KARA REVIEWED FINANCIAL STATEMENTS DECEMBER 31, 2014

TABLE OF CONTENTS

FINANCIAL STATEMENTS Independent Accountant’s Report

1

Statement of Financial Position Statement of Activities Statement of Functional Expenses Statement of Cash Flows

2 3 4 5

Notes to the Financial Statements

6

Deborah Daly CPA

www.dalycpa.com

PO Box 39 Pleasanton, CA 94566

Office (925) 426-1996 Fax (925) 426-1196

ACCOUNTANT’S REVIEW REPORT

To the Board of Directors of KARA: We have reviewed the accompanying statement of financial position of KARA (a California Nonprofit Public Benefit Corporation) as of December 31, 2014, and the related statements of activities, functional expenses and cash flows for the year then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of Organization management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited KARA’s December 31, 2013 financial statements, and expressed an unmodified audit opinion on those audited financial statements in our report dated August 4, 2014. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2013 is consistent, in all material respects, with the audited financial statements from which it has been obtained.

Deborah K. Daly, CPA Pleasanton, California June 3, 2015

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Kara Statement of Financial Position At December 31, 2014 with Comparative Totals at December 31, 2013

Unrestricted

Temporarily Restricted

Total 2014

Summarized 2013

$300,946

$80,462

$381,408

90,560 4,110

25,000

115,560 4,110 22,860 15,057

$210,831 850 123,424 3,077 23,580 17,595

538,995

379,357

22,172 700 13,179 2,715

15,435 27,654 4,657

$577,761

$427,103

$7,059 33,917

$7,059 33,917

$10,202 32,288

40,976

40,976

42,490

100,000 295,284 $141,501

100,000 295,284 141,501

100,000 178,379 106,234

395,284

141,501

536,785

384,613

$436,260

$141,501

$577,761

$427,103

ASSETS Cash Accounts receivable Grants & donations receivable Interest receivable Pledges receivable, net Prepaid expenses TOTAL CURRENT ASSETS

22,860 15,057 410,673

Investments Deposits Pledges receivable long term, net Property and equipment, net TOTAL ASSETS

128,322

22,172 700 13,179 2,715 $436,260

$141,501

LIABILITIES Accounts payable Accrued compensation TOTAL CURRENT LIABILITIES NET ASSETS Unrestricted Board designated Undesignated Temporarily restricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS

See independent accountants review report and footnotes to the financial statements. 2

Kara Statement of Activities For the Year Ended December 31, 2014 with Comparative Totals for the Year Ended December 31, 2013

Unrestricted

Temporarily Restricted

Total 2014

Summarized 2013

SUPPORT AND REVENUE Support Contributions In-kind donations Grants & awards Special events, net

$572,269 45,750 115,370 94,153

Revenue Investment income Program service fees Other Income Net assets released from temporary restrictions Expiration of purpose & time restrictions Total Support and Revenue

$10,700 148,000

1,247 99,068 1,034 123,433 1,052,324

$582,969 45,750 263,370 94,153

$433,428 64,800 259,500 49,246

1,247 99,068 1,034

1,902 88,066 742

1,087,591

897,684

(123,433) 35,267

EXPENSES Program services Grief support & education

696,185

696,185

745,789

Supporting services Management and general Fund-raising

105,106 134,128

105,106 134,128

84,428 164,713

935,419

935,419

994,930

Total Expenses INCREASE / (DECREASE) IN NET ASSETS

116,905

35,267

152,172

(97,246)

NET ASSETS AT BEGINNING OF YEAR

278,379

106,234

384,613

481,859

NET ASSETS AT END OF YEAR

$395,284

$141,501

$536,785

$384,613

See independent accountants review report and footnotes to the financial statements. 3

Kara Statement of Functional Expenses For the Year Ended December 31, 2014 with Comparative Totals for the Year Ended December 31, 2013

Program Services Grief Support & Education Salaries Payroll taxes Employee benefits Subtotal compensation Advertising Community events Conferences & meetings Dues, fees & other charges Equipment lease / purchase Insurance Maintenance & Repair Postage Printing Professional services Rent Supplies Telephone & internet Volunteer expenses Total before depreciation Depreciation Total Expenses

Mgmt & General

Supporting Services FundRaising Total

Total

Summarized

2014

2013

$352,815 30,122 40,816 423,753

$41,238 3,521 4,772 49,531

$64,148 5,477 7,421 77,046

$105,386 8,998 12,193 126,577

$458,201 39,120 53,009 550,330

$547,852 46,745 51,467 646,064

2,244 9,913 7,050

2,611

3,823

6,434

3,891 5,263 5,723 1,393 3,931 120,675 92,079 10,868 6,087 1,820 694,690

5,015 9,537 795 615 669 2,103 2,672 18,821 4,903 5,952 711 996 104,931

3,480 2,211 2,000 957 1,041 2,501 14,766 11,864 6,538 4,269 1,107 2,253 133,856

8,495 11,748 2,795 1,572 1,710 4,604 17,438 30,685 11,441 10,221 1,818 3,249 238,787

8,678 9,913 15,545 11,748 6,686 6,835 7,433 5,997 21,369 151,360 103,520 21,089 7,905 5,069 933,477

5,253 8,178 4,488 8,520 7,189 5,988 3,904 5,315 17,477 152,002 95,155 22,762 7,154 3,266 992,715

1,495

175

272

447

1,942

2,215

$696,185

$105,106

$134,128

$239,234

$935,419

$994,930

See independent accountants review report and footnotes to the financial statements. 4

Kara Statement of Cash Flows For the Year Ended December 31, 2014 with Comparative Totals for the Year Ended December 31, 2013

Total 2014 CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets

$152,172

Adjustments to reconcile increase in net assets to net cash provided by operating activities: Realized gains and dividends reinvested Unrealized gains on investments Depreciation expense (Increase) decrease in operating assets Accounts receivable Grants & donations receivable Interest receivable Pledges receivable Prepaid expenses Deposits Increase (decrease) in operating liabilities Accounts payable Accrued compensation Pledges received restricted for long term use NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Investment purchases Investment redemptions NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of the year CASH AND CASH EQUIVALENTS, end of the year

($97,246)

(116) 4 1,942

(741) 329 2,215

850 7,864 (1,033) 720 2,538 (700)

3,925 (123,424) 2,780 5,040 (11,688)

(3,143) 1,629 14,475

4,889 (13,391) 11,855

177,202

(215,457)

(6,625)

(24,141) 35,000

(6,625)

10,859

170,577

(204,598)

210,831

415,429

$381,408

$210,831

See independent accountants review report and footnotes to the financial statements. 5

Summarized 2013

KARA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE A – SUMMARY OF ACTIVITIES: Kara (Organization) is a non-profit community organization serving the San Francisco Bay Area since 1976. The agency mission is to provide grief support for children, teens, families and adults. Guided by its core value of empathy and belief that loss and grief impact everyone, Kara compassionately supports people of all ages on their journey through grief so they can move toward renewed hope and meaning. NOTE B – PROGRAM SERVICES The Organization provides comprehensive grief support, crisis response and education to individuals and communities facing the difficult realities of death and dying. Serving more than 4,600 individuals last year, Kara provides a wide breadth of grief support and education services to the community including individual and group peer support; in-house psychotherapy; on-site crisis intervention; bereavement education and training services; Camp Erin, a bereavement camp for children 6-17 years old; and community events. Kara also provides its services to individuals who are facing a life-threatening illness and have limited life expectancy. Over 150 trained and supervised volunteers provide most of Kara’s services. NOTE C – SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation The financial statements of the Organization have been prepared on the accrual basis of accounting. The significant accounting policies that follow are described to enhance the usefulness of the financials statements to the reader. The Organization reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. In addition, the Organization is required to present a statement of cash flows. Unrestricted net assets include those assets over which the Board of Directors has discretionary control in carrying out the operations of the Organization. Temporary restricted net assets include those assets, which are subject to a donor restriction and for which the applicable restriction was not met at the end of the current reporting period. Permanently restricted net assets include those assets, subject to a non-expiring donor restriction, such as an endowment. Currently the Organization does not have any permanently restricted net assets. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and, or expenses and their related notes during the reporting period. Accordingly, actual results could differ from those estimates. Income Taxes The Organization is not classified as a private foundation and is exempt from federal and state taxes under section 501(c)3 of the Internal Revenue Code and Section 23701(d) of the California Code. The Organization is considered a publicly supported organization. The Financial Accounting Standards Boards prescribes a recognition threshold and a measurement attribute for financial statement recognition of tax positions taken or expected to be taken on a tax return. Management has evaluated its uncertain tax positions and related income tax contingencies at December 31, 2014 and does not believe any material tax positions exist. Indirect Expense Allocations The costs of providing various programs and other activities have been summarized on a functional basis in the statement of functional expenses. Accordingly, certain costs have allocated to the various functional areas based on full time equivalent staff members working in each area and based on square footage of occupancy in each area, as estimated by management. 6

KARA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE C – SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents For purposes of the statement of cash flows the Organization considers cash and cash equivalents to include all cash accounts held in banks and other financial institutions, with an initial maturity of three months or less. Investments The Organization carries investments in marketable securities with readily determinable fair values in the Statement of Financial Position. Unrealized gains and losses, interest and dividends, realized changes and related fees are included in the change in net assets in the Statement of Activities. Contributions The Organization accounts for contributions received and contributions made in accordance with accounting standards for nonprofit organizations. Contributions are recognized when the donor makes a pledge to give that is, in substance, an unconditional promise. Contributions received are recorded as unrestricted, temporarily restricted or permanently restricted support depending on the existence and, or nature of any donor restrictions. Restricted contributions are reported as an increase in temporarily or permanently restricted net assets. When the restriction is met, the amount is shown as a reclassification from temporarily restricted net assets to unrestricted net assets. Contributions In-Kind Donated equipment and other goods are recorded at estimated fair market value on the day of donation. Contributed services, which require a specialized skill and which the Organization would have paid for if not donated, are recorded at their estimated fair market value at the time the services are rendered. The Organization also receives other donated services that do not meet the criteria for recognition, but which are, nonetheless, central to the Organization’s operations. These contributed services are not reflected in the financial statements. Revenue Recognition The Organization recognizes revenue on the accrual basis of accounting. Program service fees are recognized as revenue in the period in which the related service is provided. Grants and donations are recognized in accordance with contribution rules established for nonprofit organizations. The Organization’s primary revenue sources are grants and awards from local foundations and corporations, and donations from individuals. Allowance for Doubtful Accounts Management maintains a ten percent allowance on pledges receivable and a discount on long-term pledges receivable using the average US Treasury market rate for the current year and adding one percent for credit and one percent for valuation risk. Management does not maintain an allowance for doubtful accounts on therapy fees receivable or on grants receivable as amounts deemed uncollectable on therapy fees are considered immaterial and amounts due on grants receivable are likely to be received. Property, Equipment and Depreciation Property and equipment is recorded at cost when purchased or, if contributed at estimated fair market value when donated. It is the Organization's policy to capitalize items costing at least $1,000. Depreciation is computed using the straight line method over the assets estimated useful life, which ranges from five to seven years. Advertising The Organization expenses advertising costs as they are incurred. For the year ended December 31, 2014, advertising costs are $8,678 and for the year ended December 31, 2013, advertising costs are $5,253. 7

KARA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE C – SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value Measurements The Organization adopted the provisions of Fair Value Measurements which applies to all financial instruments being measured and reported on a fair value basis. Fair 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. In determining fair value, the Organization uses a fair value hierarchy which is categorized into three levels as follows: Level 1 – Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Organization has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 – Valuations are based on quoted prices in markets that are not active or for which all significant inputs are not observable, either directly or indirectly. Level 3 – Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. The Organization’s financial assets measured at fair value are as follows: 12/31/2014 Fair Value Investments

12/31/2014 (Level 1)

$22,172

$22,172

12/31/2013 Fair Value

12/31/2013 (Level 1)

$15,435

$15,435

NOTE D – CERTIFICATES OF DEPOSIT At December 31, 2014, the Organization has one certificate of deposit for $56,611, which is included in cash and cash equivalents. The certificate bears interest at 1.76% and has a maturity of twelve months, with penalties for early withdrawal, which if assessed would not have a material effect on the financial statements. NOTE E – RECEIVABLES At December 31, 2014 receivables consist of donations and grants receivable $115,560 and interest receivable $4,110. At December 31, 2013 receivables consist of therapy fees receivable $850, donations and grants receivable $123,424 and interest receivable $3,077. Pledges receivable are as follows: 12/31/2014

12/31/2013

Pledges Receivable, Current Allowance for Doubtful Pledges Current Pledges Receivable, net

$25,400 ($2,540) $22,860

$26,200 ($2,620) $23,580

Receivable in Two to Five Years Allowance for Doubtful Pledges Discount on Future Value Long Term Pledges, net

$15,000 ($1,500) ($321) $13,179

$31,500 ($3,150) ($696) $27,654

At December 31, 2014, approximately 59% of the pledges receivable are due from Moyer Foundation. At December 31, 2013, approximately 52% of the pledges receivable are due from Moyer Foundation and approximately 31% of the donations and grants receivable are due from the Harris Family Foundation. The ability of certain of the Organization’s grants and awards to continue to provide amounts comparable with prior years may be dependent upon current and future economic conditions and budget constraints. While the Board of Directors believes the Organization has the resources to continue current and future programs, its ability to do so, and the extent to which it does continue, may be dependent on the above factors. 8

KARA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE F – INVESTMENTS Investments consist of a portfolio of money funds based on guidelines established by the Organization’s Board of Directors. Investments at December 31, 2014 are $22,172 and at December 31, 2013 are $15,435. Investment income is as follows: 12/31/2014 Interest & Dividends Unrealized Changes Realized Changes Interest on CD's and Savings Total Investment Income

12/31/2013

$962 ($4) ($846) $1,135 $1,247

$125 ($329) $616 $1,490 $1,902

NOTE G – PROPERTY AND EQUIPMENT Property, equipment and related accumulated depreciation is as follows: 12/31/2014 Software Furniture and Equipment Leasehold improvements Subtotal Accumulated Depreciation Net Book Value

12/31/2013

$15,106 $30,257 $2,711 $48,074 ($45,359) $2,715

$15,106 $30,257 $2,711 $48,074 ($43,417) $4,657

For the year ended December 31, 2014 depreciation expense is $1,942 and for the year ended December 31, 2013 depreciation expense is $2,215. NOTE H – OPERATING LEASES The Organization leases office space and program space in Palo Alto and in San Mateo under three separate lease agreements, two expiring in December 2015 and one lease agreement is operating on a month to month basis. Future minimum lease payments remaining under these agreements are $100,119 for the year ending December 31, 2015. Rent expense for the year ended December 31, 2014 is $103,520 and for the year ended December 31, 2013 is $95,154. NOTE I – RESTRICTIONS ON NET ASSETS At December 31, 2014 the Organization's temporary restricted net asset activity consisted of the following: Beginning Bilingual Employee Camp Erin Community Outreach Grief Counseling Pledges Training Total

Additions

$0 $30,000 $0 $25,000 $51,234 $0 $106,234

$15,000 $13,000 $10,000 $117,700 $0 $3,000 $158,700

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Released

Ending

($15,000) ($20,500) ($5,000) ($64,738) ($15,195) ($3,000) ($123,433)

$0 $22,500 $5,000 $77,962 $36,039 $0 $141,501

KARA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2014 NOTE J – BOARD DESIGNATED NET ASSETS The Board of Directors has designated certain operating reserves to cover unanticipated expenditures and to enhance programs. At December 31, 2014 and at December 31, 2013 designated reserves are $100,000. NOTE K – CONTRIBUTIONS IN-KIND In-kind contributions recognized in the financial statements are as follows: 12/31/2014 Nurses, Therapists & Doctors Camp Erin Services Total

$25,250 $20,500 $45,750

12/31/2013 $44,050 $20,750 $64,800

In addition, the Organization has volunteers that have donated significant amounts of time for both program and supporting services. Management estimates approximately 12,300 hours were contributed by individuals during the year ended December 31, 2014. No amount for this time has been recognized in the accompanying statement of activities as this volunteer time does not meet the criteria required for recognition. NOTE L –SPECIAL EVENTS The Organization participated in the following special events. 12/31/2014 Sales (Auction / Registration) Donations Total Income Food & Facility Gross Proceeds

$35,646 $65,232 $100,878 ($6,725) $94,153

12/31/2013 $25,372 $26,312 $51,684 ($2,438) $49,246

NOTE M – SUBSEQUENT EVENTS Management of the Organization has reviewed the results of operations for the period of time from its year end, December 31, 2014, through June 3, 2015, the date the financial statements were available to be issued, and have determined that no adjustments are necessary to the amounts reported in the accompanying financial statements nor have any subsequent events occurred, the nature of which would require disclosure.

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