silicon valley community foundation · 2017-06-20 · silicon valley community foundation...

Report of Independent Auditors and Consolidated Financial Statements with

Uniform Guidance Audit Reports and Supplementary Information

Silicon Valley Community Foundation

December 31, 2016 (with comparative totals for the year ended December 31, 2015)

CONTENTS

PAGE

REPORTOFINDEPENDENTAUDITORS..........................................................................................................................................................................................1

CONSOLIDATEDFINANCIALSTATEMENTS

Statementsoffinancialposition....................................................................................................................................................................................................3

Statementsofactivities(withcomparativetotalsfortheyearendedDecember31,2015)...............................................................................4

Statementsofcashflows..................................................................................................................................................................................................................5

Notestofinancialstatements.........................................................................................................................................................................................................6

REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIALREPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS......................................................22‐23

REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERALPROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCEASREQUIREDBYTHEUNIFORMGUIDANCE…………................................................................................................................................................................................................................24‐25

SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS..........................................................................................................................................................26

SUPPLEMENTARYINFORMATION

Scheduleofexpendituresoffederalawards......................................................................................................................................................................27

Notestoscheduleofexpendituresoffederalawards....................................................................................................................................................28

REPORTOFINDEPENDENTAUDITORSTheAuditCommitteeSiliconValleyCommunityFoundation

ReportontheConsolidatedFinancialStatements

We have audited the accompanying consolidated financial statements of Silicon Valley CommunityFoundation (aCalifornia public benefit corporation) and its supporting organizations andaffiliatewhichcomprise the consolidated statement of financial position as of December31, 2016, and the relatedconsolidatedstatementsofactivitiesandcashflowsfortheyearthenended,andtherelatednotestotheconsolidatedfinancialstatements.

Management’sResponsibilityfortheConsolidatedFinancialStatements

Management is responsible for the preparation and fair presentation of these consolidated financialstatements in accordancewith accountingprinciples generally accepted in theUnitedStatesofAmerica;thisincludesthedesign, implementation,andmaintenanceof internalcontrolrelevanttothepreparationand fair presentation of the consolidated financial statements that are free frommaterialmisstatement,whetherduetofraudorerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issuedbytheComptrollerGeneraloftheUnitedStates.Thosestandardsrequirethatweplanandperformtheaudit toobtainreasonableassuranceaboutwhethertheconsolidated financialstatementsare freeofmaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedfinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttoentity’spreparation and fair presentation of the consolidated financial statements in order to design auditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopiniononthe effectiveness of Silicon Valley Community Foundation’s internal control. Accordingly,we express nosuch opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonablenessofsignificantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all materialrespects, the consolidated financial position of Silicon Valley Community Foundation and its supportingorganizationsandaffiliateasofDecember31,2016,andthechangesintheirnetassetsandtheircashflowsfortheyearthenendedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

OtherMatters

ReportonSummarizedComparativeInformation

We have previously audited Silicon Valley Community Foundation and its supporting organizations andaffiliate’s2015consolidatedfinancialstatements,andweexpressedanunmodifiedauditopiniononthoseauditedconsolidatedfinancialstatementsinourreportdatedJune2,2016.Inouropinion,thesummarizedcomparativeinformationpresentedhereinasofandfortheyearendedDecember31,2015isconsistent,inallmaterialrespects,withtheauditedconsolidatedfinancialstatementsfromwhichithasbeenderived.

OtherInformation

Ourauditwasconductedforthepurposeofforminganopinionontheconsolidatedfinancialstatementsasa whole. The Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of FederalRegulations (CFR)Part200,UniformAdministrativeRequirements,CostPrinciples,andAuditRequirementsfor Federal Awards is presented for purposes of additional analysis and is not a required part of theconsolidatedfinancialstatements.Suchinformationistheresponsibilityofmanagementandwasderivedfromandrelatesdirectlytotheunderlyingaccountingandotherrecordsusedtopreparetheconsolidatedfinancialstatements.Theinformationhasbeensubjectedtotheauditingproceduresappliedintheauditofthe consolidated financial statements and certain additional procedures, including comparing andreconcilingsuchinformationdirectlytotheunderlyingaccountingandotherrecordsusedtopreparetheconsolidated financial statements or to the consolidated financial statements themselves, and otheradditional procedures in accordancewith auditing standards generally accepted in the United States ofAmerica. In our opinion, the information is fairly stated, in all material respects, in relation to theconsolidatedfinancialstatementsasawhole.

OtherReportingRequiredbyGovernmentAuditingStandards

InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdatedJune1,2017,onourconsiderationofSiliconValleyCommunityFoundation’s internalcontrolover financial reportingandonourtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreements,andothermatters.Thepurposeofthatreportistodescribethescopeofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting,andnottoprovideanopiniononinternalcontroloverfinancialreportingoroncompliance.Thatreportisanintegralpartofanauditperformedinaccordance with Government Auditing Standards in considering Silicon Valley Community Foundation’sinternalcontroloverfinancialreportingandcompliance.

SanFrancisco,CaliforniaJune1,2017

CONSOLIDATEDFINANCIALSTATEMENTS

__________

SILICONVALLEYCOMMUNITYFOUNDATION

Seeaccompanyingnotes.Page3

CONSOLIDATEDSTATEMENTSOFFINANCIALPOSITIONDecember31,2016and2015(inthousands)

2016 2015

ASSETSCashandcashequivalents 48,400$ 111,733$Investments 8,168,894 7,143,565Contributionsandgrantsreceivable 4,325 12,277Notesandotherreceivables,net 2,834 7,212Beneficialinterestincharitableremaindertrusts 2,902 2,853Propertyandequipment,net 36,505 27,807Otherassets 839 1,105

Totalassets 8,264,699$ 7,306,552$

LIABILITIESGrantspayable 671,680$ 231,030$Accountspayableandaccruedliabilities 3,320 3,425Liabilitiestobeneficiariesfromsplitinterestagreements 33,251 33,412Depositsheldforothers 109,099 99,246

Totalliabilities 817,350 367,113

NETASSETSUnrestricted 7,283,500 6,772,697Temporarilyrestricted 60,852 65,133Permanentlyrestricted 102,997 101,609

Totalnetassets 7,447,349 6,939,439

Totalliabilitiesandnetassets 8,264,699$ 7,306,552$

ASSETS

LIABILITIESANDNETASSETS



CONSOLIDATEDSTATEMENTSOFACTIVITIESYearEndedDecember31,2016(withcomparativetotalsfortheyearendedDecember31,2015)

(inthousands)

2015Temporarily Permanently

Unrestricted Restricted Restricted Total TotalREVENUESANDSUPPORTContributions 1,382,380$ 805$ 703$ 1,383,888$ 1,232,245$Investmentincome,netofinvestmentfeesof$23,007and$17,271in2016and2015,respectively 47,277 ‐ ‐ 47,277 32,899

Netrealizedgainoninvestments 602,029 ‐ ‐ 602,029 493,864Changeinvalueofsplitinterestagreements ‐ 143 685 828 (516)Otherincome 7,805 ‐ ‐ 7,805 7,612Netassetsreleasedfromrestrictionsandreclassifications 5,992 (5,992) ‐ ‐ ‐

2,045,483 (5,044) 1,388 2,041,827 1,766,104

Unrealizedgains(losses)oninvestments,net (193,518) 763 ‐ (192,755) (230,072)

TOTALREVENUESANDSUPPORT 1,851,965 (4,281) 1,388 1,849,072 1,536,032

EXPENSESGrantsawarded 1,285,339 ‐ ‐ 1,285,339 821,119OperatingexpensesProgram 39,638 ‐ ‐ 39,638 37,608Generalandadministrative 12,664 ‐ ‐ 12,664 13,158Development 3,521 ‐ ‐ 3,521 3,881

TOTALEXPENSES 1,341,162 ‐ ‐ 1,341,162 875,766

CHANGEINNETASSETS 510,803 (4,281) 1,388 507,910 660,266

NETASSETS,beginningofyear 6,772,697 65,133 101,609 6,939,439 6,279,173

NETASSETS,endofyear 7,283,500$ 60,852$ 102,997$ 7,447,349$ 6,939,439$

2016



CONSOLIDATEDSTATEMENTSOFCASHFLOWSYearsEndedDecember31,2016and2015(inthousands)

2016 2015

CASHFLOWSFROMOPERATINGACTIVITIESChangeinnetassets 507,910$ 660,266$Adjustmentstoreconcilechangeinnetassetstocashflowsfromoperatingactivities:

Lossondisposalofpropertyandequipment 17 3Depreciationandamortization 1,905 1,730Noncashcontributions (155,644) (72,595)Contributionsreceivedforlong‐termpurposes (703) (487)Netrealizedandunrealized(gains)from

changesinfairvalueofinvestments (409,274) (263,792)Changesinassetsandliabilities

Contributionsandgrantsreceivable 7,952 (8,033)Otherreceivables 3,781 (132)Fairvalueofcharitable

remaindertrustsandrelatedaccounts (210) (3,117)Otherassets 266 97Grantspayable 440,650 120,295Accountspayableandaccruedliabilities (105) (552)

Cashflowsfromoperatingactivities 396,545 433,683

CASHFLOWSFROMINVESTINGACTIVITIESProceedsfromsalesofinvestments 2,686,161 2,866,584Purchasesofinvestments (3,146,572) (3,307,717)Paymentsreceivedonnotesreceivable 597 (1,587)Purchasesoffixedassets (10,620) (1,752)Depositsheldforothers 9,853 178

Cashflowsusedininvestingactivities (460,581) (444,294)

CASHFLOWSFROMFINANCINGACTIVITIESContributionsreceivedforlong‐termpurposes 703 487

Cashflowsfromfinancingactivities 703 487

NETCHANGESINCASHANDCASHEQUIVALENTS (63,333) (10,124)

CASHANDCASHEQUIVALENTS,beginningofyear 111,733 121,857

CASHANDCASHEQUIVALENTS,endofyear 48,400$ 111,733$

SILICONVALLEYCOMMUNITYFOUNDATIONNOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

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NOTE1–DESCRIPTIONOFTHEFOUNDATION

SiliconValleyCommunityFoundation(“SVCF”) isapubliclysupported,nonprofitpublicbenefit corporation,whichreceived its IRSexemption inNovember 2006 and officially launched in January 2007. Silicon Valley Community Foundation advances innovativephilanthropicsolutionstochallengingproblems.SVCFpartnerswithfamilies, individuals,andcorporationstomanageandfacilitatetheirphilanthropy.SVCFconnectsdonors’ intereststothemostpressingneeds,whether inSiliconValleyoraroundtheglobe.Asacomprehensive center for philanthropy, SVCF shapes critical public policy issues, partnerswith nonprofit groups and institutionsadvancingthebestideasanddirectsresourcesswiftlyandstrategicallytowardunforeseenneeds.

Mission:

Asthelargestcommunityfoundationintheworld,SVCFengagesdonorsandcorporationsfromSiliconValley,acrossthecountryandaround the globe to make our region and world better for all. Our passion for helping people and organizations achieve theirphilanthropicdreamshascreatedaglobalphilanthropicenterprisecommittedtothebeliefthatpossibilitiesstarthere.

Programs:

Advisedfunds–SVCFoffersseveraltypesoffundsthatenabledonorstoidentifyfundingopportunitiesalignedwiththeirvaluesandcharitableinterests.Donoradvisedfundsallowdonorstorecommendgrantrecipients,subjecttoSVCF’sduediligenceandapproval.Collectively,thesefundsgrantedapproximately$1,228,000,000and$573,000,000tocharitableorganizationsduringtheyearsendedDecember31,2016and2015,respectively.

Corporateadvised–SVCFmanagesoneofthelargestcorporateadvisedfundprogramsamongallU.S.basedcommunityfoundations.SVCFassistsinthegrantmakingprocess,workswithemployeecontributioncommittees,buildscommunity‐widepartnerships,andworkswith corporate fundholderson community relationsactivities.These fundsmadegrantsofapproximately$50,000,000and$52,000,000duringtheyearsendedDecember31,2016and2015,respectively.

Communityendowmentand fieldof interest funds – Through theCommunity Endowment Fund or named endowment funds,donors can contribute funds to address community needs. These funds are a permanent charitable resource. They grow throughcommunity support and provide much‐needed funding for local programs and services. They allow SVCF to act strategically toimprovethecommunitybyaddressingthemosturgentneedswithone‐timeormulti‐yeargrants.

Fieldofinterestfundsenabledonorstoidentifyabroadcharitablepurposeoracategoryofinterest(e.g.,arts,education,orhumanservices)and/orgeographicareaortargetpopulation(e.g.,seniorcitizens,childrenandyouthorimmigrants).

Together,thecommunityendowmentandfieldofinterestfundsgrantedapproximately$15,600,000and$14,000,000tocharitiesinSanMateo,SantaClara,andSanFranciscocountiesduringtheyearsendedDecember31,2016and2015,respectively.

Scholarshipfunds–SVCFadministers53scholarshipprograms.ThemajorityaredesignatedforcurrentorformerresidentsofSanMateo and Santa Clara counties. During the years ended December31, 2016 and 2015, SVCF awarded 475 and 515 scholarshipstotalingapproximately$2,389,000and$2,250,000,respectively.

Supportingorganizations–SVCFworkswithanumberofsupportingorganizations.SVCFappointsamajorityofthemembersofthegoverningboardsofthesupportingorganizations.Eachgoverningboardmaycreateitsowninvestmentpolicyandgrantguidelines.In2016 the following supporting organizationswere effectively under SVCF’s control andwere consolidated for financial statementpurposes:

WilliamH.CilkerFoundation Entrepreneurs’FoundationDirkandCharleneKabcenellFoundation SobratoFoundationTheChong‐MoonLeeFoundation ReddereFoundationBernardA.NewcombFoundation TheSkollFundRaisingAReader TheStarHillFundStartup:EducationIntervalienFoundation

GoodVenturesNeubauerFamilyCharitableTrust

DriscollFamilyFoundationTheRealEstateTrust

DropBoxFoundationforGood


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During 2016, two new supporting organizations, Neubauer Family Charitable Trust and DropBox Foundation for Good, wereestablished.InDecember2016,onesupportingorganizationwasclosed.

Affiliate–In2016,thefollowingaffiliatewaseffectivelyunderSVCF’scontrolandwasconsolidatedforfinancialstatementpurposes:

ResonanceHouse,LLC

NOTE2–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

Basisofpresentation–Theconsolidatedfinancialstatementshavebeenpreparedontheaccrualbasisofaccounting.

Principlesofconsolidation–TheaccompanyingconsolidatedfinancialstatementsasofDecember31,2016and2015,includethefinancialstatementsofSVCFanditssupportingorganizationsandaffiliate,listedinNote1above.Inter‐organizationaltransactionsandbalanceshavebeeneliminatedintheconsolidation.

Prioryearinformation–Theconsolidatedfinancialstatementsincludecertainprior‐yearsummarizedcomparativeinformationintotalbutnotbynetassetclass.Suchinformationdoesnotincludesufficientdetailtoconstituteapresentationinconformitywithaccounting principles generally accepted in the United States of America. Accordingly, such information should be read inconjunction with SVCF and its supporting organizations and affiliate’s consolidated financial statements for the year endedDecember31,2015,fromwhichthesummarizedinformationwasderived.

Cashandcashequivalents–Forconsolidated financialstatementpurposes,SVCFand itssupportingorganizationsandaffiliateconsiderallcashaccounts,exceptthosebeingheldforinvestmentpurposes,andallhighlyliquiddebtinstrumentspurchasedwithamaturityof90daysorlesstobecashequivalents.

Descriptionofnetassets–Netassetsareclassifiedbasedonexistenceorabsenceofdonor‐imposedrestrictionsasfollows:

Unrestricted isdefinedas thatportionofnetassets thathasnouseor timerestrictions.Thebylawsof SVCF includeavarianceprovisiongivingtheBoardofDirectors(the“Board”)thepowertomodifyanyrestrictionorconditiononthedistributionoffundsforanyspecifiedcharitablepurposeortospecifiedorganizationsif,inthesolejudgmentoftheBoard(withoutthenecessityoftheapprovalofanyotherparty),suchrestrictionorconditionbecomes,ineffect,unnecessary,incapableoffulfillment,orinconsistentwiththecharitableneedsofthecommunityorareaserved.Basedonthatprovision,SVCFclassifiescontributions,exceptasnotedbelow,asunrestrictedforfinancialstatementpresentation.

Temporarilyrestrictedisdefinedasthatportionofnetassetsthatconsistofarestrictiononthespecificuseortheoccurrenceofacertain future event. Contributions unconditionally promised, including irrevocable planned gifts, which are scheduled to bereceived more than one year in the future, are recorded at fair value, classified as temporarily restricted until the funds arereceived,andarediscountedataratecommensuratewiththerisksinvolved.Theaccumulationofassets,abovehistoricgiftvalue,indonorrestrictedendowmentfundsisclassifiedastemporarilyrestricteduntilappropriatedforusebasedonSVCF’sspendingpolicy. SVCF also receives grants from charitable foundations and local agencies for initiatives and special projects for whichpurposerestrictionsapply.Suchgrantsandcontributionsarerecordedastemporarilyrestricteduntilthepurposerestrictionsaremet.Whenthepurposerestrictionisaccomplished,temporarilyrestrictednetassetsarereclassifiedtounrestrictednetassetsandreportedasnetassetsreleasedfromrestrictions.

Permanentlyrestricted isdefinedas thatportionofnetassetsconsistingofthe initial fairvalueof thegiftswherethedonorhasspecified that the assets donated are to be retained in an endowment, providing a permanent source of revenue for charitablepurposes. SVCF also records contributions to charitable trusts as permanently restricted where the donor has permanentlyrestrictedthecorpusofthetrust.


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Investments–Investmentsarestatedatfairvalue.Fairvalueisdefinedasthepricethatwouldbereceivedtosellanassetorpaidto transfer a liability in an orderly transaction between willing market participants at the measurement date. SVCF and itssupporting organizations and affiliate determines fair value based on the fair value hierarchy established under applicableaccountingguidancewhichrequiresanentitytoprioritizetheuseofobservablemarket‐basedinputsovertheuseofunobservableinputswhenmeasuringfairvalue.Therearethreelevelsofinputsusedtomeasurefairvalue.FinancialinstrumentsareconsideredLevel1whenthevaluationisbasedonquotedmarketprices inactivemarketsfor identicalassetsor liabilities.Level2financialinstrumentsarevaluedusingquotedpricesforsimilarassetsorliabilities,quotedpricesinmarketsthatarenotactive,ormodelsusinginputsthatareobservableorcanbecorroboratedbyobservablemarketdataforsubstantiallythefulltermoftheassetsorliabilities.Financial instrumentsareconsideredLevel3whentheirvaluesaredeterminedusingpricingmodels,discountedcashflow methodologies or similar techniques, and at least one significant model assumption or input is unobservable and whendetermination of the fair value requires significantmanagement judgment or estimation. Financial instruments are consideredvaluedatnetassetvalue(“NAV”)whentheinvestment(i.e.,commingledfunds,hedgefunds,privateequityfunds)isvaluedatNAVbasedoncapitalstatementsprovidedbyentitiesthatcalculatefairvalueusingnetassetvaluepershareoritsequivalent.

Endowmentfunds:

Interpretationofrelevantlaw–TheBoardofSVCF,withtheadviceoflegalcounsel,hasdetermineditholdsassetswhichmeetthedefinitionofendowmentfundsundertheUniformPrudentManagementofInstitutionalFundsAct(“UPMIFA”).Asaresultofthisinterpretation,thecorpusoffundssubjecttoUPMIFAisclassifiedaspermanentlyrestricted.Thecorpusrepresentsthefairvalueoftheoriginalgiftsasofthegiftdate,andallsubsequentgiftswherethedonorhasindicatedthegiftberetainedpermanently.Thevalueofassets inexcessoforiginalgifts indonorrestrictedendowmentfundsareclassifiedastemporarilyrestrictednetassetsuntilappropriatedforexpenditurebySVCF.

Fromtimeto time, the fairvalueof theassetsassociatedwith individualdonorrestrictedendowment fundsmay fallbelowthelevelclassifiedaspermanentlyrestrictednetassets.AtDecember31,2016and2015,SVCFhad22and24endowmentfundswithdeficienciesof thisnaturetotalingapproximately$1,847,164andapproximately$1,989,000,respectively.Thesedeficienciesarereflectedinunrestrictednetassets.

InaccordancewithUPMIFA,SVCFconsidersthefollowingfactorsinmakingadeterminationastotheappropriationofassetsforexpenditure: 1)the duration and preservation of the fund, 2)the purposes of the organization and the donor‐restrictedendowmentfund,3)generaleconomicconditions,4)thepossibleeffectofinflationanddeflation,5)theexpectedtotalreturnfromincomeandtheappreciationofinvestments,6)otherresourcesoftheorganization,and7)theinvestmentpoliciesoftheSVCF.

Investmentandspendingpolicies–SVCFhasadoptedinvestmentandspendingpoliciesforendowedassetsthatattempttoprovideapredictablestreamoffundingforprogramssupportedbyitsendowmentwhileseekingtomaintainthepurchasingpoweroftheendowedassets.Theinvestmentandspendingpoliciesworktogethertoachievethisobjective.Theinvestmentpolicyestablishesanachievablereturnobjectivethroughdiversificationofassetclasses.

To accomplish the long‐term rate of return objectives, SVCF relies on a total return strategy in which investment returns areachieved throughboth capital appreciation (realizedandunrealized) and current yield (interest anddividends). SVCF targetsadiversifiedassetallocationwithanemphasisonequitybasedinvestments,withinprudentriskparameters.


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The spending policy determines the amount of money to be distributed annually from SVCF’s various endowed funds forgrantmaking and operational support. The Board generally approves the spending policy in the fourth quarter of the year forgrants tobemade inthe followingyear.SVCFassessesasupport feetoendowedfundswhich isaddedtothespendingrate forgrants and is a component of the total spending policy. The spending policy for support fees ranges from .5% to 3.5% of theaveragedailybalanceofthefundoverthepreviousmonth,andvariesbyfundtype.Thespendingpolicyforgrantsvariesbyfundtypeandwhetherthebalanceofthefundisaboveorbelowhistoricgiftvalue.Forfundswithbalancesabovehistoricgiftvaluethespendingpolicyforgrantsis4.5%or5.0%ofthefundbalanceaveragedover12trailingquarters.In2009,SVCFadoptedaslidingscalespendingpolicytoaddressunderwaterfunds,definedasthosefundswithbalancesbelowhistoricgiftvalue.ThetablebelowillustratesthereductioninspendingpolicyforgrantsfromfundswithbalancesthatareunderhistoricgiftvalueatDecember31,2016and2015:

SpendingPolicyforUnderwaterFunds

AmountUnderwaterReductioninSpending

SpendingRateforFundswith2%SupportFee

SpendingRateforFundswith.5%SupportFee

Lessthan8% None 4.50% 5.00%Over8%lessthan16% 1/3 3.00% 3.33%Over16%lessthan30% 2/3 1.50% 1.67%Over30% Full 0.00% 0.00%

The spendingpolicy is consistentwith SVCF’s objective tomaintainpurchasingpower of endowed assets aswell as to providestablesupporttothecommunity.

Concentrations of risk – SVCF and its supporting organizations and affiliate recognize there are additional inherent risksassociated with non‐publicly traded securities. Risk is managed through rigorous evaluation before an investment is made,quarterlymonitoringofvaluationsandregularcommunicationwithinvestmentmanagers.

Toaddressmarketandcreditrisksofinvestments,SVCFanditssupportingorganizationsandaffiliatemaintainformalinvestmentpoliciesthatsetoutperformancecriteria,provideinvestmentguidelinesandrequireregularreviewof investmentperformance.Investments are managed by multiple investment managers, who have responsibility for investing the funds using variousinvestmentstrategies.Aninvestmentconsultantisalsoutilized.SVCFanditssupportingorganizationsandaffiliatehavecustodyagreementswithselectedbanks,whichprocesstransactionsatthedirectionofauthorizedstaffandinvestmentmanagers.

Inaddition,concentrationsofmarketandcredit riskexist forcharitableremainder trustsaswellas forcashequivalents. In theregularcourseofbusiness,SVCFand its supportingorganizationsandaffiliatemaymaintainoperatingcashbalancesatvariousbanks in excess of federally insured limits. Management does not believe it is exposed to any significant credit risk on uninsuredamounts.

Otherconcentrations:

Majorcontributions–FortheyearendedDecember31,2016,SVCFreceived72%ofitscontributionsfrom11donors.FortheyearendedDecember31,2015,SVCFreceived70%ofitscontributionsfrom12donors.

Supporting organization assets – 6.3% and 7.3% of SVCF and its supporting organizations and affiliate’s total assets atDecember31,2016and2015,respectively,wereinonesupportingorganization.

Concentratedinvestments–17%and29%ofSVCFanditssupportingorganizations’totalinvestmentswereinonecompany’spubliclytradedcommonstockatDecember31,2016and2015,respectively.

Notes receivable – In lieu of discounting notes receivable having a maturity date that cannot be reasonably determined, thedifference between the risk free rate of return at the date of issuance of the notes and the actual interest rate of the notes iscalculatedand,ifmaterial,recordedannuallyasinterestincomeorexpense.

Split‐interestgifts – SVCF has an irrevocable remainder beneficiary interest in charitable remainder trusts and charitable giftannuitieswhosematuritiesarebasedonthelifeexpectanciesoftheincomebeneficiariesoraspecifiedtermofyears.


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Trustsandannuities inwhichSVCF isboth trusteeandremainderbeneficiaryarerecordedat the fairvalueof theassets in thetrusts. The corresponding liability for certain future amounts due to beneficiaries is recorded at the fair value of the annuitypayments.Thepresentvaluediscount ratesused forall trustsandannuitieswere2.26%and2.61%atDecember31,2016and2015,respectively.

Trusts forwhich SVCFdoesnot act as trustee are recorded at thepresent value of the assets to be received in the future. Thepresentvaluediscountrateusedforalltrustsandannuitieswere2.26%and2.61%atDecember31,2016and2015,respectively.

Propertyand equipment – Acquisitions and donations of property and equipmentwith a fair value in excess of $10,000 arecapitalizedanddepreciatedusingthestraight‐linemethodovertheestimatedusefullivesoftheassetsrangingfromthreetothirty‐nineyears.Leaseholdimprovementsareamortizedusingthestraight‐linemethodoverthe lesseroftheassets’estimatedusefullivesorthetermoftheapplicablelease.

Depositsheldforothers–SVCFacceptsfundsfromunrelatednonprofitorganizationswhodesiretohaveSVCFprovideefficientinvestmentmanagement, programmatic expertise and technical assistance. A liability is recorded at the estimated fair value ofassetsdepositedwithSVCFbynonprofitorganizations.AssetsareinvestedininvestmentpoolsofferedbySVCF.

Grantexpense–Grantsarerecognizedwhenallsignificantconditionsaremetbygrantees,allduediligencehasbeencompleted,andtheyareapprovedbystafforboardcommittee.GrantrefundsarerecordedasareductionofgrantexpenseatthetimeSVCFreceivesor isnotifiedof therefund.Grantspayablerepresent thepresentvalueofgrants tobepaidoverayearandhavebeendiscountedat1.43%.

IncludedinthegrantexpenseisacommitmentmadebySVCFthroughoneofitsDonorAdvisedFunds(DAFs)in2016tobepaidoutovertenyears.Theremainingnine$60,000,000annualpaymentsareshownasagrantpayablenetoftheappropriatediscount.

Revenue recognition – Contributions are recognized as revenue when received or unconditionally promised. Unconditionalpromisestogivethatareexpectedtobecollectedinfutureyearsarerecognizedatfairvaluebasedondiscountedcashflows.Thediscountontheseamountsiscomputedusingtherateapplicableintheyearthepromiseswerereceived.Amortizationofdiscountisrecordedasadditionalcontributionrevenueinaccordancewithdonor‐imposedrestrictions,ifany,ontheoriginalcontributions.Contributionsofassetsotherthancasharerecordedattheirestimatedfairvalue.Realestatecontributedisrecordedatappraisedvalue on the date of the gift and is generallymade available for sale as soon as practicable. Contributions of public stock arerecordedatthemeanofthequotedmarketpriceonthedateofdonation.

Allowance for doubtful accounts – SVCF and its supporting organizations and affiliate provides for amounts that may beuncollectible on contributions, grants, and other receivables.Management estimates the amount based on a variety of factors,whichinclude,butarenotnecessarilylimitedto:priorcollectionhistory,theabilityofthedebtortopay,andhistoricaltrends.FortheyearsendedDecember31,2016and2015,theallowancesrelatedtonotesandotherreceivableswere$0.

In‐kindcontributions – Significant donatedproperty and equipment is recorded at estimated fair value at the date of receipt.Contributedservices,whichrequireaspecializedskillandforwhichSVCFanditssupportingorganizationsandaffiliatewouldhavepaidforifnotcontributed,arerecordedattheirestimatedfairvalueatthedatethecontributedservicesarereceived.FortheyearsendedDecember31,2016and2015,SVCFanditssupportingorganizationsandaffiliaterecognizedapproximately$8,116,000and$8,534,000,respectively,incontributedservices.Theexpensesrelatedtothesecontributionswereallocated72%toprogramand28%togeneralandadministrativefor2016comparedto72%toprogramand28%togeneralandadministrativefor2015.

Functional expense allocations – Expenses which apply to more than one functional category have been allocated amongprogram, general and administrative, and fundraising based on the time spent on these functions by specific employees asestimated bymanagement. Indirect expenses such as facilities costs are allocated based on square footage used by functionaldepartments.Otherindirectexpenses,suchasinformationtechnologyandgeneralofficesuppliesareallocatedbasedontheoverallnumberofstaffinthevariousfunctionalcategories.Certainmarketingmaterialcostsareallocatedbasedonthepercentageofthepublicationdevotedtoeachfunctionalarea.Allothercostsarechargeddirectlytotheappropriatefunctionalcategory.

Use of estimates – The preparation of consolidated financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates and assumptions that affect the reportedamountsofassetsand liabilitiesat thedateof theconsolidated financial statementsand thereportedamountsof revenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromtheseestimates.


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Incometaxes–SVCFanditssupportingorganizationsandaffiliatearetax‐exemptorganizationsandarenotsubjecttofederalorstate income taxes, except on unrelated business income, in accordance with Section501(a) of the Internal Revenue Code. Inaddition, SVCF and its supporting organizations and affiliate qualified for the charitable contribution deduction underSection170(b) (1) (A)of the InternalRevenueCodeandhavebeenclassifiedasorganizations thatarenotprivate foundations.Unrelated business income tax, if any, is immaterial and no tax provision has been made in the accompanying consolidatedfinancialstatements.

SVCF and its supporting organizations and affiliate do not have anymaterial uncertain tax positions. SVCF and its supportingorganizationsandaffiliatefileinformationaltaxreturnsintheU.S.federalandCaliforniajurisdictions.

Subsequent events – Subsequent events are events or transactions that occur after the consolidated statement of financialpositiondate,butbeforeconsolidatedfinancialstatementsareissued.SVCFanditssupportingorganizationsandaffiliaterecognizeintheconsolidatedfinancialstatementstheeffectsofallsubsequenteventsthatprovideadditionalevidenceaboutconditionsthatexistedatthedateoftheconsolidatedstatementoffinancialposition,includingtheestimatesinherentintheprocessofpreparingthe consolidated financial statements. The consolidated financial statements do not recognize subsequent events that provideevidence about conditions that did not exist at the date of the consolidated statement of financial position, but arose after theconsolidatedstatementoffinancialpositiondateandbeforetheconsolidatedfinancialstatementsareavailabletobeissued.

SVCFanditssupportingorganizationsandaffiliatehaveevaluatedsubsequenteventsthroughJune1,2017,whichisthedatetheconsolidatedfinancialstatementswereavailabletobeissued.

New accounting pronouncement – The December 31, 2016 consolidated financial statements reflect adoption of FinancialAccounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014‐15,Disclosure ofUncertainties about anEntity’sAbilitytoContinueasaGoingConcern.ASU2014‐15definesmanagement’s responsibility toevaluatewhether there isasubstantialdoubtaboutanorganization’sabilitytocontinueasagoingconcernandtoproviderelatedfootnotedisclosures.TheFoundationadoptedthisASUandconcludedtherewasnotsubstantialdoubtofitscontinuedoperations.

NOTE3–FAIRVALUEMEASUREMENT

Thefollowingtablespresent thebalanceofassetsand liabilitiescarriedat fairvalueontheconsolidatedstatementsof financialpositionasofDecember31,2016and2015:

ASSETSInvestments Total Level1 Level2 Level3 NAVCashEquivalents

MoneyMarketSecurities 1,668,563$ 1,668,563$ ‐$ ‐$ ‐$BankCDsandDeposits 134,626 ‐ 134,626 ‐ ‐

GlobalBondsGovt/Corporate 1,284,885 371,651 908,801 ‐ 4,433ForeignBonds 73,259 1,440 ‐ ‐ 71,819HighYield 34,202 341 ‐ ‐ 33,861

GlobalEquitiesUSEquity 2,749,303 2,673,674 11,039 ‐ 64,590

International 438,886 117,464 789 ‐ 320,633EmergingMarket 39,681 13,520 ‐ ‐ 26,161

AlternativesCommodities 18,246 114 ‐ ‐ 18,132HedgeFund 862,712 ‐ ‐ ‐ 862,712PrivateEquity 562,745 ‐ ‐ 78,333 484,412RealAssets 58,642 ‐ ‐ 24,189 34,453RealEstate 243,144 ‐ ‐ 144,856 98,288

Totalinvestments 8,168,894$ 4,846,767$ 1,055,255$ 247,378$ 2,019,494

SplitinterestagreementsBeneficialinterestsincharitableremaindertrusts 2,902$ ‐$ ‐$ 2,902$ ‐$

LIABILITIESSplitinterestagreements

Liabilitiestobeneficiariesfromsplitinterestagreements (33,251)$ ‐$ ‐$ (33,251)$ ‐$

12/31/2016(inthousands)


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ASSETSInvestments Total Level1 Level2 Level3 NAVCashEquivalents

MoneyMarketSecurities 1,017,067$ 1,017,067$ ‐$ ‐$ ‐$BankCDsandDeposits 133,823 ‐ 133,823 ‐ ‐

GlobalBondsGovt/Corporate 906,262 816,066 88,647 ‐ 1,549ForeignBonds 65,003 12,073 ‐ ‐ 52,930HighYield 33,480 470 ‐ ‐ 33,010

GlobalEquitiesUSEquity 3,482,389 3,438,070 ‐ ‐ 44,319International 208,813 64,370 ‐ ‐ 144,443EmergingMarket 34,232 14,563 ‐ ‐ 19,669

AlternativesCommodities 26,552 11,740 ‐ ‐ 14,812HedgeFund 627,992 ‐ ‐ ‐ 627,992PrivateEquity 449,270 ‐ ‐ 61,357 387,913RealAssets 54,757 ‐ ‐ 24,772 29,985RealEstate 103,925 ‐ ‐ 35,504 68,421

Totalinvestments 7,143,565$ 5,374,419$ 222,470$ 121,633$ 1,425,043$

SplitinterestagreementsBeneficialinterestsincharitableremaindertrusts 2,853$ ‐$ ‐$ 2,853$ ‐$

LIABILITIESSplitinterestagreementsLiabilitiestobeneficiariesfromsplitinterestagreements (33,412)$ ‐$ ‐$ (33,412)$ ‐$

December31,2015(inthousands)

Investmentsincludethoseheldinindividualfundsestablishedbydonors,supportingorganizations,charitabletrusts,andavarietyof investmentpoolsmadeavailable todonor funds for investmentofgiftedassets.Separateassetallocationsaremaintainedforeachinvestmentpool,supportingorganizationandcharitabletrust.Theassetallocationofanyindividualdonorfundisdependentonthedonor’schoiceofapprovedinvestmentpools.Advisedfundsofonemillionormoreareeligibletobe investedseparatelyfromthepools,subjecttoreviewandapprovalbySVCF’sinvestmentcommittee.

Alternativeinvestmentsincluderedeemableinterestsinhedgefundsandcommingledpools;andnonredeemableinterestsinrealestate, real assets, andprivateequity funds.Alternative investmentsmaybe structuredas limitedpartnerships, limited liabilitycompanies, commingled trusts, and offshore investment funds. This class of assets also includes direct investment in privatecompanies,realestate,realassets,andcommodities.Ofthetotalalternativeinvestments,26%wereconcentratedinoneadvisedfundasofDecember31,2016.

Derivativesareusedbyonesupportingorganizationashedginginstrumentstoprotectagainstlossandtoachievedesiredmarketexposure.Theseincludefuturescontracts,swaps,andexchange‐listedandover‐the‐counterputandcalloptionsonsecuritiesoronfinancialindices.ThefairvalueofderivativesheldatDecember31,2016and2015,was$2,498,470and$(1,045,937),respectively.The change in net assets, as reported in the consolidated statements of activities, representing the amount of unrealized gains(losses)onderivativeinvestmentsheldatDecember31,2016and2015,was$3,593,511and$(1,961,735),respectively.

Valuation process – Finance and investment staff determine fair value measurement policies and procedures for assets andliabilities under the supervision of the Chief Operating Officer and Chief Financial Officer. These policies and procedures arereassessedannuallytodetermineifthecurrentvaluationtechniquesarestillappropriate.Avarietyofqualitativefactorsareusedtosubjectivelydeterminethemostappropriatevaluationmethodologies.Methodologiesareconsistentwiththemarket, income,andcostapproaches.Unobservableinputsusedinfairvaluemeasurementsareevaluatedandadjustedonanannualbasis,orasnecessary based on current market conditions and other third party information. In determining the reasonableness of themethodology, SVCFevaluates a varietyof factors includinga reviewof existing agreements, economic conditions, industry, andmarketdevelopments.Certainunobservableinputsareassessedthroughreviewofcontracttermswhileothersaresubstantiatedutilizing available market data including but not limited to market comparables, qualified opinions, and discount rates andmortalitytablesforsplitinterestagreements.


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ThefollowingtablepresentsinvestmentreturnsfortheyearsendedDecember31,2016and2015:

2016 2015

Investmentincome 70,284,054$ 50,170,504$Realizedandunrealizedgains,net 409,273,981 263,791,796Directinvestmentrelatedexpenses (23,007,336) (17,271,134)

456,550,699$ 296,691,166$

Level1,2,and3valuationtechniquesandinputs:

Level1investmentsincludemarketablesecurities,exchangetradedfunds,andcashequivalentsthatarecarriedatfairvaluebasedonobservablequotedmarketprices inactivemarkets;andmutual fundsthatarevaluedbasedonthenetassetvaluepersharecomputedbythefundmanagerandvalidatedbyasufficientlevelofobservableactivity(i.e.,purchasesandsales).

Level2investmentsincludebankissuedcertificatesofdepositthatarefullyFDICinsuredandvaluedusingmaturityandinterestrateasobservableinputs;domesticandforeignbondsotherthanU.S.Treasurysecuritiesthatarevaluedusingmatrixpricingormarketcorroboratedpricingandinputssuchasyieldcurvesandindices;andderivatives(i.e.,swapsandoverthecounterputandcalloptions)thatarevaluedwithpricingmodelsandinputsthatutilizecontractualtermsincludingperiodtomaturity,andreadilyobservableparametersincludinginterestrates,volatility,correlationlevelsandcreditqualityofthecounterparty.

Level 3 investments include direct investments in real estate and private companies, and beneficial interests in nontrusteedcharitableremaindertrusts.Valuationtechniquesandinputsforeacharedescribedbelow.

Privateequity–Closely‐heldprivateorrestrictedstockisreviewednolessthanannuallyusingavarietyofqualitativefactorstosubjectivelydeterminethemostappropriatevaluationmethodologies.Valuationinputsmayinclude,butarenotlimitedto,initialinvestment amount (cost), observed transaction price used in subsequent valuations, liquidation value, qualified opinion orappraisal,companyfinancialstatements,pressreleasesandcompanycommentary,andtheSVCF’sownassessmentofvalueandapplicablediscounts.

Realassets–Directinvestmentsinphysicalassetsuchasland,preciousmetals,commoditiesandtimberarereviewednolessthanannuallyusingavarietyofqualitativefactorstosubjectivelydeterminethemostappropriatevaluationmethodologies.Valuationinputs may include, but are not limited to, the initial investment amount (cost), company financial statements, and qualifiedappraisal. Fair value is determined using a variety of valuation techniques utilizing appraisals and/or company financialstatements.

Realestate–Directinvestmentinrealestateandinterestsinrealestatepartnerships(otherthanrealestatefunds)arereviewednolessthanannuallyusingavarietyofqualitativefactorstosubjectivelydeterminethemostappropriatevaluationmethodologiesconsistentwiththemarket,incomeandcostapproaches.Valuationinputsmayinclude,butarenotlimitedto,theinitialinvestmentamount(cost),partnership financialstatements,marketcomparables,qualifiedappraisal,discountedcash flow,andSVCF’sownassessmentofvalueandapplicablediscounts.Independentappraisalsofsignificantrealestateheldforinvestmentareconductedperiodically,dependingonthenatureoftheinvestment.

Beneficial interests – SVCF uses a discounted cash flow methodology to determine fair value of the beneficial interests innontrusteedcharitableremaindertrustsandtodeterminethe liabilityassociatedwithsplit interestagreements. Inputsusedforvaluation of remainder interests in nontrusteed charitable trusts include financial statements provided by the trustee, the lifeexpectancyoftheincomebeneficiaries,andanapplicablediscountratedeterminedbySVCF.Thefairvalueofbeneficialinterestsisreviewedandupdatedannuallybyadjustingthecurrentlifeexpectanciesoftheincomebeneficiaries,applicablediscountrateandmarketvalueofeach trust.Adecrease in thediscount rateanda longer lifeexpectancywilldecrease the fairvalueof the trustreceivableandliability.


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Level3roll‐forwardtables:

Investments–Thefollowingtablespresenttheroll‐forwardofLevel3investmentscarriedatfairvalue(includingthechangeinfairvalue)ontheconsolidatedstatementsoffinancialpositionfortheyearsendedDecember31,2016and2015:

2016 PrivateEquity RealAssets RealEstate

Balance,January1 121,633,444$ 61,357,315$ 24,772,153$ 35,503,976$Transfers ‐ ‐ ‐ ‐Purchases 146,481,854 30,403,752 6,338,102 109,740,000Sales (22,313,599) (13,840,425) (7,098,386) (1,374,788)Investmentincome ‐ ‐ ‐ ‐Investmentfees (475,186) ‐ (475,186) ‐Realizedgains(losses) 752,553 323,554 16,856 412,143Unrealizedgains(losses) 1,299,309 88,934 635,394 574,981

Balance,December31 247,378,375$ 78,333,130$ 24,188,933$ 144,856,312$

2015 PrivateEquity RealAssets RealEstate

Balance,January1 82,187,579$ 48,113,957$ 19,534,966$ 14,538,656$Transfers (1,253,705) (1,253,705) ‐ ‐Purchases 55,553,188 29,882,399 948,526 24,722,263Sales (14,827,188) (11,064,925) ‐ (3,762,263)Investmentincome 7,489 7,489 ‐ ‐Investmentfees (260,139) (2,472) (257,667) ‐Realizedgains(losses) (2,469,433) (2,469,433) ‐ ‐Unrealizedgains(losses) 2,695,653 (1,855,995) 4,546,328 5,320

Balance,December31 121,633,444$ 61,357,315$ 24,772,153$ 35,503,976$

SVCFand its supportingorganizationsandaffiliate’spolicy is to recognize transfers inand transfersoutof fairvaluehierarchyclassificationsatthebeginningoftheperiodinwhichtheeventorchangeincircumstancesoccurred.Thechangeinnetassets,asreported in the consolidated statements of activities, attributable to unrealized gains (losses) on Level3 investments held atDecember31,2016and2015,was$1,299,309and$2,695,653,respectively.


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Split interestagreements – The following tables present a roll‐forward for the fair value of beneficial interests in split interestagreements(includingthechangeinfairvalue)fornontrusteedcharitableremaindertrustsandlifeestates;andthefairvalueofliabilities to income beneficiaries of split interest agreements (including the change in fair value) for split interest agreementstrusteed by SVCF (i.e., charitable remainder and annuity trusts, gift annuities, and pooled income fund), as shown on theconsolidatedstatementsoffinancialpositionfortheyearsendedDecember31,2016and2015.

Balance,January1,2015 2,917,752$CRTmaturity ‐Unrealizedgains (65,210)

Balance,December31,2015 2,852,542CRTmaturity ‐Unrealizedlosses 49,840

Balance,December31,2016 2,902,382$

Balance,January1,2015 36,593,691$Newtrustsduring2015 ‐Trustmaturitiesduring2015 (93,646)Changeinvalueduetochangeinactuariallifeexpectancy 463,233Changeinvalueinestimatedfairvalueofunderlyingtrustassets (3,551,209)

Balance,December31,2015 33,412,069Newadditionsduring2016 623,320Trustmaturitiesduring2016 ‐Changeinvalueduetochangeinactuariallifeexpectancy (263,955)Changeinvalueinestimatedfairvalueofunderlyingtrustassets (520,401)

Balance,December31,2016 33,251,033$

Beneficialinterestsincharitableremaindertrusts

Liabilitiestobeneficiariesfromsplitinterestagreements

Investmentsvaluedatnetassetvalue(“NAV”)pershareoritsequivalent:

Thefollowingtablepresentstheunfundedcommitments,redemptionfrequency,andnoticeperiodforinvestmentsinentitiesthatcalculatefairvalueusingnetassetvaluepershareoritsequivalent:

Note3‐Investments,RedemptionCharacteristicsInvestmentsinentitiesthatcalculatenetassetvaluepershareoritsequivalent

Investments Note FairValueUnfunded

CommitmentsRedemptionFrequency

RedemptionNotice

Globalbondfunds a 110,112,737$ ‐$ Monthly 5‐45DaysGlobalequityfunds b 411,384,381 ‐ Monthly‐annually 5‐60DaysCommodityFunds c 18,131,539 ‐ Monthly 36Days

Hedgefunds d 862,711,785 ‐ Monthly‐illiquid 5‐360Days

Privateequityfunds e 484,412,233 179,349,991 Monthly‐illiquid 7‐90DaysRealassetsfunds f 34,453,411 8,306,019 Illiquid ‐Realestatefunds g 98,287,329 25,487,416 Illiquid ‐

Total 2,019,493,415$ 213,143,426$

(a) Global Bond Funds. This class includes investments in actively managed funds that invest in government, corporate, orsovereignbonds. Investmentsareheldwithinacommingledtrustor limitedpartnershipstructure.Allof theassets in thisclassmayberedeemedonamonthlybasiswithoutrestrictions.


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(b)GlobalEquityFunds.Thisclassincludesinvestmentsinactivelymanagedfundsthatinvestinstocksandothersecuritiesissuedbycompaniesindomesticandforeignmarkets.Investmentsareheldwithinacommingledtrustorlimitedpartnershipstructure.Theportionsthatmayberedeemedonamonthly,quarterlyorannualbasisare70%,21%and9%respectively,and10%cannotberedeemedduetoanoutstandinglockupof90daysormorebeyondDecember31,2016.Ofthetotal,10%issubjecttoafundlevelredemptiongateof10%perquarter.

(c)CommodityFunds.This class includes investments in activelymanaged commingled trust funds that invest in commodities,commodityfuturesorcompaniesinvolvedintheextractionorproductionofcommoditygoodsandrelatedservices,includingbutnotlimitedto,preciousmetals,oilandgas,agriculturalproducts,materials,naturalresources,andrealestate.Alloftheassetsinthisclassmayberedeemedonamonthlybasiswithoutrestrictions.

(d) Hedge Funds. This class includes investments in actively managed hedge funds and fund‐of‐funds employing a variety ofstrategies, including but not limited tomulti‐strategy, absolute return, long/short, arbitrage, event‐driven, distressed debt, andcredit.Hedgefundshavetheabilitytoinvestlongandshort,shiftfromanetlongpositiontoanetshortposition,applyleverage,invest in derivatives, and invest in the debt or equity of public and private companies in domestic and foreign markets.Approximately 8% of the value of this class cannot be redeemed due to an outstanding lockup of 90 days or more beyondDecember31, 2016. An additional 31%of the value of this class has redemption restrictions limiting redemption amounts perperiodtoafundlevelorinvestorlevelgateperperiod.Theremaining61%hasnorestrictionsonredemptionsbeyondredemptionfrequencyandnotificationperiod.

(e)PrivateEquityFunds.Thisclassincludesinvestmentsinactivelymanagedprivateequityfundsandfund‐of‐fundsthatinvestinprivate and public companies through a variety of strategies including but not limited to early and late stage venture capital,leveraged buy‐outs, distressed assets, special situations, and credit strategies. These investments are generally not redeemablefromthefundmanager. Instead,distributionsarereceivedthroughthe liquidationoftheunderlyingassetsofthefund,typicallyover10yearsormore.

(f)RealAssets Funds.This class includes investments in activelymanagedprivate equity funds that investprimarily inprivatecompanies involved inmining, energy and infrastructure, timber, agribusiness, natural resources, and other hard assets. Theseinvestmentsaregenerallynotredeemablefromthefundmanager.Instead,distributionsarereceivedthroughtheliquidationoftheunderlyingassetsofthefund,typicallyover5to10years.

(g) Real Estate Funds. This class includes investments in actively managed private equity funds that invest in commercialproperties in theU.S. andabroad includingbutnot limited to: residential,multi‐family,office, retail, hotel, industrial, andotherspecialties.These investmentsaregenerallynotredeemable fromthe fundmanager. Instead,distributionsarereceived throughtheliquidationoftheunderlyingassetsofthefund,typicallyover10yearsormore.

While SVCF and its supporting organizations and affiliate believe their valuationmethods are appropriate and consistentwiththoseusedbyothermarketparticipants,theuseofdifferentmethodologiesorassumptionstodeterminethefairvalueofcertainfinancial instruments could result in a different estimate of fair value at the reporting date. Those estimated valuesmay differsignificantlyfromthevaluesthatwouldhavebeenusedhadareadilyavailablemarketforsuchinvestmentsexisted,orhadsuchinvestmentsbeenliquidated,andthesedifferencescouldbematerialtotheconsolidatedfinancialstatements.


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ThetablebelowpresentsinformationaboutsignificantunobservableinputsrelatedtothecategoriesofLevel3financialassetsandliabilitiesatDecember31,2016:

FairValueatDecember31,2016 ValuationTechniques UnobservableInputs Range

Privateequitydirectinvestment 78,333,130$ Market,cost,orincome409Avaluation

Companyfinancials na*Realpropertyandrealestatelimitedpartnershipinterests 144,856,312$ Marketcomparables

Listingprices,Generalpartnerestimates na*

RealAssets 24,188,933$ Market,cost,orincome409Avaluation

Companyfinancials na*

Beneficialinterestsincharitableremaindertrusts 2,902,382$ Discountedcashflow

DiscountrateLifeexpectancies

2.26%,2to65years

Liabilitiestobeneficiariesfromsplitinterestagreements 33,251,033$ Discountedcashflow

DiscountrateLifeexpectancies

2.26%,2to65years

*Notincludedduetothewiderangeofpossiblevaluesgiventhediversenatureoftheunderlyinginvestments.

NOTE4–CONTRIBUTIONSANDGRANTSRECEIVABLE

ContributionsandgrantsreceivableasofDecember31,2016,areexpectedtobecollectedasfollows:

Lessthan Greaterthanoneyear oneyear

Contributionsreceivable 1,120,649$ ‐$Grantsreceivable 3,002,337 202,000

Total 4,122,986$ 202,000$

ContributionsandgrantsreceivableasofDecember31,2015,areexpectedtobecollectedasfollows:


Contributionsreceivable 4,582,062$ 4,500,000$Grantsreceivable 3,195,357 ‐

Total 7,777,419$ 4,500,000$

NOTE5–NOTESANDOTHERRECEIVABLES,NET

NotesreceivableandotherreceivablesasofDecember31,2016,consistedofthefollowing:


Programrelatedloans ‐$ 1,141,875$Otherreceivables 1,127,822 564,454

Total 1,127,822$ 1,706,329$


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NotesreceivableandotherreceivablesasofDecember31,2015,consistedofthefollowing:Lessthan Greaterthanoneyear oneyear

Programrelatedloans 648,000$ 1,000,000$Executiveloans 61,269 ‐Otherreceivables 5,358,065 144,465

Total 6,067,334$ 1,144,465$

Programrelatedloansarestatedattheamountofunpaidprincipal.

NOTE6–PROPERTYANDEQUIPMENT,NET

PropertyandequipmentconsistedofthefollowingatDecember31:2016 2015

Leaseholdinterestinbuilding 27,614,316$ 18,700,000$Leaseholdimprovements 19,231,235 18,825,395Constructioninprogress 115,108 91,671Officeequipmentandother 2,961,165 1,948,510Computerequipment 4,617,285 4,373,839

Total 54,539,109 43,939,415Less:accumulateddepreciationandamortization (18,034,039) (16,132,459)

Propertyandequipment,net 36,505,070$ 27,806,956$

NOTE7–GRANTSPAYABLE,NET

Grantspayableareexpectedtobedisbursedasfollows:

YearsEndingDecember31,

2017 149,541,315$2018 115,497,0512019 76,296,9772020 67,346,1432021 60,814,143Thereafter 240,765,142

Total 710,260,771

Discount (38,580,665)

Grantspayable,net 671,680,106$


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NOTE8–TEMPORARILYRESTRICTEDNETASSETS

TemporarilyrestrictednetassetswererestrictedforthefollowingatDecember31:2016 2015

Charitableremaindertrustsandirrevocableplannedgifts 5,654,556$ 5,195,309$Specialprojects 5,448,923 12,981,805Endowment(unappropriatedearnings) 49,748,469 46,955,433

Total 60,851,948$ 65,132,547$

NOTE9–PERMANENTLYRESTRICTEDNETASSETS

PermanentlyrestrictednetassetswererestrictedforthefollowingatDecember31:2016 2015

Charitableremaindertrustsandirrevocableplannedgifts 7,514,012$ 6,216,806$Endowment 95,483,458 95,391,758

Total 102,997,470$ 101,608,564$

NOTE10–ENDOWMENTDISCLOSURES

California enacted the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) effective January1, 2009. SVCF isrequired toprovide informationaboutnetassetswhicharedefinedasendowment.Classifications includeendowmentwhich ispermanently restricted by donors (permanently restricted net assets) and endowment which has been board designated. ThechangesinendowmentnetassetsfortheyearsendedDecember31,2016and2015,wereasfollows:

UnrestrictedTemporarilyRestricted

PermanentlyRestricted Total

Endowmentnetassets,January1,2015 82,230,171$ 45,701,736$ 95,241,391$ 223,173,298$Investmentreturn:Investmentincome 5,246,057 ‐ ‐ 5,246,057Netappreciation(realizedandunrealized) 1,564,553 1,259,998 ‐ 2,824,551

Totalinvestmentreturn 6,810,610 1,259,998 ‐ 8,070,608

Contributions 22,826 15,000 156,228 194,054

Appropriationofendowmentassetsforexpenditure (14,822,558) ‐ ‐ (14,822,558)

Otherchanges:Transfersto/(from)board‐designatedendowmentfunds (589,578) ‐ ‐ (589,578)Othertransfers 21,361 (21,301) (5,861) (5,801)

Endowmentnetassets,December31,2015 73,672,832 46,955,433 95,391,758 216,020,023Investmentreturn:Investmentincome 5,764,053 ‐ ‐ 5,764,053Netappreciation(realizedandunrealized) 7,318,732 763,334 ‐ 8,082,066

Totalinvestmentreturn 13,082,785 763,334 ‐ 13,846,119

Contributions 4,353,975 2,029,701 91,700 6,475,376

Appropriationofendowmentassetsforexpenditure (17,628,069) ‐ ‐ (17,628,069)

Otherchanges:Transfersto/(from)board‐designatedendowmentfunds (647,366) ‐ ‐ (647,366)Othertransfers ‐ ‐ ‐ ‐

Endowmentnetassets,December31,2016 72,834,157$ 49,748,468$ 95,483,458$ 218,066,083$


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Donorrestrictedendowments (1,146,464)$ 47,703,768$ 95,483,458$ 142,040,762$Boarddesignatedendowments 73,980,621 2,044,700 ‐ 76,025,321

Total 72,834,157$ 49,748,468$ 95,483,458$ 218,066,083$



Donorrestrictedendowments (1,071,080)$ 46,940,433$ 95,391,758$ 141,261,111$Boarddesignatedendowments 74,743,912 15,000 ‐ 74,758,912

Total 73,672,832$ 46,955,433$ 95,391,758$ 216,020,023$

December31,2016

December31,2015

NOTE11–RELATEDPARTYTRANSACTIONS

SVCFhadthefollowingrelatedpartytransactions:

Boardmembersmayhold interestsormaybeemployedbycorporationsorpartnershipswhosesharesor interestsareheldasinvestmentsbySVCFanditssupportingorganizationsandaffiliate.Aconflictofinterestpolicyhasbeenestablished,whichcoversinvestmentsandvendorrelationshipswithBoardmembers,volunteers,andstaff.

SVCF’s volunteer members of the Board are active in oversight of fundraising events, activities, and in making privatecontributions.Contributionsreceived fromtheBoardor fromcompanieswithwhich theBoard isaffiliatedwereapproximately$1,748,000and$916,000fortheyearsendedDecember31,2016and2015,respectively.

SVCF’ssupportingorganizationsutilizetheservicesofaninvestmentmanagerwhosefounderisalsothefounderofthesupportingorganization. In‐kind investment management service fees of approximately $2,094,000 and $2,148,000 were donated by theinvestmentmanagerduringtheyearsendedDecember31,2016and2015,respectively.

NOTE12–RETIREMENTPLANS

SVCFhasadefinedcontribution retirementplanunderSection403(b)of the InternalRevenueCode, forwhich substantiallyallemployeesareeligible.Employeesmayelecttomakecontributionstotheplanundersalarydeferralprovisionsandareconsideredeligibleforthosevoluntarycontributionsonthefirstdayofemployment.SVCFcontributes5%ofsalarytotheplanforalleligibleemployees,asdefined,onapayperiodbasisbeginningwiththesecondyearofemployment.ContributionstotheplanfortheyearsendedDecember31,2016and2015,were$618,000and$588,000,respectively.

SVCFalsoprovidesadefinedcontributionplanunderSection457(b)oftheInternalRevenueCodeforemployeesthataremembersofaselectgroupofmanagementandhighlycompensatedemployees.Theemployeesmayelecttomakecontributionstotheplanunderasalaryreductionagreement.EmployercontributionsareatthediscretionoftheSVCF.ContributionsbySVCFfortheyearsendedDecember31,2016and2015,were$0and$18,000,respectively.

In2016,SVCFinitiatedadeferredcompensationplanunderSection457(f)oftheInternalRevenueCodeforseniorexecutives.TheinitialfundingoftheplanfortheyearendedDecember31,2016was$225,000.


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NOTE13–COMMITMENTS

Themainofficefacility inMountainViewisretainedunderanoperating leasewithatermof10years,expiringinAugust2023.SVCFalsomaintainsconferenceandofficespaceinSanMateowithaleasethathasatermof10years,expiringinDecember2019.Inaddition,SVCFhasasatelliteofficeinSanFranciscowithaleasetermofoneyear,expiringJuly2017andanofficeinSanJosewith a lease expiring July 2018. Following is a schedule of futureminimum rental payments under itsnoncancelableoperatingleases.

YearsEndingDecember31,

2017 2,678,570$2018 2,930,8872019 2,995,7352020 2,645,1482021 2,689,098Thereafter 4,497,839

18,437,277$

Rental expense consisted of approximately $2,243,000 and $2,140,000 for the years ended December31, 2016 and 2015,respectively,forthemainofficefacility.RentalexpensefortheSanMateoofficeandconferencecenterwasapproximately$370,000and$320,000 for theyearsendedDecember31,2016and2015,respectively.Leaseexpense for theSan JoseandSanFranciscosatelliteofficesfortheyearsendedDecember31,2016and2015,was$22,800and$22,000,respectively.

REPORTOFINDEPENDENTAUDITORSONINTERNALCONTROLOVERFINANCIALREPORTINGANDONCOMPLIANCEANDOTHERMATTERS

BASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS

TheAuditCommitteeofSiliconValleyCommunityFoundation

We have audited, in accordance with the auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standardsissued by the Comptroller General of the United States, the consolidated financial statements of SiliconValley Community Foundation, which comprise the consolidated statement of financial position as ofDecember31,2016,andtherelatedconsolidatedstatementsofactivitiesandcashflowsfortheyearthenended,andtherelatednotestotheconsolidatedfinancialstatements,andhaveissuedourreportthereondatedJune1,2017.

InternalControlOverFinancialReporting

Inplanningandperformingourauditoftheconsolidatedfinancialstatements,weconsideredSiliconValleyCommunityFoundation’sinternalcontroloverfinancialreporting(internalcontrol)todeterminetheauditprocedures that are appropriate in the circumstances for thepurposeof expressingouropinionson theconsolidatedfinancialstatements,butnotforthepurposeofexpressinganopinionontheeffectivenessofSiliconValleyCommunityFoundation’sinternalcontrol.Accordingly,wedonotexpressanopinionontheeffectivenessofSiliconValleyCommunityFoundation’sinternalcontrol.

Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallowmanagementor employees, in the normal course of performing their assigned functions, to prevent, or detect andcorrect, misstatements on a timely basis. A material weakness is a deficiency, or a combination ofdeficiencies, ininternalcontrolsuchthatthereisareasonablepossibilitythatamaterialmisstatementoftheentity'sconsolidatedfinancialstatementswillnotbeprevented,ordetectedandcorrected,onatimelybasis.Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,ininternalcontrolthatislesssevere than a material weakness, yet important enough to merit attention by those charged withgovernance.

Ourconsiderationof internalcontrolwas for the limitedpurposedescribed inthe firstparagraphof thissection and was not designed to identify all deficiencies in internal control that might be materialweaknesses or significant deficiencies. Given these limitations, during our auditwe did not identify anydeficienciesininternalcontrolthatweconsidertobematerialweaknesses.However,materialweaknessesmayexistthathavenotbeenidentified.

ComplianceandOtherMatters

As part of obtaining reasonable assurance about whether Silicon Valley Community Foundation’sconsolidated financial statements are free from material misstatement, we performed tests of itscompliancewithcertainprovisionsof laws, regulations, contracts, andgrantagreements,noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationofconsolidatedfinancialstatementamounts.However,providinganopiniononcompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpresssuchanopinion.TheresultsofourtestsdisclosednoinstancesofnoncomplianceorothermattersthatarerequiredtobereportedunderGovernmentAuditingStandards.

PurposeofthisReport

Thepurposeofthisreportissolelytodescribethescopeofourtestingofinternalcontrolandcomplianceand theresultsof that testing,andnot toprovideanopinionon theeffectivenessof theentity’s internalcontrol or on compliance. This report is an integral part of an audit performed in accordance withGovernmentAuditing Standards in considering the entity’s internal control and compliance. Accordingly,thiscommunicationisnotsuitableforanyotherpurpose.


REPORTOFINDEPENDENTAUDITORSONCOMPLIANCEFORTHEMAJORFEDERALPROGRAMANDREPORTONINTERNALCONTROLOVERCOMPLIANCEAS

REQUIREDBYTHEUNIFORMGUIDANCETheAuditCommitteeofSiliconValleyCommunityFoundation

ReportonCompliancefortheMajorFederalProgram

We have audited Silicon Valley Community Foundation’s (a California public benefit corporation)compliancewiththetypesofcompliancerequirementsdescribedintheOMBComplianceSupplementthatcouldhaveadirectandmaterialeffectonSiliconValleyCommunityFoundation'smajorfederalprogramforthe year ended December 31, 2016. Silicon Valley Community Foundation's major federal program isidentified in the summary of auditor's results section of the accompanying schedule of findings andquestionedcosts.

Management’sResponsibility

Managementisresponsibleforcompliancewithfederalstatutes,regulations,andthetermsandconditionsofitsfederalawardsapplicabletoitsfederalprogram.

Auditor’sResponsibility

OurresponsibilityistoexpressanopiniononcomplianceforSiliconValleyCommunityFoundation'smajorfederal program based on our audit of the types of compliance requirements referred to above. WeconductedourauditofcomplianceinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica;thestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards,issuedbytheComptrollerGeneraloftheUnitedStates;andtheauditrequirementsofTitle2U.S.CodeofFederalRegulationsPart200,UniformAdministrativeRequirements,CostPrinciples,andAuditRequirementsforFederalAwards(UniformGuidance).ThosestandardsandtheUniformGuidancerequirethatweplanand perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectthemajorfederalprogramoccurred.Anauditincludesexamining,onatestbasis,evidenceaboutSiliconValleyCommunityFoundation'scompliancewiththoserequirementsandperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.

Webelievethatourauditprovidesareasonablebasisforouropiniononcomplianceforthemajorfederalprogram. However, our audit does not provide a legal determination of Silicon Valley CommunityFoundation'scompliance.

OpinionontheMajorFederalProgram

Inouropinion,SiliconValleyCommunityFoundationcomplied, inallmaterialrespects,withthetypesofcompliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectonthemajorfederalprogramfortheyearendedDecember31,2016.

ReportonInternalControlOverCompliance

Management of Silicon Valley Community Foundation is responsible for establishing and maintainingeffectiveinternalcontrolovercompliancewiththetypesofcompliancerequirementsreferredtoabove.Inplanningandperformingourauditof compliance,weconsideredSiliconValleyCommunityFoundation'sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffecton the major federal program to determine the auditing procedures that are appropriate in thecircumstancesforthepurposeofexpressinganopiniononcomplianceforthemajorfederalprogramandtotestandreportoninternalcontrolovercomplianceinaccordancewiththeUniformGuidance,butnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance.Accordingly,we do not express an opinion on the effectiveness of Silicon Valley Community Foundation's internalcontrolovercompliance.

A deficiency in internal control over compliance exists when the design or operation of a control overcompliancedoesnotallowmanagementoremployees, inthenormalcourseofperformingtheirassignedfunctions, to prevent, or detect and correct, noncompliancewith a type of compliance requirement of afederalprogramonatimelybasis.Amaterialweaknessininternalcontrolovercomplianceisadeficiency,oracombinationofdeficiencies,ininternalcontrolovercompliancesuchthatthereisareasonablepossibilitythat material noncompliance with a type of compliance requirement of a federal program will not beprevented, or detected and corrected, on a timely basis. A significant deficiency in internal control overcomplianceisadeficiency,oracombinationofdeficiencies,ininternalcontrolovercompliancewithatypeof compliance requirementof a federalprogram that is less severe thanamaterialweakness in internalcontrolovercompliance,yetimportantenoughtomeritattentionbythosechargedwithgovernance.

Our considerationof internal control over compliancewas for the limitedpurposedescribed in the firstparagraph of this section and was not designed to identify all deficiencies in internal control overcompliance that might be material weaknesses or significant deficiencies. We did not identify anydeficiencies in internal control over compliance that we consider to be material weaknesses. However,materialweaknessesmayexistthathavenotbeenidentified.

ThepurposeofthisreportoninternalcontrolovercomplianceissolelytodescribethescopeofourtestingofinternalcontrolovercomplianceandtheresultsofthattestingbasedontherequirementsoftheUniformGuidance.Accordingly,thisreportisnotsuitableforanyotherpurpose.


SILICONVALLEYCOMMUNITYFOUNDATIONSCHEDULEOFFINDINGSANDQUESTIONEDCOSTS

ForTheYearEndedDecember31,2016

Page26

Section I – Summary of Auditor’s Results

Financial Statements

TypeofreporttheauditorissuedonwhethertheconsolidatedfinancialstatementsauditedwerepreparedinaccordancewithGAAP: Unmodified

Internalcontroloverfinancialreporting:

Materialweakness(es)identified? Yes No

Significantdeficiency(ies)identified? Yes Nonereported

Noncompliancematerialtotheconsolidatedfinancialstatementsnoted? Yes No

FederalAwards

Internalcontrolovermajorfederalprogram:

Materialweakness(es)identified? Yes No

Significantdeficiency(ies)identified? Yes Nonereported

Anyauditfindingsdisclosedthatarerequiredtobereportedinaccordancewith2CFR200.516(a)? Yes No

Identificationofmajorfederalprogramandtypeofauditor’sreportissuedoncomplianceformajorfederalprogram:

CFDANumbers NameofFederalProgramTypeofAuditor’sReportIssued

94.019 SocialInnovationFund Unmodified

DollarthresholdusedtodistinguishbetweentypeAandtypeBprograms: $ 750,000

Auditeequalifiedaslow‐riskauditee? Yes No

SectionII–FinancialStatementFindings

Nonereported

SectionIII–FederalAwardFindingsandQuestionedCostsNonereported

SUPPLEMENTARYINFORMATION

__________

SILICONVALLEYCOMMUNITYFOUNDATIONSCHEDULEOFEXPENDITURESOFFEDERALAWARDSForTheYearEndedDecember31,2016

Seeaccompanyingnotestoscheduleofexpenditureoffederalawards.Page27

FederalGrantor/ProgramTitle GrantNumberFederalCFDANumber

"Passedthrough"toSubrecipients

FederalExpenditures

CorporationForNationalandCommunityService

SocialInnovationFund 14SIHCA001 94.019 1,764,405$ 2,106,123$

TotalCorporationForNationalandCommunityService 2,106,123$

TOTALEXPENDITURESOFFEDERALAWARDS 2,106,123$

SILICONVALLEYCOMMUNITYFOUNDATIONNOTESTOSCHEDULEOFEXPENDITURESOFFEDERALAWARDS

ForTheYearEndedDecember31,2016

Page28

NOTE1–BASISOFPRESENTATION

TheaccompanyingScheduleofExpendituresofFederalAwards(the“Schedule”)includesthefederalgrantactivityofSiliconValleyCommunityFoundationunderprogramsofthefederalgovernmentfortheyearendedDecember31,2016.Theinformationinthisschedule ispresented in accordancewith the requirementsofTitle2U.S. Codeof FederalRegulations (CFR)Part200,UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because theSchedulepresentsonlyaselectedportionoftheoperationsofSiliconValleyCommunityFoundation,itisnotintendedtoanddoesnot present the consolidated financial position, consolidated activities, and changes in net assets or consolidated cash flows ofSiliconValleyCommunityFoundation.

NOTE2–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

ExpendituresreportedontheSchedulearereportedontheaccrualbasisofaccounting.SuchexpendituresarerecognizedfollowingthecostprinciplescontainedintheUniformGuidance,whereincertaintypesofexpendituresarenotallowableorarelimitedastoreimbursement.SiliconValleyCommunityFoundationelectednottousethe10%deminimisindirectcostrateallowedundertheuniformguidance.

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