293,792) (293,792) NET INCREASE IN CASH 5,677,892 Cash - Beginning of Year 3,148,689 CASH - END OF YEAR $ 8,826,581 See accompanying Notes to Financial Statements. 5 SIXTEEN THIRTY FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Sixteen Thirty Fund (“The Fund”) is a 501(c)(4) social welfare organization. The mission of the Fund is to provide education and build a base of grassroots activism and a national movement to demand the advancement of a new agenda on a broad range of issues important to the welfare of Americans including, but not limited to, healthcare, education, fiscal policy, the environment and energy. The Fund engages a grassroots infrastructure to inform and empower Americans to take ownership of our country's policy direction and demand that our government - at the federal, state and local levels - enact policy reforms to improve the lives of Americans. It conducts and publicizes research regarding a wide range of subjects and promotes policies that will drive people to action and provide them with the tools and education necessary to enact these policies. Through its efforts, the Fund helps to achieve the realization of a society that benefits all Americans. The Fund qualifies as an organization exempt from federal income tax under section 50l(c)(4) of the Internal Revenue Code of 1986, as amended (the "Code") because it is operated exclusively for the promotion of social welfare. The Fund primarily engages in promoting the common good and general welfare by seeking to educate and achieve reforms in a broad range of policy areas including, but not limited to, healthcare, education, fiscal policy, the environment and energy thereby improving not only the lives of individual Americans and their families, but also the social welfare of American communities and the entire nation. Programs: The Sixteen Thirty Fund engages in a range of activities to ensure the success of innovative policy solutions to address issues facing our country: educational activities designed to create a national environment in which reforms can succeed; direct and grassroots lobbying activities designed to introduce and enact legislation that achieves reforms in these issue areas; and, in limited amounts, political activities designed to support those candidate for public office who share the Sixteen Thirty Fund's principles and oppose those who hold views contrary to those held by the Fund. The Fund's activities are focused in three major areas: a) public communications and education, b) public engagement, and c) research and policy analysis. These activities are conducted both directly by the Fund’s staff as well as in concert with nonprofit partner organizations throughout the country. 6 SIXTEEN THIRTY FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Organization (Continued) Grant Making Execution: The Fund manages grant portfolios and executes domestic and international grant making programs on issues ranging from global health and development to conservation. A strength of the Fund is its nimble, compressed grants-management process that allows donors and projects to avoid many of the bureaucratic tangles often associated with large philanthropic giving. The Fund operates a streamlined, online grants management process that includes effective due diligence reviews and that moves funds to a variety of initiatives and programs quickly and efficiently. The Fund monitors implementation and, at the end of each grant cycle, supports programs in compiling reports that measure impact. The Fund conducts due diligence reviews and moves funds to on-the-ground initiatives and programs in a direct and efficient manner. The Fund also monitors grants and gives key stakeholders worldwide 24hour-a-day access to status information through a web-based grants administration system. Basis of Accounting The accompanying financial statements are presented in accordance with the accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred. Financial Risk The Fund maintains its cash in bank deposit accounts which, at times, exceed FDIC federally insured limits. The uninsured portions of cash accounts are backed solely by the assets of the underlying institution. As such, the failure of an underlying institution could result in financial loss to the Fund. Management believes that the Fund is not exposed to any significant financial risk on cash. Use of Estimates The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the 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. Actual results could differ from those estimates. Cash and Cash Equivalents For financial statement purposes, the Fund considers certificates of deposit and money market funds with an original maturity of three months or less to be cash equivalents. 7 SIXTEEN THIRTY FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment Acquisitions of property and equipment greater than $2,000 and with a useful life greater than 12 months are recorded at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets, and the useful life for software is three years. There was no depreciation expense for the year ended December 31, 2014, captitalized items had not yet been placed into service. Financial Statement Presentation Net assets and revenues, gains, and losses are classified based on donor imposed restrictions. Accordingly, net assets of the Fund and changes therein are classified and reported as follows: Unrestricted - Unrestricted net assets represent contributions and investment income received with no donor-imposed restrictions. Temporarily Restricted - Temporarily restricted net assets represent contributions whose use has been limited by donors to a specific purpose or time period. Permanently Restricted - Permanently restricted net assets represent restricted contributions that require the principal of the gift to be maintained in perpetuity and provide a permanent source of income. The Fund had no permanently restricted net assets at December 31, 2014. Contributions & Grants The Fund records unconditional contributions and grants received and unconditional promises to give as unrestricted or temporarily restricted support depending on the existence and/or nature of any donor restrictions. Temporarily restricted contributions and grants received that are used according to donor restrictions in the same period are recognized as temporarily restricted contributions, and reclassified as net assets released from restrictions in the same period. Conditional contributions and grants are recognized as revenue in the period when the conditions have substantially been met. Functional Allocation of Expenses The costs of the Fund’s programs, fundraising and administration have been summarized on a functional basis in the Statement of Activities. Expenses are specifically allocated to the various programs and supporting services whenever practical and, when this is impractical, allocations are made on the basis of job descriptions, expense reports, or estimates of management. Income Taxes The Fund is exempt from Federal income tax under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(4). The Internal Revenue Service recognizes the Fund’s status as a public charity organization. 8 SIXTEEN THIRTY FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes (Continued) The Fund’s income tax returns are subject to review and examination by federal and state authorities. The Organization is not aware of any activities that would jeopardize its tax-exempt status. The Fund is not aware of any activities that are subject to tax on unrelated business income or excise or other taxes. NOTE 2 RELATED-PARTY TRANSACTIONS The Fund has an administrative support agreement with Arabella Advisors (“Arabella”), a Virginia limited liability company that provides association management services to nonprofits. Sixteen Thirty Fund also has an administrative cost‐sharing agreement with New Venture Fund (“NVF”), a District of Columbia nonprofit corporation and 501(c)(3) charitable organization. The relationships between the Fund and both NVF and Arabella are purely contractual in nature and approved by board members of the Fund. The Fund is not controlled directly or indirectly by either NVF or Arabella. The President of the Fund is on the Board of Directors of the New Venture Fund and has a direct financial interest in Arabella. Reimbursements under the administrative support agreement with Arabella for the year ended December 31, 2014 were $385,086. Amounts payable to Arabella were $150,815 as of December 31, 2014. Reimbursements under the cost‐sharing agreement with NVF for the year ended December 31, 2014 were $80,523. In addition, during 2014, the Fund reimbursed NVF for $293,792. Amounts payable to NVF were $323,056 as of December 31, 2014. NOTE 3 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following at December 31, 2014 Purpose Restricted NOTE 4 Beginning Balance Releases Additions Ending Balance $ 3,007,140 $ (11,223,917) $ 16,523,735 $ 8,306,958 DONOR CONCENTRATION Sixteen Thirty Fund received 70% of its total contributions and grants revenue from three donors in the year ended December 31, 2014. 9 SIXTEEN THIRTY FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE 5 DONATED SERVICES Contributions of services are recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. The value of the contributed services recognized as revenues in the accompanying statement of activities for the year ended December 31, 2014 was comprised of legal services to support various projects, valued based upon standard billing rates of the law firm. The expense was allocated to program expenses. NOTE 6 SUBSEQUENT EVENTS Management evaluated subsequent events through December 31, 2015, the date the financial statements were available to be issued. Events or transactions occurring after the year ended December 31, 2014, but prior to December 31, 2015, that provided additional evidence about conditions that existed at the year ended December 31, 2014, have been recognized in the financial statements for the year ended December 31, 2014. Events or transactions that provided evidence about conditions that did not exist at the year ended December 31, 2014, but arose before the financial statements were available to be issued have not been recognized in the financial statements for the year ended December 31, 2014. 10