(1) Summary of Significant Accounting Policies
(a) Organization and Purpose
Darden Restaurants, Inc. Foundation (the Foundation) is a private nonprofit corporation exempt from federal income tax under Section 501(c)(3) and is a private foundation under Section 509 (a) of the Internal Revenue Code of 1986, as amended (the Code). The Foundation is subject to a maximum 2% federal excise tax on net investment income. The Foundation was organized to administer charitable funds for the benefit of communities.
The Code requires the Foundation to make certain minimum distributions in accordance with a specified formula. At May 31, 2005 and 2004, the Foundation was in compliance with those requirements. During 2004, the Foundation received a $10,000 tax refund for overpayments made during the year ended May 31, 2002. The Foundation’s sponsor is Darden Restaurants, Inc.
(b) Basis of Presentation The Foundation presents its financial statements in three classes of net assets based on the existence or absence of externally (donor) imposed restrictions. These classes of net assets are unrestricted, temporarily restricted, and permanently restricted. The net assets of the Foundation and changes therein have been classified and reported as unrestricted net assets since the net assets are not subject to donor imposed stipulations.
(c) Cash and Cash Equivalents The Foundation considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
(d) Contributions Received and Contributions Made Contributions received and contributions made are recognized as support and expense, respectively, when the gift is unconditionally made to the donee. During 2005 and 2004, all contributions received and contributions made by the Foundation were unconditional.
(e) Investments Investments are reported at their estimated fair value. The estimated fair value of investments was determined based on quoted market prices. Realized and unrealized gains and losses are included in investment gain, net, in the statements of activities.
(f ) Use of 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 the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of support and revenue and expenses during the reporting period. Actual results could differ from those estimates.
(2) Contributions
Contributions receivable of $2,000,000 and $7,000,000 at May 31, 2005 and 2004, respectively, represent amounts due from the Foundation’s sponsor.
Contribution revenue of $2,225,000 and $7,000,000 for the years ended May 31, 2005 and 2004, respectively, represents unconditional gifts made by the Foundation’s sponsor.
(3) Investments
The amortized cost and fair value of investments at May 31, 2005 and 2004, are summarized as follows:
| |
Cost |
Fair Value |
Net Unrealized
Gains (Losses) |
| 2005: |
|
|
|
| Mutual Fund- Intermediate-Term Treasury |
$ 972,880 |
940,086 |
(32,794) |
| Mutual Fund- Domestic Equity |
1,236,640 |
1,468,235 |
231,595 |
| Mutual Fund- International Equity |
313,746 |
531,075 |
217,329 |
Total |
$ 2,523,266 |
2,939,396 |
416,130 |
| |
|
|
|
| 2004: |
|
|
|
| Mutual Fund- Intermediate-Term Treasury |
$ 629,956 |
586,448 |
(43,508) |
| Mutual Fund- Domestic Equity |
1,208,787 |
1,356,968 |
148,181 |
| Mutual Fund- International Equity |
302,991 |
456,772 |
153,781 |
Total |
$ 2,141,734 |
2,400,188 |
258,454 |
(4) Due to Sponsor
Due to sponsor of $6,000 at May 31, 2005, represented federal excise taxes paid by the sponsor on behalf of the Foundation. No amounts were due from or due to sponsor at May 31, 2004.
(5) Grants Payable
Grants payable of $909,303 and $1,287,192 at May 31, 2005 and 2004, respectively, represent approved grants for future payments to various organizations. Grants payable at May 31, 2005, are scheduled to be paid as follows:
| In one year or less |
$ 620,650 |
| Between one year and five years |
300,700 |
| |
921,350 |
| Less unamortized discount at 3.5% |
(12,047) |
Grants payable, net |
$ 909,303 |
(6) Administrative Expenses
Substantially all the facilities, personnel and operating costs of the Foundation, which are nominal dollar amounts, are
provided by Darden Restaurants, Inc.
(7) Related Party Transactions
During the year ended May 31, 2005, the Foundation granted and paid $500,000 to Darden Dimes, Inc., a publicly
supported organization exempt from federal income tax under Section 501(c)(3). Darden Dimes, Inc. receives its primary
support from employees of Darden Restaurants, Inc., the Foundation’s sponsor, and, in turn, provides emergency
assistance grants to employees who are faced with a crisis. This grant was made to support Darden Dimes, Inc. as it
provided assistance to the many employees of Darden Restaurants, Inc. impacted by the four major hurricanes that hit
the United States during the 2004 calendar year. The $500,000 was included in Other program grant expenses for the
year ended May 31, 2005.
|
