End of the Year Finanial Wrapup

I know that reading balance sheets is probably not on your top fun activities for a holiday weekend, but as the end of the year rolls around, we'd like to let you know what happened to all the money you donated this year.  One of the things we hope sets the Fund apart from other brony charities is that we operate totally transparently, which is to say that our books are open and we don't try to hide any of the details of what we've been up to.  To be clear, we're not accussing anyone else of anything, but as a registered public charity and candidate for tax-exempt status, we are required to make our finances public.

We're actually going beyond the requirements, because as a charity with less than $75,000 in gross receipts, all we have to file with the IRS is form 990-N, the so called ePostcard, that basically says that we're still alive and operating.  But, right from the start, we've regularly published our balance sheet and profit and loss statements, because we think you have a right to know what happens when you donate.  So, without further adue, accounting!

To start, let's look at our balance sheet as of December 29th.  Not quite the end of the year, but things are relatively quiet at the moment after brisk calendar sales, so it's a good time to take a peek.

As should be obvious, we started the year with zero dollars (we incorporated in May), and currently have just under $11K in cash, mostly in our credit union checking account, but some in transit between PayPal and our checking account, and still shown as with PayPal.  We have no liabilities, having paid all our bills upfront in cash.  We don't count all of the calendars and posters and such that we have in inventory as assets, because we don't technically sell them, we give them away as premiums for donations and they don't have a set price.

Why haven't we done something with that $11K?  Well, some of it needs to be there to fund ongoing operations, such as reprinting posters and calendars, but almost all of it is part of the $50K we're saving up to make our initial donation to CalArts, to fund the scholarship.  We're over 20% there now, and have lots of activities planned for 2013 to carry us over the top.

So how much did we bring in, and where did we spend money?  Turn to our profit and loss statement for the same period (yes, non-profits still use a profit and loss statement...)

The big number at the top (Donations) is the total amount of money we brought in, including the original IndieGoGo campaign for the Thank You Ad, which rolled into the Fund when it incorporated.  $40K would have been a nice round number, but we came close, raising just under $39K in about 8 months.  Not bad at all, and all thanks to the overwhelming generosity of the brony community.

Topping the expense side of our operations is the item you would expect us to spend money on, donations to charity.  We donated nearly $19K in 2012, in the form of a direct $7,000 cash donation to the Marine Toys for Tots Foundation, and the donation of ad time worth another $12K.

Our largest single non-donation expense was "Cost of Goods Sold", which is almost totally printing expenses for posters and calendars.  We get some great deals on the Internet that keep our printing costs low, but we also printed a lot of stuff in 8 months, including premiums that should take us through a good piece of 2013 without having to reprint.  Postage is our next highest cost, as it's not cheap to mail out premiums, especially to overseas donors (it costs more than $5 in postage to send a calendar to Europe, for example.)  

After printing and mailing premiums, the next expense is credit card fees.  This is especially high because IndieGoGo took 5% right off of the top of the money we collected from them.  Paypal pulls another 3-5% off funds than run through them.  There's a reason that, in spite of the logistical headaches of going to conventions, they're our favorite way to raise funds.  We don't lose anything off the top to cash transactions.  We also love to meet our donors in person, of course!

Registrations includes applying to be a tax-exempt charity with the IRS ($850), registering our name as a service mark (mainly to offer a defense against cybersquaters), and various state registration fees.  Office supplies include envelopes for mailing premiums and things like a cash box for conventions.  Advertising is printing flyers and signs for conventions.

So there you have it, our financial year in review.  Our overhead cost (non-donation expenses compared to income) was around 22%, which would qualify us to be a top-rated charity. Next year, it should be well under 10%, as we won't have some high one-time costs we incurred starting up this year.  Highlights for 2013 should include getting our tax-exempt status from the IRS (expect that in the early spring, if all goes well) and fully funding the scholarship.