1. art and entertainment
2. shows and events
3. festival

1
Pre-Proposal Application
Complete and submit via email to The Joanna Foundation email account with the required attachments (see
checklist). Late applications will not be accepted. A limited number of organizations will be invited to submit full
proposals. Invitees will receive additional instructions by email. Organizations who are not invited to submit a
full proposal also will be notified by email.
Section 1: Organizational Information
Organization Name Spoleto Festival USA
Mailing Address
14 George Street/Charleston, SC 29401
Physical Address
same as above
Website Address
www.spoletousa.org
501(c) (3) Status
Yes
✔
Date Received
09/08/1978
Pending
Date Anticipated
No
Specify Other Exempt Status
Section 2a: Contact Information for Applicant Organization
Name and Title of Chief Executive
Nigel Redden, General Director
Phone Number 843.722.2764
Email Address [email protected]
Name and Title of Primary Contact
Leah Harrison, Institutional Writer
(if different from above)
Phone Number 843.720.1138
Email Address [email protected]
Will another organization serve as Fiscal Agent?
No
Yes
✔
(Skip Section 2b)
(Complete Section 2b)
The Joanna Foundation – Pre-Proposal Application
2
Section 2b: Organization Acting as Fiscal Agent
Organization Name
Mailing Address
Physical Address
Website Address
501(c) (3) Status
Yes
Date Received
No
Specify Other Exempt Status
Name and Title of Chief Executive
Phone Number
Email Address
Name and Title of Primary Contact
(if different from above)
Phone Number
Email Address
Section 3 – Project Information
Proposed Program or Project Title (75 character limit including spaces and punctuation)
Open Stage Door 2015, Spoleto's complimentary youth ticket distribution
Proposed Amount
$3000
Direct relevance to one or more of five designated areas in South Carolina: Berkeley, Charleston and
Dorchester Counties and/or the communities of Joanna and Newberry (500 character limit including
spaces and punctuation)
Open Stage Door extends Spoleto's cultural benefits to underserved populations throughout
Charleston, Berkeley, and Dorchester counties, introducing hundreds of children and young
adults to progressional theater, music, opera, and dance each year.
The Joanna Foundation – Pre-Proposal Application
3
Section 4 – Primary Purpose of the Proposed Funds
Brief Description of Primary Purpose (3000 character limit including spaces and punctuation)
Spoleto Festival USA's mission is to create a comprehensive and innovative arts festival in
Charleston, South Carolina, by producing and presenting events featuring an international mix of
distinguished artists and emerging talent. The Festival seeks excellence in all its endeavors as it
strives to provide excitement, enjoyment, and education for artists and audiences alike. Spoleto
Festival USA’s goals are to: offer programs of the highest artistic caliber to a diverse and expanding
regional, national, and worldwide audience; support experimental and innovative work; nurture
exceptional young artists; present a variety of both new and traditional works; engage young people;
encourage public understanding and appreciation of the arts; and improve the cultural/economic life
of the community.
Each season Spoleto Festival USA offers a distinct mix of innovative international programming that
includes the very best of traditional and contemporary work. The Festival's artistic program spans
the entire spectrum of the performing arts and is singular in its depth, breadth, and diversity.
Purposely designed to be wide-ranging and inclusive, Festival programs have featured such popular
performers as Ella Fitzgerald, k.d. lang, David Sedaris, Savion Glover, and Bela Fleck as well as
promising young artists at the beginning of their careers, including Yo-Yo Ma, Joshua Bell, Dawn
Upshaw, and Alisa Weilerstein.
Spoleto Festival USA is known for its original productions and commissions of new work and has
offered more than 200 American debuts and world premieres by artists as diverse as Philip Glass,
Chen Shi-Zheng, Osvaldo Golijov, and Pascal Dusapin. The Festival has introduced its audiences to
international theater companies large and small--from Nottingham Playhouse and the Gate Theatre
to Kneehigh, 1927, and The Foundry--and featured dance presentations from some of the world's
best known ensembles--Alvin Ailey American Dance Theater, the Joffrey Ballet, Moscow Ballet
Theatre, and Cedar Lake Contemporary Ballet among them.
Spoleto Festival USA is firmly committed to extending its exceptional cultural resources to
constituencies throughout the Lowcountry through an ongoing multi-faceted program of audience
development efforts. These free outreach events seek to engage a broad audience by expanding
appreciation for the understanding of the performing arts throughout the community at large. In
addition to a range of program-specific events, each season the Festival's outreach includes Open
Stage Door; "Conversations With...," artist/audience discussions moderated by CBS News
correspondent Martha Teichner; and artists-in-the-community events such as master classes,
hospital visits, and hands-on demonstrations.
Section 5 – Required Attachments / Checklist
✔
List of Organizational Officers and Directors with primary business or professional affiliations
✔
Documentation of IRS tax-exempt status (IRS determination letter)
✔
Most recent audited financial statements – If your organization does not engage an independent
auditor, include a note of explanation and provide unaudited financial statements for the most
recently completed fiscal year and your most recent IRS Form 990 Tax Return. If your program
is a component of a complex institution or national organization, include a note of explanation
and provide statements of financial status and operating results that accurately represent the
resources and operations of your component.
The Joanna Foundation – Pre-Proposal Application
BOARD MEMBERS AND AFFILIATIONS, 2014 – 2015
OFFICERS
Chairman of the Board
President
Treasurer
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
General Counsel & Secretary
Mr. M. Edward Sellers
Mr. William G. Medich
Mr. Ronald D. Abramson
Mr. Richard J. Almeida
Mrs. Jennie L. DeScherer
Mrs. Lou Rena Hammond
Dr. John M. Palms
Mr. W. Lucas Simons
Mr. Mack I. Whittle, Jr.
Mr. Loren R. Ziff
Ms. Anita G. Zucker
Mr. John B. Hagerty
DIRECTORS
Mr. Ronald D. Abramson, Treasurer
Washington, DC
Shareholder, Buchanan Ingersoll & Rooney
Chairman Emeritus, Corcoran Gallery of Art Board of Trustees
Doctor of Fine Arts, honorus causa, Corcoran Gallery of Art
Board Member: Buchanan, Ingersoll & Rooney; New York University; Washington Airports
Task Force; National Symphony Orchestra; DC Jazz Festival
Mr. Richard J. Almeida, Vice President
Chicago, IL; Charleston, SC
Director Emeritus: UAL Corp; Ingredion Inc.; CARE USA Council of Board Alumni
Board Member: Save Venice (Treasurer); Charleston Library Society (Treasurer);
Drayton Hall Site Advisory Council; Historic Charleston Foundation (Investment
Advisory Committee); Carolina Yacht Club (Audit Committee)
Member: The Economics Club of Chicago; Chicago Council on Global Affairs;
Commercial Club of Chicago; Old Masters Society of The Art Institute of Chicago;
The Arts Club (Chicago); The Chicago Club; Carolina Yacht Club; The Metropolitan
Club (New York)
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 2 of 14
Mrs. Katharine I. Bachmann
Charleston, SC; St. Louis, MO; Boca Grande, FL
Retired Professor, University of South Carolina School of Law
Board of Trustees, Columbia Museum of Art (Chair, Collections Committee)
Ms. Susan L. Baker
New York, NY
Co-Chair, The Collegiate Chorale
Board Member: Animal Medical Center, Shen Wei Dance Arts, American Friends of Les Arts
Florissants
Former Chair, New York City Opera
Former Board Member, Lincoln Center
Mrs. Valerie M. Barnet
Spartanburg, SC
Board Member: Walker Foundation; South Carolina School for Deaf and Blind;
Mental Fitness, Inc.
Mr. Henry J. Blackford, III
Charleston, SC
Senior Vice President/Senior Commercial Relationship Manager, First Citizens Bank and
Trust Co., Inc.
Rotary Club of Charleston - Breakfast
Fundraising Committee, Coastal Community Foundation
Country Club of Charleston
St. Michael’s Episcopalian Church
Former Board Member: Gibbes Museum of Art; Charleston Metro Chamber of Commerce;
College of Charleston Foundation; Trident United Way; Porter-Gaud School; Coastal
Community Foundation
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 3 of 14
Mrs. Amy Blumenthal
Charlotte, NC
President, AmyEnt
Chair: North Carolina School of the Arts Board of Visitors; NC Dance Theatre Board of
Advisors
Board Member: Appalachian State University School of Music; Wildacres Retreat;
Martha Graham Dance; NC Blumenthal Performing Arts Center; Duke Mansion/Lee
Institute
Former Chair: Arts and Sciences Council, Charlotte-Mecklenburg; NC Dance Theatre
Mrs. Tippy Stern Brickman
Sullivan’s Island, SC
Artists’ Consultant
Board Member, Gibbes Museum of Art
Former Owner/Curator, Tippy Stern Fine Art, LLC
Former Board Member: Charleston Concert Association; Charleston Symphony
Orchestra (Vice President); Charleston Theatreworks (Vice President)
Mrs. Joan S. Coker
Hartsville, SC
Board Member: E.T.V Communications; Kalmia Gardens; South Carolina Governor’s
School for the Arts and Humanities; Brookgreen Gardens; Coker College
Performing Arts Series; South Carolina Independent Colleges and Universities
Former President, E.T.V. Endowment
Mr. Leonard S. Coleman, Jr.
Atlantic Highlands, NJ; Palm Beach, FL
Board Member: Heinz; Omnicom; Avis-Budget; Churchill Downs; Electronic Arts;
Aramark; Little League Baseball; Metropolitan Opera; Children’s Defense Fund; Jackie
Robinson Foundation
Mrs. Jennie L. DeScherer, Vice President
New York, NY
Board of Directors, SLE Lupus Foundation, Lupus Research Institute (Executive Committee)
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 4 of 14
Mr. LeGrand Elebash
Mt. Pleasant, SC
CEO, Civis Consulting, Inc.
Former Board Member: Operation Home; I’On Trust; Halsey Institute of Contemporary Art
Mrs. Alicia Mullen Gregory
John’s Island, SC
President, Gregory Management Company
President, River Oaks Foundation, Inc.
Board Member, Medical University of South Carolina Children’s Hospital Fund
Mr. John B. Hagerty, General Counsel & Secretary
Charleston, SC
Partner, Nelson Mullins Riley & Scarborough, LLP
Member, Society of International Business Fellows
Mrs. Penelope C. Hall
Millbrook, NY
Member: Century Association; Cosmopolitan Club; National Trust for Historic Preservation
Council
Mrs. Lou Rena Hammond, Vice President
Charleston, SC
Chairman and Founder, Lou Hammond & Associates
Capital Campaign Cabinet, Gaillard Performance Hall Foundation
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 5 of 14
Mr. Timothy W. Hughes
Charleston, SC; Highlands, NC; Atlanta, GA
Board Member: Highlands-Cashiers Chamber Music Festival; Highlands-Cashiers Land
Trust; French Protestant (Huguenot) Church, Charleston
Mr. Barry I. Kalinsky
Charleston, SC
Vice President, Bob Ellis Shoes
Board of Trustees, Historic Charleston Foundation
Mrs. Deborah Kennedy Kennard
Charleston, SC
Member: District of Columbia Bar Association
Former Board Member: Barker Adoption Foundation (Executive Committee);
Legal Aid Society for the District of Columbia (Executive Committee; Chair, Nominating
Committee); National Child Research Center (Secretary; Live Auction Co-chair);
Choral Arts Society of Washington, D.C.; Community IMPACT!
Former Member: La Cite Joyeuse; International Young Women’s Partnership
Dr. George H. Khoury
Charleston, SC
President, PRAC Society
Manager and Member, Charleston Neurosurgical Associates, LLC
Past Chairman of Neurosurgery, Roper/St Francis Hospital
Past President, South Carolina Association of Neurological Surgeons
Past President, South Carolina Spine Society
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 6 of 14
Mr. William G. Medich, President
Charleston, SC
Regional President, South State Bank
Board of Directors, Coastal Community Foundation (President)
Dr. John M. Palms, Vice President
Isle of Palms, SC
Distinguished Professor Emeritus, University of South Carolina
Distinguished President Emeritus, University of South Carolina
Chairman Emeritus, The Institute for Defense Analyses
Mentor, Defense Science Study Group, The Institute for Defense Analyses
Ms. Susan Pearlstine
Charleston, SC
Former Owner/Director, Pearlstine Distributors, Inc.
Co-manager, Pearlstine Family Fund, Coastal Community Foundation
Board Member: Kahal Kadosh Beth Elohim (Vice President - Development);
MUSC Foundation; Halsey Institute of Contemporary Art; Foundation for Sarcoidosis
Research; Park City Community Foundation
Mr. James N. Richardson, Jr.
Hilton Head Island, SC
President, The Richardson Group, LLC
CEO, Windmill Harbour Company, Inc.
Founder, South Carolina Yacht Club
CEO, General Manager and Owner, Coligny Plaza
Chairman, World Presidents Organization – Rebel Chapter
Commissioner, South Island Public Service District
Board Member, Coastal States Bank
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 7 of 14
Mr. M. Edward Sellers, Chairman
Columbia, SC
Chairman, BlueCross BlueShield of South Carolina
Chairman, New Carolina, South Carolina’s Council on Competitiveness
Vice Chair, Palmetto Institute
Board Member: E.T.V Communications; Healthcare Initiative Advisory Board, Harvard
Business School
Mr. W. Lucas Simons, Vice President
Nashville, TN
Operating Partner, Council Capital
Mrs. Kaye Scott Smith
Sullivan’s Island, SC
Board Member, Sullivan’s Island Park Foundation
Member, Ashley Hall Parents’ Association
South Carolina Cass Elias McCarter Guardian ad Litem
Red Cross Tiffany Circle
Mr. Phillip D. Smith
Charlotte, NC
Executive Vice President, Group Head, Government & Institutional Banking, Wells Fargo
Board of Visitors, Culverhouse College of Commerce, University of Alabama
Co-chair, Boy Scouts Sporting Clay Committee
Mentor, American Corporate Partners (ACP)
Former Vice Chairman, Municipal Securities Rulemaking Board
Former Member: Securities Industry and Financial Markets Association; Municipal Executive
Committee; Government Finance Officers Association Banking Committee
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 8 of 14
Mrs. Cynthia Anne Solomon
Sullivan’s Island, SC
Consultant, Carolina Eyecare Physicians
Director, Operation Sight
Board Member: Kahal Kadosh Beth Elohim (Vice President - Development);
Association for the Blind and Visually Impaired, Charleston; Trident United Way;
Kiawah Island Club
Chairman, Women’s Leadership Council, Trident United Way;
Ms. Carolyn Carter Starr
New York, NY
Consultant
Former President & CEO, Grey Group
Board Member, New York Women’s Forum
Member, International Women’s Forum
Former Member, US National Advertising Review Board
Former Trustee, Heartshare Human Services of New York
Past President, New York Women in Communications
Mrs. Elizabeth H. Sullivan
Charleston, SC
Owner, Elizabeth Sullivan Design
Mrs. Cynthia B. Thompson
Charleston, SC; Holland, OH
Vice Chair, Toledo Museum of Art Board of Directors
Emerita Board Member, University Missouri System
Former Chair, Girl Scouts USA
Former Board of Trustees, University of Toledo
Former Member, Ohio Cultural Facilities Commission
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 9 of 14
Mrs. Hellena Huntley Tidwell
Atlanta, GA
Board of Directors, South Arts
Former Board Member, National Black Arts Festival; Alliance Theatre
Former Senior Vice President, Arts & Science Council, Charlotte
Former Chair, Penland School of Crafts
Mr. Paul G. Trippe
Columbia, SC
South Atlantic Region Executive and Managing Director, U.S. Trust/Bank of America
Private Wealth Management
Mr. Mack I. Whittle, Jr., Vice President
Greenville, SC
Investor/Advisor
Former Chairman, President, & CEO, The South Financial Group
Board of Trustees, University of South Carolina (Past Chairman)
Chairman, University of South Carolina Medical School, Greenville
Former Chairman, South Carolina Chamber of Commerce
Past President, South Carolina Bankers Association
Former Board Member: Greenville County Art Museum; South Carolina Arts Foundation;
The Palmetto Business Forum; South Carolina State Museum Foundation; Midlands
Business Leadership Group; The Palmetto Institute; The SC Council on Competitiveness;
The Palmetto Trust for Historic Preservation; Greenville Symphony Advisory Board
Mr. Loren Ziff, Vice President
Charleston, SC
Principal, EastRock Properties, LLC
Chairman, Operation Sight
Co-Chairman, Push Up & Up, Inc.
Board Member, Friends of Sullivan’s Island School
Advisory Board: Jewish Studies Program, College of Charleston; School of Languages,
Cultures & World Affairs, College of Charleston
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 10 of 14
Ms. Anita G. Zucker, Vice President
Charleston, SC
Chairperson and CEO, The InterTech Group, Inc.
Owner: Carolina Ice Palace; Original Ms. Rose’s Fine Food and Cocktails; Tristan Catering;
492 King; South Carolina Stingrays
Co-founder and Past President, The Education Foundation, Charleston Metro Chamber of
Commerce
Executive Committee Member and immediate Past Chairperson, School of Business Board
of
Governors, College of Charleston
Board Member: Coastal Community Foundation; Trident United Way; Hebrew Immigrant
Aid Society; Teammates For Kids Foundation; Saul Alexander Foundation; The Jewish
Studies Advisory Board (Chair); The Charleston Promise Neighborhood (Vice Chair);
Advisory Board, Neuroscience Department, Medical University of South Carolina (Chair)
Member: Trident Technical College Area Commission; Rotary Club of Charleston; Education
and Economic Development Coordinating Council, State of SC; Committee for the
Holocaust Memorial at Marion Square; inaugural Tiffany Circle Society of Charleston,
American Red Cross (Co-Chair); SC Aerospace Task Force
Director Emerita: Medical University of South Carolina Foundation; Citizen’s Advisory
Committee, Hollings Cancer Center
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 11 of 14
CHAIR EMERITI:
Mr. Homer C. Burrous, Chairman Emeritus
Charleston, SC
President, Burrous Enterprises Ltd.
Former Chairman, Sunbelt Coca-Cola Bottling Company
Mr. Carlos E. Evans, Chairman Emeritus
Charlotte, NC
Former Executive Vice President, Eastern Commercial Banking, Wells Fargo
Chairman, Salem Capital
Chair, Medical University of South Carolina Foundation
Board Member: Queens University; National Coating Systems; American Welding
and Gas
Mr. William B. Hewitt, Chairman Emeritus
Charleston, SC
Chairman, The Charleston Promise Neighborhood
Board of Trustees, Medical University of South Carolina
Chairman Emeritus, Medical University of South Carolina Foundation
Mrs. Martha Rivers Ingram, Chairman Emerita
Nashville, TN
Chairman Emerita, Ingram Industries
Chairman Emerita, Vanderbilt University Board of Trust
Chairman Emerita, The KeyBoard, Vanderbilt Blair School of Music
Co-founder, Nashville Repertory Theatre
Life Member, Executive Committee, The Nashville Symphony
Capital Campaign Cabinet, Gaillard Performance Hall Foundation
Member, Gaillard Management Corporation
Board Member: Tennessee Performing Arts Center; Nashville Repertory Theatre;
Nashville Opera Association; Advisory Board of the Nashville Ballet
Former Board Chair, The Nashville Symphony
Former Vice Chair, Campaign for Schermerhorn Symphony Center
Photo by John Russell/Vanderbilt University
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 12 of 14
Mr. Joel A. Smith, III
Columbia, SC
Dean Emeritus, Darla Moore School of Business, University of South Carolina
Mr. Charles S. Way, Jr., Chairman Emeritus
Charleston, SC
Chairman, The Beach Company
Capital Campaign Cabinet, Gaillard Performance Hall Foundation
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 13 of 14
DIRECTORS EMERITI CIRCLE:
Mrs. Nancy M. Folger
Washington, DC
Board Member: Arena Stage; The Foundation for The National Archives; Vital Voices;
The Sitar Arts Center; Live It, Learn It; Young Concert Artists
Mr. David Maybank, Jr.
Charleston, SC
Mrs. Susan W. Ravenel
Charleston, SC
Board Member, Southern Arts Foundation; MUSC Neurosciences Advisory Board
Former Chairman, South Carolina Arts Commission
Former Board Member: American College of the Building Arts; Gibbes Museum of Art;
Ms. Kathleen Rivers
Charleston, SC
Owner, Kathleen Rivers Interior Design
Mrs. Joan Sarnoff
New York, NY
Founding Director, Opera Orchestra of New York
Chairman, Board of Overseers, St. Luke’s Roosevelt Hospital
Board of Trustees, Mt. Sinai Hospital
Spoleto Festival USA
2014-2015 Board Members and Affiliations
Updated March 12, 2015
Page 14 of 14
Mrs. Judith S. Vane
Charleston, SC
Chairman, The Simon’s Guild
Board of Directors, Art Forms & Theatre Concepts, Inc.
Mrs. Katherine Westmoreland
Charleston, SC
HONORARY:
Dr. Joseph Flummerfelt
Indianapolis, IN
Former Artistic Director for Choral Activities, Spoleto Festival USA
Mrs. Janice S. McNair, Honorary Member
Houston, TX
Mr. Charles Wadsworth
New York, NY
Former Director for Chamber Music, Spoleto Festival USA
SPOLETO FESTIVAL USA, INC.
CHARLESTON, SOUTH CAROLINA
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
FOR THE YEARS ENDED AUGUST 31, 2014 AND 2013
Erik M. Glaser, CPA
Chris M. Duncan, CPA
_____________________________________________________________________________________________
American Institute of CPAs
| Public Company Accounting Oversight Board
|
SC Association of CPAs
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Spoleto Festival USA, Inc.
Charleston, South Carolina
We have audited the accompanying financial statements of Spoleto Festival USA, Inc. (a nonprofit organization),
which comprise the statements of financial position as of August 31, 2014 and 2013, and the related statements of
activities and cash flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Spoleto Festival USA, Inc. as of August 31, 2014 and 2013, and the changes in its net assets and its
cash flows for the years then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matter
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The
supplementary combining schedules of financial position on pages 21 and 22 are for purposes of additional
analysis and are not a required part of the financial statements. Such information is the responsibility of
1040 Anna Knapp Boulevard, Mount Pleasant, SC 29464 | P 843.849.0655 | F 843.849.0612 | www.glaserduncan.com
management and was derived from and relates directly to the underlying accounting and other records used to
prepare the financial statements. The information has been subjected to the auditing procedures applied in the
audits of the financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial statements or to
the financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the information is fairly stated in all material
respects in relation to the financial statements as a whole.
October 17, 2014
Mount Pleasant, South Carolina
1040 Anna Knapp Boulevard, Mount Pleasant, SC 29464 | P 843.849.0655 | F 843.849.0612 | www.glaserduncan.com
SPOLETO FESTIVAL USA, INC.
STATEMENTS OF FINANCIAL POSITION
AUGUST 31, 2014 AND 2013
2014
2013
ASSETS
Cash and equivalents
Contributions and grants receivable, net
Accounts receivable, net
Prepaid expenses
Inventory
Investments
Beneficial interest in charitable remainder trust
Property and equipment, net
Total Assets
$
483,497
3,004,776
83,131
201,873
4,000
5,830,934
283,345
7,526,731
$
491,638
2,333,487
22,628
130,260
4,000
4,940,890
304,796
8,063,710
$
17,418,287
$
16,291,409
79,349
85,587
30,158
800,000
915,834
$
37,014
75,366
32,302
1,050,000
1,170,833
LIABILITIES AND NET ASSETS
Liabilities
Accounts payable
Accrued expenses
Deferred income
Line of credit
Notes payable
$
Total Liabilities
1,910,928
2,365,515
Net Assets
Unrestricted:
Operating
Cash reserve
Designated
Capital assets
Total unrestricted
15,274
398,673
945,504
5,702,704
7,062,155
6,577
714,241
352,724
6,191,305
7,264,847
876,058
7,569,146
852,090
5,808,957
15,507,359
13,925,894
Temporarily restricted
Permanently restricted
Total Net Assets
Total Liabilities and Net Assets
$
17,418,287
$
16,291,409
See accompanying notes to the financial statements
3
SPOLETO FESTIVAL USA, INC.
STATEMENT OF ACTIVITES
FOR THE YEAR ENDED AUGUST 31, 2014
Temporarily
Restricted
Unrestricted
Revenues and Contributed Support
Revenues:
Admissions
Merchandise sales
Advertising and sponsorships
Box office handling charges
Investment return, net of brokerage fees
Change in value of split interest agreement
Rental and other income
Operating
$
Total Revenues
2,901,321
5,411
65,850
937
169,986
230,408
Cash Reserve
$
3,373,913
Contributed Support:
Contributions and grants
Net assets released from restrictions
Benefit programs and fundraising events
net of special event expense of $277,574
-
$
-
2,553,128
828,500
204,432
(520,000)
263,922
Capital
Assets
Designated
-
645,969
-
$
Permanently
Restricted
Total
184,472
$
Total
2,901,321
5,411
65,850
937
815,955
414,880
$
$
(21,451)
-
-
645,969
184,472
4,204,354
(21,451)
75,730
-
14,175
-
2,847,465
308,500
353,919
(308,500)
-
-
263,922
$
4,182,903
1,760,189
-
-
2,901,321
5,411
65,850
937
815,955
(21,451)
414,880
4,961,573
-
-
263,922
Total Contributed Support
3,645,550
(315,568)
75,730
14,175
3,419,887
45,419
1,760,189
5,225,495
Total Revenues and Contributed Support
7,019,463
(315,568)
721,699
198,647
7,624,241
23,968
1,760,189
9,408,398
Expenses
Program and production
Marketing, public relations and box office
Development and fundraising
General and administrative
Bad debt expense
Interest and fees
Depreciation and disposal of assets
Total Expenses
Excess (deficiency) of support and revenue
over expenses
4,477,185
826,577
473,971
805,957
175
38,410
-
-
128,919
-
292,290
21,929
36,548
58,489
32,015
634,468
4,769,475
848,506
639,438
864,446
175
70,425
634,468
-
-
4,769,475
848,506
639,438
864,446
175
70,425
634,468
6,622,275
-
128,919
1,075,739
7,826,933
-
-
7,826,933
397,188
Transfers
Transfers to/from other funds
(315,568)
(388,491)
592,780
-
-
Increase (Decrease) in Net Assets
8,697
(315,568)
592,780
Net Assets, beginning of year
6,577
714,241
352,724
Net Assets, end of year
$
15,274
$
398,673
(877,092)
$
945,504
(202,692)
388,491
-
(488,601)
5,702,704
7,264,847
$
7,062,155
1,760,189
-
(202,692)
6,191,305
$
23,968
$
1,581,465
-
-
23,968
1,760,189
1,581,465
852,090
5,808,957
13,925,894
876,058
$
7,569,146
$
15,507,359
See accompanying notes to the financial statements
4
SPOLETO FESTIVAL USA, INC.
STATEMENT OF ACTIVITES
FOR THE YEAR ENDED AUGUST 31, 2013
Temporarily
Restricted
Unrestricted
Revenues and Contributed Support
Revenues:
Admissions
Merchandise sales
Advertising and sponsorships
Box office handling charges
Investment return, net of brokerage fees
Rental and other income
Operating
$
Total Revenues
2,805,840
12,568
64,750
167,345
168,708
286,214
Cash Reserve
$
3,505,425
Contributed Support:
Contributions and grants
Net assets released from restrictions
Benefit programs and fundraising events
net of special event expense of $242,404
-
$
-
2,506,676
462,500
496,741
(137,500)
246,925
Capital
Assets
Designated
-
183,834
-
$
Total
223,575
$
Total
2,805,840
12,568
64,750
167,345
352,542
509,789
183,834
223,575
3,912,834
119,170
-
50,048
-
3,172,635
325,000
-
Permanently
Restricted
-
$
-
$
-
$
-
566,024
(325,000)
246,925
-
3,912,834
1,934,073
-
-
2,805,840
12,568
64,750
167,345
352,542
509,789
5,672,732
-
-
246,925
Total Contributed Support
3,216,101
359,241
119,170
50,048
3,744,560
241,024
1,934,073
5,919,657
Total Revenues and Contributed Support
6,721,526
359,241
303,004
273,623
7,657,394
241,024
1,934,073
9,832,491
Expenses
Program and production
Marketing, public relations and box office
Development and fundraising
General and administrative
Bad debt expense
Interest and fees
Depreciation and disposal of assets
Total Expenses
Excess (Deficiency) of support and revenue
over expenses
-
76,455
-
202,544
21,578
35,964
57,542
10,430
42,458
600,685
4,617,397
876,471
590,045
743,842
42,112
72,333
600,685
-
-
4,617,397
876,471
590,045
743,842
42,112
72,333
600,685
6,495,229
-
76,455
971,201
7,542,885
-
-
7,542,885
226,549
(697,578)
226,297
Transfers
Transfers to/from other funds
359,241
(225,832)
Increase (Decrease) in Net Assets
Net Assets, beginning of year
Net Assets, end of year
4,414,853
854,893
477,626
686,300
31,682
29,875
-
$
-
-
465
359,241
226,549
6,112
355,000
126,175
6,577
$
714,241
$
352,724
114,509
225,832
-
(471,746)
6,663,051
$
6,191,305
241,024
$
1,934,073
-
2,289,606
-
-
114,509
241,024
1,934,073
2,289,606
7,150,338
611,066
3,874,884
11,636,288
7,264,847
$
852,090
$
5,808,957
$
13,925,894
See accompanying notes to the financial statements
5
SPOLETO FESTIVAL USA, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31, 2014 AND 2013
2014
Cash Flows from Operating Activities:
Cash received from admission, merchandise and other sales and charges
Cash received from contributors for other than long-term purposes
Cash paid to employees and vendors
Interest and dividends received
Interest paid
$
Net cash provided by (used for) operating activities
3,325,752
3,515,479
(7,144,427)
128,174
(51,546)
2013
$
(226,568)
Cash Flows from Investing Activities:
Acquisition of property and equipment
Proceeds from sale of investments
Purchase of investments
3,626,668
3,425,361
(6,936,493)
124,830
(62,650)
177,716
(97,489)
1,426,838
(1,592,173)
(262,409)
1,975,799
(2,255,817)
Net cash used for investing activities
(262,824)
(542,427)
Cash Flows from Financing Activities:
Contributions received restricted for endowment
(Payments) proceeds from line of credit, net
Payments on notes payable
986,250
(250,000)
(254,999)
619,000
250,000
(355,000)
481,251
514,000
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
(8,141)
Cash and equivalents at beginning of year
Cash and equivalents at end of year
149,289
491,638
$
483,497
342,349
$
491,638
$
2,289,606
Reconciliation of change in net assets to net cash provided by (used for) operating activities:
Change in net assets
Adjustments to reconcile changes in net assets to net cash provided
by (used for) operating activities:
Net realized and unrealized gain on investments
Depreciation and loss on disposal of property and equipment
Bad debt expense
Donated stock
Contributions restricted for long-term purposes
Changes in assets - (increase) decrease:
Contributions and grants receivable
Beneficial interest in remainder trust
Accounts receivable
Inventory and prepaid expenses
Changes in liabilities - increase:
Accounts payable, accrued expenses and deferred revenue
Net cash provided by (used for) operating activities
$
$
1,581,465
(724,709)
634,468
175
(1,760,189)
(258,240)
600,685
42,112
(175,576)
(1,934,073)
102,475
21,451
(60,503)
(71,613)
(39,640)
(304,796)
46,229
(75,441)
50,412
(13,150)
(226,568)
$
177,716
See accompanying notes to the financial statements
6
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
OPERATIONS
Spoleto Festival USA, Inc. (the “Festival”) is a not-for-profit cultural organization, incorporated on September
16, 1977, whose purpose is to create a comprehensive and innovative arts festival in Charleston, South
Carolina. The Festival produces and presents events featuring an international mix of distinguished artists and
emerging talent. The Festival seeks excellence in all of its endeavors as it strives to provide excitement,
enjoyment and education for artists and audiences alike. The Festival depends on earned income and
contributed support to fund its activities and to meet its obligations. Management believes the Festival will
continue to rely on these sources of income and endowment earnings to meet operating and production costs
in future years.
BASIS OF ACCOUNTING
The financial statements of the Festival have been prepared on the accrual basis of accounting in accordance
with accounting principles generally accepted in the United States of America. Accordingly, revenue is
recognized when earned rather than when received and expenses are recognized when incurred rather than
when paid.
INCOME TAX STATUS
The Festival is exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue
Code. The Financial Accounting Standards Board (FASB) provides guidance on the Festival’s evaluation of
accounting for uncertainty in income taxes. Management evaluated the Festival’s tax position and concluded
that the Festival had taken no uncertain tax positions that require adjustment to the financial statements to
comply with the provisions of this guidance.
CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, the Festival considers all investment instruments purchased
with a maturity of three months or less to be cash equivalents. Mutual funds and other temporary and
permanent investments are excluded from cash and cash equivalents.
CONTRIBUTIONS, GRANTS, AND ACCOUNTS RECEIVABLE
Receivables are stated at unpaid balances, less an appropriate discount where applicable and less allowance
for doubtful accounts. The Festival provides for losses on accounts receivable using the allowance method.
The allowance is based on experience and other circumstances which may affect the ability of donors to meet
their obligations. Receivables are considered impaired if payments are not received in accordance with the
terms of the pledge. It is the Festival’s policy to charge off uncollectible receivables when management
determines the receivable will not be collected. Allowance for doubtful accounts for contributions and grants
receivable at August 31, 2014 and 2013 was $30,000. Allowance for doubtful accounts on accounts receivable
was $5,000 at August 31, 2014 and 2013. Bad debt expense for the years ended August 31, 2014 and 2013
was $175 and $42,112, respectively.
INVENTORY VALUATION
Inventories, consisting primarily of posters, are stated at the lower of cost (first-in, first-out method) or fair
market value.
INVESTMENTS
The Festival follows the provisions of Accounting Standards Codification (ASC) 958, Section 320, Not-forProfit Entities, Investments – Debt and Equity Securities. Under ASC 958, investments in marketable
securities with readily determinable fair values and all investments in debt securities are reported at their fair
values in the statements of financial position. Unrealized gains and losses are included in the changes in net
assets. Donor restricted interest and dividend income are reported as increases in unrestricted net assets if the
restrictions are met in the reporting period in which the income and gains are recognized. Investment
appreciation (depreciation) and income that is not donor restricted, which exceeds the Board’s current policy
for operating use, is reported in the unrestricted designated fund.
7
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES - continued
BENEFICIAL INTEREST IN CHARITABLE REMAINDER TRUST
Beneficial interest in charitable remainder trust includes the estimated fair value of the remainder interest of an
irrevocable charitable trust in which the Festival is the secondary beneficiary. The fair value of the Festival's
remainder interest is determined using investment returns consistent with the composition of the asset
portfolios, life expectancy of the primary beneficiary, and relevant discount rates.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost and are depreciated over the estimated useful lives of the respective
property items using the straight-line method. Leasehold improvements are depreciated over the term of the
lease. Maintenance and repairs are expensed as incurred. Expenditures, which result in substantial betterment
of assets, are capitalized at cost. When it is determined that the carrying value of a long-lived asset will not be
fully recovered, an asset is considered impaired and a loss is recognized as it is written down to its fair value.
Production sets and costumes are generally expensed, except for those for which future use, rental or sale is
highly probable, in which case they are included in prepaid and other assets.
The Festival capitalizes all expenditures in excess of $500 for property and equipment. Contributed property
and equipment is recorded at fair value at the date of donation. If donors stipulate how long the assets must be
used, the contributions are recorded as restricted support. In the absence of such stipulations, contributions of
property and equipment are recorded as unrestricted support.
INTERFUND TRANSFERS, RECEIVABLES AND PAYABLES
Receivables and payables among funds represent temporary borrowings, which are expected to be repaid
within one year. These receivables and payables are eliminated for presentation of the combined totals of all
funds of the Festival. Transfers between funds are not expected to be repaid.
ADVERTISING AND PROMOTION EXPENSES
The costs of advertising and promotion are expensed as incurred, except for the direct costs incurred related to
performance presentations of future years and major publications expected to be sold over a significant
number of years. Advertising expense for the years ended August 31, 2014 and 2013 were $2,970 and $4,930,
respectively.
CONTRIBUTIONS
Unconditional promises to give are recorded as contributions receivable in the year pledges are made.
Contributions receivable for support of current operations are included in the statements of activities as
unrestricted, while pledges for support of future operations are reported as increases in temporarily restricted
net assets until the donor-imposed stipulation expires. Contributions are released from restriction as the nature
of the restriction changes, or restrictions are satisfied.
Unconditional promises to give to be collected in the future are recorded at fair value by estimating the present
value of the cash flows. A discount rate of approximately 1.75% was applied to contributions due after one
year. Pledges receivable and contributed support are increased for discount amortization and decreased for
initial discounts and allowances for accounts that management estimates to be uncollectible.
A substantial number of volunteers have donated significant amounts of time to the Festival’s program
services and its fundraising activities. The value of these amounts has not been recorded. Contributions of
certain goods and professional services, that would otherwise be paid for if not contributed, are estimated and
recorded.
The Festival records various types of in-kind support including donated professional services and facilities.
These services are used for the support of the Festival and its operations. Contributed professional services are
recognized if the services received (a) create or enhance long-lived assets, or (b) require specialized skills, are
provided by individuals possessing those skills, and would typically need to be purchased if not provided by
8
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES – continued
CONTRIBUTIONS - continued
donation. Contributions of tangible assets are recognized at fair market value when received. The amounts
reflected in the accompanying financial statements as in-kind support are offset by like amounts included in
expenses or assets, if capitalizable. In-kind contributions of approximately $79,173 and $65,841 were
received for various services, consulting, and use of facilities during the years ended August 31, 2014 and
2013, respectively, and primarily benefited the Festival’s operations. Total stock securities donated to the
Festival during the years ended August 31, 2014 and 2013 were $149,568 and $175,576, respectively.
Bequests represent conditional pledges which are subject to change. Accordingly, bequests are not recognized
as contributions until after the will is probated, without challenge, by the court.
FUNCTIONAL CLASSIFICATION OF EXPENSES
Directly identifiable expenses are charged to programs and supporting services and have been summarized on
a functional basis in the Statements of Activities. Accordingly, certain costs have been allocated among the
programs and supporting services benefited.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates. Areas requiring
significant estimates include the allowance for doubtful accounts, the discount on unconditional promises to
give, the economic useful lives of fixed assets for depreciation purposes, the economic lives and residual
values of capital leases, and the functional allocation of expenses. It is at least reasonably possible that the
significant estimates used will change within the next year.
FINANCIAL STATEMENT PRESENTATION
The Festival follows the provisions of ASC 958-605, Not-for-Profit Entities, Revenue Recognition and ASC
958-205, Not-for-Profit Entities, Presentation of Financial Statements.
Revenues are reported as increases in unrestricted net assets unless use of the related asset is limited by donorimposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on
investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets
unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on
net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed)
are reported as reclassifications between the applicable classes of net assets.
As required by ASC 958-205, the accompanying financial statements have been prepared to present balances
and transactions according to the existence or absence of donor-imposed restrictions. This presentation has
been accomplished by classification of fund balances and transactions into the following classes of net assets:
Unrestricted Net Assets - Net assets not subject to donor-imposed stipulations.
Operating Fund – This fund is utilized to account for all unrestricted activities of producing the Festival,
fundraising and administrative support, excluding interest expense on financing of property and depreciation
of property and equipment. The fund also includes certain unrestricted earnings on endowment and other
investments, and discretionary transfers out to the capital asset, cash reserve and designated funds.
Cash Reserve Fund – This fund accounts for contributions received and net assets retained for the purposes
of providing short-term working capital for the Festival.
9
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES – continued
FINANCIAL STATEMENT PRESENTATION - continued
Designated Fund – The Board of Directors established this fund during 2002 to account for unrestricted
contributions which the Board of Directors has designated for purposes other than those of the Operating
Fund. The Designated Fund has included various campaign-specific contributions and fundraising expenses,
as well as investment appreciation, depreciation and income. Such designations are subject to future change.
Capital Assets Fund – The Board of Directors established this fund in 2003 to account for unrestricted
property and equipment, including related depreciation, repairs and direct debt and interest expense related to
financing obtained for the property and equipment acquisitions and improvements.
Temporarily Restricted Net Assets - Net assets subject to donor-imposed stipulations that will be met by
actions of the Festival and/or the passage of time.
Restrictions may include support of a particular activity, investment for a specified term or use in a specified
future period. When a donor-imposed restriction expires, that is, when a stipulated time restriction ends or
purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets.
It is the Festival’s policy to record temporarily restricted contributions received, for which the restriction
expires in the same year, as unrestricted support.
Future Operating Fund – This fund accounts for contributions received, which are restricted for subsequent
year’s festivals or for other temporary purposes.
Permanently Restricted Net Assets - Net assets subject to donor-imposed stipulations that they be maintained
permanently by the Festival. The donors of these assets permit the Festival to use all or part of the income
earned on related investments for general or specific purposes.
Endowment Fund – This fund is used to account for funds subject to restrictions of gift instruments which
require that the principal be invested in perpetuity, with realized gains, interest income and dividend income
being immediately available to the unrestricted Operating or Designated funds. Endowment contributors have
approved the Board’s policy of appropriating for distribution each year, as determined by the investment
committee 4 to 5% of its endowment funds’ average fair value over the prior 36 months as of March 31
(measurement date) each year. Unrealized losses are not required by the contributors to be replenished by the
unrestricted fund.
RECENT ACCOUNTING PRONOUNCEMENTS
In April 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
No. 2013-06, Not-for-Profit Entities (Topic 958): Services Received from Personnel of an Affiliate. The
revenue recognition guidance for not-for-profit entities requires that contributed services be recognized at fair
value if employees of separately governed affiliated entities regularly perform services (in other than an
advisory capacity) for and under the direction of the donee. In addition, that guidance indicates that those
contributed services should be recognized only if they (1) create or enhance nonfinancial assets or (2) require
specialized skills, are provided by individuals possessing those skills, and typically would need to be
purchased if not provided by donation. This standard goes into effect prospectively for fiscal years beginning
after June 15, 2014. Upon adoption, the Festival does not consider this standard will have a material impact on
its financial position or results of its activities.
10
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
2. CONCENTRATION OF CREDIT RISK
At August 31, 2014, the Festival maintains cash balances with several financial institutions of which $292,558
exceeded the Federal Deposit Insurance Company (FDIC) limit of $250,000.
The Festival’s investments in securities are exposed to various risks, such as interest rate, market and credit
risk. Due to the level of risk associated with investment securities and the level of uncertainty related to
changes in value of the investments, it is at least reasonably possible that changes in risks in the near term
would materially affect the Festival’s investment balance. Securities and cash accounts maintained by the
Festival's investment firm are insured by the Securities Investors Protection Corporation (SIPC) up to
$500,000 ($250,000 for cash balances). SIPC insurance does not cover changes in value attributed to market
valuation changes.
3. CONTRIBUTIONS AND GRANTS RECEIVABLE
Contributions and grants receivable as of August 31 consist of the following:
Contributions and grants receivable
Less: Unamortized discount
Less: Allowances
Contributions and grants receivable, net
Amounts due in:
Less than one year
One to five years
More than five years
Contributions and grants receivable
2014
2013
$
3,077,670 $
(42,894)
(30,000)
2,416,324
(52,837)
(30,000)
$
3,004,776
$
2,333,487
$
1,361,670
1,716,000
-
$
1,282,824
1,133,500
-
$
3,077,670
$
2,416,324
4. INVESTMENTS
Investments along with their cost, fair value and net unrealized gain at August 31, 2014 are as follows:
Cost
Domestic equities mutual funds
International equities mutual funds
Bond funds
International bond funds
Real-estate and energy funds
Cash reserve funds
Fair Value
Net Unrealized
Gain
$
1,553,971
1,164,243
1,078,839
353,536
605,474
50,217
$
2,206,968
1,386,866
1,104,484
371,591
710,808
50,217
$
652,997
222,623
25,645
18,055
105,334
-
$
4,806,280
$
5,830,934
$
1,024,654
11
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
4. INVESTMENTS - continued
Investments along with their cost, fair value and net unrealized gain (loss) at August 31, 2013 are as follows:
Cost
Domestic equities mutual funds
International equities mutual funds
Bond funds
International bond funds
Real-estate and energy funds
Hedged equities funds
Cash reserve funds
Fair Value
Net Unrealized
Gain (Loss)
$
1,577,976
1,109,341
903,595
335,205
659,710
10,202
33,912
$
1,852,438
1,206,988
905,151
327,156
604,300
10,945
33,912
$
274,462
97,647
1,556
(8,049)
(55,410)
743
-
$
4,629,941
$
4,940,890
$
310,949
The following summarizes the investment return and classification in the statement of activities and changes
in net assets for the years ended August 31:
2014
Interest and dividends
Net realized gains
Net unrealized (losses) gains
Brokerage fees
2013
$
128,174 $
11,004
713,705
(36,928)
124,830
310,686
(52,446)
(30,528)
$
815,955
352,542
$
5. FAIR VALUE MEASUREMENTS
In accordance with ASC 958-320, Not for Profit Entities, Investments – Debt and Equity Securities, the
Festival’s investments are stated at fair market value. Fair market value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. ASC 820, Fair Value Measurement Disclosures, also establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure
fair value:
Level 1
Quoted prices in active markets for identical instruments traded in active markets.
Level 2
Observable inputs other than level 1 prices, such as quoted prices for similar instruments in
active markets, quoted prices for identical or similar instruments in markets that are not active;
and model-based valuation techniques for which all significant assumptions are observable in
the market.
Level 3
Valuation is generated from techniques that use significant assumptions not observable in the
market. These unobservable assumptions reflect estimates of assumptions that market
participants would use in pricing the asset or liability. Valuation techniques include use of
option pricing models, discounted cash flow models and similar techniques.
12
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
5. FAIR VALUE MEASUREMENTS - continued
A summary of investments summarized by input level as of August 31, 2014:
Level 1
Investments:
Domestic mutual funds
International mutual funds
Bond funds
International bond funds
Real-estate and energy funds
Cash reserve funds
Level 2
Level 3
Total
$
2,206,968
1,386,866
1,104,484
371,591
710,808
50,217
$
-
$
-
$
2,206,968
1,386,866
1,104,484
371,591
710,808
50,217
$
5,830,934
$
-
$
-
$
5,830,934
A summary of investments summarized by input level as of August 31, 2013:
Level 1
Investments:
Domestic mutual funds
International mutual funds
Bond funds
International bond funds
Real-estate and energy funds
Hedged equities funds
Cash reserve funds
Level 2
Level 3
Total
$
1,852,438
1,206,988
905,151
327,156
604,300
33,912
$
-
$
10,945
-
$
1,852,438
1,206,988
905,151
327,156
604,300
10,945
33,912
$
4,929,945
$
-
$
10,945
$
4,940,890
The following table provides a reconciliation of the beginning and ending balances for assets measured at fair
value using significant unobservable inputs (Level 3) as defined in ASC 820:
For year ended August 31,
2014
2013
Balance, beginning of year
$
Sale of instrument during year
Realized and unrealized gains (losses)
Balance, end of year
10,945
$
(9,253)
(1,692)
$
-
278,862
(273,400)
5,483
$
10,945
6. RELATED PARTY TRANSACTIONS
The following is a summary of transactions and balances with related parties, including employees, directors
and officers:
Various employees, board members, their families and companies contributed a total of $636,460 and
$2,064,800 in cash and stock donations during the years ended August 31, 2014 and 2013, respectively.
Pledge balances due from related parties as of August 31, 2014 and 2013 totaled $838,000 and $1,490,005,
respectively.
13
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
6. RELATED PARTY TRANSACTIONS - continued
A board member is Executive Vice President for Wells Fargo Bank, N.A. where the Festival maintains two
bank accounts, a line of credit and a note. Wells Fargo Bank, N.A also manages the Festival’s investment
portfolios. Another board member is the South Atlantic Region Executive for Bank of America, N.A. where
the Festival maintains two bank accounts, and a note.
A board member is the owner of AAA Rentals which is a vendor for the Festival during the years ended
August 31, 2014 and 2013, and was paid $22,985 and $42,815, respectively, for party and equipment rentals.
On April 15, 2013, the Festival signed an agreement with the Lincoln Center for the Performing Arts, Inc.
(“Lincoln Center”) to co-produce Matsukaze, an opera. The opera was performed at the 2013 Spoleto
Festival, as well as the Lincoln Center Festival 2013. The agreement provided that the Lincoln Center would
pay the Festival a co-production fee of $216,243. The general director of the Festival is also the director of the
Lincoln Center Festival. This agreement expired on August 30, 2013.
7. BENEFICIAL INTEREST IN CHARITABLE REMAINDER TRUST ASSETS
Beneficial interest in charitable remainder trust assets consist of the following at August 31:
2014
Charitable remainder interests receivable held in
trust by third-parties
$
283,345
2013
$
304,796
8. PROPERTY AND EQUIPMENT
Property and equipment, less accumulated depreciation, at August 31, is as follows:
2014
Buildings and related improvements:
George Street building renovation
George Street garden, landscaping and paving
th
Leasehold improvements - theaters and stages
Equipment:
Lighting and technical theater equipment
Computers and office equipment
Musical instruments
Furniture
Vehicles
$
$
632,415
346,138
67,138
173,769
40,278
Total depreciable property and equipment
Less accumulated depreciation
Property and equipment, net
2,887,221
410,501
922,802
6,518,438
2013
623,413
316,000
67,138
173,769
60,298
11,998,700
(4,471,969)
$
7,526,731
2,886,598
404,134
903,934
6,485,948
11,921,232
(3,857,522)
$
8,063,710
Depreciation expense totaled $634,468 and $598,987 for the years ended August 31, 2014 and 2013,
respectively.
14
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
9. LINE OF CREDIT
On June 1, 2014, the Festival renewed a line of credit agreement with Wells Fargo Bank, N.A. with a
maximum borrowing amount of $1,400,000, and interest at prime plus .55% and a floor of 3.8% (3.8% at
August 31, 2014). At August 31, 2014 and 2013, the balance was $800,000 and $1,050,000,
respectively. Payments of interest only are due monthly. The line is secured by all personal property including
pledges receivables and other assets. The line of credit expires on June 1, 2015. Interest expense on this line of
credit was $23,053 and $20,204 for the years ended August 31, 2014 and 2013, respectively.
10. TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets consist of the following at August 31:
2014
Future operating
Temporarily restricted net assets
2013
$
876,058
$
852,090
$
876,058
$
852,090
11. ENDOWMENTS
The Festival’s endowments consist of several funds established for a variety of purposes. The endowments
include only donor-restricted endowment funds. As required by accounting principles generally accepted in
the United States of America, the net assets associated with the endowments are classified and reported based
on the existence or absence of donor imposed restrictions.
Interpretation of Relevant Law
The Festival has interpreted the State of South Carolina’s enacted version of the Uniform Prudent
Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the
original gift, as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to
the contrary. As a result of this interpretation, the Festival classifies as permanently restricted net assets the
original value of the gifts donated to the endowment and the original value of subsequent gifts to the
endowment. The remaining portion of the donor-restricted fund that is not classified as permanently restricted
net assets is classified as temporarily restricted until those amounts are appropriated for expenditure by the
Festival in a manner consistent with the standards of prudence prescribed by UPMIFA.
In accordance with UPMIFA, the Festival considered the following factors in making their determination to
appropriate or accumulated endowment funds:
1.
2.
3.
4.
5.
6.
7.
The duration and preservation of the funds
The purpose of the donor restricted endowment fund
General economic conditions
The possible effect of inflation and deflation
The expected total return from income and appreciation of investments
Other resources of the Festival
Investment policies of the Festival.
15
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
11. ENDOWMENTS - continued
The following tables present the Festival’s endowment net asset classification and composition for the
indicated years:
At August 31, 2014
Temporarily
Permanently
Unrestricted
Restricted
Restricted
Total
Donor-designated
endowment funds
$
1,042,050 $
- $
7,569,146 $
8,611,196
Total funds
$
1,042,050
$
-
$
7,569,146
$
At August 31, 2013
Temporarily
Permanently
Restricted
Restricted
Unrestricted
8,611,196
Total
Donor-designated
endowment funds
$
396,079
$
-
$
5,808,957
$
6,205,036
Total funds
$
396,079
$
-
$
5,808,957
$
6,205,036
Permanently restricted net assets consist of the following at August 31:
2014
Endowment for artistic programming
Endowment for artistic leadership and
specific programming
Endowment for apprenticeship program
$
3,824,884
2013
$
3,694,262
50,000
$
7,569,146
3,824,884
1,934,073
50,000
$
5,808,957
Funds with Deficiencies
From time to time, the fair value of assets associated with individual donor-restricted endowment funds may
fall below the level that the donor or UPMIFA requires the Festival to retain as a fund of perpetual duration.
Deficiencies of this nature that are reported in the unrestricted net assets were $0 at August 31, 2014 and 2013.
Strategies Employed for Achieving Investment Objectives
The Festival follows an investment policy with long-term growth as the main objective. The Festival relies on
a total return strategy in which investment returns are achieved through both capital appreciation (realized and
unrealized) and current yield (interest and dividends). The Festival utilizes a diversified asset allocation, with
greater emphasis on equity-based investments, to achieve its long term return objectives within prudent risk
constraints.
Spending Policy and How the Investment Objectives Related to Spending Policy
The Festival has a policy of appropriating for distribution each year, as determined by the investment
committee and approved by the board of directors: 4 to 5% of its endowment funds’ average fair value over
the prior 36 months as of March 31st (measurement date) each year. In establishing these policies, the Festival
considered the expected return on its endowment. Accordingly, the Festival expects the current spending
policy to allow its endowment to maintain its purchasing power by growing at a rate equal to planned payouts.
Additional real growth will be provided through new gifts and excess investment return.
16
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
11. ENDOWMENTS - continued
Changes in endowment net assets for the year ended August 31, 2014 are as follows:
Temporarily
Restricted
Unrestricted
Endowment net assets,
beginning of year
$
Investment return:
Net dividends and
interest income
Net appreciation
(realized and
unrealized)
Total investment return
396,079
Endowment net assets,
end of year
-
5,808,957
$
6,205,036
-
-
128,174
687,797
815,971
-
-
687,797
815,971
-
-
1,760,189
1,760,189
-
-
(170,000)
$
$
Total
128,174
Contributions
Appropriation of
endowment assets for
expenditure
$
Permanently
Restricted
1,042,050
$
-
$
7,569,146
(170,000)
$
8,611,196
Changes in endowment net assets for the year ended August 31, 2013 are as follows:
Temporarily
Restricted
Unrestricted
Endowment net assets,
beginning of year
$
Investment return:
Net dividends and
interest income
Net appreciation
(realized and
unrealized)
Total investment return
Contributions
Appropriation of
endowment assets
for expenditure
Endowment net assets,
end of year
212,228
$
-
$
Total
3,874,884
$
4,087,112
124,830
-
-
124,830
229,021
353,851
-
-
229,021
353,851
-
-
1,934,073
1,934,073
-
-
(170,000)
$
Permanently
Restricted
396,079
$
-
$
5,808,957
(170,000)
$
6,205,036
17
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
11. ENDOWMENTS - continued
Other Endowments
In February 1998, the Spoleto Festival USA Fund was established at the Coastal Community Foundation of
South Carolina (the “Community Foundation”) for the purpose of providing annual distributions to the
Festival. These funds are excluded from the financial statements as a result of the Community Foundation’s
variance power over the funds. The original donor that established the fund, and the Community Foundation,
intends for this fund to be available to receive additional property from the Festival and other donors; the
Community Foundation determines annual distributions. Annual distributions are currently calculated at five
percent (5%) of the ending fund balance on June 30th each year.
The balance of the fund at June 30, 2014 and 2013 was $6,211,814 and $5,602,978, respectively. The Festival
received $310,590 and $289,149 from this endowment during the years ended August 31, 2014 and 2013,
respectively. Amounts received for the years ended 2014 and 2013 were 5% of the fund’s market value at June
30th, respectively.
During 2004, the Wayland H. Cato, Jr. & Marion Rivers Cato Spoleto Garden Endowment fund was
established at the Community Foundation for the purpose of maintaining the garden at the Festival’s 14
George Street office. The balance of the fund as of June 30, 2014 and 2013 was $352,708 and $318,112,
respectively. Contributions from this fund to Festival were $11,943 and $15,906 during the years ended
August 31, 2014 and 2013, respectively.
12. NOTES PAYABLE
The Festival has a term loan with Bank of America, N.A. At August 31, 2014 and 2013, the balance was
$815,834 and $870,833 respectively. Interest is at one-month BBA LIBOR plus 3% (3.15% at August 31,
2014). Payments of principal and interest are due monthly based on a 240 month amortization schedule. The
note matures on June 14, 2019 and is secured by a mortgage note on the real property located at 14 George
Street, Charleston, South Carolina. The note requires a balloon payment of $550,000 at maturity.
The Festival had a promissory note with Wells Fargo Bank, N.A. At August 31, 2014 and 2013, the balance
of this note was $0 and $150,000, respectively. This note bore interest at a fixed rate of 4.10% with monthly
interest only payments, and a single annual principal payment of $133,333. The note matures on June 15, 2015
and requires a final principal payment of $133,333 at maturity. The note is secured by various assets and rights
primarily related to the management agreement of Memminger Auditorium in Charleston, South Carolina and
the leasehold improvements therein. The Festival paid this note in full during 2014.
On May 1, 2012, the Festival signed a $250,000 equipment note with Theater Production Services, Inc. for
various production equipment and tools as identified within the note agreement. The note agreement requires
principal payments of $50,000 annually through maturity on May 1, 2016. The note is secured by the
identified equipment, and has a balance of $100,000 and $150,000 at August 31, 2014 and 2013, respectively.
The note is non-interest bearing, and management has determined that any imputed interest recognized under
this agreement would be immaterial to the financial statements as a whole.
18
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
12. NOTES PAYABLE – continued
Future scheduled principal payments of all notes payable due at August 31, 2014 are as follows:
2015
2016
2017
2018
2019
Thereafter
$
105,000
105,000
55,000
55,000
595,834
-
$
915,834
For the years ended August 31, 2014 and 2013, interest expense on notes payable totaled $31,998 and
$42,458, respectively.
13. COMMITMENTS
The Festival has an agreement with Technical Theater Solutions for the period September 1, 2007 through
August 31, 2010 for all necessary technical management for the safe and efficient operation of the Spoleto
Festival Production Department, for a monthly payment of $10,744 plus reimbursement of specific expenses.
Expenses under this contract were $127,476 for each of the years ended August 31, 2014 and 2013,
respectively. This agreement was extended under its current terms on a month to month basis.
The Festival has agreements with The International Alliance of Theatrical Stage Employees, Moving Picture
Technicians, Artists and Allied Crafts of the United States, its Territories and Canada, AFL-CIO, CLC, Local
Number 333 effective March 3, 2014 through December 31, 2016, which outlines employee rights, wage rates,
and contribution amounts to the IATSE Annuity Fund for union employees working at certain Festival theater
and production locations. The Festival also has an agreement effective March 3, 2014 to April 26, 2015 for
non-Spoleto events occurring at Memminger Auditorium.
The Festival entered into a management agreement with the City of Charleston on February 2, 2007. In
exchange for the right to occupy, possess, enjoy and use the Memminger Auditorium, the Festival has paid for
renovation and construction costs for existing and new buildings, and will provide certain management
services for the Memminger Auditorium. The term of the agreement is 50 years with the right to renew the
agreement for an additional 25 years on the same terms. Renovations were completed in May 2008.
On May 14, 2014, the Festival signed an agreement with a third party to co-produce Facing Goya, an opera.
The opera was performed at the 2014 Spoleto Festival, as well as the 2014 Singapore International Festival of
Arts. The agreement provided that the co-producer would pay the Festival a co-production fee of
$173,950. This agreement expires on January 30, 2015, and the Festival has provided substantially all
services under this agreement at August 31, 2014.
14. RETIREMENT PLAN
On January 1, 2006, the Festival implemented the Spoleto USA 401(k) Plan for the purpose of providing
retirement benefits for participating employees. An eligible employee may begin participation in the Plan
immediately after one year of employment. The Festival provides a discretionary matching contribution of
100% on the first 3% of salary, plus a 50% match on the next 2% of salary. Employees fully vest in the
discretionary match upon eligibility and participation. The Festival paid $27,833 and $27,835 during the years
ended August 31, 2014 and 2013, respectively. The Festival paid $1,625 and $1,000 in administrative
expenses for the years ended August 31, 2014 and 2013, respectively. All other plan expenses are paid by plan
participants.
19
SPOLETO FESTIVAL USA, INC.
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
15. SUPPLEMENTAL CASH FLOW INFORMATION
For the years ended August 31:
2014
Supplemental Cash Flow Information:
Cash paid for interest
$
51,146
2013
$
62,650
16. SUBSEQUENT EVENTS
In accordance with ASC 955, the Festival’s management has evaluated subsequent events after August 31,
2014 and through October 17, 2014, the date these financial statements were available for issuance. There
were no material subsequent events requiring recognition or additional disclosure in these financial
statements.
20
SUPPLEMENTARY INFORMATION
SPOLETO FESTIVAL USA, INC.
COMBINING SCHEDULE OF FINANCIAL POSITION
AUGUST 31, 2014
Unrestricted
Operating
Cash Reserve
Capital
Assets
Designated
Temporarily
Restricted
Permanently
Restricted
Total
Total
Total
Interfund
Eliminations
Total
Assets
Cash and equivalents
Contributions and grants
receivable, net
Accounts receivable, net
Prepaid expenses
Inventory
Due from other funds
Investments
Beneficial interest in remainder trust
Property and equipment, net
Total Assets
$
477,954
$
183,886
68,449
130,484
4,000
1,248,603
-
-
$
138,673
260,000
-
-
$
103,150
35,750
1,042,050
-
5,543
$
483,497
81,116
14,682
71,389
7,526,731
506,825
83,131
201,873
4,000
1,544,353
1,042,050
7,526,731
$
-
$
408,939
183,774
283,345
-
-
$
2,089,012
691,250
4,788,884
-
$
2,113,376
$
398,673
$
1,180,950
$
7,699,461
$ 11,392,460
$
876,058
$
7,569,146
$
55,057
55,466
16,808
800,000
1,170,771
-
$
-
$
235,446
-
$
24,292
30,121
13,350
1,013,160
915,834
$
$
-
$
-
-
$
(2,419,377)
-
483,497
3,004,776
83,131
201,873
4,000
5,830,934
283,345
7,526,731
$ (2,419,377) $ 17,418,287
Liabilities
Accounts payable
Accrued expenses
Deferred income
Line of credit
Due to other funds
Notes payable
Total Liabilities
79,349
85,587
30,158
800,000
2,419,377
915,834
$
- $
(2,419,377)
(2,419,377)
79,349
85,587
30,158
800,000
915,834
2,098,102
-
235,446
1,996,757
4,330,305
-
-
1,910,928
15,274
-
398,673
-
945,504
-
5,702,704
-
7,062,155
-
876,058
-
7,569,146
-
7,062,155
876,058
7,569,146
15,274
398,673
945,504
5,702,704
7,062,155
876,058
7,569,146
-
15,507,359
7,699,461
$ 11,392,460
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted
Total Net Assets
Total Liabilities and Net Assets
$
2,113,376
$
398,673
$
1,180,950
$
$
876,058
$
7,569,146
$ (2,419,377) $ 17,418,287
See Independent Auditors' Report
21
SPOLETO FESTIVAL USA, INC.
COMBINING SCHEDULE OF FINANCIAL POSITION
AUGUST 31, 2013
Unrestricted
Operating
Cash Reserve
Capital
Assets
Designated
Temporarily
Restricted
Permanently
Restricted
Total
Total
Total
Interfund
Eliminations
Total
Assets
Cash and equivalents
Contributions and grants
receivable, net
Accounts receivable, net
Prepaid expenses
Inventory
Due from other funds
Investments
Beneficial interest in remainder trust
Property and equipment, net
Total Assets
$
485,746
$
190,425
9,336
86,784
4,000
895,460
139,927
-
-
$
171,741
542,500
-
-
$
63,170
396,079
-
5,892
$
491,638
105,384
13,292
43,476
8,063,710
530,720
22,628
130,260
4,000
1,437,960
536,006
8,063,710
$
-
$
487,694
59,600
304,796
-
-
$
1,315,073
89,000
4,404,884
-
$
1,811,678
$
714,241
$
459,249
$
8,231,754
$ 11,216,922
$
852,090
$
5,808,957
$
13,421
37,528
13,052
1,050,000
691,100
-
$
-
$
106,525
-
$
23,593
37,838
19,250
788,935
1,170,833
$
$
-
$
-
-
$
(1,586,560)
-
491,638
2,333,487
22,628
130,260
4,000
4,940,890
304,796
8,063,710
$ (1,586,560) $ 16,291,409
Liabilities
Accounts payable
Accrued expenses
Deferred income
Line of credit
Due to other funds
Notes payable
Total Liabilities
37,014
75,366
32,302
1,050,000
1,586,560
1,170,833
$
- $
(1,586,560)
-
37,014
75,366
32,302
1,050,000
1,170,833
(1,586,560)
2,365,515
1,805,101
-
106,525
2,040,449
3,952,075
-
-
6,577
-
714,241
-
352,724
-
6,191,305
-
7,264,847
-
852,090
-
5,808,957
-
7,264,847
852,090
5,808,957
6,577
714,241
352,724
6,191,305
7,264,847
852,090
5,808,957
-
13,925,894
8,231,754
$ 11,216,922
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted
Total Net Assets
Total Liabilities and Net Assets
$
1,811,678
$
714,241
$
459,249
$
$
852,090
$
5,808,957
$ (1,586,560) $ 16,291,409
See Independent Auditors' Report
22