Document 6451718

5
ANNUAL FINANCIAL REPORT PURSUANT TO SECTION 91.5(b) OF THE NEW YORK STATE CODE OF RULES &
REGULATIONS FOR CHARITABLE ORGANIZATIONS
For the fiscal year ended December 31, 2006
CHILDREN’S TUMOR FOUNDATION, INC.
(Exact name of registrant as specified in its articles of incorporation)
New York
(State of
incorporation or organization)
13-2298956
(I.R.S. Employer Identification No.)
95 Pine Street, 16th Floor
New York, NY
(Address of principal executive offices)
10005
(Zip Code)
Registrant’s telephone number, including area code: (212) 344-6633
Registrant’s website: www.ctf.org
Documents Incorporated by Reference
Portions of the registrant’s IRS 990 for the fiscal year ending 12/31/2006 are incorporated by reference into Part III hereof.
TABLE OF CONTENTS
Item
Description
Page
7.
8.
PART I
Business.............................................................................................................................................................................
Mission Statement and History..........................................................................................................................................
Programs............................................................................................................................................................................
Employees .........................................................................................................................................................................
Properties...........................................................................................................................................................................
Legal Proceedings .............................................................................................................................................................
PART II
Selected Financial Data .....................................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ............................................
2006 Significant Developments.........................................................................................................................................
Explanation of Key Metrics and other items .....................................................................................................................
Liquidity and Capital Resources........................................................................................................................................
Controls and Procedures....................................................................................................................................................
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9
9
11
12
12
9.
10.
11.
PART III
Directors and Executive Officers ......................................................................................................................................
Corporate Governance.......................................................................................................................................................
Principal Accountant Fees and Services............................................................................................................................
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14
15
12.
13.
PART IV
Signatures ..........................................................................................................................................................................
Audited Financial Statements ............................................................................................................................................
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17
1.
A.
B.
2.
3.
4.
5.
6.
A.
B.
2
2
3
7
7
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PART I
Item 1. BUSINESS
A. MISSION STATEMENT
The Children's Tumor Foundation is a non-profit 501(c)(3) medical research foundation, dedicated to improving the
health and well being of individuals and families affected by neurofibromatosis (NF). The mission of The Children's
Tumor Foundation is to:
• Encourage and support research and the development of treatments and cures for neurofibromatosis types 1 and 2,
Schwannomatosis and related disorders (hereafter collectively referred to as "NF");
• Support persons with NF, their families and caregivers by providing thorough, accurate, current and readily
accessible information;
• Assist in the development of clinical centers, best practices and other patient support mechanisms (but not
including direct medical care) to create better access to quality healthcare for affected individuals; and,
• Expand public awareness of NF to promote earlier and accurate diagnoses by the medical community, increase the
non-affected population's understanding of the challenges facing persons with NF, and encourage financial and
other forms of support from public and private sources.
History
We were founded in 1978 by Dr. Allan Rubenstein, a neurologist with an interest in neurofibromatosis, Lynne
Courtemache Shapiro, a Registered Nurse who has NF1, and Joel Hirschstritt, Esq., who agreed to assist them on a pro
bono basis to establish the Foundation in New York City. Dr. Rubenstein served on our Board of Directors and as
Chairman of our Medical Affairs Committee since their inception until 2003. He continues his clinical practice, and is
the founder, President & CEO of NexGenix Pharmaceuticals, a biotechnology company engaged in drug development
for NF. In recognition of his long and distinguished service, he has been named Director of Medical Affairs, Emeritus.
Selected Milestones:
1980 - Established our Research Advisory Board (RAB).
1984 - Launched first NF research program in the world and awards our first research grants.
1985 - Convened the first major international NF scientific conference.
1987 - NF diagnostic criteria, nomenclature and management guidelines for NF1 and NF2 are established by NIH
Consensus Conference convened at the request of the Foundation.
- First mouse model for NF created.
1990 - The NF1 gene and neurofibromin, the gene product it encodes, are discovered.
1993 - The NF2 gene and merlin/schwannomin, its gene product, are discovered.
1994 - Our website, originally www.nf.org, now www.ctf.org, is launched.
1997 - NF International Summer Camp for teens is launched.
2000 - Development of new and powerful mouse models for NF allowing gene deletion in specific tissues.
2004 - Funded the establishment of The NF Project to investigate the effectiveness of existing drugs in treating NF.
- Research Advisory Board formally recognized Schwannomatosis as the third form of NF.
2005 - Hired first Chief Scientific Officer for research and clinical programs.
2006 - Established Drug Discovery Initiative and pilot program for NF Clinic Network.
Originally incorporated under the name The National Neurofibromatosis Foundation, after several years of study the
Board of Directors voted in 2004 to change our name to The Children’s Tumor Foundation, effective January 1, 2005.
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“The Children’s Tumor Foundation,” “The National Neurofibromatosis Foundation,” “Racing for Research”,
“Racing4Research” and “NF Marathon Team” are trademarks or service marks of The Children’s Tumor Foundation,
Inc.
B. PROGRAMS
Research Program: The Foundation is the largest non-government source of NF research funding. We provide
external funding primarily through three grant mechanisms:
a. The Young Investigator Award (YIA). The YIAs have been our cornerstone grant since their inception in
1985. Offering up to $90,000 over two years, they are open to pre- and postdoctoral scientists investigating novel
ideas in basic, translational and clinical research in NF. In addition to the high quality of science and the many
discoveries made through this program, it encourages young scientists to pursue careers in NF research. Many of
the senior researchers in NF today were recipients of our YIAs early in their careers. Discoveries made through the
YIA program are often pursued with follow-on grants from larger funding sources such as the National Institutes
of Health and the Congressionally Directed Medical Research Program.
The YIA program is advertised in major scientific journals in the fourth quarter of each year. Applications are due
by March 31. Our Research Advisory Board (RAB) peer reviews the applications and makes recommendations for
funding to the Board of Directors. Awards are announced at The NF Conference held in early June.
b. Drug Discovery Initiative (DDI). The DDI is a new program that was initiated in 2006 to fill a gap in NF
research identified by advisory Boards. Pharmaceutical companies are more likely to invest in NF research if there
is preclinical data available. The DDI funds & facilitates preclinical screening to develop this data with two
components: Grants of $10,000 for in vitro screens and $25,000 for in vivo screens of candidate NF therapeutics.
In addition, the DDI program includes an online Toolbox hosted on our website. It is a condition of funding that
researchers make their tools (candidate drugs, animal models, cell lines etc.) publicly available for collaboration
with other researchers.
c. Children's Tumor Foundation NF Clinic Network (CTF-NFCN). This is a new program that completed its
pilot phase in 2006 and is being rolled out broadly in 2007. We have long been active in clinical matters, but in
2005 began to address the need for national guidelines for NF clinical care in the US. Our Clinical Care Advisory
Board (CCAB) has developed NF Clinic Guidelines that recommend what types and level of care an individual
should expect to receive when visiting an NF Clinic.
NF Clinics adopting these guidelines may apply to become members of the CTF-NFCN. This program is intended
to standardize and improve NF clinical care nationally across the US. Members of the CTF-NFCN are expected to
submit data to the NF Database, the Foundation's NF patient registry, and all NF clinics are encouraged to
contribute to this valuable resource which can be used for clinical trials & research. Members are also eligible for
the CTF Clinic Coordinator program, which will support a part or full-time coordinator for the clinic with funds
that have been raised locally by our Chapters and Affiliates.
d. The NF Conference. In 1985, we convened the first ever scientific meeting focusing on neurofibromatosis.
This meeting has grown into the preeminent annual meeting of NF scientists and clinicians worldwide. In 2006 the
meeting was held from June 4-7 in Aspen Colorado, and was attended by over 180 researchers from 11 different
countries. The NF Conference is a major part of our efforts to encourage research and foster collaboration in the
scientific community.
In addition to these programs, when our advisory boards identify a specific area that requires research we may issue
contract awards. There were no new contract awards made in 2006 as our focus is on building the DDI and NFCN
programs. Two previous contract awards (3D Imaging and Schwannomatosis) were completed in 2006.
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Our research programs benefit through the pro bono participation of dedicated researchers and clinicians on our advisory
boards. Our Research Advisory Board (RAB) is comprised of scientists involved in basic, translational and clinical research
in the NF and cancer fields, as well as selected consumer representatives. The RAB serves as our peer review panel for all
grants, and works with our Clinical Care Advisory Board in advising us on program development and major issues in NF
research.
Research Advisory Board 2007 Members
Margaret Wallace, Ph.D. Co-Chair
Andrea McClatchey, Ph.D. Co-Chair
Cristina Fernandez-Valle, Ph.D.
Bruce Korf, MD, Ph.D.
Cynthia M. Hingtgen, MD, PhD
David Viskochil, MD, Ph.D.
Stuart A. Aaronson, M.D.
Maria T. Acosta, MD
Dusica Babovic-Vuksanovic, MD
Andre Bernards, Ph.D.
Adrienne D. Cox, Ph.D.
Florent Elefteriou, Ph.D.
Rick Fehon Ph.D.
David A. Ingram, MD
Joseph Kissil, Ph.D.
Dimitra Mangoura, MD, Ph.D.
Shyra Miller, Ph.D.
Michael J. Fisher, MD
Vijaya Ramesh, Ph.D.
Karlyne Reilly, Ph.D.
David Stevenson, MD
Sheila M. Thomas, Ph.D.
James H. Tonsgard, MD
Anat Stemmer-Rachamimov, MD
Kristine S. Vogel, Ph.D.
Yuan Zhu, Ph.D.
David H. Gutmann, MD, Ph. D.
Sara A. Courtneidge, Ph.D.
Jay Gibbs, Ph.D.
Frank McCormick, Ph.D., FRS
Kevin Shannon, MD
Brigitte C. Widemann, MD
Gideon E. Bollag, Ph.D.
Karen Cichowski, Ph.D.
D. W Clapp, MD, Ph.D.
Channing J. Der, Ph.D.
Janet M Hock, BDS, Ph.D.
Michael J. Morin, Ph.D.
Kathy Warren, Ph.D.
Peter Phillips, MD
David Stokoe, Ph.D.
Our Clinical Care Advisory Board is comprised of physicians who are specialists in NF and its complications, and regularly see NF
patients for primary and secondary care. They serve as a peer review panel for the CTF-NFCN, and as writers and editors for the
clinical information we publish on our website and in our brochures.
Clinical Care Advisory Board 2007 Members
David Viskochil, MD Ph.D. Co-Chair
David Gutmann, MD Ph.D. Co-Chair
Robert Miyamoto. Ph.D.
Jan M. Friedman, MD, Ph.D.
Bruce R. Korf, MD, Ph.D.
Scott R. Plotkin, MD, Ph.D.
Tena Rosser, MD
Elizabeth K. Schorry, MD
William H. Slattery III, MD
In addition to our external grants we sponsor various research and clinical meetings throughout the year. The most prominent
of these is The NF Conference, which we founded in 1985 as The NNFF Consortium for the Molecular Biology of NF1, NF2
& Schwannomatosis. Held annually since 1992, the Conference has grown into the preeminent worldwide meeting on NF
research, with over 180 scientists and doctors from 11 different countries attending in 2006.
Our research staff also hosts satellite meetings and staffs booths throughout the year at various scientific meetings, including
The American Society of Human Genetics, Society for Neuroscience, BIO 2006, American Association of Cancer Research
and others.
Public Education and Awareness: We employ a variety of methods to communicate with our constituents and the general
public to improve the knowledge and understanding of NF, and to distribute current information on research.
a. Website: The Foundation was one of the earliest non-profits to establish a website (1994) and we continue to
enhance the content and ease of use. Our site receives over 60,000 sessions per month and serves multiple
constituencies. The research area provides online application for our grant programs; hosts our DDI Toolbox (see
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research section) and is updated daily with the latest research news. NF patients and families access the site regularly
for up to date clinical information, locating an NF doctor, and for support services through our discussion board (over
200,000 postings). Potential donors, Foundations and other grant making organizations visit the site to perform due
diligence before making their decisions. Our Annual Reports, audited financial statements and IRS filings are available
for download from our website.
b. Newsletter: The Neurofibromatosis News is our quarterly print newsletter. Produced in house, the newsletter
contains research updates, clinical trial announcements, patient stories, event coverage from our Chapters and Affiliates
nationwide, fundraising updates and other program information. Our newsletter is a major driver of traffic to our
website, where readers can obtain more information and greater detail on issues covered in print.
c. Email Updates: The NF Research E-Newsblast is a bi-monthly one-page email newsletter that is written and edited
by our research staff. The original audience was the research community, but due to demand we now distribute it to our
lay constituents as well. The primary objectives of the Newsblast are to distribute new findings in NF research as widely
and quickly as possible, and to publicize grant opportunities, both our own and others such as the National Institutes of
Health and the Congressionally Directed Medical Research Program.
d. Public Relations: We actively promote personal stories of NF to media outlets, issue news releases on items of
interest to the general public, and produce and distribute public service announcements to radio and TV stations
nationwide. Several years ago we initiated a campaign to enhance the visibility of May being declared NF Awareness
Month, and continue to grow this effort.
Patient Support:
through:
In addition to the services we provide to the NF community listed above, we actively support patients
a. Information Brochures: We publish over fourteen brochures on the various complications of NF. These brochures
include one written to address questions arising from an initial diagnosis, age specific brochures, and others that address
specific complications of NF (learning disabilities, mosaisim, etc.). All of our brochures are currently being updated by
our Clinical Care Advisory Board, with completion expected by summer of 2007.
b. The NF Handbook: While written pro bono by Dr. Allan Rubenstein and Dr. Bruce Korf, we funded the
production and printing of The NF Handbook, which is available for sale through us as well as Thieme.com,
Amazon.com and other booksellers. We own the copyright to the book and published the 2nd Edition in 2005. The book
is a valuable resource to the clinical community and we plan to continue to update it on a five-year cycle.
c. Support Group Meetings & Medical Symposia: Our Chapters and Affiliates are actively involved in setting up
support group meetings and symposia in their local communities. Information on activity by state can be found on our
website on the activities by state page. We support local efforts in hosting these meetings by distributing invitations,
fostering collaborations, printing and fulfillment services, and securing doctors and researchers to appear to make
presentations.
d. NF International Summer Camp: For over 10 years we have hosted a camp for teenagers with NF. We contract
with Camp Kostopoulous, a special needs camp with trained counselors located in Emmigration Canyon Utah. Camp K
offers a truly western camp experience with horseback riding, fishing, canoeing, arts and crafts, high and low ropes
courses and a variety of other activities. For many campers it is their first chance to meet other kids with NF. We have a
scholarship program for those in financial need, and no camper is ever denied admission due to finances.
Chapters & Affiliates:
Chapters are regional organizations that have formed a local board and signed a Chapter agreement with us. Affiliate status is
extended to individuals who want to support the Foundation in their region (but are not working with a local board) and sign
an Affiliate agreement with us.
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We support our Chapters and Affiliates with a variety of resources to assist them in their efforts. These include: fundraising
support, design and printing services, mailing and fulfillment, and other services as required. Funds raised through our
Chapters and Affiliates are deposited in our main deposit account at our national office. In addition, our donor database and
acknowledgement letters are managed by our national office staff. Our Chapters and Affiliates have been a major part of the
success of the Foundation in all program areas. We expect their role to continue to grow in the coming years, particularly in
connection with our new NF Clinic Network Program.
We have Chapters and Affiliates located in the following states:
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut(NNE & Tri-State Chapters)
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Louisiana
Maine (NNE Chapter)
Massachusetts (NNE Chapter)
Michigan
Maryland (DC, MD, VA Chapter)
Missouri
Nebraska
Nevada
New Hampshire (NNE Chapter)
New Jersey (Tri-State Chapter)
New York (Tri-State Chapter)
North Carolina
Ohio
Oregon
Pennsylvania
Rhode Island (NNE Chapter)
Tennessee
Utah
Washington
Wisconsin
Wyoming
The NF Marathon Team: Begun in 2000, this is a national program that touches our three primary program groups:
fundraising for research, increasing public awareness and patient support. Our Marathon staff markets the program nationally
and signs up runners who agree to fundraise on our behalf. The team is open to all levels, from competitive runners with sub
3-hour times, to recreational runners looking to challenge themselves. Promotions, ranging from apparel to hotel and airfare,
are offered upon attainment of certain fundraising goals. One of the highlights of our team’s events is the pre-race pasta
dinner, where runners, volunteers and their families can meet informally and share experiences.
Our team staff attended 16 marathons in 2006. 389 runners ran on our behalf, raising over $900,000. All of the net income
from the NF Marathon Team is restricted to NF research. While an important fundraising program, The NF Marathon Team
is also a large part of our public education and patient support programs. We have had success in getting TV coverage of our
runners and their personal stories in local markets, leading to increased awareness of NF and the Foundation within the
general population. Additionally, the infrastructure, planning and training we foster provide an outlet for NF patients, their
families and unaffiliated runners to challenge themselves physically, and to network with others in a supportive environment.
Development: We raise funds through a variety of events, campaigns and programs:
a. Special Events: Our Tri-State (NY, NJ & CT) and Northern New England (MA, NH, VT, RI, & ME) Chapters hold
Gala Dinners each fall. The NY Gala Dinner is our largest single event, raising over $800,000 in 2006. Our Chapters
and Affiliates host events nationwide throughout the year, including golf tournaments, auctions, racquetball
tournaments, casino nights (where licensed) and concerts.
b. Grant Applications: We apply to a variety of grant making organizations for support of our programs. As research
is our primary expense, most of our applications are focused on funding our Young Investigator Awards and our Drug
Discovery Initiative. A listing of foundation support can be found in our annual report.
c. Tea Party Program: This program was developed to assist supporters who desired a formal mechanism to support
the Foundation with a small to medium scale event. We provide invitations and collateral materials as part of a kit to
supply supporters with all of the items needed to host a tea party to benefit the Foundation.
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d. Individual Gifts: Our development staff regularly visits and communicates with potential and existing donors to
solicit their support for our programs. We believe that our governance policies, advisory boards, peer review process,
grant reporting and accomplishments are major factors in attracting new and continuing support from individuals,
corporations and foundations.
e. Workplace Giving Campaigns: We are national members of United Way and Community Health Charities, and
are regional members in selected local campaigns. Our staff and volunteers through our Chapters and Affiliates actively
seek to participate in local marketing campaigns hosted by the United Way and Community Health Charities to increase
workplace giving.
Advocacy: In 1991 the Foundation began to work with our donors and constituents nationwide to actively lobby for
increased federal funding for NF research. Through our efforts, in 1996 NF was added as an individual program to the
Congressionally Directed Medical Research Program (CDMRP). While we have funded science that has led to the discovery
of genes for NF1 and NF2, animal model development, and many other basic and clinical advances, much of this would not
have been possible without larger, sustained funding provided by the CDMRP and The National Institutes of Health (NIH).
In 1997 we hired Patton Boggs in Washington DC to serve as our legal counsel and lobbying firm. We continue to work with
them to preserve these federal programs.
Our lobbying campaign includes letter writing campaigns by our constituents; invitations to our events and symposia
nationwide; newsletter articles; and personal visits with legislators and their staffs. The NF Coalition was formed several
years ago by a group of local organizations to lobby for NF Research. While we are not a member of the Coalition, we work
with them on strategy to coordinate our efforts.
Item 2. EMPLOYEES
As of December 31, 2006, we had 20 employees. Our employees are offered participation in our group health insurance plan,
and receive other standard benefits including disability and life insurance. In addition, all employees are eligible after six
months of employment to participate in our 401K plan. After one year of employment the Foundation will contribute 3% of
their salary to the plan, which is immediately vested.
Item 3. PROPERTIES
Our national office is located at 95 Pine Street, 16th Floor, NY NY, where we lease 4,000 square feet of office space under a
lease expiring in May 2009. In addition, we lease field offices for our regional offices in Los Angeles and Boston.
Item 4. LEGAL PROCEEDINGS
None
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PART II
Item 5. SELECTED FINANCIAL DATA
In 2004 the Board of Directors voted to change our fiscal year from September 30 to December 31. We produced audited
financial statements and filed an IRS 990 for the three-month period ending December 31, 2004. For comparison purposes,
the selected consolidated financial data for the three most recent 12-month fiscal years are included below. This data has been
derived from, and is qualified by reference to our Audited Financial Statements. Certain prior period amounts have been
reclassified to conform to the current year presentation. This data should be read in conjunction with our Audited Financial
Statements and related footnotes and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” included elsewhere in this report.
See further discussion under Item 7. – “Explanation of Key Metrics and Other Items.”
12/31/06
12/31/05
9/30/04
$2,500,146
447,435
6,050
119,806
130,320
6,034
1,156,805
$4,366,596
$2,453,153
277,255
$1,899,775
324,336
111,248
0
132,355
760,411
$3,734,422
122,578
0
82,201
959,620
$3,388,510
Expenses
Research & Medical Programs
Public Education & Patient Support
Total Program Expenses
2,373,112
930,542
3,303,654
1,671,109
1,165,972
2,837,081
2,002,085
962,645
2,964,730
Management & General Expenses
Fundraising Expenses
Total Supporting Services
TOTAL EXPENSES
381,075
644,323
1,025,398
4,329,052
230,727
612,223
842,950
3,680,031
343,497
925,157
1,268,654
4,233,384
37,544
54,391
(844,874)
90,984
11,029
181,225
283,238
69,492
1,077
48,892
119,461
69,042
(34,317)
187,903
222,628
320,782
2,936,348
3,257,130
173,852
2,762,496
2,936,348
(622,246)
3,235,022
2,612,776
Revenues
Individual Contributions
Corporations & Foundations
Membership
United Way/NVHA/CFC
Gifts in Kind
Other Income
Special Event Rev, net of direct benefit to donor
TOTAL REVENUES
Change in Net Assets Before Investments
Investments
Interest & Dividends
Gain/(Loss) on Sales of Assets
Unrealized Gain/(Loss)
TOTAL INVESTMENT GAIN/(LOSS)
INCREASE (DECREASE) IN NET ASSETS
Beginning Net Assets
Ending Net Assets
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Item 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
EXECUTIVE SUMMARY
Overview
During 2006 we continued to expand on the growth initiatives put in place in 2005. The major components of our revenue
growth in 2006 were the success of our annual Gala Dinner in NYC and The NF Marathon Team. These increases were made
in part by our Chapters and Affiliates, as we saw increased activity in their local events and participation in our national
fundraising programs. Direct mail and workplace giving campaigns (United Way and Community Health Charities) saw
modest increases in 2006.
A. 2006 Significant Developments
Research:
Young Investigator Awards: We received 34 applications in 2006. After our Research Advisory Board peer reviewed
the proposals, nine were selected for funding. Given the two-year length of the YIAs, publications resulting from this
research are generally made 2-3 years after our award. Of the seven awards made in 2004, six resulted in published papers in
2006. One 2004 YIA was terminated early due to the researcher leaving the institution. As of April 18, 2007, we have
received 42 applications that are currently in peer review.
Drug Discovery Initiative: We received 16 applications for the inaugural round of this program in August of 2006. Five
were selected and funds were released in October. We announced a second round of DDI funding in December 2006 and
received 18 applications by the January 31, 2007 deadline. We anticipate funding up to five of these proposals and to
announce the results in May 2007.
NF Clinic Network: We established a pilot program for this new initiative with four hospitals. Our Clinical Care
Advisory Board completed the development of NF Clinic guidelines in early 2007. We are now actively publicizing the
network to over 600 hospitals nationwide. Adoption of the guidelines and membership in the Network make clinics eligible
for funding of up to $40,000 per year for NF Clinic Coordinator salary support. The availability of these funds is subject our
ability to raise them locally through our Chapters and Affiliates.
Contract Grants: We completed the funding of two contract grants in 2006: The Schwannomatosis Award ($100k/1
year) and the Digital Imaging Project ($240,000/3 years). The Digital Imaging Project developed software to perform 3D
imaging of NF tumors to enable volumetric measurement from MRI slides. We will be working to distribute this technology
to NF clinicians and radiologists in 2007 and 2008. The project can be viewed at www.nftumormetrics.org. No new contract
grants were made in 2006.
The NF Landscape: To better understand the history of NF research and assist us in determining our priorities for the
future, our Chief Scientific Officer, Dr. Kim Hunter-Schaedle and her staff compiled available public information on NF
research and published The NF Landscape. Covering from 1996 to 2006, this 174 page document tracks NF research funding
by source (NIH, CDMRP, etc.), type of research (basic, translational, clinical etc.), type of NF, institution and a variety of
other variables.
Strategic Plan: At the direction of our Board, we began to work on a strategic plan for research. We hosted a 2-day
meeting in August attended by members of our Board of Directors and Research and Clinical Care Advisory Boards as well
as representatives from the National Institutes of Health, Congressionally Directed Medical Research Program, NF Inc.,
Juvenile Diabetes Research Foundation and the Spinal Muscular Atrophy Foundation. This planning process reviewed our
existing programs, identified gaps in research that we could fill, established spending caps for specific programs, and
developed a road map for investing incremental dollars. Copies of our research plan, and The NF Landscape, are available by
request from Dr. Hunter-Schaedle.
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NF2 & Schwannomatosis: While it is our objective to encourage more research into all forms and complications of NF,
we are developing initiatives to increase the quantity of research into NF2 and Schwannomatosis, the two rarer, but in many
cases more debilitating forms of NF. These initiatives include increased presence at neurology and oncology conferences and
meetings, outreach to researchers working in related fields, and marketing the transparency and openness of our grant
mechanisms to a wider audience. We will measure our success in this area by the increase in applications we receive to our
programs and others for NF2 and Schwannomatosis, and by closely tracking publications and other media.
Public Education & Patient Support:
Brochures and Pamphlets: We publish 13 brochures and pamphlets on a variety of NF topics. Our Clinical Care
Advisory Board has reviewed our existing print information and began the process to updating, rewriting and consolidating
our brochures. Several new brochures are being developed for new topic areas. We expect to complete this process in 2007.
After the publication of the English versions we will begin working to translate these materials into other languages.
Website: We installed a content management system to facilitate faster updates and enhance multimedia capabilities. In
2007 we plan to incorporate flash technology and other improvements to further improve navigation and ease of use. Our
privacy policy was reviewed and approved, and is posted prominently on our site. As a health care foundation, we are
particularly focused on protecting the privacy of visitors to our site.
Newsletters (Print & Email): Our research staff developed a bi-monthly email newsletter, The NF Research ENewsblast, for distribution to the research community. The primary focus of this newsletter is to distribute published results
more broadly, and to enhance the marketing of available grant opportunities, both our own and those of others. Due to
demand we have expanded the distribution of this to our donor base as well. Our print newsletter distribution was increased
to 28,000 per quarter.
Chapters and Affiliates:
NF Clinic Network: Four of our Chapters (Los Angeles, Denver, Seattle and St. Louis) were instrumental in funding the
pilot phase of The NF Clinic Network. Hospitals in these cities were awarded between $20,000 and $40,000 to support the
hiring of an NF Clinic Administrator. We are rolling out this program nationwide and look forward to continuing to work
with our local representatives to grow this network.
PSA Campaign: In 2005 Harold Ramis, our Honorary Director, wrote, filmed and produced a television public service
announcement for the Foundation. The PSA campaign that was begun in 2005 was completed in August of 2006. Over the
one-year period Nielson tracking data shows that our PSA received over 14,000 airplays on over 100 broadcast and cable
networks. The estimated value of this airtime was in excess of $4,000,000. We have not recorded the value of this airtime as
gift in kind revenue.
Local Programs: We rely on our Chapters and Affiliates to meet the needs of their local communities with our support.
In most cases this includes the hosting of NF symposia, patient support meetings, and a variety of other mechanisms to
address the needs of their communities. More information on each Chapters and Affiliates activities can be found on the state
pages of our website.
B. Explanation of Key Metrics and other items
We monitor our financial health with the many accounting measurements common to all businesses, i.e. revenue and expense
growth, current ratio, long-term commitments etc. We measure our efficiency by using non-profit industry ratios such as
fundraising, program and management expense ratios. All numbers used in the calculations below are from our audited
financial statements beginning on page 17.
Fundraising Expense Ratio:
Program Expense Ratio:
14.8%
75.7%
(Fundraising Expenses/Total Public Support and Revenue)
(Program Expenses/ Total Public Support and Revenue)
10
Overhead Ratio:
Revenue Growth yr/yr
Program Growth yr/yr
8.72%
16.9%
16.4%
(Management & Admin Expenses / Total Public Support and Revenue)
As we continue to grow we expect to benefit from economies of scale in fundraising and administration expenses. Our budget
for 2007 calls for fundraising to remain in the 14-15% range, and for our overhead ratio to decline to 7%.
Business Overview:
We are a tax exempt 501(c)(3) non-profit foundation that raises money to fund research; support NF Clinics; increase
public education and awareness; and provide patient support (but not individual financial support) for those who are affected
by neurofibromatosis. We prepare our financial statements on the accrual basis of accounting in accordance with United
States generally accepted accounting principles for not-for-profit organizations.
Revenue Recognition: Under Financial Accounting Standard No. 116, Accounting for Contributions Received and
Contributions Made, we distinguish contributions received as either unrestricted, temporarily restricted, or permanently
restricted. There were no permanently restricted gifts recorded in 2006. Temporarily restricted gifts are those with donor
imposed stipulations that will be met with either our actions or the passage of time. When a temporary restriction is satisfied,
for example our funding of a research grant, or our hosting of an event, these gifts are reclassified to unrestricted.
We record unconditional pledges to give as revenue in the period received only when we have sufficient written
documentation to support this determination. We actively encourage our donors to include corporate matching gift program
forms when available. Given our history and experience, we assume a very high likelihood of receiving these matching gifts.
Accordingly, under FAS 116, when we receive a matching gift form with a donation, we book these matching gifts as pledge
revenue in the period when the form is received. Our pledge receivable balance at 12/31/06 was $6,605.
While our revenue recognition policy does not require the exercise of significant judgment or the use of significant
estimates, we believe that our policy is significant as revenue is a key component of our results of operations.
Expense Recognition: We record expenses when an invoice has been submitted and approved according to our internal
control procedures. Research grants we make that require us to make payments in future years are fully expensed in the year
awarded when evidenced by our written commitment to fulfill the grant terms. For research grants we make that are not
evidenced by this commitment, or are made on a best efforts basis, expense is recorded in the period the payment is made. As
an example, our YIAs are fully expensed in the year they are awarded; our clinical grants and DDIs are fully expensed when
the payments to the institutions are made.
Allowance for Doubtful Accounts: We consider all pledges to be fully collectible and have not established a provision
for doubtful accounts. If a pledge becomes uncollectible, the amount will be charged to operations when that determination
is made.
Depreciation of Property, Plant and Equipment: Our business is not capital intensive. Our largest capital expenses are
for computers, office equipment and telecommunications equipment. We believe our furniture and equipment to be in good
working order and anticipate no material capital expenses for 2007.
Amortization of Intangible Assets: We record our trademarks, service marks and urls at historical cost and amortize
them using the straight-line method based on an estimated useful life of 12 to 20 years.
Item 7. LIQUIDITY AND CAPITAL RESOURCES
Our ongoing capital resources depend on several factors, including our existing cash and cash equivalents balances, and cash
flows generated by our fundraising efforts and investment income.
11
Liquidity: As of December 31, 2006, our current assets were $631,745; current expenses were $499,061 (including 2007
grants payable of $289,623); and our net working capital was $132,684.
Capital Resources: Our fund functioning as an endowment (FFE) is designated by our Board of Directors as restricted
funds. Withdrawals from the FFE require written approval from our Fiscal Affairs and Audit Committee. No funds from the
FFE were released by the Board in 2006. The assets in the FFE totaled $2,804,962 at 12/31/06. The investment of the FFE is
governed by our Investment Policy Committee. See footnote 5 of our audited financial statements for our current investment
allocation.
Item 8. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the
reports that we file or submit to New York, where we are incorporated, and other states to maintain our registrations, and to
the Internal Revenue Service is recorded, processed, summarized and reported within the time periods required by the various
governing bodies.
In 2006 we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures. This was carried out under the supervision and with the participation of our management team, including our
President and Director of Finance and Administration. As of the date of such evaluation, our President and Director of
Finance and Administration affirm that the design and operation of our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting:
There have been no changes in our internal control over financial reporting during the most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting. In 2006, as part of our review and evaluation of our internal controls and procedures, we were assisted by two
organizations: The Wortzman Companies; and ALG Computer Consulting and Training, who agreed to serve on a pro bono
basis. Their findings resulted in no material changes to our internal control procedures, but have identified some areas that to
adhere to best practices require us to update and enhance our documentation. We have presented these findings to our Board
of Directors, along with a plan to remediate them in 2007.
12
PART III
Item 9. DIRECTORS AND EXECUTIVE OFFICERS
Directors
Per our bylaws, none of our directors are compensated for their services. As of April 18, 2007 the following people served on
our Board of Directors:
Suzanne Earle, Chairwoman
Farah M. Walters, Treasurer
Joel Cohen
Patricia L. Francy
James. F. Gusella, PhD.
Rick D. Jaffa
Bruce Korf, M.D., Ph.D.
John Risner
Tara Skirzenski
Peggy Wallace, Ph.D.
St. Petersburg, FL
Shaker Heights, OH
New York, NY
New York, NY
Charlestown, MA
Palisades, CA
Birmingham, AL
Larchmont, NY
Mendham, NJ
Gainesville, FL
Nate Walker, Vice-Chairman
Encino, CA
Carolyn Setlow, Secretary
New York, NY
Mark Ebel
Denver, CO
Daniel B. Gilbert
Livonia, MI
Richard Horvitz, Chairman Emeritus Mayfield Heights, OH
Alfred R. Kahn
New York, NY
Jason Pontin
Cambridge, MA
Robert Schaffer
Detroit, MI
Stuart Match Suna
New York, NY
David Viskochil, M.D., Ph.D.
Salt Lake City, UT
Salt Lake City, UT
Boston, MA
Harold Ramis
Doris Schnuck
Honorary Directors:
The Honorable Jake Garn
Alan H. Robbins, M.D.
Highland Park, IL
St. Louis, MO
The standing committees of the Board of Directors are:
Fiscal Affairs & Audit
Investment
Leadership Development
Executive Committee
Medical Liaison
Personnel
Public Awareness & Education
Volunteer Relations
Development
Government Affairs
Planning
Organization Integrity& Legal Affairs
Executive Officers
The following people were serving as our executive officers as of April 18, 2007. There is no familial relationship between
any of our executive officers or between any of these officers and any of our directors.
John W. Risner, 47, has been the President of The Children’s Tumor Foundation since July 1, 2005. He served as our
Executive Director from April 2004 – June 2005 and had previously served as Treasurer and member of our Board of
Directors since June of 2002. From 1997 to 2002 Mr. Risner served as Senior Vice President and Portfolio Manager of
AIG/SunAmerica Investment Management, specializing in high yield and convertible bonds. From 1991 – 1997 Mr. Risner
was Senior Portfolio Manager at Value Line Asset Management. Mr. Risner holds a B.S. from the University of Maryland, an
MBA from Fordham University and is a Chartered Financial Analyst. He is a member of the Board of Directors and Audit
Committee of NII Holdings, a cellular company with service in Latin America and has previously served on the Board of
UGC Europe and Airgate PCS.
Kim Hunter-Schaedle, Ph.D., 42, has been the Chief Scientific Officer of The Children’s Tumor Foundation since August
2005. Dr. Hunter-Schaedle has a B.Sc. (Hons) from St. Andrew's University, Scotland and a Ph.D. in Neuroscience from the
University of London. She has served on the scientific staff of St. George's Hospital Medical School, University of London;
The Rockefeller University, New York; and Ontogeny, Inc. (now Curis, Inc.) in Cambridge, MA. Dr. Hunter-Schaedle spent
four years with the Juvenile Diabetes Research Foundation, where she established and directed and industry liaison and
funding program. She has also served on the staff of Science & Technology Ventures, the technology transfer and licensing
office of Columbia University.
13
Thomas M. Malone, 34, has been the Director of Finance & Administration of The Children’s Tumor Foundation since
May 2006. Mr. Malone holds a Master of Public Administration from New York University, and a Bachelor of Arts in
Economics from the State University of New York at Albany. He previously served as Director of Finance and
Administration at Mount Sinai Medical Center, Department of Human Genetics, in New York City. Prior to Mount Sinai,
Mr. Malone serve as Director-Office of Budget and Finance at Columbia University in New York City, and as Director of
Finance and Administration in the Department of Genetics at the University of Alabama at Birmingham.
George T. Orfanakos, 38, has been Vice President for development of The Children’s Tumor Foundation since May 2006.
Mr. Orfanakos holds a Bachelor of Arts in Humanities, Hellenic College, a Master of Divinity from Holy Cross Greek
Orthodox School of Theology in Brookline, MA, and was ordained as a Greek Orthodox Priest. He previously served as
Executive Director of Saint George Greek Orthodox Church in Clifton NJ, where he was responsible for the ministry,
fundraising, counseling and administration of this 4,500 member parish.
Item 10. CORPORATE GOVERNANCE
Our business and affairs are managed under the direction of the Board of Directors in accordance with the New York Non
Profit Corporation Law and our Restated Certificate of Incorporation and Amended and Restated Bylaws. Members of the
Board of Directors are kept informed of our business through discussions with management, by reviewing materials provided
to them, and by participating in meetings of the Board of Directors and its committees.
The Board of Directors and staff are committed to the highest standards of governance and transparency in all of our
programs, financial reporting and relations with our constituents. This has been recognized by our earning the Better
Business Bureau’s Wise Giving Alliance Seal of Approval, demonstrating our commitment to meeting the extensive
standards of America’s most experienced charity evaluator. The corporate governance practices that we follow are
summarized below.
Conflict of Interest Policy
The Board of Directors has approved a Conflict of Interest policy for our directors and executive officers. Our staff also signs
our personnel policies and procedures handbook. These policies address such topics as protection and proper use of our
assets, compliance with applicable laws and regulations, accuracy and preservation of records, accounting and financial
reporting, and conflicts of interest. A current copy of our Conflict of Interest policy may be obtained by writing to our
Director of Finance & Administration at the Children's Tumor Foundation, 95 Pine Street, 16th Floor, NY NY 10005.
Related Party Transactions
None
Board and Committee Meetings
Our Board meets in person three times per year. In 2006 these meetings were held on February 11 in Cleveland Ohio, June 3
in Aspen CO (in connection with The NF Conference research meeting), and September 16 in New York City. A quorum was
present at each meeting. In addition to attending meetings, directors also fulfill their responsibilities by attending, in person
or telephonically, sessions at which they are briefed about the status of particular matters and by review of our reports to
directors.
The standing committees of the Board generally meet at least four times per year. Meetings that do not occur in connection
with our full Board meetings are usually held telephonically.
Fiscal Affairs & Audit Committee
The Fiscal Affairs & Audit Committee assists the Board of Directors in its oversight of the quality and integrity of our
financial statements and related disclosures for our accounting, auditing, and reporting practices. The Fiscal Affairs & Audit
14
Committee’s role includes discussing with management our processes to manage our business, and for compliance with
applicable legal, ethical, and regulatory requirements. The Committee is responsible for the appointment, replacement,
compensation, and oversight of the independent registered public accounting firm engaged to audit our financial statements
Executive Sessions of the Board
It is the practice of our Board of Directors to have executive sessions where non-employee directors meet on an informal
basis at the beginning or end of each regularly scheduled meeting of the Board of Directors. During these executive sessions,
directors can meet with and question our employees outside the presence of employee directors or management.
Communications with the Board of Directors
Constituents may communicate directly with the Board of Directors. Given our volume of donations, our internal control
procedures require two people to open our mail. Communication intended solely for the Board of Directors should be
prominently marked “Confidential” on the outside of the envelope. The communication will not be opened, but rather will be
forwarded unopened to the intended recipient. Letters not addressed to any individual member will be forwarded to our
Chairwoman. Letters to the Board of Directors should be sent in care of to:
Thomas Malone, Director of Finance & Administration
Children's Tumor Foundation
95 Pine Street, 16th Floor
NY NY 10005
Item 11. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate amount of fees billed to us by Cusack & Co. for professional services rendered in connection with the audit of our
annual financial statements and preparation of our IRS 990 filings for the fiscal years ended December 31, 2006 and December
31, 2005 were $27,325 and $22,785 respectively.
15
PART IV
Item 12. SIGNATURES
Pursuant to the requirements of Section 91.5(b) of the New York State Code of Rules and Regulations for Charitable
Organizations, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CHILDREN’S TUMOR FOUNDATION INC.
By: /s/ THOMAS M. MALONE
Thomas M. Malone
Director of Finance and Administration
(On behalf of the registrant and as
Principal Accounting Officer)
This report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on May
27, 2007.
Signature
Title
/s/ JOHN W. RISNER
John W. Risner
President
/s/ THOMAS M. MALONE
Thomas M. Malone
Director of Finance and Administration
(Principal Accounting Officer)
CHILDREN’S TUMOR FOUNDATION, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................................................................
CONSOLIDATED FINANCIAL STATEMENTS
Statement of Financial Position — As of December 31, 2006 and 2005 ........................................................................................
Statement of Activities and Changes in Net Assets — For the Years Ended December 31, 2006 & December 31, 2005 .............
Statement of Functional Expenses – For the Year Ended December 31, 2006 ..............................................................................
Statement of Functional Expenses – For the Year Ended December 31, 2005 ..............................................................................
Statement of Cash Flows — For the Years Ended December 31, 2006 and 2005 ..........................................................................
Notes to Financial Statements..........................................................................................................................................................
16
17
18
19
20
20
21
22
CUSACK & COMPANY
Certified Public Accountants LLC
JOSEPH D. BATTAGLIA, CPA
KENNETH B. CLAFLIN, CPA
PAUL A. CUDA, CPA
JAMES M. CUSACK, CPA
JASON D. MARRA, CPA
JOHN A. CRISCONE
TERRENCE P. GILLOOLEY
JOHN J. TAFILOWSKI
KIMBERLY A. URQUHART
7 AIRPORT PARK BOULEVARD
LATHAM, NEW YORK 12110
(518) 786-3550
FAX (518) 786-1538
E-MAIL ADDRESS: [email protected]
WWW.CUSACKCPA.COM
CLIFTON PARK/HALFMOON
(518) 644-7063
MEMBERS OF :
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
AND
NEW YORK STATE SOCIETY OF
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR’S REPORT
Board of Directors
Children’s Tumor Foundation, Inc.
New York, New York 10005
We have audited the accompanying statements of financial position of Children’s Tumor Foundation, Inc.
as of December 31, 2006 and 2005, and the related statements of activities and change in net assets, functional
expenses, and cash flows for the years then ended. These financial statements are the responsibility of the
Foundation's management. 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 of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Children’s Tumor Foundation, Inc. as of December 31, 2006 and 2005, and the change in its net
assets, functional expenses and cash for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
CUSACK & COMPANY, CPA’S LLC
Latham, New York
March 21, 2007
17
CHILDREN’S TUMOR FOUNDATION, INC.
STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2006 AND 2005
ASSETS
2006
Current Assets
Cash and Cash Equivalents
Pledges and Other Receivables
Prepaid Expenses
Total Current Assets
$
569,762
6,605
55,378
631,745
2005
$
333,553
59,636
20,046
413,235
69,309
70,448
3,034,663
125,000
6,948
19,562
3,186,173
2,740,172
9,348
18,637
2,768,157
$ 3,887,227
$ 3,251,840
$
$
Furniture and Equipment, Net
Other Assets
Investments
Land
Intangible Assets, Net
Security Deposit
Total Other Assets
Total Assets
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts Payable
Grants Payable
Accrued Vacation
Rent Payable
Capital Lease Obligation
Total Current Liabilities
14,585
289,625
10,979
2,717
317,906
34,238
80,000
6,584
2,717
10,796
134,335
Long-Term Liabilities
Grants Payable
Rent Payable
Assets Held in Trust
Total Long-Term Liabilities
133,750
4,754
173,687
312,191
7,470
173,687
181,157
Total Liabilities
630,097
315,492
390,734
2,804,962
3,195,696
61,434
3,257,130
111,651
2,525,944
2,637,595
298,753
2,936,348
$ 3,887,227
$ 3,251,840
Net Assets
Unrestricted
Undesignated
Board Designated
Total Unrestricted
Temporarily Restricted
Total Net Assets
Total Liabilities and Net Assets
18
See accompanying notes and independent auditor’s report.
2
CHILDREN’S TUMOR FOUNDATION, INC.
STATEMENTS OF ACTIVITIES AND CHANGE IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
Unrestricted
Public Support, Reclassifications and Revenue
Contributions
Membership
Corporations and Foundations
United Way/CHC
Gifts-in-Kind
Other Income
Assets Released from Restrictions
Total Contributions
Special Event Revenue
Special Event Revenue - Gross
Less: Direct Benefit to Donors
Net Special Event Revenue
Total Public Support, Revenue and Reclassifications
Expenses
Program Expenses
Research and Medical Programs
Public Education and Patient Support Services
Total Program Expenses
Supporting Services
Management and General
Fundraising
Total Supporting Services
Total Expenses
Change in Net Assets Before Investment Income
$ 2,396,571
6,050
225,802
119,806
130,320
6,034
562,527
3,447,110
103,575
221,633
(562,527)
(237,319)
-
4,603,915
(237,319)
Total
$ 2,500,146
6,050
447,435
119,806
130,320
6,034
3,209,791
Unrestricted
$ 1,501,702
180,432
111,248
132,355
1,156,525
3,082,262
1,350,296
(193,491)
1,156,805
1,052,187
(291,776)
760,411
4,366,596
3,842,673
2005
Temporarily
Restricted
$
951,451
96,823
(1,156,525)
(108,251)
(108,251)
Total
$ 2,453,153
277,255
111,248
132,355
2,974,011
1,052,187
(291,776)
760,411
3,734,422
2,373,112
930,542
3,303,654
-
2,373,112
930,542
3,303,654
1,671,109
1,165,972
2,837,081
-
1,671,109
1,165,972
2,837,081
381,075
644,323
1,025,398
-
381,075
644,323
1,025,398
230,727
612,223
842,950
-
230,727
612,223
842,950
4,329,052
-
4,329,052
3,680,031
-
3,680,031
37,544
162,642
90,984
11,029
181,225
283,238
69,492
1,077
48,892
119,461
320,782
282,103
298,753
2,936,348
2,355,492
61,434
$ 3,257,130
$ 2,637,595
274,863
90,984
11,029
181,225
283,238
Change in Net Assets after Investment Income
558,101
Net Assets, End of Period
$
1,350,296
(193,491)
1,156,805
Investment Income
Interest and Dividends
Gain (Loss) on Sale of Assets
Unrealized Gain (Loss) on Investments
Total Investment Income
Net Assets, Beginning of Period
2006
Temporarily
Restricted
(237,319)
(237,319)
2,637,595
$ 3,195,696
$
(108,251)
(108,251)
$
54,391
69,492
1,077
48,892
119,461
173,852
407,004
2,762,496
298,753
$ 2,936,348
19
See accompanying notes and independent auditor’s report.
3
CHILDREN’S TUMOR FOUNDATION, INC.
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2006
Research
and
Medical
Programs
Grant Contribution Awards
Salary and Benefits
Advocacy
Occupancy
Printing
Postage/Shipping
Supplies
Travel
Conferences/Meetings/Events
Camp
Insurance
IT Related
Professional Fees
Auditing and Legal
Dues and Other Fees
Telephone
Equipment Rental and Maintenance
Other Expenses
Depreciation and Amortization
Public
Education
Management
and Patient
and
Support Services
General
Fund
Raising
Total
$
1,253,840
533,736
156,000
56,437
16,044
18,456
6,253
60,046
163,958
8,776
26,916
600
8,889
17,654
19,406
14,369
11,732
$
439,092
45,082
85,793
37,585
6,479
48,177
73,181
47,613
6,545
24,396
25,029
1,464
4,967
14,976
5,164
56,250
8,749
$
192,080
20,050
1,901
2,333
344
2,527
10,023
3,125
17,378
14,447
27,325
48,936
6,205
2,465
27,760
4,176
$
304,689
30,320
35,836
30,991
6,092
19,616
87,302
3,650
14,029
64,621
5,378
12,493
3,980
20,447
4,879
$
1,253,840
1,469,597
156,000
151,889
139,574
89,365
19,168
130,366
334,464
47,613
22,096
82,719
104,697
28,789
68,170
51,328
31,015
118,826
29,536
$
2,373,112
$
930,542
$
381,075
$
644,323
$
4,329,052
20
See accompanying notes and independent auditor's report.
See accompanying noes and independent auditor’s report.
4
CHILDREN’S TUMOR FOUNDATION, INC.
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2005
Research
and
Medical
Programs
Grant Awards
Salary and Benefits
Advocacy
Occupancy
Printing
Postage/Shipping
Supplies
Travel
Conference/Meetings/Events
Camp
Insurance
IT Related
Professional Fees
Auditing and Legal
Dues and Other Fees
Telephone
Equipment Rental and Maintenance
Other Expenses
Depreciation and Amortization
$
537,750
637,513
132,696
50,064
29,914
29,869
5,761
33,762
94,770
5,485
21,027
17,921
7,944
10,023
12,578
8,454
20,625
14,953
$
1,671,109
Public
Education
and Patient
Support Services
$
Management
and
General
Fund
Raising
Total
657,655
47,505
103,118
32,814
6,269
40,514
86,005
42,487
5,007
21,692
24,218
8,195
8,837
17,644
8,721
44,652
10,639
$
165,071
12,435
9,486
7,989
1,525
3,054
1,337
5,445
984
2,057
6,733
3,851
2,189
5,309
3,262
$
368,234
27,740
7,515
17,821
3,389
22,186
63,432
2,984
12,146
12,881
4,589
34,468
8,593
4,883
14,086
7,276
$
537,750
1,828,473
132,696
137,744
150,033
88,493
16,944
96,462
247,261
42,487
14,813
60,310
56,004
22,785
60,061
42,666
24,247
84,672
36,130
$ 1,165,972
$
230,727
$
612,223
$
3,680,031
21
See accompanying notes and independent auditor's report.
See accompanying noes and independent auditor’s report.
5
CHILDREN’S TUMOR FOUNDATION, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006
2005
Cash Flows Provided by (Used in) Operating Activities
$
Increase in Net Assets
Changes Due to Operating Activities
Depreciation and Amortization
Realized Gains on Investments
Unrealized Holding Gain on Investments
Direct Reinvestment of Investment Income
Rent Subsidy
Donation of Land
Changes in Operating Assets:
(Increase) Decrease in Assets
Pledges and Other Receivables
Prepaid Expenses
Security Deposit
Changes in Operating Liabilities:
(Increase) Decrease in Liabilities
Accounts Payable and Accrued Expenses
Grants Payable
Accrued Vacation
Net Cash Provided by Operating Activities
320,782
$
173,852
29,536
(11,308)
(181,225)
(78,924)
(2,717)
(125,000)
36,130
(1,077)
(48,892)
(61,661)
(2,717)
-
53,031
(35,332)
(925)
8,056
11,859
700
(19,653)
343,375
4,395
(26,855)
(45,500)
(35,810)
296,035
8,085
Cash Flows Provided by Investing Activities
Proceeds from Sale of Investments
Purchase of Investments
Purchase of Furniture and Equipment
492,007
(515,041)
(25,996)
453,936
(382,847)
(1,698)
(49,030)
69,391
Capital Lease Repayments
(10,796)
(11,778)
Net Increase in Cash and Cash Equivalents
236,209
65,698
Cash and Cash Equivalents at Beginning of Year
333,553
267,855
Net Cash Provided by (Used In) Investing Activities
Cash Flows Provided by Financing Activities
Cash and Cash Equivalents at End of Year
$
569,762
$
333,553
22
See accompanying notes and independent auditor's report.
See accompanying noes and independent auditor’s report.
6
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Children’s Tumor Foundation, Inc. (formerly known as the National Neurofibromatosis
Foundation, Inc.) was incorporated in 1978 in accordance with New York State Not-For-Profit
Corporation Law. The Foundation was formed to sponsor scientific research aimed at finding the
cause and effective treatment for neurofibromatosis; to promote the development of diagnostic
procedures and assist in the development of clinical centers in the United States; to develop programs
that will increase public awareness of neurofibromatosis; and to assist patients and their families with
accurate and comprehensive information about neurofibromatosis, including support groups and
referrals to qualified physicians and health-care facilities.
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis of accounting in
accordance with United States generally accepted accounting principles for not-for-profit
organizations. Under these provisions, net assets and revenues, gains, and losses are classified based
on the existence or absence of donor-imposed restrictions. Expenses are classified as unrestricted.
Accordingly, net assets of the Foundation and changes therein are classified and reported as follows:
Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations.
Unrestricted net assets may be designated for specific purposes by action of the Board of
Directors.
Board of Directors designated restricted for mission - Unrestricted net assets that cannot be
released without the vote of the Board.
Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that will be
met either by actions of the Foundation and/or the passage of time. When a restriction is
satisfied or expires, temporarily restricted net assets are reclassified to unrestricted net assets and
reported in the statement of activities as net assets released from restrictions. Donor-restricted
contributions whose restrictions are met in the same reporting period are also reported as
temporarily restricted support.
Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be
maintained permanently by the Foundation. Generally, the donors of these assets permit the
Foundation to use all or part of the income earned on related investments for general or specific
purposes.
23
See independent auditor’s report.
7
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Support and Expenses
Contributions received and unconditional promises to give are measured at their fair values and are
reported as an increase in unrestricted net assets. The Foundation reports gifts of goods and equipment
as unrestricted support unless explicit donor stipulations specify how the donated assets must be used.
Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts
of cash or other assets that must be used to acquire long-lived assets are reported as restricted support.
Absent explicit donor stipulations about how long those long-lived assets must be maintained, the
Foundation reports expirations of donor restrictions when the donated or acquired long-lived assets
are placed in service.
Expenses are recorded when incurred in accordance with the accrual basis of accounting.
Furniture, Equipment and Depreciation
Furniture and equipment are reflected at cost, with depreciation provided on a straight-line basis over
estimated useful lives of five to seven years. The cost of maintenance and repairs is charged to
expense as incurred; significant renewals and betterments are capitalized. Land is reported at cost.
Receivables
The Foundation considers accounts and pledges receivable to be fully collectible and, accordingly, no
allowance for doubtful accounts has been established. If accounts become uncollectible, they will be
charged to operations when that determination is made.
Contributed Services and Goods
The Foundation pays for services requiring specific expertise; however, many individuals volunteer
their time and perform a variety of tasks that assist the Foundation with specific program areas,
campaign solicitations and fund raising events. The Foundation estimates that it receives more than
20,000 volunteer hours per year.
Significant materials and other assets received as donations are recorded and reflected in the
accompanying financial statements at their fair values at the date of receipt.
Promises to Give
As of December 31, 2006 and 2005, contributors to the Foundation have not made any conditional
promises to give for restricted research and public education purposes. In addition, there are no verbal
unconditional promises to give as of December 31, 2006 and 2005.
24
See independent auditor’s report.
8
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Functional Allocation of Expense
The costs of providing the various programs, fund raising and other activities have been summarized
on a functional basis in the statement of functional expense. Accordingly, certain costs have been
allocated among the program and fund raising activities benefitted. The Foundation does not have a
staff primarily involved in administrative or managerial activities as the majority of staff is involved
in the development and delivery of programs. Accordingly, a majority of the Foundation's salaries
and benefits are attributed to various program activities. The allocation of salaries and benefits is
primarily based on time studies.
Investments
Investments of marketable debt and equity securities are carried at market values. Non marketable
assets are valued $125,000.
Tax-Exempt Status
The Foundation is a non-profit corporation and is exempt from income taxes under Section 501(c)(3)
of the Internal Revenue Code. It has been designated as a publicly supported organization which is
not a private foundation under Code Section 509(a).
Grants, Awards and Fellowships
The Foundation approves research and fellowship contribution awards subject to periodic internal peer
reviews of performance. These contributions generally are payable in installments over a period of
two or three years, upon the approval and acceptance of periodic progress reports provided to the
Foundation by award recipients. Grants are fully accrued once the recipients accept the contribution
award. Grants and fellowships are subject to automatic forfeiture if award recipients do not comply
with award stipulations.
Estimates
The preparation of 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. Actual results could differ from these estimates.
2.
REPORTING ENTITY
The Foundation's By-Laws provide for the reporting entity to include a number of affiliates and
chapters. These financial statements include the operating results of the Foundation’s national office
and chapters/affiliates located throughout the United States.
25
See independent auditor’s report.
9
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
2.
REPORTING ENTITY (CONTINUED)
The following is a list of chapters and affiliates included in the financial statements.
Maryland (DC, MD, VA Chapter)
Missouri
Nebraska
Nevada
New Hampshire (NNE Chapter)
New Jersey (Tri-State Chapter)
New York (Tri-State Chapter)
North Carolina
Ohio
Oregon
Pennsylvania
Rhode Island (NNE Chapter)
Tennessee
Utah
Washington
Wisconsin
Wyoming
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut (NNE & Tri-State Chapters
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Louisiana
Maine (NNE Chapter)
Massachusetts (NNE Chapter)
Michigan
3.
CASH EQUIVALENTS
It is the policy of the Board of Directors to review its plans for future cash flow from time to time and
designate appropriate sums to be available during temporary cash flow reductions. Cash equivalents
consist of highly liquid investments with an initial maturity of three months or less. Fair value
approximates carrying amounts.
4.
PLEDGES AND OTHER RECEIVABLES
Individual pledges due to the Foundation total $6,605 and $59,636 at December 31, 2006 and 2005,
respectively.
5. INVESTMENTS
Investments are recorded at market value. The value assigned to investments received by gift is the
market value at the date of donation.
The Board of Directors has approved the following investment policy for marketable securities held in
the Fund Functioning as an Endowment (FFE): Assets held in the FFE shall be managed to the following
broad market indexes and portfolio allocation: 40% - Total Stock Market Index Fund; 10% - Total
International Stock Index Fund; 25% - Short-Term Bond Market Index Fund; 25% - General Bond
Market Index Fund. The portfolio is rebalanced quarterly to maintain the stated allocation. The Fiscal
Affairs Committee regularly reviews the investment policy and performance.
26
See independent auditor’s report.
10
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
5. INVESTMENTS (CONTINUED)
Investments at December 31, 2006 and 2005, are comprised of the following:
2006
Cost
2005
Market Unrealized
Value Appreciation
Debt Securities and Funds $ 1,242,859 $ 1,473,981 $ 231,122
Equity Funds
165,718
1,394,964 1,560,682
$ 2,637,823 $ 3,034,663 $ 396,840
Total
6.
Market
Value
Cost
$1,435,215
1,140,233
$2,575,448
Unrealized
Appreciation
$ 1,455,410 $ 20,195
1,284,762
144,529
$ 2,740,172 $ 164,724
FURNITURE AND EQUIPMENT
Furniture and equipment and related depreciation as of December 31, 2006 and 2005 consist of:
2006
Furniture
Equipment
Leasehold Improvements
Total
Less: Accumulated Depreciation
Furniture and Equipment
$
$
5,726
173,196
3,450
182,972
(113,063)
69,309
2005
$
$
5,726
187,468
3,450
196,644
126,196
70,448
Depreciation expense was $27,136 and $33,730 for the years ended December 31, 2006 and 2005,
respectively.
7.
INTANGIBLE ASSETS
Intangible assets with a cost value of $12,000 are composed of service marks, website universal
resource locators (Url’s - www.ctf.org, etc.) and our trade name. Intangible assets are amortized using
the straight-line method over the estimated period benefitted, with amortization expense being $2,400
for each year ended December 31.
8.
ASSETS HELD IN TRUST
The Foundation is in possession of trust assets with conditions imposed by the settlor in the trust. The
Foundation has agreed that all trust assets received will be held and invested at the discretion of the
Foundation. All income generated by these investments is to be used for research purposes and none
of the principal can be expended. When certain conditions are completed by the Foundation, the
original trust corpus is to be forwarded to other organizations as stipulated in the trust document. The
conditions of use for the income of the trust assets will extend beyond one year and, accordingly, these
amounts have been reflected as long-term. In addition, as none of the principal can be expended, these
amounts are reflected as an other liability of $173,687 at December 31, 2006 and 2005.
27
See independent auditor’s report.
11
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
9. GRANTS PAYABLE
During the year ended December 31, 2006 and 2005, $815,636 of additional research funds were
designated by the Board and management for research grants and contracts. A total of $848,511 in
grant payments were disbursed prior to December 31, 2006, representing current and prior year
commitments.
Grants payable at December 31, 2006 and 2005 are schedule for payment in the following fiscal years:
Year Ending December 31,
2006
2007
2008
Total Grants Payable
2006
2005
289,625
133,750
$ 423,375
$ 80,000
0
$ 80,000
$
10. LEASE COMMITMENTS
The current office lease for the Foundation’s national office is for a fifteen year term (expiring in
2009), at a base monthly rent of $8,258 plus escalation clauses for real estate taxes, operating
expenses and utilities. The lease agreement additionally stipulated the first five months were rent-free
and, accordingly, a liability for this reduction is being amortized over the fifteen year lease term. The
amount of the subsidy will be $2,717 for the remaining term of the lease.
Future minimum lease payments, exclusive of escalation clauses, is $99,096 each year through 2009.
In addition, the Foundation leases office space for certain chapter/affiliate operations on a month-tomonth basis. Currently, monthly rent expense for these locations totals approximately $1,350.
Rent expense inclusive of operating charges totaled $134,857 and $112,806 for the years ended
December 31, 2006 and 2005, respectively.
11. PENSION PLAN
The Foundation offers a 401(k) retirement plan to all full-time employees. Under the terms of the
Plan, employees who participate may contribute up to an annual maximum allowable limitation as
established in the Internal Revenue Code. In addition, after one year of employment, employees are
entitled to a Foundation contribution (currently 3% of salary) which are 100% vested to the
employees. Pension expense for the years ended December 31, 2006 and 2005 was approximately
$22,000 and $35,000, respectively.
28
See independent auditor’s report.
CHILDREN’S TUMOR FOUNDATION, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2006 AND 2005
12.
NATURE AND AMOUNT OF TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets at December 31, 2006 and 2005 were available for the following
purposes:
Source
Foundations
Individuals
Memorials
Individuals
Individuals
Purpose
2006
Research
Research
Research
Camp
Conferences
$
$
13.
15,000
40,750
5,684
61,434
2005
$
$
143,000
132,753
23,000
298,753
CONCENTRATION OF CREDIT RISK
The Foundation has concentrated its credit risk for cash by maintaining deposits in banks located
within the same geographic region and the same bank. At times throughout the year the Foundation
may maintain certain bank account balances in excess of the FDIC insured limits. The Foundation
does not have any collateral available to them from the bank to insure this credit risk, but maintaining
deposits with high-quality financial institutions minimizes the risk.
29
See independent auditor’s report.
13