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Notes to Consolidated Financial Statements
June 30, 2011 and 2010
(1) Organization and Purpose
The Research Foundation of The City University of New York (the
Foundation) was chartered in 1963 to further the purposes of The
City University of New York (the University or CUNY) and other
not-for-profit organizations, through the pursuit, acquisition, and
administration of grants and gifts. The Foundation is a separate
legal entity and is exempt from federal income taxes under the
provisions of Section 501(c)(3) of the Internal Revenue Code
(the Code).
230 West 41st Street LLC (the LLC) was established on May 7,
2004 as a Delaware limited liability company and organized pur-
suant to the Limited Liability Operating Agreement (the Agreement)
dated July 14, 2004 between the Foundation (the Sole Member
with a 100% interest in the LLC) and the LLC. The LLC was formed
to acquire, own, and operate an approximately 300,000-square-
foot office building located at 230 West 41st Street in New York,
New York (the Property). The LLC is a single-member limited lia-
bility company organized and, accordingly, is treated as a disre-
garded entity for federal, state, and local income tax purposes.
GrantsPlus Inc. (GrantsPlus) was created by the Foundation
and incorporated in May 2004 to provide postaward administra-
tion of sponsored programs for not-for-profit organizations other
than the Foundation or CUNY. GrantsPlus is a separate legal
entity exempt from federal income taxes under the provisions
of Section 501(c)(3) of the Code.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying consolidated financial statements, which con-
solidate the Foundation, the LLC, and GrantsPlus (collectively, the
Organization), are prepared on the accrual basis of accounting in
accordance with generally accepted accounting principles in the
United States of America for external financial reporting by not-for-
profit organizations. All intercompany accounts and transactions
have been eliminated in consolidation. The consolidated financial
statements present balances and transactions according to the
existence or absence of donor-imposed restrictions. At June 30,
2011 and 2010, none of the Organization’s net assets or changes
there in was subject to donor-imposed restrictions, and, accord-
ingly, are classified and reported as unrestricted net assets, and
which includes grants and contracts for the performance of certain
services or functions.
Revenues and gains and losses on investments and other
assets are reported as changes in unrestricted net assets unless
limited by explicit donor-imposed restrictions or by law. Expenses
are reported as decreases in unrestricted net assets.
(b) Grants and Contracts
Revenue from grants and contracts, awarded to and accepted by
the Foundation, GrantsPlus, and various units of the University, as
joint grantees, primarily for research, training, and academic devel
opment programs, is recognized as earned, that is, as the related
costs are incurred under the grant or contract agreements. Included
in private grants and contracts revenue are grants sponsored by
CUNY, totaling approximately $39,276,000 and $36,804,000 at
June 30, 2011 and 2010, respectively.
Facilities and administrative costs recovered on grants and
contracts are recorded at rates established by the Foundation with
its federal cognizant agency, or predetermined by the nonfederal
sponsor. Facilities and administrative cost rates for government
grants and contracts are subject to audit, and subsequent final
settlements, if any, are recorded as current period adjustments.
Management believes the impact of any future settlements to be
immaterial to the consolidated financial statements.
(c) Use of Estimates
The preparation of consolidated financial statements in conform
ity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of
contingencies at the date of the consolidated financial statements
and the reported amounts of revenue and expenses during the
reporting period. These estimates and assumptions are based on
management’s best estimates and judgment. Management evalu-
ates its estimates and assumptions on an ongoing basis using
historical experience and other factors, and adjusts such estimates
when facts and circumstances dictate. In the preparation of the
Organization’s consolidated financial statements, management
uses significant accounting estimates with respect to the valuation
of accounts receivable and postretirement benefit obligation.
(d) Cash Equivalents
Highly liquid debt instruments with maturities at date of purchase
of three months or less are classified as cash equivalents, except
for those short-term investments that are managed by an external
investment manager for long-term investment purposes.
(e) Investments
Investments are reported at fair value based upon quoted market
prices. Realized and unrealized gains and losses on investments
are reflected in the accompanying consolidated statements of
activities.
The Research Foundation of the City University of New York
The Research Foundation of The City University of New York