Board of Directors Meeting, November 17, 2009

2009 Finance Committee Report

2

ACTION ITEM – Proposed Motions

1) To remove the restriction on the Board Designated Fund established by the Board at its November 22, 2000 meeting.

2) To accept the revised Reserve Policy to remove all references to “Board Designated Fund.”

United Way of Central and Northeastern Connecticut

Board of Directors Meeting, November 17, 2009

2009 Treasurer’s Report

4

Current Fiscal Year Highlights

As of September 30, 2009

• $16.2 million in total net assets as of September 30. An increase of $1.2 million from last fiscal year end.

• Cash & cash equivalents of $3.7 million is the same cash position of a year ago.

• Collections on the 2008 campaign receivables are slightly behind the rate we experienced for the 2007 campaign a year ago. Management still feels comfortable with the uncollectible rate of 6.25%.

• Long-term Investments of $12.4 million, with a composite rate increase of nearly 13% for the quarter ending September 30th (ahead of our primary benchmarks).

• Accounts Payable and Accrued Expenses are up by $885,000 compared to a year ago, primarily due to the increase to our pension liability at fiscal year end of $460,000. The remaining increase is due to the timing of our payables and payout of the national workplace campaigns.

United Way of Central and Northeastern Connecticut

5

Current Fiscal Year Highlights

As of September 30, 2009 (continued…)

• Campaign Amounts Raised is down by 35% from a year ago ($340,000). This is due to timing of current campaign results being slightly behind last year at this same time.

• Investment income, net of fees is down by $63,000 (62%) compared to last September. This is expected due to the recent conditions of the market.

• Total Public Support and Revenue is $759,000.

• Our operational spending is slightly ahead of last fiscal year’s first quarter by 5.4%, but down by 7.8% against our planned assumptions.

• Our Operational Deficit is $631,000, compared to $381,000 last year. The decrease in campaign revenue is the primary reason for the increased deficit.

United Way of Central and Northeastern Connecticut

6

2009 2008

Assets

Cash and cash equivalents $ 6,331,695 $ 5,065,673

Money market funds 170,644 420

Prepaid expenses and other assets 166,647 170,829

Pledges receivable, net 10,265,938 10,626,601

Other receivables 384,446 87,650

Investments 10,935,433 16,493,461

Investments held in trust by others 5,070,569 6,190,313

Plant and equipment, net 1,964,596 1,767,193

Total Assets $35,289,968 $40,402,140

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

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Investments:

UnrealizedCost Market Gains (Losses)

Mutual Funds: Domestic Equity $ 4,293,385 $ 3,187,356 30% $ (1,106,029) International Equity 4,548,857 3,171,965 29% (1,376,892) Fixed Income 4,431,623 4,195,907 38% (235,716)

Commodities/ Natural Resources 277,450 304,013 2% 26,563

Real Estate 60,015 76,192 <1% 16,177

$13,611,330 $10,935,433 $(2,675,897)

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

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2009 2008

Liabilities

Accounts payable and accrued expenses $ 2,338,023 $ 1,485,597

Campaign support due to C.H.C. 2,352,007 2,336,596

Undistributed agency support 9,574,880 10,074,357

Donor designations payable 4,455,625 4,471,820

Grants payable:Changing Community Conditions 1,531,164 2,055,664Other misc. initiatives and encumbered funds 69,028 189,028

Total Liabilities 20,320,727 20,613,062

Net assets Unrestricted 8,148,627 11,797,622 Temporarily restricted 508,225 559,323 Permanently restricted 6,312,389 7,432,133

Total Net Assets 14,969,241 19,789,078

Total Liabilities and Net Assets $35,289,968 $40,402,140

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

9

2009 2008

Campaign Amounts Raised $28,637,881 $ 28,636,344

Add: Contributions from other UW Campaigns, net 332,792 417,207

Less: Uncollectible Pledges (1,808,845) (1,402,380)CHC’s share of Campaign (includingdonor designations to CHC), net of pledge loss (2,957,497) (3,123,334)

Amounts designated by donors, net of pledge loss (11,138,744) (10,985,118)

Campaign Revenue, net 13,065,587 13,542,719

Total Other Revenue 2,188,998 3,189,590

Total Support and Revenue $15,254,585 $ 16,732,309

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

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2009 Pledge Loss Expense – analysis and notes

Analysis

2008 Campaign – initial reserve ($28 million @ 6.25%) $ 1,750,000

2007 Campaign – campaign w/off; actual loss > reserve 170,127

Prior payments adjustments and corrections (111,282)

Uncollectible pledges $1,808,845

• Provisions for uncollectibles is based upon historical loss factors adjusted by management’s estimates of current economic and local business factors.

• Any excess or difference (actual pledge loss versus reserve) impacts subsequent fiscal years and unrestricted reserves.

• 2005 – 2007 campaigns averaged 5.64% pledge loss.

• 2000 – 2007 campaigns averaged 5.32% pledge loss.

United Way of Central and Northeastern Connecticut

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2009 2008

Community Investment (program support) $9,400,000 $ 9,925,000

Grants and Initiatives 74,655 1,148,994 Community Investment Services 1,753,195 1,432,813

Total Community Investment and Program Services 11,227,850 12,506,807

Support Services:

Resource Development 2,639,842 2,441,448

Management and General 1,258,710 1,195,556

Total Community Investmentand Support Services $15,126,402 $16,143,811

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

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2009 2008

Total support and revenue $ 15,254,585 $ 16,732,309

Total Community Investment andSupport Services 15,126,402 16,143,811

Operating Surplus (Deficit) 128,183 588,498

Non-operating revenues and expenditures:

Change in unrealized loss on investments (2,022,451) (4,000,510)

Realized gain (loss) from sale of investments (2,397,515) 1,030,846 Pension related changes other than net periodic pension cost (528,054) (174,561)

Change in Net Assets $(4.819.837) $(2,555,727)

United Way of Central and Northeastern Connecticut

June 30, 2009 Audited Financial Statements

13

Capital Spending Approvals

The following motions were approved by the Executive Committee on October 22, 2009:

• Approved up to $40,000 as capital spending for the purchase and implementation of new financial accounting software, Serenic.

• Approved up to an amount not to exceed $70,000 to renovate the third floor to retain current tenants.

United Way of Central and Northeastern Connecticut