WNPS State Board Fall 2016 Financial Review Oct. 22,

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Agenda 2015 – Audited Financial Statements and Report – IRS financial status – Profit & Loss year-to-date & projection for year-end – Restricted funds 2017 proposed budget – Endowment distribution – Administrative Overhead – 2017 budget proposal Administrative Overhead Policy change proposal 3

Decisions Requested Approvals of – 2015 Audited Financial Statement, Auditors communication, IRS 990 – 2017 proposed budget and associated proposals – Administrative Overhead Policy change 4

WNPS Accounting Components State General Funds Stateed Funds State General Funds State Temporarily Restricted Funds State Permanently Restricted Funds Chapter(s) General Funds Chapter(s) Temporarily Restricted Funds Society General Funds Society Temporarily Restricted Funds Society Permanently Restricted Funds += 5

2015 Society Audit Results 6

Audited Financial Statements and 990 Form Action Requested: State Board review and acceptance of the Audited Financial Statements, Auditor Communication, and IRS

2016 State Financial Status Profit & Loss status as of 9/30/2016 Temporarily Restricted fund status Endowment Fund status 8

State General Fund 2016 Profit & Loss Status Year-end estimate highly dependent on achieving 4 th quarter contributions at least equal to those received in 2015 (~$28K or 37% of total contributions) If achieved, expect to end the year with a loss of approx $8,300 Contributors to expected improvement in year-end result versus plan - Contributions running better than plan (~15K) - Douglasia & calendar production costs lower then planned (~ $5K) Why the improvement is not better - Fees for accounting & audit services higher then planned (~$3.5K) - Profit from events (particularly Botany WA) less then planned (~$3K) - Chapter rebates higher then planned (~$3K) - Insurance costs higher then planned (~$1.3K) 9 Details of 2016 P&L year-to-date and year-end estimate contained in accompanying PDF file

Current Cash Balances With a projected $13K loss for 4 th Quarter 2016 (which could be worse if income projections are not met) available cash for general operations will be drawn down. Likely will drop us below bank account minimum, incurring nominal fees. Cash flow needs may require use of Operating Reserve funds during the 1 st half of

Temporarily Restricted Fund Status Accounting Improvement Project has been spent down to $0 Goal remains to spend down and close the Hinman fund in 2016 to reduce administrative effort. 11

Endowment Fund Status 12

2017 State Plan 2017 Endowment Distribution proposal 2017 Administrative Overhead proposal 2017 Preliminary “as is” Budget 13

2017 Endowment Grant Distribution Per policy, annual distribution limited to not more than 5% of Fair Market Value (FMV) as of Sept 30, and not to reduce Permanently Restricted donations FMV as of 9/30/2016 = $143,291 with $25,275 temporarily restricted – 5% = $7,164 Proposed distribution = $6,500 – Conservation = $2,000 – Education = $2,000 – Research = $2,500 FAC endorses this proposal Action requested: State Board approval 14

2017 Admin OH Rate Admin OH rate calculated on 3-year rolling average of functional costs Mgmt & General Expense Fundraising + Program Expenses Admin OH % = ___________________________ 2016 WNPS Society Administrative Overhead¹ Year Management & General Expenses Program Services Expenses Fundraising Expenses Admin OH % 2013$16,566$208,515$4,5407.8% 2014$22,450$220,721$5,5639.9% 2015$43,649$193,709$13, % 3-Year Average$27,555$207,648$7, % ¹ WNPS Administrative Overhead Policy; Draft 2015 WNPS Audit Report 15

State General Fund 2017 Proposed Budget FAC recommends a “balanced budget” for 2017 To achieve a balanced budget 1.“Priced in” higher profit targets on workshops, Botany WA & Study Weekend ($4,140 increased profit) 2. Eliminated funds for one edition of Douglasia ($3,125 of decreased expense) Without these changes, would expect to run ~$7,000 in the hole in 2017 Increases in income & expenses primarily due to higher spending levels on State & CPS Stewardship programs as compared to

2017 Event Profit Targets As part of balancing 2017 plan targeting $4140 higher profit than 2016 from events approx $2300 higher profit than the average of the last 4 years Botany WA is about ½ of this increase ($1100) 17

2017 Proposed Budget Summary – Income 18 Details of proposed 2017 budget contained in accompanying PDF file

2017 Proposed Budget Summary – Expenses (page 1) 19

2017 Proposed Budget Summary – Expenses (page 2) 20

Other notes re: 2017 State budget Only salary increase included is 0.2% COLA based on projected Social Security increase No provision for overtime payments if required by law Admin OH income on Stewardship programs masks ongoing shortfall in operating income versus expenses. FAC endorses 2017 plan as presented Action Requested: State Board approval 21