legal momentum financial statements fy 2013

7/26/2019 Legal Momentum Financial Statements Fy 2013

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LEGAL MOMENTUM

FINANCIAL STATEMENTS

JUNE 30, 2013 and 2012


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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, 2013 and 2012, 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, 2013 and 2012, 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 YorkOctober 14, 2013


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LEGAL MOMENTUM

See notes to financial statements 2

Statements of Financial Position

June 30,

2013 2012

ASSETSCash and cash equivalents (including restricted cash of $136,683 and $ 1,242,465 $ 1,454,975

$126,937 in 2013 and 2012, respectively)Grants and contribution receivable 997,997 2,248,384

Investments 777,659 810,974 Accounts receivable 26,182 47,107 Prepaid expenses and other assets 51,848 63,886 Property and equipment, net 74,004 148,369

$ 3,170,155 $ 4,773,695LIABILITIES AND NET ASSETS

Liabilities:Accounts payable and accrued expenses $ 348,101 $ 364,471

Deferred rent 111,288 217,792 Deferred revenue 13,632

473,021 582,263

Commitments and contingency (Note G)

Net assets:Unrestricted 1,791,461 2,089,734

Temporarily restricted 705,673 1,901,698 Permanently restricted 200,000 200,000

2,697,134 4,191,432

$ 3,170,155 $ 4,773,695


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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

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

Statement of Functional ExpensesYear Ended June 30, 2012

Program Services Sup

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

Personnel:Salaries $ 245,753 $ 245,753 $ 247,522 $ 212,187 $ 951,215 $ 121,714

Payroll taxes 21,688 21,688 19,381 16,762 79,519 9,801 Employee benefits 38,303 38,303 55,221 21,743 153,570 19,152

305,744 305,744 322,124 250,692 1,184,304 150,667

Donated services 131,856 131,856 26,609 21,367 311,688 2,447 Occupancy 184,779 184,779 151,695 141,793 663,046 54,510 Conferences, meetings and travel 13,696 13,696 5,197 2,035 34,624 598 Insurance 3,530 3,530 3,530 3,199 13,789 1,823 Consultants and subcontractors 217,838 217,838 14,643 14,245 464,564 40,406 Accountants and professional fees 8,000 8,000 8,000 7,200 31,200 4,400 Publications, subscriptions, memberships 4,327 4,327 851 986 10,491 159 Office supplies and equipment 21,001 21,001 16,804 14,697 73,503 2,511 Telephone and mail 6,950 6,950 4,600 4,651 23,151 1,674 Bank charges and interest expense 2,483 2,483 2,510 2,211 9,687 1,359 Miscellaneous expenses 1,775 1,775 1,635 1,512 6,697 918

Depreciation and amortization 16,801 16,801 16,801 15,456 65,859 7,397

613,036 613,036 252,875 229,352 1,708,299 118,202

Total expenses $ 918,780 $ 918,780 $ 574,999 $ 480,044 $ 2,892,603 $ 268,869


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LEGAL MOMENTUM

See notes to financial statements 6

Statements of Cash Flows

Year EndedJune 30,

2013 2012

Cash flows from operating activities:

Change in net assets $ (1,494,298) $ 692,003Adjustments to reconcile change in net assets to net cash used in

operating activities:Depreciation and amortization 76,570 80,653Donated investments (21,443) (10,110)Net realized and unrealized (gains) losses on investments (28,893) 22,842Changes in:

Grants receivable 1,250,387 (1,148,183)Accounts receivable 20,925 73,786Prepaid expenses and other assets 12,038 9,539

Accounts payable and accrued expenses (16,370) (3,482)Deferred rent (106,504) (84,324)

Deferred revenue 13,632

Net cash used in operating activities (293,956) (367,276)

Cash flows from investing activities:Proceeds from sales of investments 184,432 20,208Purchases of investments (100,781) (102,841)Purchase of property and equipment (2,205) (2,000)

Net cash provided by (used in) investing activities 81,446 (84,633)

Net decrease in cash and cash equivalents (212,510) (451,909)Cash and cash equivalents - beginning of year 1,454,975 1,906,884

Cash and cash equivalents - end of year $ 1,242,465 $ 1,454,975

Supplemental disclosures of cash flow information:Non-cash donation of services $ 798,704 $ 317,056


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LEGAL MOMENTUM

Notes to Financial StatementsJune 30, 2013 and 2012

7

NOTEA-THE ORGANIZATION AND ITS SIGNIFICANTACCOUNTING 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] Financial reporting:

(a) Basis of accounting:

The accompanying financial statements of the Organization have been prepared using the accrual basisof accounting and conform to accounting principles generally accepted in the United States of Americaas applicable to not-for-profit entities.

(b) Functional allocation of expenses:

The costs of providing the Organization's various programs and supporting services have beensummarized on a functional basis in the accompanying statements of activities. Accordingly, certaincosts have been allocated among the programs and supporting services using reasonable ratiosdetermined by management.

(c) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principlesrequires management 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 fromthose estimates.

(d) Cash and cash equivalents:

The Organization considers cash equivalents to be all highly liquid investments with a maturity of threemonths or less when purchased. Deposits have been pledged as collateral for a letter of credit (seeNote G).

(e) 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.


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LEGAL MOMENTUM


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NOTEA-THE ORGANIZATION AND ITS SIGNIFICANTACCOUNTING POLICIES (CONTINUED)

[2] Financial reporting: (continued)

(e) Net assets: (continued)

(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.

[3] 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. Net investment income and realized andunrealized gains and losses on investments are reported in the accompanying statements of activities.

[4] 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.

[5] 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).

[6] 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 from

restrictions as the funds are spent and the restrictions are satisfied.

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

[7] 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.


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LEGAL MOMENTUM


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NOTEA-THE ORGANIZATION AND ITS SIGNIFICANTACCOUNTING POLICIES (CONTINUED)

[8] 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 theamount that would be incurred if employees with such unused vacation time were to leave. AtJune 30, 2013 and 2012, this accrued vacation obligation was $63,322 and $82,485, respectively, and wasreported as part of accounts payable and accrued expenses in the accompanying statements of financialposition.

[9] 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.

[10] 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).

[11] Income tax:

The Organization has adopted the provisions of the Financial Accounting Standards Board's AccountingStandards Codification ("ASC") Topic 740-10-05 relating to accounting and reporting for uncertainty inincome taxes. Because of the Organization's general tax-exempt status, the adoption of

ASC Topic 740-10-05 has not had, and is not expected to have, a material impact on the Organization'sfinancial statements.

[12] 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 the date of the independent auditors' report.

NOTE B-INVESTMENTS

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

June 30,

2013 2012Fair Fair

Cost Value Cost Value

U.S. government obligations $ 14,562 $ 9,160 $ 29,683 $ 24,832Bond funds 433,405 437,412 413,148 430,736Equity funds 247,835 331,087 328,667 355,406

$ 695,802 $ 777,659 $ 771,498 $ 810,974


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LEGAL MOMENTUM


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NOTE B-INVESTMENTS (CONTINUED)

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

Year Ended June 30,

2013 2012

Interest and dividends $ 34,977 $ 34,162Net realized (losses) gains (13,488) 8,871Net unrealized gains (losses) 42,381 (31,713)

$ 63,870 $ 11,320

ASC Topic 820-10-05 establishes a three-level valuation hierarchy of fair-value measurements. These valuationtechniques are based on observable and unobservable inputs. Observable inputs reflect market data obtainedfrom independent sources, while unobservable inputs reflect market assumptions. These two types of inputscreate 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) thereis 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 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, 2013

Level 1 Level 2 Total

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

Total $ 331,087 $ 446,572 $ 777,659

June 30, 2012

Level 1 Level 2 Total

U.S. government obligations $ 24,832 $ 24,832Bond funds 430,736 430,736Equity funds $ 355,406 355,406

Total $ 355,406 $ 455,568 $ 810,974

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,

2013 2012

U.S. Department of Justice $ 693,822 $ 1,690,774State Justice Institute 2,075 20,110New York Community Trust 0 37,500Ford Foundation Capacity Grant 250,000 500,000

Aiming High Contributions 52,100

$ 997,997 $ 2,248,384

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,

2013 2012

Furniture and fixtures $ 288,210 $ 286,005Telephone system 110,776 110,776Computers 364,898 364,898

Leasehold improvements 994,054 994,054

1,757,938 1,755,733Less accumulated depreciation and amortization (1,683,934) (1,607,364)

$ 74,004 $ 148,369

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.

Under article 24(c), the Organization's obligation to contribute to the bargaining unit staff was suspended for theperiod of October 1, 2010 through September 11, 2011. As a result of a new collective-bargaining agreementsigned in November 2012, the Organization re-instated pension-plan contributions as of July 2012, to each staffmember who meets the length-of-service requirements, at the rate of 9% on up to $55,000 of each employee'sbase salary.

The Organization's contribution for fiscal-years 2013 was $61,740; there was no contribution in fiscal-year 2012.

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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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 theOrganization 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 2013 and 2012, the Organization received donated services, consisting primarily of legalservices and investment management services, at their fair values, in the amounts of $807,204 and $317,056,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. It alsorents office space in New York City, under a lease which was due to expire in December 2013. Subsequentto year-end, the Organization signed a new New York City lease agreement, commencing in September2013 and expiring in February 2019. Rent expense was $739,996 and $741,829 for fiscal-years 2013 and2012, respectively. Minimum future rental payments are as follows:

Year EndingJune 30, Amount

2014 $ 691,7012015 497,3412016 509,7752017 457,8782018 223,658

Thereafter 152,521

$ 2,532,874

[2] Letter of credit:

Under the lease agreement for the New York office space, the Organization is obligated under a $70,780

unused bank letter of credit, which is required in lieu of a security deposit. The letter of credit iscollateralized by a time deposit that the Organization must maintain with the bank. The time deposit had abalance of $83,000 as of both June 30, 2013 and 2012.

[3] Government contracts:

The Organization's government-funded activities are subject to audit by the applicable granting agencies.At June 30, 2013, 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 H-CONCENTRATION OF CREDIT RISK

The Organization maintains cash deposits in a major bank, and the account balances at times may exceed

federally 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 NETASSETS

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

June 30,

2013 2012

Gender equity $ 300,641 $ 786,987Violence against women 300,641 786,987

Job and workplace 41,394 131,394Women and poverty 29,204 97,537Management and general 23,197 48,197Development 10,596 50,596

$ 705,673 $ 1,901,698

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

Year Ended June 30,

2012 2011

Gender equity $ 486,346 $ 348,186

Violence against women 486,346 348,286Job and workplace 95,000 75,833Women and poverty 68,333 358,432Management and general 25,000 21,083Development 40,000 21,083

$ 1,201,025 $ 1,172,903

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 Delaware Uniform Prudent Management of Institutional FundsAct as requiring the consideration of the preservation of the historic dollar value of the original gift as of thegift 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.

legal momentum financial statements fy 2013

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