Highlights from the 2016 Audited Financials
The USMMA Alumni Association and Foundation’s (AAF) 2016 Financial Statements were finalized on 23 May 2017 and were posted to the AAF website on 6 June 2017. Click on the following link to see the detailed 2016 audited financial results and footnotes: www.usmmaaf.com/fs16
This letter is an opportunity to share some of the summary highlights from our 2016 audited financial statements. Overall, the audit statements show the healthy state of the AAF financial position. The AAF had an increase of overall contributions of $3.4 million, primarily due to $3.1 million raised for the Lower Roosevelt Field Project. Unrestricted contributions (Area of Greatest Need) increased by $130,000 from 2015. AAF Net Assets are now just under $35 million. The AAF Board of Directors, the AAF Audit Committee, and the AAF Staff are dedicated to keeping the AAF in a firm financial state in order to enable the AAF to meet its mission to support the Academy, the Regiment of Midshipmen, and the alumni.
Highlights from the 2016 Audited Financials
Cost to Raise a Dollar – from Exhibit B/C of the 2016 Audited Financials:
- 2016 “Fundraising” expenses (Exhibit C – Page 2): $429,877
- 2016 “Contributions”(Exhibit B – Page 1): $6,469,761
$429,877 / $6,469,761 = $0.066 Cost to Raise One Dollar
We are frequently asked about our “costs to raise a dollar,” which is a common term applied in the non-profit world. We monitor all of the various components of this metric to ensure that we are operating as efficiently as possible and continuously improving in this area. Our cost to raise a dollar from 2012-2016 ranges between 17 cents to less than 7 cents in 2016. The low number in 2016 is due to the additional $3.1 million raised for the Lower Roosevelt Field Project and keeping expenses virtually unchanged from 2015.
The Blue and Gray Golf Outings play an important role in generating contributions to the AAF, and in particular Athletics, and build tremendous goodwill among our alumni, parents, friends, and the maritime community. There is a significant cost in hosting them. For 2016, the “cost to raise a dollar” solely for the Blue and Gray outings is $0.56.
Expenses, Including Gifts, Grants, and Awards:
- 2016 Total Expenses, including Gifts, Grants, and Awards, increased by $101,000 (+2.9%) from the prior year. Approximately 33% of 2016 expenses comprised of Gifts, Grants, and Awards* and totaled $1,189,000.
- The AAF is in the business of providing support for our mission. A list of 2016 gifts made to the Academy and the Midshipmen by the AAF can be viewed by clicking on the following link: www.usmmaaf.com/2016gifts
- Salaries, payroll taxes, and benefits for eight full time employees and one part-time employee was $820,000; a 14% increase from 2015. The part-time employee was on staff the entire year and there was a slight overlap of employees, one replacing the other. The new employee earned more than the replaced employee.
- Legal fees are included in “professional and contracted services.” The AAF incurred legal expenses of $43,000 in 2016. Legal fees can cover various items such as contract review, litigation expenses, and organizational governance ensuring that the AAF meets ever changing federal, state, and local guidelines. It may be necessary to incur large legal expenses during any future time period.
- Due to the unprecedented issues in 2016 at the Academy regarding Sea Year Stand Down and Middle States Accreditation, the AAF contracted a well-respected public relations firm, Edelman, to counter the reputational damage caused by these issues. Edelman will promote the Academy, its mission, and the accomplishments of the graduates and Midshipmen at a time when correcting negative press and misinformation is required.
- Management and General Expenses decreased from $803,000 to $731,000.
*Important Note: Non-profit accounting treats the AAF’s “Gifts” to the Academy, Midshipmen, and alumni as “Expenses.”
- Total contributions for 2016 were $6,470,000, representing a $3,400,000 increase from the prior year, with $3.1 million due to the donations for the Lower Roosevelt Field Project. Unrestricted contributions (Area of Greatest Need) increased $130,000, a +5.2% increase from 2015.
- Total contributions consisted of the following: $2,624,000 Unrestricted; $3,836,000 Temporarily Restricted; $9,500 Permanently Restricted.
- Unrestricted contributions (Area of Greatest Need) are funds available to be used for any purpose and give the AAF the greatest flexibility when deciding how best to support the Academy and Midshipmen. The AAF will gift $1 million of Unrestricted funds to the Lower Roosevelt Field Project in 2017.
- The amount of “Cash and Cash Equivalents” increased from $9,891,000 in 2015 to $13,556,000 in 2016.
- The balance sheet remains debt free and had Total Net Assets of just under $35 million.
- Total Investment activity generated a gain of $428,000. In addition, there was approximately a $2.2 million gain reported due to the change in value of a family trust that is not managed by the AAF.
- The goal of our investment strategy is to optimize the return for the level of risk associated with the portfolio of investments.
Thank you for your generous support of the USMMA Alumni Association and Foundation. Please feel free to contact any of the undersigned with any questions or comments.