legal momentum financial statement 6.30.2014

8/20/2019 Legal Momentum Financial Statement 6.30.2014

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LEGAL MOMENTUM

FINANCIAL STATEMENTS

JUNE 30 2014 and 2013


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INDEPENDENT AUDITORS' REPORT

Board of DirectorsLegal Momentum

New York, New York

Report on the Financial Statements

We have audited the accompanying financial statements of Legal Momentum (the "Organization"), whichare comprised of the statements of financial position as of June 30, 2014 and 2013, and the relatedstatements of activities, functional expenses, and cash flows for the years then ended, and the relatednotes to the financial statements.

Management's Responsibility for the Financial Statements

The Organization's management is responsible for the preparation and fair presentation of these financialstatements 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 preparationand fair presentation of financial statements that are free from material misstatement, whether due tofraud or error.

Audi tors ' Responsibil ity

Our responsibility is to express an opinion on these financial statements based on our audits. Weconducted 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 assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in thefinancial 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 theorganization's preparation and fair presentation of the financial statements, in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the organization's internal control. Accordingly, we express no such opinion. Anaudit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation ofthe financial statements.

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

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Legal Momentum as of June 30, 2014 and 2013, and the changes in its net assetsand its cash flows for the years then ended, in accordance with accounting principles generally acceptedin the United States of America.

New York, New YorkNovember 11, 2014


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LEGAL MOMENTUM

See notes to financial statements 2

Statements of Financial Position

June 30,

2014 2013

ASSETSCash and cash equivalents (including restricted cash of $7,250 and $ 926,394 $ 1,133,364

$136,683 in 2014 and 2013, respectively)Grants and contribution receivable 406,359 997,997

Investments 982,502 886,760 Accounts receivable 2,519 26,182 Prepaid expenses and other assets 56,094 51,848 Property and equipment, net 105,552 74,004

$ 2,479,420 $ 3,170,155 LIABILITIES AND NET ASSETS

Liabilities: Accounts payable and accrued expenses $ 247,345 $ 348,101

Deferred rent 41,216 111,288 Deferred revenue 13,632

288,561 473,021

Commitments and contingency (Note G)

Net assets:Unrestricted 1,642,606 1,791,461

Temporarily restricted 348,253 705,673 Permanently restricted 200,000 200,000

2,190,859 2,697,134

$ 2,479,420 $ 3,170,155


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LEGAL MOMENTUM

See notes to financial statements

Statement of Functional Expenses Year Ended June 30, 2014

Program Services Sup

Violence Job Women ManagementGender Against and and and Equity Women Workplace Poverty Total General

Personnel:Salaries $ 239,238 $ 239,238 $ 270,970 $ 212,665 $ 962,111 $ 117,674

Payroll taxes 18,850 18,850 21,356 16,750 75,806 9,241 Employee benefits 50,486 50,486 73,566 32,697 207,235 29,901

308,574 308,574 365,892 262,112 1,245,152 156,816

Donated services 88,023 88,023 99,598 78,330 353,974 55,772 Occupancy 135,549 135,549 144,586 127,982 543,666 33,511 Conferences, meetings and travel 9,456 9,456 7,319 2,753 28,984 (328) Insurance 2,838 2,838 3,214 2,523 11,413 1,396 Consultants and subcontractors 248,107 248,107 20,670 19,457 536,341 5,307

Accountants and professional fees 5,542 5,542 5,545 5,541 22,170 20,009 Publications, subscriptions, memberships 3,958 3,958 2,092 2,080 12,088 525 Office supplies and equipment 16,999 16,999 18,557 14,314 66,869 7,547 Telephone and mail 2,731 2,731 2,594 2,121 10,177 1,479 Bank charges and interest expense 1,627 1,627 1,976 1,447 6,677 800 Miscellaneous expenses 1,897 1,897 2,135 1,688 7,617 1,290 Depreciation and amortization 12,104 12,104 13,451 10,975 48,634 4,665 Special events expense

528,831 528,831 321,737 269,211 1,648,610 131,973

Total expenses $ 837,405 $ 837,405 $ 687,629 $ 531,323 $ 2,893,762 $ 288,789


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LEGAL MOMENTUM

See notes to financial statements

Statement of Functional ExpensesYear Ended June 30, 2013

Program Services Su

Violence Job Women ManagementGender Against and and And Equity Women Workplace Poverty Total General

Personnel:Salaries $ 232,718 $ 232,718 $ 271,216 $ 220,533 $ 957,185 $ 135,172

Payroll taxes 19,227 19,227 21,890 18,388 78,732 10,776 Employee benefits 44,237 44,237 81,315 33,106 202,895 34,054

296,182 296,182 374,421 272,027 1,238,812 180,002

Donated services 262,651 262,651 68,537 146,245 740,084 37,810 Occupancy 169,883 169,883 169,883 169,883 679,532 49,724 Conferences, meetings and travel 10,514 10,514 5,304 1,901 28,233 609 Insurance 3,562 3,562 3,562 3,562 14,248 1,781 Consultants and subcontractors 357,199 357,199 7,596 12,346 734,340 2,629 Accountants and professional fees 8,000 8,000 8,000 8,000 32,000 4,000 Publications, subscriptions, memberships 3,375 3,375 1,506 1,406 9,662 145 Office supplies and equipment 13,114 13,114 12,892 11,542 50,662 1,443 Telephone and mail 4,126 4,126 3,400 3,400 15,052 1,344 Bank charges and interest expense 2,049 2,049 2,049 2,049 8,196 1,056 Miscellaneous expenses 1,130 1,130 1,165 1,165 4,590 315 Depreciation and amortization 15,763 15,763 15,763 15,763 63,052 6,760 Special events expense

851,366 851,366 299,657 377,262 2,379,651 107,616

Total expenses $ 1,147,548 $ 1,147,548 $ 674,078 $ 649,289 $ 3,618,463 $ 287,618


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LEGAL MOMENTUM

See notes to financial statements 6

Statements of Cash Flows

Year EndedJune 30,

2014 2013

Cash flows from operating activities:

Decrease in net assets $ (506,275) $ (1,494,298) Adjustments to reconcile decrease in net assets to net cash used in

operating activities:Depreciation and amortization 65,707 76,570Loss on disposal of property and equipment 333Donated investments (11,842) (21,443)Proceeds from donated investments 11,842 21,443Net realized and unrealized gains on investments (64,334) (28,893)Bad debt expense 2,100Changes in:

Grants receivable 589,538 1,250,387 Accounts receivable 23,663 20,925

Prepaid expenses and other assets 29,662 12,038 Accounts payable and accrued expenses (100,756) (16,370)Deferred rent (70,072) (106,504)Deferred revenue (13,632) 13,632

Net cash used in operating activities (44,066) (272,513)

Cash flows from investing activities:Proceeds from sales of investments 260,884 162,989Purchases of investments (292,292) (209,882)Purchase of property and equipment (97,588) (2,205)Security deposit paid (33,908)

Net cash (used in) provided by investing activities (162,904) (49,098)

Net decrease in cash and cash equivalents (206,970) (321,611)Cash and cash equivalents - beginning of year 1,133,364 1,454,975

Cash and cash equivalents - end of year $ 926,394 $ 1,133,364

Supplemental disclosures of cash flow information:Non-cash donation of services $ 535,666 $ 798,704


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LEGAL MOMENTUM

Notes to Financial StatementsJune 30, 2014 and 2013

7

NOTE A - THE ORGANIZATION AND ITS SIGNIFICANT ACCOUNTING POLICIES

[1] The Organization:

Legal Momentum (the "Organization"), formerly known as the NOW Legal Defense and Education Fund,was established in 1970 under the not-for-profit laws of the District of Columbia. The Organization pursuesequality for women and girls in the workplace, the schools, the family, and the courts, using a variety ofstrategies, including litigation, policy analysis, administrative advocacy, and public education programs.

The Organization is exempt from federal income taxes under Section 501(c)(3) of the U.S. Internal RevenueCode and from state and local taxes under comparable laws. The Organization has filed an election withthe Internal Revenue Service to make expenditures to influence legislation.

[2] Basis of accounting:

The accompanying financial statements of the Organization have been prepared using the accrual basis ofaccounting and conform to accounting principles generally accepted in the United States of America as

applicable to not-for-profit entities.

[3] Functional allocation of expenses:

The costs of providing the Organization's various programs and supporting services have been summarizedon a functional basis in the accompanying statements of activities. Accordingly, certain costs have beenallocated among the programs and supporting services using reasonable ratios determined bymanagement.

[4] Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets, liabilities,

revenues and expenses and the disclosure of contingencies. Actual results may differ from those estimates.

[5] Cash and cash equivalents:

The Organization considers cash equivalents to be all highly liquid investments with a maturity of threemonths or less when purchased.

[6] Net assets:

The net assets of the Organization and the changes therein are classified and reported as follows:

(i) Unrestricted:

Unrestricted net assets represent those resources for which there are no donor restrictions as totheir use.

(ii) Temporarily restricted:

Temporarily restricted net assets represent those resources subject to donor-imposed requirementsthat will be fulfilled either by actions of the Organization or the passage of time. Net assetsreleased from restrictions reflect the fulfillment of the restricted purposes specified by the donors.

(iii) Permanently restricted:

Permanently restricted net assets represent those resources the use of which has beenpermanently restricted by donors.


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LEGAL MOMENTUM


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NOTE A - THE ORGANIZATION AND ITS SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[7] Investments and investment income:

Investments in marketable securities are reported at their fair values at fiscal year-end. Donated securitiesare initially recorded at their fair values on the dates of the gifts and are generally sold upon receipt. Netinvestment income and realized and unrealized gains and losses on investments are reported in theaccompanying statements of activities.

[8] Property and equipment:

Property and equipment are stated at their costs at the dates of acquisition or at their fair values at the datesof donation. Depreciation of furniture and equipment is provided using the straight-line method, over anestimated useful life of five years. Leasehold improvements are amortized using the straight-line method,over the term of the underlying leases.

[9] Fair-value measurement:

The Organization reports a fair-value measurement of all applicable financial assets and liabilities, includinginvestments, grants receivable, accounts receivable and short-term payables (see Note B).

[10] Revenue recognition:

Contributions to the Organization are recorded as revenue upon the receipt of cash or unconditionalpledges. Contributions are considered available for unrestricted use unless specifically restricted by thedonors. The Organization records bequest income at the time it has an established right to a bequest andthe expected proceeds are measurable.

Government and foundation grants are recorded as restricted support when received and released fromrestrictions as the funds are spent and the restrictions are satisfied.

Rental income is recorded in accordance with the terms of underlying leases.

[11] Deferred rent:

The difference between rent expense incurred by the Organization on an accrual basis and the lesseramounts paid in cash is attributable to scheduled rent increases and is reported as a deferred rent liability inthe accompanying statements of financial position.

[12] Accrued vacation:

Based on their tenure, the Organization's employees are entitled to be paid for unused vacation time if theyleave the Organization. Accordingly, at each fiscal year-end, the Organization recognizes a liability for the

amount that would be incurred if employees with such unused vacation time were to leave. AtJune 30, 2014 and 2013, this accrued vacation obligation was $85,614 and $63,322, respectively, and wasreported as part of accounts payable and accrued expenses in the accompanying statements of financialposition.

[13] Interns:

A substantial number of unpaid interns (approximately 20-25 per year) have made significant contributionsof their time to the Organization. The value of this contributed time does not meet the criteria for recognitionof contributed services required under generally accepted accounting principles and, accordingly, is notincluded in the accompanying financial statements.


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LEGAL MOMENTUM


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NOTE A - THE ORGANIZATION AND ITS SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[14] Endowment fund:

The Organization reports all applicable disclosures to its funds treated as endowment. The Board ofDirectors has not designated any unrestricted funds to function as endowment (see Note J).

[15] Income tax:

The Organization adopted the provisions of the Financial Accounting Standards Board's (FASB) AccountingStandards Codification ("ASC") Topic 740 "Income Taxes," relating to accounting and reporting foruncertainty in income taxes. Because of the Organization's general tax-exempt status, the adoption of

ASC Topic 740 has not had, and is not expected to have, a material impact on the Organization's financialstatements. Management believes that the Organization is no longer subject to examination by federal orstate tax authorities for years prior to 2011.

[16] Subsequent events:

The Organization considers the accounting treatments, and the related disclosures in the current fiscal-year's financial statements, that may be required as the result of all events or transactions that occur afterthe fiscal year-end through November 11, 2014, the date of the independent auditors' report.

[17] Reclassification:

Certain amounts reported in the fiscal-year 2013 financials have been reclassified to conform to the fiscal-year 2014 presentation.

NOTE B - INVESTMENTS

At each fiscal year-end, investments consisted of the following:

June 30,

2014 2013

Fair FairCost Value Cost Value

Money markets $ 174,396 $ 174,396 $ 109,101 $ 109,101U.S. government obligations 14,605 7,972 14,562 9,160Bond funds 296,522 309,484 433,405 437,412Equity funds 373,905 490,650 247,835 331,087

$ 859,428 $ 982,502 $ 804,903 $ 886,760

During each fiscal year, net investment income (losses) consisted of the following:

Year Ended June 30,

2014 2013

Interest and dividends $ 33,157 $ 34,977Net realized gains (losses) 23,117 (13,488)Net unrealized gains 41,217 42,381

$ 97,491 $ 63,870


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LEGAL MOMENTUM


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NOTE B - INVESTMENTS (CONTINUED)

The FASB's ASC Topic 820 "Fair Value Measurements and Disclosures," establishes a three-level valuationhierarchy of fair-value measurements. These valuation techniques are based on observable and unobservableinputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputsreflect market assumptions. These two types of inputs create the following fair-value hierarchy:

Level 1: Valuations are based on observable inputs that reflect quoted market prices in active markets forthose investments, or similar investments, at the reporting date.

Level 2: Valuations are based on (i) quoted prices for those investments, or similar investments, in activemarkets, or (ii) quoted prices for those investments, or similar investments, in markets that are notactive, or (iii) pricing inputs other than quoted prices that are directly or indirectly observable at thereporting date. Level 2 assets include those investments that are redeemable at or near thebalance sheet date and for which a model was derived for valuation.

Level 3: Valuations are based on pricing inputs that are unobservable and include situations where (i) there

is little, if any, market activity for the investments, or (ii) the investments cannot be independentlyvalued, or (iii) the investments cannot be immediately redeemed at or near the fiscal year-end.

The availability of available market data is monitored to assess the appropriate classification of financialinstruments within the fair-value hierarchy. Changes in economic conditions or valuation techniques may requirethe transfers of financial instruments from one level to another. In such instances, the transfer is reported at thebeginning of the reporting period. For 2014 and 2013, there were no transfers among Levels 1, 2 or 3.

The classification of investments within the fair-value hierarchy is not an indication of the risks, liquidity, or degreeof difficulty in estimating the fair value of each investment. The following summarizes the fair values of theOrganization's assets at each fiscal year-end, in accordance with ASC Topic 820-10-05 valuation levels:

June 30, 2014

Level 1 Level 2 Total

Money market $ 174,396 $ 174,396U.S. government obligations $ 7,972 7,972Bond funds 309,484 309,484Equity funds 490,650 490,650

Total $ 665,046 $ 317,456 $ 982,502

June 30, 2013

Level 1 Level 2 Total

Money market $ 109,101 $ 109,101U.S. government obligations $ 9,160 9,160Bond funds 437,412 437,412Equity funds $ 331,087 331,087

Total $ 440,188 $ 446,572 $ 886,760

There are no Level 3 investments.


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LEGAL MOMENTUM


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NOTE C - GRANTS RECEIVABLE

At each fiscal year-end, grants receivable consisted of the following:

June 30,

2014 2013

U.S. Department of Justice $ 362,505 $ 693,822State Justice Institute 28,604 2,075Ford Foundation Capacity Grant 250,000

Aiming High contributions 15,250 52,100

$ 406,359 $ 997,997

Based on prior experience, management expects to collect the receivables in full, and, accordingly, has not

established an allowance for uncollectible accounts.

NOTE D - PROPERTY AND EQUIPMENT

At each fiscal year-end, property and equipment consisted of the following:

June 30,

2014 2013

Furniture and fixtures $ 88,219 $ 288,210Telephone system 2,742 110,776Computers 4,956 364,898

Leasehold improvements 177,855 994,054

273,772 1,757,938Less accumulated depreciation and amortization (168,220) (1,683,934)

$ 105,552 $ 74,004

Depreciation expense for 2014 and 2013 was $65,707 and $76,570, respectively.

During 2014, the Organization wrote off fully depreciated property and equipment of $1,581,754, resulting inlosses on the disposition of $333.

NOTE E - RETIREMENT BENEFITS

The Organization has a defined-contribution pension plan, qualified under Section 403(b) of the Internal RevenueCode. The plan covers all employees who meet the Organization's length-of-service requirements. Contributionsby the Organization are discretionary and can be made only with the Board of Directors' approval.

The Organization's contribution for fiscal-years 2014 and 2013 was $60,872 and $61,740, respectively.

In addition, the Organization has a 403(b) tax-sheltered annuity retirement plan, which is available to allemployees. Contributions are made by employees and are not matched by the Organization.


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LEGAL MOMENTUM


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NOTE F - DONATED SERVICES

A substantial number of volunteers have donated significant amounts of their time to the Organization. Thesecontributed services have been valued at the standard market rates that would have been incurred by the

Organization to obtain them, and, because they meet the following criteria prescribed by generally acceptedaccounting principles, they have been reported as both revenue and expense in the accompanying statements ofactivities:

the services received either create or enhance nonfinancial assets, or

the services received require specialized skills, are provided by individuals possessing those skills,and would typically need to be purchased if not provided by contribution.

During fiscal-years 2014 and 2013, the Organization received donated services, consisting primarily of legalservices and investment management services, at their fair values, in the amounts of $535,666 and $807,204,respectively.

NOTE G - COMMITMENTS AND CONTINGENCY

[1] Operating leases:

The Organization rents office space in Washington, D.C., under a lease which expires in May 2017. Thelease for the office space in New York City expired in December 2013. The Organization signed a new NewYork City lease agreement, commencing in October 2013 and expiring in February 2019. Rent expense was$621,955 and $739,996 for fiscal-years 2014 and 2013, respectively. Minimum future rental payments areas follows:

Year EndingJune 30, Amount

2015 $ 496,9172016 509,3362017 457,4342018 223,2002019 75,324

$ 1,762,211

[2] Rental Income:

During fiscal-years 2014 and 2013, the Organization entered into a sublease with an unrelated tenant. Thelease term expired December 2013 and the annual rental income was approximately $240,000 and$289,000 in 2014 and 2013, respectively,

[3] Letter of credit:During fiscal-year 2013, under the lease agreement for the New York office space, the Organization wasobligated under a $70,780 unused bank letter of credit, which was required in lieu of a security deposit. Theletter of credit was collateralized by a time deposit that the Organization maintained with the bank. AtJune 30, 2013, the time deposit had a balance of $83,000. In November 2013, the Organization changedlocations, as described above, and terminated the line of credit.

[4] Government contracts:

The Organization's government-funded activities are subject to audit by the applicable granting agencies. At June 30, 2014, there were no material obligations outstanding as a result of such audits, and theOrganization's management believes that unaudited projects will not result in any material obligations.


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NOTE G - COMMITMENTS AND CONTINGENCY (CONTINUED)

[5] Employment agreement:

The Organization has an employment agreement with its President ending in April 2016.

NOTE H - CONCENTRATION OF CREDIT RISK

The Organization maintains cash deposits in a major bank, and the account balances at times may exceedfederally insured limits. Management believes that the Organization is not exposed to any significant risk of lossdue to the failure of the bank.

NOTE I - TEMPORARILY RESTRICTED NET ASSETS

At each fiscal year-end, temporarily restricted net assets consisted of the following:

June 30,

2014 2013

Gender equity $ 174,127 $ 300,641Violence against women 174,126 300,641Job and workplace 41,394Women and poverty 29,204Management and general 23,197Development 10,596

$ 348,253 $ 705,673

During each fiscal year, net assets released from restrictions consisted of the following:

Year Ended June 30,

2014 2013

Gender equity $ 375,817 $ 486,346Violence against women 375,816 486,346Job and workplace 43,894 95,000Women and poverty 29,204 68,333Management and general 23,197 25,000Development 10,596 40,000

$ 858,524 $ 1,201,025

NOTE J - ENDOWMENT FUND

[1] The endowment:

The Organization's endowment consists of a single donor-restricted fund, which is reported as permanentlyrestricted.

[2] Interpretation of relevant law:

The Board of Directors has interpreted the District of Columbia Uniform Prudent Management of InstitutionalFunds Act as requiring the consideration of the preservation of the historic dollar value of the original gift asof the gift date of the donor-restricted endowment fund, absent explicit donor stipulations to the contrary.


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NOTE J - ENDOWMENT FUND (CONTINUED)

[3] Endowment objectives:

The Organization has adopted investment and spending policies for endowment assets that attempt toprovide a predictable stream of funding to programs supported by its endowment while seeking to maintainthe purchasing power of the endowment assets.

NOTE K - SUBSEQUENT EVENTS

Subsequent to fiscal year-end, the Organization opened a new line of credit in the amount of $500,000 with JPMorgan Chase bank.

legal momentum financial statement 6.30.2014

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