NATIVE AMERICAN HERITAGE ASSOciATION •. ·.· .. ·.. . .. · •.. ·.·.. .Finan¢ia1 Stat~ents . ·· ... · · · .. ·. · ·. · .··· ..• · .. ·· For the Years.EndedAugus.t31, 20J4and2013

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Independent Auditor's Report , ' ' ' . -

Fin~ncial.s tatements;

Statements of Financial' Position~ '· ~ .~

Statement~ ofActivities · ' . . . ' .

S ta:tements ofFunctiqnal Expenses •' ' -. ·_., . I \• ' '-'

Statement~ of Cash Flows

~ Notes to Financial Statements · 1' ' {•',

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· · .· .. •.·.····•· .. Bi}t_LQ2k &j\ss6.ClA.TEs, ~C/ C-ER1'ufiEn F-oi~Lic AceouNTA.Nis'A.Nn,CoNsui:rA:Nts •.. . · · . .· · . .!}3iA;S?u~<'i~ing>-sp:eet, :L~eso~r~;y~· ~bl7~ .. ~.h~ll~ck~~<t~:?~m.. .·. : ' '.

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·.NATIVE AMERICAN HERITAGE'ASSOCIA110N -' · .. . ' - -~ \ --~ . . '·,' ·;·::- -~·-· · .. ·

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,we have: ·aGdited~: ·th~- ·accompru1yirig .firiancial .. s~teplents _qf·Native .. J\med~rui :Heritfige., ~ · · · · ·· · · .· ·.· A~$()cia#on. (~ n(mptofit brgaiiizati<jh), which coniprise':th,e :_statements >of fmanc.~al ppsiti9J:l as' O:f;· • , , , · Aiigu~(3l, 201.4 ahd2013~ and the' ~elated· st'atetitents <l'factivities;· :functional ¢xpen~es apd cash .

·~ floWs.fortbe,yearsthen erid~d, and the relaiednotesto'the ;fina.nci!il statements.'.· .. ···.· . ' : . ' ·." ~ •• ,· }_:,.-:'. \ J ,· !",\.,. ~ .' ,1.;, ,· ... ' ·• '- ·~----, __ ~· ' ; ",':, \ (,: _:: ·: " _,··,··:.:_-.··, ,···,'. · ... ; .. ' / '

, ·1\fa~agefueat's.Re~porisibitit}r,.tor·tJ:ie Fin~nciafState.ment~ . , · · : ,- ' " ·.' ·':'· ' ' . . . . ~ '· ' "' . . . )• ·.. . . ' , l ,c ,•,' ..

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· .· .•. ·:: M~agem¢nt is. respori~ibl¢ ·for the prcp~ati6n' ill!d 'f~~.pie&ellflltion. o{these fin~sia1 'statem~nt~ ·· · .. :in ac00rdance ~thaccounting priricip.le~ genera1!yiccepte4: intl\e Ut¥ted States of America; this

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··.•.· .incluqe~·~the·,'de~lgn,_'imEl~hientatio~, ap-9 :maiilten~c~ of .ihtem.aLconti-ol· ·relevant ._'1Q,the . · pfepaiati:On la6d'fai(p~senfution o:ffiilancial. staie~¢nts tha:t are "tree frotn;tnatel'iaFnii~stat~ment, .

, • ,; , 1 , • • , , , '· , , • : ~ , • ', ~- 1 • r • -.. ,, • - "r • , . , ' ' •

·whetherduetofraud ot error.' , · · · .. ,; .,. .. • - • • L.. • • • ' .. ·, •• -

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Auditor's Q:esponsi~lliljr. · ' ( .· ., '

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():ur ~e3Jon,sibility i~lo ,express ari opinion ,qnthese fin~Cial St{ltelnepts b~sed ~J;l our audits,· ,\}'e' .. : c9rtduC.tt1d· Q\11' a~dits·.'in' accor~ance .~t4. ~ciditiirg • standards generally . acce}Jted: in··w~ Uo,ited''

.. ..· .. , Sia~es, q'f Altieri ca. . Those st~datdS' ~.requir~ .. that\Ve ., plan. and perfopn the audi(·t~l > pq~. . . . ·· .. · .. -:reasonable assiirance about whether the {lnanciafstatemerits: ate Jree·from niateriaf 'misstatement. '

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. · A~ a~ditc.lrivolv~s '.r>erlorinirig~pr~ced~~~·t~ Qb~hi:_ atid,it,evid~nc~. ~b6ht the~am~unts- and: . . ·· ' '·i,, '.disclos~es'~iti the'.fin~ciirl,. stateme~ts;·· i .The;~:Pf9cedtifes;, selected~ depend o.ri ·th~. atiditot's.·.·.· .

.. · . . . . ... . }ud~ent, including . fhe ;'4ss~ssmeht :of ¢-e · .. risks .. :of ·. ina~etial· rJa,iss~tement .o:f .. the. financial -:-''·.'

. ' ',. ' ' ,_· . '. . $fateni~t1(~, '•wh,~ther:'.4ue . >to:. fral!d -~~"·. erro~~ .. ' ~~ makfng tho~y • ri~~' '4ssesstilents~' ~he, .. ~ud1tot .· . '.

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'·. _ ....

' ' . ;: 3 • ! ' c.onsiders'iJ1teiil~l ~qntrol,relevantto the entity';~ piep~atiop ~d:fair ptesentation·Qf t);te' financial ' '~ , ·· · . ·· •.·.~ statem¢nts~in 'oider .. to design -audit piqcedcites'thaf'are appropfiate·· i~ the d~umsiances,but Q.ot' · . ·· ···. ·

• • 1 • , • : · · • .• fqt' :t~e, p4fPOSe of ~~pressing~·an<Opinigri :(jfi' tfle effe¢tiveness·;of the .entity;(ihtern~l eopttol. ·. ·, . ' '. •• Acc.ordin~ly,. we express~ no s~h.opini()n .... Ait ;audtt al~d ~ inCl:tidys evilluating<the. ~PPropdatep~s{ ..

·. '· . . ofac~ounting. po}!<~ie~, used and the. reasqpab~el)i!SS :of sign.ffi~ant · 8,CCOlp'lting ystiin~tes. p,l~de' by- :. •· · .management, as W¢1Las eyaliiating the overil!Lpresenfation of the· fmandat ~tatements~: · ·: . . · ·

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·' we .h~li~~~ ·tbatth~;audit ·evideri~e ·. ~e ·have tlbt~i~~d ts. .. s~mcie~rai{d approprhlt~.· to :nfo~id~. ·a.·, · .. ,;~a~i,~.f<?r9\li audit opinion. ·. " · · ·., · · . ·· ·· ·. , ·. . · · · · ·. · '

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In ()ur opinion, the financial .statements referred to above present fairly, in all material respects, · ··the.firiancial.position ofN~tiveA11,1ericari~HeritageAssociation·.as of August31,2D14. and 2013, . and the changes ·in' its net assets. G\Ud its .cash flows . for the years then ended in. acco.rdance with G\CcoU:nting principles generally accepted in the United States ofAmeric.a. · ·

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t>~u~ .;1 ~ , ~.c~ · ·· BJ]LLOCK& ASSOCIATES,.P.C ... Leesburg, Virginia December 31, 2014

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NA~IVEAMERICANHERITAGE···ASSOCIATION .. Statements ofFirlancial Position:

August 31, 2()14 and2013 ) ' ', '• .

. Current asset~·: Ca&h and cash equivalents

··•A.ccOjlnts·.tece.ivable Inve¥tory (Note 1) ·· Prep~:tid expenses . ·

$ ·. ·. 1,696,893

Total curr~ntassets ' ( .' •• ·' •• ..: j -, '

.·. Prope~yand equipment, atcost·;etof •. ··. accu~ulkted.depreciation ~Note·.·3) ·

Other assets: .. · .. . Marketable secudties.(Note 6) Unemployment & refimdable.deposits

.. Other deposits.· . · · Total other assets ·

Total assets

LIABILITIES .AND NET ASSETS

Curtent1iabilities: · .. Ac~ounts payabk Accrued expenses Accrued salaries .and benefits . Margin lo'an De.ferreq revenue .. · .

· TotalcU.rrent liabilitit~~ ·

· Net assets: Dnrestrict~d

T.otalJiabilities and net assets

1,115,319 .· 6,541;008 ..

26f2 837 ' ,' '

39,983. $ 16(116 19,699

3,205,556 . 4,523,661

7,805,015'.

. . . 871496 ·'·' ' ' "'

1,97$,020 3;9·on,44~ ·

263,846 .

112,.274 . 1},659 31,469

. 3,520,436 .. . .• 840,049

4,517,887 ..

S.e~ independent audit()r's report ~d accompanying notes to fu?.~nciaLstatewents; . • . ·,,·.' . ,· , , , '· < I - ,' ', • ;'• , , • .c ·'

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.NAtiVE AMERICANHERITAGBASSOCIATION ' '·. . . ,, I.' \ . , . . -. ' ,, .. ,

.. · .·. ·. .. .Stat~m~nts ofActivit!es .. . . · · For. the years ended Angust31, 2014and2013

Unrestricted net·assets: Support and. revenu~: · Contributions ~ Cash . Con~ributions '" Fo~d . . . C?ntrib\lti?n~- ClothiDg .. · ....

. Contributions ·"".·Gifts· in. Kind . Sales, itet of costs .·· . ·. .. . •· .. Special events, }(;ISS related expenses .of . · . $7S,3q2 and $4,798~696, respectively Grants · ·

· Miscellaneous income . · . Gain em asset disposal

· Interest and dividends R~afued gain on investtnents .. . Unrealized gain (l()ss) 011 inv~stments · • Total unrestdcted)upport and revenu~

Expenses: ·Fu11ctional expenses:

Prograrn . . .•. · . ···Management and·gene#l ·

Fund.raising · ·Total functj6nal expenses .

\' ,-. .' ;_ ' ' -' ' -, ' ', . ' : -~ '

Increase. (decrease)• in unrestricted .net asset& . . ) . . .

Net assets at beginning of year '

·. Net.assets afend .ofyear

2014

$ 2,358,.785. 6DlT93o··

' '-' ·- ' ' 3,073,046

29,747,524 '20,580

. 2,723,022

. $ .. 4,289:;59~ .·.··6,009,855

3;056,564. 19,265,378

(4,386)

. 0~419,8~4) ..

414,017 48,~36'

·200,342

34,411,426 .7l4,9Ll9

1;257,320 . 36,383,695 .. ·

(4,.523;~48)

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... See independent aU<:litor's repoitand accompanying notes to financial statements .. • , ' I ' ' '-, , ( ' - -, , •,' - ·' ' , - '

:. .· NATIVE AMERICAN HERITAGE ASSOCIJ\TION

·· ... ·. Statementof.Functional Expenses·

'FortlieYearEnde<fAugust 0.1, 2014

Accounting

.·.Advertising - ',, ·' I

Ba1:1k and credit card charges

Computer maintenance i >\·. ' ' c

Consulting fees . .·

.· Custodia~ . Deliveryexl?ense ·

Depreciation .. · Donated goods-cJotliing .

Uonations-'casli

. IJonatio~s"GiJtsirt Kind

·Donations-food

,Drugte.sting

Du.es&fees. Employee benefits-child care·.·

Employee benefits~i~surance · . E)llployee bep.efits-pension Employee rel,atfons .

:Envelopes, prihting &production .. · Food distribution expense · Gifts \nKlMfee exp~ns~ · .

Ins11rance ·.

Interest exl?ense

.Legal fees· Meetings & travel .·

Offjce expe11se Payroll taxes .

'Postage . ·

Promoti6nal fees

. Prop~rty taxes

Prospectlist

Real estate and otliertaxes. · ·

Rep~irs artd maint~nance Salaries Security·

State registrations ·

· Supplies · Telephone

Utilities

Vehicle expense·

Program

· Services

$

. 115

.139,422 113,481

3,094,748 . . 106;654 .

. 27,085,256 ·.

(},017,,930 ·. 78

• l.?69

58,385 69,131

.221,502 ·. 999,675

19,118 ·.

2,960 648

18,622 ,276

.-

7,579. ·. 266278

·' 438

3,106 . 7,345.

16,443 184,933.

$. 94,667 579

1,089. 2,244,. ·.

45

. 3'8,748

14,463 9,165

32,372 ··50,976

207

;17,920 91,422.

3,17.3 7,604 3,627

12,994 264.

$ 30,864

8,524·

146 3,0'00

510 ·-

4,622

'l6j049 . 27,471.

,_

222

1,900 681

3,919 5,872

194 7,824. . 476,827

- I 1,382; 2,064

.. 25.4,796 1,706

. 4,4(15 . 775 . .193,158 . '102,740

420 6,456

222 5,052

1,919

$1,316,18's

$ 94,667.

31,443 9,613 • 2,505 3,000.

·· .. 45 139,422 152,739

3j094,148 . 106,()54 .

n;o85,256 . . (},017,930

. 78

. 20,654·

9,165 ·. 106;866. 147,578

207. . 37~,769

221,502 999;675 ;37"260

91,422 .. · 5,073·.

.11,251

8,l94 37,488

}34 484,651

1,382··

2,064 25.4,796

.1?706 12,759

.562;176. 858

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NATIVE AMERICAN HERITAGE ASSOCIATION ; . ' . . -

Stateinent. o{Functional Expenses . For 'tp.e Year Encl~d August 31,2013

- 'j ' • ' .- ;

Bank and. credit 'card ch~rges Computermaintenan¢e .. Custodial. D~;Jlivety expense Depreciation

Drtlg testing··

Donations~cash .·

Donation~-Gifts in Kin& ' " - .. ~ . . .. \

· Dohafions-food ' , , • ',· I

Dues& fees

Employee ~e~efits-child cai'e .. Employee benefits~insu;rance · ]3mployee benefits-pension.. . . · Envelo.pes, printing & ptod.uction

Fpodd.jstril>ution expense.

Gifts :in K:ind fee ~xpense ' / • 1

lnsun:lhee Intetest.expe1;18e

Lega1fees · Meet~ngs & travel

.. Office exp~D;se' ... Payp)llt11.xes

Payroll process fee Postage

. Proinotiona1 fees . · Property taxes

P:rospec.t list · Real estate and other taxes · ·Rent

Repairs andmaintenance Salaries Security

Utillties

· :Vehicle expense Total expenses

Program·

Services·

.106,716 •'.

91,.1.61 195.

3,034;862 106;039

23,647,284 . 6,009,85~ · ..

. ··2.,253

.49,362 . 60,241

225,()0.1 572,419 22,522·

2,378 348'

.18,298 '365

1,046

: 6,505. 269,309 .

.·425

. 2,422

7,661 r.s,s2o.

158 579 •, '· ' '.

· .. $34,411;42()'.

'$ 76,023 '533

439 3,343

45

,'•_ ~.

14,831 11,640 .

. 32,071 65,0~4.

15,357 79)772 7,73J'

,7,885 4,374'

19,766

1~4 8,829

-· ··f,849

7,235 124'

8,394· 290,526

570 '6,533.

2S2 5,029 .·.

;6,282 . 2,098·

. $114,949•

$ 190

·8;ncr 378.

473

2,180.

.. 18;691

. 26~~98· 430,266

701:. . 12,852 10,246

'·326'

1,749 6,388 ··184

~04,978'

454

.··217,004.

ll4,538

1>313. , .

$

8,550 . 3,:721

45 106,716'.

.. '129,904 195

3,034,862·. 106,039'

. 23,6:47,284 6,0~9,855

19,264 ..

11,640 •r.oo,i24 151,553 430;2()6.

• ~ ~ , I . '

225'601 ' . ';

572;479 . 38,580 92,624 17;977 10,589 6,471.

. 44,452 ,\ ' '/

.·· 733

414,853 . 454

7,235 ·124' .. . '

. 14,899

. 6'74,313 945'

. 6,53.3

),987 12,690 21,802

. 160,677' $36,383,695

' <' ___ .'.. ·." '' •• '- ' : ,. _· ,. ' ._ _- ,-' ' .. ' ' ,- '' !.'

See. independept auditor's report and accompanying notes to finanda:1 statementS;

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.NATIVE AMERICAN HERitAGE ASSOCIATION

. StatementsofCash Flo~s. Forthe Years Ended Augilst ~~. 2014 and 2013

o, ' ' ,·

Cash flows '&om operating acti~ities: ' Increase/( d.ecrease).in net assets Adjustments to reconcile net income Jo net cash provided by operating activities:

. Depreciation and amortization , Gain oJlasset dispos~l . Realized g~in on investments u nrealjz~d. gain on iri~estinents .. (Inqre~se)/decreasein accounts receivable (Increase)/decrease in inventofies · (Increase )/decrease in prepaid expen8es (Increase)/decrease in deposits · lncre(tse/(decrease} in accounts payable Decrease in accniedsalari~s • and benefits Increase/( decrease) in.deferred revenue · Increase/( decrease} in accrued expenses.· Total adjustments · . .

Net cashprov:ided (used) by operating activities

.'2014

$ 2,723,022·

.152,739 (33,794) (95,408)

(555,894). ' 859,701

' . (2,640,566) (2,348,99'1)

. . 16,.611 ' ' (72,291),

(1 }.,770)· . 3,683,612 .

2 457·. ' . (1,043,594)

1,679,428

129 9o4~· ' .

(48,236). . (200,342)

.. (1,975,020). (360,203 2,367,055. ,(25~894)

·16 544 ·' (3,631)

(1,097;629) . ' {11,778) .'

3,511,176 . {1;012, 772)

Cash flows from investing activities: . . · Cash payments. for the pur'Chase of property . . (288,33.2) ·· ,. · .. · (8,3oo)·

(250,.819) . ' 1,650;272. ' • Investments, net ofrea~iZed and unrealized gain/(loss) ·Net cash pr,<wide<i (used) by.investing•activities

cashflo:ws from financillg aCtivities: Cash proceeds fro:m margin loan · · · .. Cash·proceeds/(repaytnents) online ofcredit

Net cash provided (used) by financing activities

N ~fin: crease lh cash and equivalents . Cash and equivalents - begirilling of year . Cash and equivalents. - end of year .

Supplementaldisclos~res of cash How info~ation: · ; ·.,

Cash paid during the year for: c,

·.Interest expense

(539,151). . . . .1,641,972

. . . .(314,880).

. (314,880)

845,397 871496 .

' ' . ~ ,- '

$1,696,893

1,666,370 (970,000)

96 370

T25,570

. . . 145,926 · .. ..· $871,496 ..

See independent audi~or's report and accompanying notes tofinancial statements. ' ' ' ~· ' ' " ) ' ' ,, < ' ·'' ' 7

NotestoFinan~ial Statenwnts }\ugust 31, 2014 aml20 13 .

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. A summary of the Organization's significant accounting policies is presented below. to assistthe readerin;evaluatingthe·organization's finapcial statements:.·· · ·

',' ' ,,. ,' ' <~ , ' - '' ' ' ' Nature of busiii~~s: Native. American Heritage Association is. a 11Qt-:for.:profit corporatjo,n· dedicated to helping Native .Americans Jiving. on and off the t:ribaJ reservations< in South Dakota and Wyoming.·. Jhe Organization is. headquartered }n Rapid City, South 'Qakota, with, certain •· administrative and fundraising activities carried out at ~branch officeJn Front Royal, Virginia. Virtually all revenue oftheOrganization is obtained by soliciting monetary and .clothing conttibutions frpm the general puplic through direct mail, .as well as from food donations by Ainerica's Second .Harvest'and.

·donated goods f[qm Good 360 andBluSource. 1 . · . ' . ' ,· .

. · TheOr.ganization'spdmarypmgram isto. assistNative Americansontriba1feservaH~ns · . . ·through t11e distribution, ofdotmted fo()d, clpthirig, and other items, · · ·

Casl,I .. and c~sh equivalents: . For financial·· statement.•purp~ses, the· Orga~ization considers alll;lighly liquid 4J_vestments with an .original maturity ofthreemonths or less to· be ca~h equivaleJ;ltS~ ·.··Cash is held in bank,deposit accounts, whiGh, at times, CXC(eeds . federally·insured limits.. At •. August $11 .2014.•.and.20l3,·there,.·existed•~cash deposits of approximately $1,40Q,DOO and, $614,000 ·ir1 excess of. federally . illiSuted ·lhnits, respectively .. , The Organization has not exp·erienced any losses ih such accQunts and

· beli(;Jves it is not expo~edt() ariysignificantcreditriskon cash. · · I', - , - ',-_·, ' .· ',' :",_ , , .; '

Contributed Inventory: ·.The ·Organization .receives·. contrib~ted, p.erishable .and nonperi~hable food items from ·America's •• Second H.arvest · The Organization pays an ·

.. administrative fee to cover the costs of handling the foog; howe;er~ the'product itself is . · considered to be donated and)s recorqed as jl;lventorYand co~tribution revenue afthe ·

tillle of shipment. ··The . food is• di~tributed ·.on· the tribal· reservations . sl).orlly after receipt. Thevalueofthefood ipventoryforthey~ars ended August 31,· 2014.and20J3 was$0 and. $Q, re~pecti"ely. ·Distribution expense is recorded €1fthe time the {qod is distributed. · For the years ended August31, 2014 artd 2013, the fairvalueofthe donated food was recorded at $1.'72 an:d $1.69 per pound, respectively~ . This ~alue wasdefive9 from a

· · . study perfonned. by , the independert auditors~. of America's ..• Second . Harvest that . , determined the average wholesale ycalue of one pmmq. ofdonated product. Wholesale . value is considered to approximate fair ~arket value due to the large qwintities .of

. donated food received.. .

NA'tiVEAMERJCANHERITAGE··ASSOGIATION Notes to Financial State111el1ts ·(continued)

. The Organization',receives contributed clothing from. the general J?Ublic. .The do thing is distributed on the tribal. reservations shortl;Y ,after receipL . Jhe· value.ofthe clothing inventory for·the :Years end~d. August .31, 20.14 and 2013 was $0 and $21,7Q2, re~pectiyely~ ·FortheyearsendedAugust :31,2014 ~d2013,the Organization recorded the fair111arket vaiue ofthe clothing as c.ontribution revenue a,nd distribution. expense at an estimated. $14.42 and $14:.42 per po\lnd, respectively. ·

The.prganization receives other contributed items fr9m90od 369 and BluS<>urce, .$Uch .. as clothing, personal can~/c()smetics, househ'Old items, .and .. furniture. The Organization

pays. ari · admiilistratiye fee to cover the .cost·.·· of handling,. how eyer . th~ products .• are ... considered domtt:d !llld are recorded .as inve~toryand conttibution revenue atthe ~ime of . shipment. The items are distributed on the. tribal .. reservatib1}S. shortly after receipt. .. The ..

·value ofthe inventtlry,items for the .yeru;s ended August 31, ·2()14 au.<! .2013 whs $6,541,()08 and $3.,878, 740 respectively, Distribution eXpen-se is recorded at thetinle . ·

• the items are distributed .. · The fair value. ofthe donated items is determined bY the donor . organization> to. Good 360 and Blt~Source who then pass the doriation to the Organizatio11. •· · ·

Use of estHnates: The pret}aration of • financhil statem~nts in conf~nnity with .. accounting .priliciples .. generally. accepted in the United States .. of America requires

.... 111anagementto make estimates and assumptions that afl'ect the amo.unts and disqlosures · ·. reported in the financial s~atements ... ,Actualres11lts .could diffel( from'thos~ eslimat~s,

Property and depreciation·: . . Property and.·equipment: ar.e recorded. at cost or, if donated, at the . approximate fair .· yalue . at· th~ ·date ·ofdonation ... ·.·.·All as.sets ... over $1,000 with l;lll 'estimated .useful life exceeding 9ne year are capitalized~ . Depreciation is ·calculated using the ,straighHine method over the estimated useful lives of the resvectiye . ·assets.· Maintenance and repairs. are charged to .expense asincu1Ted; major renewals and · betterments are capitalized ... When items ofproperty·or equipment are 'soldQT retired, the,·· related cost and accumulated depreciation are removed from the 'accolJ:nts and ~ny g£!in odoss is included in income. · · · :" '' " ·- ' ' '

Rec~g~iti()n of revenu~ and expe~tses: · • The financial statements of the Organization · are presented on the accrualbasis of accounting. ·

. . .

Fullctional expenses: The. ¢ost ofproviding program and other activ.ities has been SUII11Tlarized on a·. functional. basi~ . in the Statements ofACtivities ... Acc9rdingly, •certairi costs have been, allocated a:tnorig the 'programs and supporting services benefited. the · Organization conducts no joint activities: · · · , · · ·

.. NATIVE AMERICAN HERITAGE ASSOCIATION. · Notes to financial Statement~ (ccmtiqued)

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··1. · Summary of significantacc~unting policies (continued): " ' < " ' ,. ' - - - ' c ' ' ' '

Advertising costs~ The Organization expeQ.ses all advertising costs as th~y are incurred .

. Contributions: The Organization records contributions in accordance with SFAS No.

. 116.. ·· Accordingly, contributions received are record~d as ·unrestricted; ternporarlly restricted, or penuan(intly restricted support depending on the exi~teilceand/or nature of

·any·· donor restrictions. As all material .used ip soliciting. contributions gives the • . Organiz3;tion. variance power to .use the contributiOn ''for the most critical need. at the

· ·· timereceived,'' all contribution revenue is considered.to be unrestricted ... · ·

Inco.rne taxes':. The Organization qualifies as .an exempt orgariizationunder Section 50l(c)(3) of the Internal.Revenue Code lind is notsubject to :feder~l income tax. In · addition, ·.the Organization has . been determined by the IRS pot • to be a · '~private · · · foundation" .within the meaning of Section 509( a)(l}ofthe IBte,rual Re~enue Code. The Organization is subject to income tax on any unrelated business net income. At Augu~t 31, 2014 and2013 the Organization had an outstanding liability for securities purchased on tnargiri. ··Therefore, the Organization inc!lrred t~cnrelated debt· financed income which · js subject to income tax. The Organization also· conducted ·a cruise as a Jundraising . activity during the ·Year ended August 31, 2013 which met the criteria for a regulatly conducted unrelated business. The Organization incurred $0 and $0 in tfnrelated business income tax for the years ended August31, 2014 and 2013, respectively. The federal income tax returns oftheOrganization for 2014, 2013 and 2012 are subjectto ·examination by the IRS; ge~erallyfor three years after they were filed; · · ·.

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Concenjrati~ns: · The Organization receives a significant portion of its contributions rrom America's Second Harvest;. Good 360, and BluSource, the los's of Which·could have an in),pact on the Organization. · · · . . . .

· 2. . Restrictions on assets:

· In· accordance .• with F ASH . No .. 117, "Financial· . Statements of No~·Jor-Profit · Organizations," the Organization reports informationregarding.its .. fulancial position and activities according to. thlee classes of'net assets: urirestricted, temporarilyrestricted, .. and. peiman.ently restrict'Cd .. No temp()rarily or permanently restricted m~f ~s~et~ exist at .August31, 2014an,d2013: · · ·

· 3, Property and equipment:

. · Major classifications of property .and equip~entai1d their respective depreciabl~ lives.at . August 31, 2014 and 2013, are su:rnlnarized below: . · · . . .

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10

. Buildings and1eaey~holdimprov~l1lents (27~35 Years) · · Fumitureap.d equipment{3-1QYears) Vehicles(5Years) · .·· . .. . . ·website·.development (5Years) Land .. ··

. Less:. accum'Uhtteddepreciation · · Net property ar1d ;eqtiip:tpent

$2,105,445 323,641. 750,392

. 24,75.5 ·'183,371.

'3,387,604 1,051,027

.· $2.33.6.577

$2,1 05,445 .. 289,78:7 612,351 24,755'

.183,371 .3,215,709 .1,048,519

$2.167.190

Effective January .. l, 2002, .. the .drgfl:nizatio11 adopted a·SEB .. IRApensionplan;·whereby. full-ti111~·· eJl?.ployees with a minimulll emplo.yment. period or two years,. and who have .

·.attained the lige of 21 are eligjble for the plan ... Effective fo~ 2007, the Qrganizatio'n contributes f5% .ofeach eligible employee's wa~es to the. plan .. For tl.le. years ended ·. Apgqst 3J, 2014 and 20l3;the O~ganization contributed $147,578 and $151,553,

· resp~ctively. The plan follows the calendar year;. . · . . .

5. . ·. MarginLoan: . v f <~_, ' ,' - , J ,. ' ' ' .(. ' ,. ,1, ', '' ','' '( .'· : • ' i I I

·.Til 2012, the Organization Opened. a mat;gin account with Wells Fargo AdVisors .to· p\Jrchase securiti¢s. The securities purchased on margin are .considered e011ateral for the

· marginloan: · ' · · · · · · ·· ' . .

The amountofthe loan changes daily when securities are purchased and sbld .. The rate of interest charged is .calcmla;ted monthly, 'based.onthe a¥erage dailydebit balance in.the margin acc,ount. The intere.strates at Auglist 31:2014and2013 were 2;75% and2.75%J, respectively. M~nagement, based on income information from Wells Fargo Advisors, has. calculated the return on investments forth~ years ~nded August 31, 201 4 and 2013,

, to beapproximately 16.2%.and 9.67%,{espectively. ·. · ·

. The Or~anization ho!Os marketahk securitks at. A u!!ust 31, 20 i4 and 2013. of tl"\ese holdings is as follows:

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NATIVE AMERICAN HERITAGEASSOCIATION Notesto Financial State1Ilents (continued) .

Cost Basis,··

Augu~t31,2014 ·Cumulative · Unrealized Gain(Loss)

Fair· Value··

1-leld.,to-tnaturity ~· Debtseburities . $1,595555 . .

. Available~ for ,.sal~.~ Equi,tY se'curities.

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' . .

Cost· Basis-.

· August31, 2013 .Cumulative Unrealized Gam(LossY ·

Fair .Value

}feld~ to-maturity -:"I)ebt securities $1.566,962 $ 29.869 .

Available..: f9r'"sa1e :_ Equity securities . $2517,909 ' $403,477.

$1.479,643 .· $(70.708) . $1.408.935 ., .

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·The.OI"gabization holds $2(),857.artcl$23,930 .in·cash·and .cash·equivalerits.at August-~1, . 2014 and 2013,respectjvely,·The unrealized gainsand.·losses on marketable securities for the current year are included. as . fl. separate component .of ot)ler revenue in the ·

· · a2coinpanying • statement ofactiviti~s. · F • · • •

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The Fair Value Measurements. Topic of the FASB Accountmg Standards Codific~tion . establishes a. faii value hierarchy that prioritizes the mputs to valuation: techniques used to .. · measure fairyf1lue. The hi~rarchy gives the highest priorityto unadjusted quoted prices .. in· active markets for identical assets or Jial>ilities (Levell measurewe,nts) ·.and th.e lowest

· .· priority to unobservable inputs (Level3 measurements}. ·The three levels o fthe farr value . hierarchyare briefly described below: · · · . · , . · .. · , · · ·

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inputsto the V(lluation methodology are unadjust~d q-qote<l'pric~s for identical assets or liabilities inactive markets. ·. · · ·

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Inputs .. to t]Je valuation.meth()dolQgy.include .. quoted prices for · similar ~s~~ts and liabilitie.s in. active. markets,. ar1d . inJ?uts th~t are · obsen:able fot the assets or liability, . either directly or indirectly, ... for substantially the full term ofthe. fmancial i]lstrin11ent~ .

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. NATIVE AMERICAN HER.ITAGE ASSOCIATION · · Notes to Financial Statemenjs(contimied}

6. ·Marketable Securities (continued): •

7.

Leve13 . . .

Inputs to the va1uatiori .methodology are uhobserirable .. ·and signifi~ant to· the fair value measureroeQ.t:

Th~ fair values. of all of the marketable securities as of August 3.1, 2014. an,d 2013 are based .on ?nadjusted, quoted prices in active markets as of the measurement date (often· · referred to as Level 1 inputs). · ·

.The Otga~ization entered into an agreement with Royal Caribbean Cti:tise~, Ltd. to pay ' · $2,010,526 'from July '12, 2013 through November 21, 2014 for,cruise .ship guest

. accommodations, As ofAugustJ1,2014, $1,206,316 'Yas paid perthe agreement. The:. ()rganization also entered into .an agreement·wjth American Artist Corporation ¢ffective • July 31, 2013 topay$80,000 from October 15, 2013 through Januaty 31, 2015-for talent buyer .services. As of August 31, 2014, $80,0QO was paid .per the agreement. Both agreements represent costs for a fundniising cruise occu:rril1g; February 19, 2015.

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8. · Subsequent Events:.

Subsequenteventshaveheen.evaluated throughDecember 31, 2014,as this is the date the. finartcial statements were available to be issued. ·

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