AMERICAN INSTITUTE OF GRAPHIC ARTS

FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2014 AND 2013
AND
INDEPENDENT AUDITORS REPORT

AMERICAN INSTITUTE OF GRAPHIC ARTS

TABLE OF CONTENTS
Page
Independent Auditors Report

Financial Statements
Statements of Financial Position

Statement of Activities for the Year Ended September 30, 2014

Statement of Activities for the Year Ended September 30, 2013

Statements of Cash Flows

Notes to Financial Statements

INDEPENDENT AUDITORS REPORT

To the Board of Directors

American Institute of Graphic Arts
We have audited the accompanying financial statements of the American Institute of Graphic Arts
(AIGA) which comprise the statements of financial position as of September 30, 2014 and 2013,
and the related statements of activities and cash flows for the years then ended, and the related notes
to the financial statements.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to AIGAs
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the AIGAs internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.

(Continued)
1

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the American Institute of Graphic Arts. as of September 30, 2014 and 2013, and
the related statements of activities and cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.

February 5, 2015

AMERICAN INSTITUTE OF GRAPHIC ARTS

STATEMENTS OF FINANCIAL POSITION

September 30,
2014
2013
ASSETS
Cash and cash equivalents
Accounts receivable
Prepaid expenses and deposits
Investments
Property and equipment, net
Mortgage financing cost, net

58,831 $ 364,571
113,261
98,816
418,840
313,376
21,788,869
2,497,137
15,003
2,125,443
38,290
$ 22,394,804 $ 5,437,633

LIABILITIES AND NET ASSETS

Liabilities
Line of credit payable
Accounts payable and accrued expenses
Deferred revenue
Loan payable
Mortgage payable

Net assets
Unrestricted
Undesignated
Board designated

- $ 249,900
322,238
363,690
1,354,477
2,160,956
48,228
1,067,951
1,676,715
3,890,725

20,015,279
242,865
20,258,144

Temporarily restricted
Permanently restricted
Total net assets

774,377
341,195
1,115,572

359,945
331,336
100,000
100,000
20,718,089
1,546,908
$ 22,394,804 $ 5,437,633

See notes to financial statements.

3

AMERICAN INSTITUTE OF GRAPHIC ARTS

STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2014

Unrestricted
Revenues
Membership dues
Programs
Contributed rent
Grants and contributions
Special events (net of direct donor
benefits of $92,770)
Investment return
Miscellaneous
Net assets released from restrictions
Total revenue

$ 2,833,423
2,492,606
110,200
22,182

48,369

Total
$ 2,833,423
2,492,606
110,200
70,551

4,661
(24,421)
28,609

412,077
(203,342)
214,996
5,930,511

5,641,324
759,462
389,044

5,641,324
759,462
389,044

6,789,830

6,789,830

28,609

20,030,500

20,030,500

19,142,572

28,609

19,171,181

100,000
100,000

1,546,908
$ 20,718,089

Total expenses
Change in net assets before gain on sale
of building, net of associated costs

Change in net assets

Net assets
Beginning of year
End of year

Permanently
Restricted

412,077
(208,003)
214,996
24,421
5,901,902

Expenses
Program services
Management and general
Fund-raising

Gain on sale of building, net

of associated costs

Temporarily
Restricted

(887,928)

1,115,572
$ 20,258,144

See notes to financial statements.

4

331,336
359,945

(859,319)

AMERICAN INSTITUTE OF GRAPHIC ARTS

STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2013

Unrestricted
Revenues
Membership dues
Programs
Grants and contributions
Special events (net of direct donor
benefits of $58,960)
Investment return
Miscellaneous
Net assets released from restrictions
Total revenue

$ 2,896,749
1,320,617
62,469

Expenses
Program services
Management and general
Fund-raising
Total expenses
Change in net assets
Net assets
Beginning of year
End of year

Temporarily
Restricted

Permanently
Restricted

$ 2,896,749
1,320,617
129,679

1,257
(5,500)
62,967

113,589
189,825
172,332
4,822,791

4,457,268
638,495
165,764

4,457,268
638,495
165,764

5,261,527

5,261,527

62,967

1,617,275
$ 1,115,572

113,589
188,568
172,332
5,500
4,759,824

(501,703)

See notes to financial statements.

67,210

Total

268,369
331,336

100,000
100,000

(438,736)

1,985,644
$ 1,546,908

AMERICAN INSTITUTE OF GRAPHIC ARTS

STATEMENTS OF CASH FLOWS

Year Ended September 30,

2014
2013
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash
provided by (used in) operating activities
Depreciation and amortization
Net realized and unrealized (gain) loss on investments
Gain on sale of building
Changes in operating assets and liabilities
Accounts receivable
Prepaid expenses and deposits
Accounts payable and accrued expenses
Deferred revenue
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from sale of investments
Purchase of investments
Acquisition of property and equipment
Proceeds from sale of building
Net cash provided by investing activities

$ 19,171,181 $ (438,736)

112,223
315,394
(20,030,500)

140,750
(104,379)
-

(14,445)
(105,464)
(41,452)
(806,479)
(1,399,542)

(4,397)
(46,618)
(24,544)
595,692
117,768

956,914
(20,564,040)
(4,669)
22,071,676
2,459,881

952,928
(688,377)
(2,987)
261,564

(249,900)
500,000
(548,228)
(1,067,951)
(1,366,079)

(24,751)
(124,980)
(149,731)

Cash flows from financing activities

Principal payments on line of credit
Proceeds from loan payable
Principal payments on loan payable
Principal payments on mortgage
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents

(305,740)

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Supplemental cash flow disclosure

Cash paid for interest

See notes to financial statements.

6

229,601

364,571
134,970
58,831 $ 364,571
76,576 $

88,802

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION
American Institute of Graphic Arts (AIGA), the professional association for design, was
founded in 1914. Its mission is to advance design as a professional craft, strategic advantage and
vital cultural force. At the national level, we pursue our mission by connecting practitioners,
enthusiasts and patrons through regional, national and global events, and by creating and curating
content that:

Advocates for a greater understanding of the value of designers and design in

government, business, media and the public

Enhances professional development

Defines global standards and ethical practices

Inspires designers and the public

Establishes criteria for design education that meet the needs of the profession

Makes powerful tools and resources available and accessible

Celebrates and enhances the value of design

Mobilizes a global design movement

As of October 1, 2014, AIGA had 25,875 members: 10 Trustees, 146 Design Leaders, 8,016
Sustaining Members, 4,368 Supporters and 13,335 Contributors.
AIGA had 69 chapters as of October 1, 2014. The accompanying financial statements do not
include the financial position or the change in net assets and cash flows of these chapters, each of
which is an autonomous corporation organized under the laws of the state in which it is located.
AIGAs revenues are primarily derived from membership dues and various programmatic
activities it carries out. AIGA offered the following programs during its 2014 fiscal year:

Head, Heart, Hand: AIGA Design Conference, October 10-12, 2013, Minneapolis
(1,776 attendees)

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION (Continued)

Connecting Dots: Research, Education + Practice, March 14-15, 2013, Cincinnati (165
attendees)

Facilitation: by Design, April 1718, 2014, Phoenix (9 attendees)

AIGA Centennial Gala, April 25, 2014, New York City (620 attendees)

Facilitation: by Design, May 8-9, 2014, New Orleans (16 attendees)

Elevate: AIGA Leadership Retreat, May 29-31, 2014, Denver (266 attendees)

Elevate: AIGA Alumni Retreat, May 31-June 1, 2014, Denver (35 attendees)

Facilitation: by Design, June 19-20, 2014, San Francisco (51 attendees)

Business Perspectives for Creative Leaders, July 20-25, 2014, at Yale School of
Management, New Haven (34 attendees)

Facilitation: by Design, July 24-25, 2014, New York City (46 attendees)

New Ventures: Intersections in Design Education, September 11-13, 2014, Portland

(186 attendees)

Deferred revenue and prepaid expenses were recorded for Gain: AIGA Design and Business
Conference held in New York City on October 23-24, 2014.
In 2014, Justified: AIGA Annual Design Competition received 724 entries: 20 were selected
for publication on AIGA.org.
AIGA offered several webinar series for members during 2013-2014, including:
How to write a book, October 17, 2013
Strategic design for non profits, October 31, 2013
Womens leadership, January 16, 2014
11 Tips for in-house designers, March 13, 2014
8

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

1 - ORGANIZATION (Continued)
Exhibitions in AIGAs gallery included:

Divine Details: A shop for the (extra)ordinary, November 2-December 28, 2013

Facing Forward: AIGA at 100, February 19-April 4, 2014

Century: 100 Years of Type in Design, May 1-July 31, 2014

National sponsors for the 2014 fiscal year were Adobe Systems, the official sponsor for design
solutions; Aquent, the official sponsor for professional development; and Shutterstock, the
official sponsor for creative inspiration.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Presentation
AIGAs net assets, revenues, expenses, gains and losses are classified, based on the existence or
absence of donor-imposed restrictions, into the following three categories:
Unrestricted net assets - Unrestricted net assets represent the portion of expendable funds
available for the support of all AIGAs operations.
Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may
or will be met, either by action of AIGA and/or the passage of time.
When a restriction expires, that is, when a stipulated time restriction ends or purpose
restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net
assets and reported in the statement of activities as net assets released from restrictions.
Permanently restricted net assets - Net assets subject to donor-imposed stipulations that must
be maintained permanently by AIGA. Generally, the donors of these assets would permit
AIGA to use all or part of the income earned on any related investments for general or specific
purposes.

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America (GAAP) requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Cash and Cash Equivalents
Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to
certain limitations. For purposes of the statement of cash flows, AIGA considers all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents,
except such investments held as part of AIGAs investment portfolio which is deemed to be for
long-term purposes.
Investments
Investments are stated at fair value. GAAP establishes a framework for measuring fair value.
That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements). Under GAAP, the three levels of the fair value
hierarchy are described below:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical
assets or liabilities in active markets that AIGA has the ability to access.
Level 2: Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by observable market
data by correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full term of the asset or liability.
Level 3: Unobservable inputs that reflect managements own assumptions.
10

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property and Equipment
Property and equipment are stated at cost or, if donated, at the estimated fair market value of the
assets at the date of donation. Costs for repairs and maintenance are charged to expenses as
incurred. All plant assets, other than land, are depreciated over their estimated useful lives using
the straight-line method. Estimated useful lives used to calculate depreciation are as follows:
Building and improvements
Furniture, fixtures and equipment
Computer equipment

30 years
5 years
3 years

Deferred Revenue and Related Expenses

Revenue received and expenses paid in the current period for publications, conferences,
exhibitions, programs and other events scheduled to take place in the subsequent period are
deferred on the statement of financial position. The majority of non-membership deferred
revenue and related expenses relate to the national conference which is held in October,
subsequent to the fiscal year.
Membership dues are allocated to the period to which they relate and are recognized accordingly.
Membership dues billed and received in advance are reflected as deferred revenue in the
statement of financial position.
Donated Materials and Services
Donated materials, generally, printing and paper supplies, are estimated at $409,882 and
$106,024 for the years ended September 30, 2014 and 2013, respectively. In addition, AIGA
received contributed rent in the amount of $110,200 for the year ended September 30, 2014.
Such donations are recorded in the statement of activities as programs revenue, with an offset to
expenses as program services, as donors of such items receive commensurate value in return.
Volunteer officers and committees which serve without remuneration play an important role in
the functioning of AIGA. No amounts have been reflected in the financial statements for such
donated services, as they do not meet the criteria for recognition.
Functional Allocation of Expenses
Expenses have been charged to program or supporting services, either directly when identifiable,
or indirectly based on managements estimation of the services benefited.

11

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
AIGA is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code
and is classified as a publicly supported organization as described in Section 509(a).
AIGAs tax filings prior to 2011 are no longer subject to examination by tax authorities.
Reclassifications
Certain reclassifications have been made to the prior year financial statements to conform to the
current year presentation.
Subsequent Events
These financial statements were approved by management and available for issuance on
February 5, 2015. Management has evaluated subsequent events through this date.

3 - PREPAID EXPENSES AND DEPOSITS

Prepaid expenses and deposits consisted of the following:
September 30,
2014
2013
AIGA Design Conference
Gain: AIGA Design and Business Conference
Other conferences
Security deposits
Other prepayments

12

47,729
4,727
304,660
61,724
$ 418,840

$ 187,838
23,910
4,660
96,968
$ 313,376

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

4 - INVESTMENTS AND INVESTMENT RETURN

AIGAs investments, which are considered to be Level 1, consisted of the following:
September 30,
2014
2013
Common stock
Corporate fixed income
Mutual funds
Corporate and foreign income
U.S. Govt. Bonds
Short-term deposits

$ 1,552,102
8,022,657
8,530,372
316,620
1,087,196
2,279,922
$ 21,788,869

$ 1,491,180
233,345
698,816
73,796
$ 2,497,137

The investment return is summarized as follows:

Year Ended September 30,
2014
2013
Interest and dividends
Net unrealized gain (loss) on investments
Net realized gain on sale of investments

$ 112,052
(378,546)
63,152
$ (203,342)

85,446
19,056
85,323
$ 189,825

AIGA invests in various investment securities in accordance with a board-adopted investment

risk strategy. Investment securities are exposed to various risks such as interest rate, market, and
credit risks. Due to the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will occur in the near term
and that such changes could materially affect the amounts reported in the statements of financial
position.

13

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:
September 30,
2014
2013
Land
Building
Building improvements
Office machinery and equipment
Furniture and fixtures

Less - Accumulated depreciation

$

50,016
5,525
55,541
40,538
15,003

$ 388,800
2,066,035
1,423,995
645,233
303,193
4,827,256
2,701,813
$ 2,125,443

On July 11, 2014, AIGA sold the building at 164 Fifth Avenue in New York, NY. The proceeds
from the sale were $23,000,000, offset by associated costs of $2,969,500, resulting in a net gain
on sale of $20,030,500.
In connection with the sale, the new owner agreed to lease the building to AIGA for a term of
eight months and agreed to waive all rent for this period.
6 - MORTGAGE FINANCING COST
Mortgage financing cost, which represents the unamortized balance of expenses incurred
associated with the March 2006 refinancing, is amortized over the life of the loan and consisted
of the following:
September 30,
2014
2013
Legal fees
Other

Less - Accumulated amortization

$

-0-

5,073
82,168
87,241
48,951
38,290

Amortization expense for the years ended September 30, 2014 and 2013 was $4,534 and $5,816,
respectively.

14

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

7 - LINE OF CREDIT AND LOAN PAYABLE

AIGA had a $250,000 line of credit with a bank, payable on demand. Interest was determined
based on the prime rate plus 1%. The interest rate at September 30, 2013 was 4.25%. The line of
credit was satisfied in full on July 11, 2014. Interest expense for fiscal 2014 and 2013 was
$10,768 and $13,478, respectively.
AIGA had a term loan agreement with a bank in the amount of $77,000 with principal and
interest payments over a 36-month period at a fixed interest rate of $4.25%. The term loan
agreement was satisfied in full on July 11, 2014. Interest expense for fiscal 2014 and 2013 was
$1,997 and $2,623 respectively.
In June 2013, AIGA obtained a line of credit (Portfolio Loan Agreement or PLA) with a
bank. The amount of the line of credit is based on a percentage of investment assets pledged by
AIGA on which the line of credit is secured. At September 30, 2014, the line of credit amounted
to $1,000,000. The interest rate is determined by a variable rate (Corresponding PLA Index) plus
3.0%. The interest rate at September 30, 2014 was 3.16%. There was no amount outstanding
under this line of credit at September 30, 2014. Interest expense for fiscal 2014 was $11,162.

8 - DEFERRED REVENUE
Deferred revenue consisted of the following:
September 30,
2014
2013
Conferences
Membership dues

413,460
941,017
$ 1,354,477

$ 1,121,787
1,039,169
$ 2,160,956

9 - MORTGAGE PAYABLE
AIGA had a 15-year mortgage loan agreement with Citibank, N.A. for $1,900,000, at a fixed
interest rate of 6.69% that was due to mature on April 1, 2020. The mortgage loan agreement was
satisfied in full on July 11, 2014.
Interest expense on the mortgage debt for the years ended September 30, 2014 and 2013 was
$52,649 and $75,323, respectively.

15

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

10 - AIGA LEGACY CAMPAIGN

The AIGA Legacy Campaign is the banner under which a variety of funds have been created to
channel charitable gifts toward the challenges facing the profession. The funds to which people
giving to the campaign can commit their donations include funds in support of AIGAs archives
and scholarship programs, as well as the AIGA Legacy Fund (for special projects), the Legacy
Endowment (to secure the future of AIGA), the Diversity Fund, the Design Writing & Criticism
Awards and the AIGA Disaster Relief Fund.
Board-designated net assets consisted of the following:
September 30,
2014
2013
AIGA Legacy Fund
Archives Funds
Scholarship Funds
Legacy Endowment
Diversity Fund
Denver Archives

$ 189,332
53,533
$ 242,865

$ 105,924
38,007
51,237
44,300
14,577
87,150
$ 341,195

11 - TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets consisted of the following:
September 30,
2014
2013

Program
Scholarship Funds
Disaster Relief Fund
Archives Funds
AIGA Legacy Fund
Diversity Fund
Legacy Endowment
Total

56,006
303,939
$ 359,945

16

61,345
9,087
2,758
256,070
975
1,101
$ 331,336

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

12 - PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets are restricted to investments held in perpetuity, the income from
which is expendable to support the Henry Wolf AIGA Scholarships.

13 - RETIREMENT PLAN
AIGA has a defined contribution retirement plan that covers substantially all full-time employees.
Contributions, which are made entirely by AIGA, will vary each year and are determined by the
Executive Director, as part of AIGAs budget, approved annually at the Board of Directors
meeting. Expense for the years ended September 30, 2014 and 2013 was $178,071 and $4,927
respectively.

14 - RELATED PARTY TRANSACTIONS

AIGA provides management and personnel services to AIGAs New York Chapter. Fees and
expenses billed by AIGA were as follows:
Year Ended September 30,
2014
2013
Management fees
Payroll and related benefits

12,000
96,670
$ 108,670

17

12,000
138,615
$ 150,615

AMERICAN INSTITUTE OF GRAPHIC ARTS

NOTES TO FINANCIAL STATEMENTS

15 - SUBSEQUENT EVENTS
On November 6, 2014, AIGA entered into an operating lease with 233 Broadway Owners, LLC,
pursuant to which AIGA will lease a portion of the 17th floor office space located at 233
Broadway, New York, New York. The lease contains rent abatements and provides for landlord
renovations. Future minimum rental payments, including escalations, under the operating lease
are summarized as follows:
Year Ending
September 30,
2015
2016
2017
2018
2019
Thereafter

100,122
406,328
416,487
395,623
447,037
2,882,683
$ 4,648,280

18