Financial Statements and Report of
Independent Certified Public
Accountants
Institute of International Education, Inc.
September 30, 2023 and 2022

Page

Contents
Report of Independent Certified Public Accountants

3

Financial Statements
Statements of financial position

5

Statements of activities

6

Statements of functional expenses

7

Statements of cash flows

9

Notes to financial statements

10

GRANT THORNTON LLPREPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

757 Third Ave., 9th Floor
New York, NY 10017-2013
D+1 212 599 0100

F

+1 212 370 4520

Board of Trustees
Institute of International Education, Inc.
OpinionWe have audited the financial statements of Institute of International Education, Inc.
(“IIE”), which comprise the statements of financial position as of September 30, 2023
and 2022, and the related statements of activities, functional expenses, and cash
flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material
respects, the financial position of IIE as of September 30, 2023 and 2022, and thechanges in its net assets and its cash flows for the years then ended in accordancewith accounting principles generally accepted in the United States of America.
Basis for opinion
We conducted our audits of the financial statements in accordance with auditing
standards generally accepted in the United States of America (US GAAS). Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of IIE and to meet our other ethical responsibilities inaccordance with the relevant ethical requirements relating to our audits. We believethat the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the UnitedStates of America, and for the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements thatare free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether
there are conditions or events, considered in the aggregate, that raise substantial
doubt about IIE’s ability to continue as a going concern for one year after the date thefinancial statements are available to be issued.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with US GAAS will always
detect a material misstatement when it exists. The risk of not detecting a material

GT.COM

Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and each of its member firms
are separate legal entities and are not a worldwide partnership.

misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would influence thejudgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with US GAAS, we:









Exercise professional judgment and maintain professional skepticism throughout
the audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures
responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 IIE’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as
well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in
the aggregate, that raise substantial doubt about IIE’s ability to continue as agoing concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding,among other matters, the planned scope and timing of the audit, significant audit
findings, and certain internal control-related matters that we identified during the audit.

New York, New YorkMay 31, 2024

Institute of International Education, Inc.
STATEMENTS OF FINANCIAL POSITION
September 30,(in thousands)

2023

2022

ASSETSCash and cash equivalents
Accounts receivable on sponsored programs, net
Contributions receivable, net
Investments, at fair value
Prepaid expenses and other assets
Fixed assets, net
Right-of-use assets, net
Beneficial interests in perpetual trusts held by third parties
Total assets$

77,142
52,415
2,947
212,134
6,912
14,03056,237
2,947$

71,05551,017
4,606
188,7426,614
13,72437,3172,827$

424,764$

375,902$

48,901
26,09665,062$

48,44232,37043,978LIABILITIES AND NET ASSETS
Liabilities
Accounts payable and accrued expenses
Sponsored funds received in advance
Lease liabilities
Total liabilities
Net assets
Without donor restrictions
Board-designated endowment funds
Undesignated, available for general operations
Total net assets without donor restrictions
With donor restrictions
Total net assets$

Total liabilities and net assets

The accompanying notes are an integral part of these financial statements.
5140,059

124,790105,215
91,547

93,24776,854

196,762

170,101

87,94381,011

284,705

251,112424,764$

375,902

Institute of International Education, Inc.
STATEMENTS OF ACTIVITIESYears ended September 30,(in thousands)

2023
With Donor
Restrictions

Without Donor
Restrictions
Revenues and support
Sponsored programs
Contributions
Net assets released from restrictions
Investment return (loss)
Publications and membership fees
Other revenues$

Total revenues

325,650918
12,074
20,655
639
147

$

Total

10,034(12,074)
8,972
-

$

325,650
10,952
29,627
639
147

2022
With Donor
Restrictions

Without Donor
Restrictions$

304,364
815
12,169(26,073)
677
469

$

Total

14,336(12,169)(13,065)-$

304,364
15,151(39,138)677
469

360,083

6,932

367,015

292,421(10,898)

281,523

245,230
35,755
11,012
8,500
1,117

-

245,230
35,755
11,0128,500
1,117

229,228
30,924
10,594
8,460
1,091

-

229,228
30,924
10,5948,460
1,091

301,614-301,614280,297-

280,297

30,071
1,737-

30,071
1,737

28,056
1,897-

28,056
1,897

Total supporting services

31,808-31,80829,953-29,953

Total expenses

333,422-

333,422

310,250-

310,250

CHANGE IN NET ASSETS

26,661

6,932

33,593(17,829)(10,898)(28,727)

170,101

81,011

251,112

187,930

91,909279,839

Expenses
Program services
International exchange of students and scholars
Leadership development educational services
Higher education institutional development
Emergency student and scholar assistance
Research and publications
Total program services
Supporting services
Management and generalFundraising

Net assets
Beginning of year
End of year$

196,762

The accompanying notes are an integral part of these financial statements.
6$

87,943$284,705$

170,101$

81,011$

251,112

Institute of International Education, Inc.
STATEMENT OF FUNCTIONAL EXPENSES
Year ended September 30, 2023
(in thousands)

Program Services
International
Exchangeof Students
andScholars
Grantee expenses
Grantee stipends and grants
Tuition, books and fees
Enrichment programs
Grantee travel
Grantee health insurance
Other

$

Institute expenses
Employee salaries and benefits
Occupancy
Travel, receptions and benefits
Communication
Purchased services
Other

$

108,814
27,237
1,206
7,738
4,904
2,550

Leadership
Development
Educational
Services

Higher
Education
Institutional
Development$$

12,112
582
1,215
2,365
295
229

145
490
135
908
1
156

Supporting Services

Emergency
Student and
ScholarAssistance
$

1,805
3,540
112
140
102
157

Research andPublications

Total Program
ServicesManagement
and General

$

$

$

-

122,876
31,8492,668
11,151
5,302
3,092

Total
Supporting
Services

Fundraising
-

$

-

$

Total
-

$

122,876
31,8492,668
11,151
5,302
3,092

152,449

16,798

1,835

5,856

-

176,938---

176,938

26,365
4,300
1,814
439
56,859
3,004

8,563
1,219
787
162
7,789
437

5,456
736
581
108
1,594
702

1,779
290
51
18
467
39

728
124
54
10
162
39

42,891
6,669
3,287
737
66,871
4,221

19,450
3,351
788
555
4,631
1,296

1,294
250
57
31
99
6

20,744
3,601
845
586
4,730
1,302

63,635
10,2704,132
1,323
71,601
5,523

92,781

18,957

9,177

2,644

1,117

124,676

30,071

1,737

31,808156,484

245,230$

35,755$

11,012

$

8,500

$

The accompanying notes are an integral part of this financial statement.
7

1,117

$

301,614$30,071

$

1,737

$

31,808$333,422

Institute of International Education, Inc.
STATEMENT OF FUNCTIONAL EXPENSES
Year ended September 30, 2022
(in thousands)

Program Services
International
Exchangeof Students
andScholars
Grantee expenses
Grantee stipends and grants
Tuition, books and fees
Enrichment programs
Grantee travel
Grantee health insurance
Other

$

Institute expenses
Employee salaries and benefits
Occupancy
Travel, receptions and benefits
Communication
Purchased services
Other

$

109,093
29,891
307
5,005
3,940
2,544

Leadership
Development
Educational
Services

Higher
Education
Institutional
Development$$

10,254
128
978
2,830
211
187

126
491
84
1,049
179

Supporting Services

Emergency
Student and
ScholarAssistance
$

2,616
3,075
134
126
80
23

Research andPublications

Total Program
ServicesManagement
and General

$

$

$

-

122,089
33,585
1,503
9,010
4,231
2,933

Total
Supporting
Services

Fundraising
-

$

-

$

Total
-

$

122,089
33,585
1,503
9,010
4,231
2,933

150,780

14,588

1,929

6,054

-

173,351---

173,351

25,153
4,038
1,123
479
44,925
2,730

7,936
1,009
749
172
6,127
343

5,507
693
665
108
1,003
689

1,582
288
16
17
464
39

725
117
35
14
168
32

40,903
6,145
2,588
790
52,687
3,833

16,696
4,443
391
691
4,100
1,735

1,210
251
77
33
317
9

17,906
4,694
468
724
4,417
1,744

58,80910,8393,056
1,514
57,104
5,577

78,44816,336

8,665

2,406

1,091

106,946

28,056

1,897

29,953

136,899229,228$

30,924$

10,594

$

8,460

$

The accompanying notes are an integral part of this financial statement.
8

1,091

$

280,297$

28,056

$

1,897

$

29,953$

310,250

Institute of International Education, Inc.
STATEMENTS OF CASH FLOWS
Years ended September 30,(in thousands)

2023
Cash flows from operating activities:
Increase in net assets
Adjustments to reconcile increase in net assets
to net cash provided by operating activities:
Depreciation and amortization
Net realized gain on sales of investments
Net unrealized (gain) loss on investments
Change in value of beneficial interest in perpetual trust
Change in operating assets and liabilities:
Accounts receivable on sponsored programs
Contributions receivable, net
Prepaid expenses and other assets
Operating lease assets and liabilities
Accounts payable and accrued expenses
Sponsored funds received in advance$

33,5932022$(28,727)

2,462(2,721)(20,248)
(120)

3,371
(1,695)43,847728(1,398)
1,659
(298)
2,164
459
(6,274)(13,499)(3,338)
1,105
6,661
4,001
3,644

9,278

16,098(16,165)
15,742(2,768)(25,409)16,338(5,400)Net cash used in investing activities(3,191)(14,471)

NET INCREASE IN CASH AND CASH EQUIVALENTS

6,087

1,627

71,05569,428Net cash provided by operating activities
Cash flows from investing activities:
Purchase of investments
Proceeds from sale of investments
Purchase of fixed assets

Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year$

77,142$

71,055

Supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases
Operating lease right-of-use assets obtained in exchange for lease liabilities
Operating lease right-of-use assets adjustment due to lease remeasurements
Operating lease right-of-use assets adjustment due to early terminations

$
$
$
$

4,174
22,794
41
(85)

$
$
$
$

5,865
280
-

The accompanying notes are an integral part of these financial statements.
9Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS
September 30, 2023 and 2022
(in thousands)
NOTE 1- DESCRIPTION OF ORGANIZATION
The financial statements include the accounts of all Institute of International Education, Inc.’s (“IIE” or the“Institute”) affiliates, both domestic and international, including those which are separately incorporated andperform activities in the name of the Institute. All significant intercompany transactions have been eliminatedin preparing the accompanying financial statements.
Institute of International Education, Inc.
The Institute was founded in 1919 and incorporated in 1928 in the State of New York. The Institute develops
and administers programs of international educational exchange and technical assistance under negotiatedcontracts with governments, international organizations, corporations, foundations, and colleges anduniversities throughout the United States and abroad.
IIE implements many of the world’s most effective and prestigious scholarship and training programs. The
Institute helps governments and corporations develop an educated workforce and prepares students andprofessionals for success in the global economy. IIE provides opportunities to underserved populations,protects scholars and students in danger, and encourages teaching and learning across cultures.
Services to students, teachers, and other professionals from more than 175 countries are provided by theInstitute’s New York headquarters, domestic and international offices. The Institute performs counselingand information services, extends a lifeline to threatened and displaced students and scholars, issues
publications, and conducts conferences, seminars and other special projects.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation
The accompanying financial statements have been prepared on the accrual basis of accounting inconformity with accounting principles generally accepted in the United States of America (“GAAP”). IIE isrequired under these principles to report revenues, expenses, gains and losses based on the existence orabsence of donor-imposed restrictions. Accordingly, the net assets of IIE are classified and reported asfollows:
 Net assets without donor restrictions - Net assets without donor restrictions include those that are
not subject to donor-imposed restrictions and that may be expended for any purpose in performing
the primary objectives of IIE. Net assets without donor restrictions include board-designated net
assets, which are used to account for all resources over which the Board of Trustees has
discretionary control. Revenues are reported as increases in net assets without donor restrictions
unless the related asset is limited by donor-imposed restrictions. Gains and losses on investments
and other assets or liabilities are reported as increases or decreases in net assets without donor
restrictions unless their use is restricted by explicit donor stipulation or law. Expenses are reported
as decreases in net assets without donor restrictions.
 Net assets with donor restrictions - Net assets with donor restrictions are subject to stipulations
imposed by donors. Some donor-imposed restrictions are temporary in nature, such as those thateither expire with the passage of time or can be fulfilled and removed by actions of IIE pursuant tothose stipulations. When a donor restriction expires, that is, when a stipulated time restriction ends
or purpose restriction is met, net assets with donor restrictions are released to net assets without
donor restrictions and reported in the statement of activities as net assets released from restrictions.
Some donor-imposed restrictions are perpetual in nature that neither expire with the passage of

10

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
time nor can be fulfilled or otherwise removed by actions of IIE. These net assets include funds
which have been restricted by the donor to be held and invested in perpetuity and permit IIE to use
the income and gains for specified or unspecified purposes.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimatesand assumptions that affect the reported amounts of assets, liabilities, and related disclosures of contingent
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. On an ongoing basis, IIE evaluates its estimates, including those described below. IIE
bases its estimates on historical experience and on various other assumptions that IIE believes arereasonable under the circumstances. Actual results could differ from those estimates.
Revenues from Sponsored Programs
IIE receives funding from sponsored programs in the form of grants and contracts from various government
agencies, foundations, corporations, and other private sources. The funding may represent a reciprocaltransaction in exchange for an equivalent benefit in return, or it may be a nonreciprocal, non-exchangetransaction in which the funding provided is for the benefit of IIE or the public at large, in accomplishmentof the organization’s mission. A majority of IIE’s sponsored program revenues are from conditional, nonexchange transactions.
Revenues from non-exchange transactions are recorded as net assets without donor restrictions or net
assets with donor restrictions depending upon the existence and/or nature of donor restrictions. Revenues
from non-exchange transactions may also be subject to conditions, in the form of both a barrier toentitlement and a refund of amounts paid (or a release from obligation to make future payments). Revenues
from conditional, non-exchange transactions are recognized when the barrier is satisfied, which is generally
as costs are incurred. In addition, IIE has elected the simultaneous release option for conditional
contributions that are subject to purpose restrictions. Under this option, net assets without donor restrictions
include the donor-restricted contributions for which the purpose restrictions are met in the same reporting
period as the revenue is recognized. As of September 30, 2023 and 2022, IIE has unrecorded conditional
agreements of $373,969 and $301,150, respectively.
For exchange transactions, IIE’s performance obligations include administering programs and performing
other services (i.e., outreach) on behalf of the sponsors. There is a single performance obligation for eachcontract and the obligation is satisfied over time. The transaction price includes reimbursement for costreimbursable programmatic costs and fixed fees for administrative services. As a practical expedient, IIE
does not adjust the promised amount of consideration for the effects of a significant financing component
since the period between when IIE transfers a promised good or service to a customer and when thecustomer pays for that good or service is one year or less. Revenues from fixed fees are generally
recognized ratably over the contract term. Revenues associated with cost reimbursable expenses arerecognized as eligible costs are incurred. For the years ended September 30, 2023 and 2022, revenues
from exchange transactions included in sponsored programs revenue were $19,617 and $18,333,
respectively. The aggregate amount of the exchange transaction price allocated to performance obligations
that are partially unsatisfied as of September 30, 2023 and 2022 was $10,138 and $17,812, respectively.
Contributions Revenue
Revenues from non-exchange transactions that are considered unconditional generally are recognized asrevenues with donor restrictions when the grant funds are awarded and are released into net assets without
donor restrictions when the purpose has been met.

11

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
Contributions Receivable
Contributions to be received after one year are discounted at a rate commensurate with the risks involved.
Amortization of the discount is recorded as additional contribution revenue and used in accordance withdonor-imposed restrictions, if any, on the contributions.
Cash Equivalents
All highly liquid investments having an original maturity of 90 days or less at the time of purchase andmoney market funds are considered to be cash equivalents and reported at fair value. All short-term, highly
liquid investments, which would otherwise qualify as cash equivalents that are included in IIE’s investment
pool and are intended to be held for long-term purposes are treated as investments and are therefore
excluded from cash and cash equivalents in the statement of financial position and statement of cash flows.
Accounts Receivable on Sponsored Programs
To the extent of anticipated future payments for sponsor program revenues already recognized, accounts
receivable on sponsored programs, net of allowances for doubtful accounts, are reported in the statementof financial position. The allowance for doubtful accounts is determined by a review of account balances,including the age of the balance and historical collection experience. As of September 30, 2023 and 2022,
the allowance for doubtful accounts was $1,256 and $1,444, respectively.
Beneficial Interests in Perpetual Trusts Held by Third Parties
IIE is an income beneficiary of various trusts held by others in perpetuity. As a result, IIE has recorded, as
an asset, the net present value of the income estimated to be received from these trusts based upon
multiplying the fair value of the underlying assets by IIE’s ownership percentages.
Changes in fair value of IIE’s beneficial interests are recognized as gains or losses in the net assets withdonor restrictions. According to the original donors’ stipulations, distributions of net income from these trusts
are to be made to IIE and are to be spent for specified purposes. During the years ended September 2023
and 2022, IIE’s beneficial interests in perpetual trusts increased by $120 and decreased by $728,
respectively, with the changes included in net assets with donor restrictions.
Sponsored Funds Received in AdvanceCash received for sponsored program revenue not yet recognized is reported as sponsored funds received
in advance in the statement of financial position. If revenue is not earned for the total amount of the funds
received in advance, the remaining portion will be refunded to the sponsor upon the closeout of an award.
Retirement Benefits
Retirement benefits are available for substantially all employees through a 403(b) plan. IIE’s contributions
for the years ended September 30, 2023 and 2022 under the provisions of this defined contribution plan
totaled $3,704 and $3,413, respectively.
The Institute has an active 457(b) deferred compensation plan and an active 457(f) deferred compensation
plan, offered to select members of management. Employee contributions to the 457(b) plan are capped at
the annual Federal limit for deferred compensation. Employee contributions to the 457(f) plan are no longer
allowed. The assets related to both plans are included in prepaid expenses and other assets. As of
September 30, 2023, the 457(b) plan balance was $2,740 and the 457(f) plan balance was $103. As of
September 30, 2022, the 457(b) plan balance was $2,147 and the 457(f) plan balance was $97. The 457(b)plan assets primarily consist of money market funds and other marketable securities. The 457(f) plan assets

12Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
consist of a guaranteed annuity and an equity account invested in U.S. stocks. The assets of both plans
are considered Level 1 financial assets based on the fair value hierarchy described in Note 5. The liabilities
that relate to these plans are included in accounts payable and accrued expenses in the statements offinancial position.
Functional Allocation
The costs of providing IIE’s various programs and supporting activities have been summarized on afunctional basis in the accompanying statements of functional expenses. Certain costs have been allocatedamong the programs and supporting services benefited. “Grantee expenses” listed on the statements
include support expenditures such as tuition and grantee maintenance, and “Institute expenses” include allservices and operational costs (e.g., salaries, occupancy).
Investments
Marketable debt and equity security investments are carried at fair value, with unrealized gains and losses
reflected in changes in net assets. Fair values are principally based on quoted market prices as of thereporting date.
Limited liquidity investments are stated at estimated fair value. Limited liquidity investments are primarily
made under agreements to participate in limited partnerships and limited liability corporations which are
generally subject to certain withdrawal restrictions. These investments are valued on the basis of IIE’sequity in the net assets. Values for these investments may include financial interest in both nonmarketable
and market-traded securities, and may be based on appraisals, market values discounted for concentrationof ownership, or other estimates. Because of the inherent uncertainty of valuing these investments, as wellas the nature of the underlying investments, IIE’s estimate of fair value may differ significantly from thevalues that would have been used had a ready market for the investments existed. The financial statements
for these investment interests are audited annually by independent auditing firms. These investments may
be illiquid, and thus IIE may not be able to realize the value of such investments in a timely manner.
Fixed Assets
Fixed assets are recorded at cost. Depreciation is recognized over the estimated useful lives of the related
assets using the straight-line method, ranging from two (2) to thirty (30) years. Such estimates are based
upon management’s judgments of how long the assets will remain in service. Amortization of leasehold
improvements is computed using the straight-line method over the shorter of the remaining lease term or
the estimated useful lives of the improvements. Depreciation on fixed assets for the years ended
September 30, 2023 and 2022 was $2,462 and $3,371, respectively.
IIE periodically evaluates the estimated recoverability of its long-lived assets, annually or whenever eventsor changes in circumstances indicate that the carrying amount may not be recoverable. There were no
impairments of long-lived assets as of September 30, 2023 or 2022.
Indirect Costs
IIE recovers indirect costs by allocating such costs to specific programs administered by IIE. Indirect costs
are those costs incurred by common and joint objectives (or activities) and therefore, cannot be readily
assigned to a specific direct cost objective. Indirect costs include general and administrative and facility
costs. IIE allocates to and recovers these costs from federal programs at a rate negotiated with its cognizant
federal agency.

13

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
Taxes
The Institute is a not-for-profit organization exempt from federal income tax under Section 501(c)(3) of the
U.S. Internal Revenue Code. The Institute is not generally required to pay corporate income tax in mostjurisdictions in which it operates by virtue of, inter alia, IIE’s not-for-profit status and/or the status of its local
affiliate or representative offices. However, IIE pays payroll and use taxes in the normal course of businesswhere required, and some activities may be subject to sales and value added taxes in certain jurisdictions.
Accordingly, IIE pays or maintains appropriate provisions to account for such liabilities.
Leases
Effective October 1, 2021, the Institute adopted Financial Accounting Standards Board AccountingStandards Update (“ASU”) No. 2016-02, Leases (Topic 842), and all related amendments using themodified retrospective approach.
ASU No. 2016-02 requires lessees to recognize the assets and liabilities that arise from leases on thebalance sheet. At lease inception, leases are classified as either finance leases or operating leases withthe associated right-of-use (“ROU”) asset and lease liability measured at the net present value of futurelease payments. Operating leases are expensed on a straight-line basis as lease expense over the noncancelable lease term. Lease expense for finance leases is comprised of the amortization of the ROU asset
and interest expense recognized based on the effective interest method.
The Institute has made the following accounting policy elections with regard to its lease accounting:

The Institute does not separate lease and nonlease components for its real property class of assets.

When the rate implicit in the lease is not determinable, rather than use the Institute's incremental
borrowing rate, the Institute uses a risk-free discount rate for the initial and subsequent
measurement of lease liabilities for all asset classes.



The Institute does not apply the recognition requirements to all leases with an original term of
12 months or less, for which the Institute is not likely to exercise a renewal option or purchase theasset at the end of the lease; rather, short-term leases will continue to be recorded on a straightline basis over the lease term.

Additional lease disclosures are contained in Note 11.
Reclassifications
Certain prior period amounts have been reclassified in order to conform to the 2023 presentation. Such
reclassifications did not change total assets, liabilities, revenues, expenses, or changes in net assets asreflected in the 2022 financial statements.

14

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
NOTE 3 - CONTRIBUTIONS RECEIVABLE
As of September 30, 2023 and 2022, contributions receivable, net, were due in the following periods:
2022

2023
In one year or less
Between one year and four years

$

2,123
873

$

3,719
946

2,996

4,665

(49)

(59)

Less:
Present value discountNet amount

$

2,947

$

4,606

NOTE 4 - LIQUIDITY AND AVAILABILITY OF FINANCIAL RESOURCES
IIE’s financial assets and resources available to meet cash needs for general expenditures within one yearof the date of the statement of financial position were as follows:2023
Financial assets:
Cash and cash equivalents
Accounts receivable on sponsored programs, net
Contributions receivable due within one year
Undesignated investments$

Total financial assets available within one year
Liquidity resources:
Bank line of credit (undrawn)
Total financial assets and resources available within
one year$

2022

77,142
52,4152,123
35,261$

71,05551,0173,719
33,007

166,941

158,798-

10,000166,941$

168,798

As part of IIE’s liquidity management strategy, IIE structures its financial assets to be available as general
expenditures, liabilities including debt service, and other obligations come due. Cash withdrawals from theinvestment pool align with IIE’s spending policy but may be adjusted periodically based on the timing ofgifts received, income and capital distributions, operating expenses and other factors affecting available
cash. To meet potential liquidity needs, IIE also had a committed bank line of credit which totaled $10,000
as of September 30, 2022. This line of credit was closed on September 29, 2023. On November 29, 2023,
IIE secured a new line of credit of $10,000. It is available from November 29, 2023 to November 30, 2024.
IIE also has board-designated endowment funds of $105,215 and $93,247 as of September 30, 2023 and2022, respectively. IIE does not intend to spend from its board-designated endowment funds other thanamounts appropriated for expenditure as part of its annual budget approval process; however, amounts
from its board-designated endowment could be made available upon approval of the Board, if necessary.

15

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
NOTE 5 - FINANCIAL INSTRUMENTS
IIE follows guidance with respect to accounting and reporting for the fair value of financial assets andliabilities. This guidance establishes a fair value hierarchy for those instruments measured at fair value that
distinguishes between assumptions based on market data (observable inputs) and IIE’s own assumptions(unobservable inputs). The hierarchy consists of three levels as noted below:
Level 1 - Quoted prices are available in active markets for identical investments as of the reporting
date, without adjustment. The type of investments in Level 1 includes listed equities held in
the name of IIE and excludes listed equities and other securities held indirectly throughcommingled funds.
Level 2 - Pricing inputs, including broker quotes, are generally those other than exchange quoted
prices in active markets, which are either directly or indirectly observable as of the reporting
date, and fair value is determined by using models or other valuation methodologies.
Level 3 - Pricing inputs are unobservable for the investment and include situations where there is little,
if any, market activity for the investment. Investments that are included in this category
generally include privately held investments and securities held in partnership format.
Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The
three techniques are as follows:
Market Approach
Prices and other relevant information generated by market transactions involving identical or comparable
assets or liabilities;
Cost Approach
Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and,
Income Approach
Techniques to convert future amounts to a single present amount based on market expectations (including
present value techniques).
IIE adopted the accounting concept under GAAP to utilize the net asset value (NAV) as the “practical
expedient” for measuring and reporting fair value. The practical expedient is an acceptable method under
GAAP to determine the fair value of investments reported at net asset value from the respective generalpartners (a) that do not have a readily determinable fair value predicated upon a public market and (b) either
have the attributes of an investment company or prepare their financial statements consistent with themeasurement principles of an investment company under GAAP.
The methods described above may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, while IIE believes its valuation methods areappropriate and consistent with other market participants, the use of different methodologies orassumptions to determine the fair value of certain financial instruments could result in a different estimateof fair value at the reporting date.

16

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
The following table summarizes the valuation of IIE’s investments measured on a recurring basis by caption
and by level within the valuation hierarchy as of September 30 of the respective year:2023
Level 2
Other
Significant
Observable
InputsLevel 1
QuotedPrice in
Active Markets
Short term investments
Equity securities:
US
International
Commodities
Debt securities:
Bond funds$

Sub-total

17$

Level 3Significant
Unobservable
Inputs
-

$

-

Total
$

80,20255,8781,223--

80,20255,8781,223

47,706--47,706

185,026--

185,026

Investments measured at net
asset value

27,108

Total investments
Beneficial interest in perpetual trusts
Total

17

$

185,026--

212,134

-

-

2,947

2,947

185,026

$

-

$

2,947

$

215,0812022
Level 2
Other
Significant
Observable
InputsLevel 1
QuotedPrice in
Active Markets
Short term investments
Equity securities:
US
International
Commodities
Debt securities:
Bond funds$

Sub-total

17$

Level 3Significant
Unobservable
Inputs
-

$

-

Total
$

70,94446,8101,389--

70,94446,8101,389

49,017--49,017

168,177--

168,177

Investments measured at net
asset value

20,565

Total investments
Beneficial interest in perpetual trusts
Total

17

$

168,177--

188,742

-

-

2,827

2,827

168,177

17

$

-

$

2,827

$

191,569

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
IIE’s assets with a fair value estimate using net asset value per share as a basis as of September 30, 2023
and 2022 are as follows:

Fund Strategy

Equity-oriented

# of
Funds

6

NAV

$

9,162

UnfundedCommitments$

2023
Redemption
Frequency

15,413

Quarterly

Redemption
Notice Period

60 days

For four funds,
redemptions are generally
not permitted or at thediscretion of the generalpartner. One fund has agate that triggers at 25%
of investor-level NAV per
redemption.
For one fund,redemptions are notpermitted. Two funds
have gates that trigger
between 25-50% ofinvestor-level NAV per
redemption. Two funds
have gates that trigger
between 10-15% of fundlevel NAV per
redemption.

Multi-strategy

616,392

6,650

Quarterly –Annually

60 – 120 days

Credit-oriented

2

1,554

3,947

N/A

N/A

Total

14

$ 27,108Fund Strategy

# of
Funds

2022
Redemption
Frequency

Redemption
Notice Period

Equity-oriented

4

NAV

$

6,940

Multi-strategy

513,625Total

9$ 20,565

$

8,100

5,000

$

For the two funds,
redemptions are notpermitted.

26,010UnfundedCommitments$

Redemption Restrictions

Quarterly

Quarterly Annually

13,10018

Redemption Restrictions

60 days

For two funds, redemptions
are generally not permitted
or at the discretion of thegeneral partner. For one
fund, redemptions are
subject to a 1-year lock-up
expiring in December
2022. One fund has a gatethat triggers at 25% ofinvestor-level NAV per
redemption.

65 - 120 days

For one fund, redemptions
are not permitted. One
fund has a gate thattriggers at 25% of investorlevel NAV per redemption.
Two funds have gates thattrigger between 10-15% of
fund-level NAV per
redemption.

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
NOTE 6 - FIXED ASSETS, NET
Fixed assets, net, consist of the following categories as of September 30:
Estimated
Useful Lives
Furniture
Equipment
Software development costs
Leasehold improvements

7 Years
2-4 Years
3-7 Years
3-25 Years

2023$

Total costs of fixed assets
Less: accumulated depreciation$

Total fixed assets, net

1,810
5,393
22,509
8,668

2022
$

96
5,688
23,2807,808

38,38036,872(24,350)(23,148)

14,030$13,724NOTE 7 - NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions are restricted for the following purposes as of September 30, 2023 and
2022:
2023
Subject to expenditure for specific purpose:
International exchange of students and scholars
Leadership development educational services
Higher education institutional development
Emergency student and scholar assistanceFundraising
Endowment net assets
Total net assets with donor restrictions

2022

$

6,909
1,550
8,099
(15)
71,400

$

7,756
770
6
9,703
561
62,215$87,943$81,011NOTE 8 - NET ASSETS RELEASED FROM RESTRICTIONS
Net assets released from restrictions for the years ended September 30, 2023 and 2022 were as follows:
2023
Purpose restrictions accomplished:
International exchange of students and scholars
Leadership development educational services
Higher education institutional development
Emergency student and scholar assistanceFundraising
Release of appropriated endowment net assets with purpose
restrictions
Total net assets released from restrictions

19

$

2,450
660
5,641
576

2022
$

2,747
$

12,074

2,575
786
(49)
5,318
432
3,107

$

12,169

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
NOTE 9 - ENDOWMENT NET ASSETS
In managing its endowment net assets, IIE adheres to the standard of prudence prescribed by the New
York Prudent Management of Institutional Funds Act (“NYPMIFA”) and considers the following factors prior
to appropriating for expenditure endowment net assets:
 The duration and preservation of the endowment fund; The purposes of IIE and its endowment fund; General economic conditions; The possible effect of inflation or deflation; The expected total return from income and the appreciation of investments;
 Other resources of IIE;
 Alternatives to expenditure of the endowment fund; and,
 The investment policy of IIE.
The policy governing the investment of IIE’s endowment includes two objectives: (1) provide a reasonable
and prudent level of currently expendable income in accordance with the spending policy set by the Boardof Trustees (4.5% of the endowment’s moving average fair value over the prior 36 months as of
September 30 of the preceding fiscal year in which distribution is planned, unless otherwise specified by adonor); and (2) support IIE and its mission over the long term by maintaining future growth of theendowment. Under this policy, the endowment assets are invested in a manner that is intended to produce
a return, net of inflation and investment management costs. Actual returns in any given year may vary fromthis amount.
To satisfy its long-term rate-of-return objectives, IIE relies on a total return strategy in which investment
returns are achieved through both capital appreciation (realized and unrealized) and current yield (interestand dividends). IIE targets a diversified asset allocation to achieve its long-term objective within prudent
risk constraints.
In accordance with current New York State law, IIE is required to preserve the fair value of the original gift
as of the gift date for any gifts that are required to be maintained in perpetuity in accordance with thedirection of the applicable donor gift instrument. For these gifts, IIE retains in perpetuity and classifies as
net assets with donor restrictions (a) the original value of initial and subsequent gift amounts donated to thefund and (b) any accumulations to the fund that are required to be maintained in perpetuity in accordancewith the direction of the applicable donor gift instrument. Gift amounts required to be held in perpetuity were
$6,917 and $5,791 as of September 30, 2023 and 2022, respectively.
The remaining portion of the donor-restricted endowment funds that is not required to be held in perpetuity
is classified as net assets with donor restrictions until those amounts are appropriated for expenditure by
IIE in a manner consistent with the standard of prudence prescribed by law, at which time, those amounts
are reclassified to net assets without donor restrictions. When donor-restricted endowment fund deficits
exist, in the case of underwater endowments, they are classified as a reduction of net assets with donor
restrictions. IIE has interpreted NYPMIFA to permit spending from endowments with a deficit in accordancewith prudent measures required under law. There were no underwater endowment funds as of
September 30, 2023 and 2022.

20

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
As of September 30, 2023, endowment net asset composition by type of fund and purpose consisted of thefollowing:With Donor
Restrictions

Without Donor
Restrictions
Donor-restricted endowment funds:
Scholarships and professional development
Scholar Rescue Fund
Fulbright Legacy Fund
Board-designated endowment funds:
IIE Initiatives Fund
Fulbright Legacy Fund
Scholar Rescue Fund
Gilman Impact and Innovation Fund
IIE's Children of Employee Program
Andrew Heiskell Endowment

$

-

$

17,90943,317
10,17479,566
13,731
8,155
2,910
534
319

Total

$

105,215

Total

$

$

71,40017,90943,317
10,17479,566
13,731
8,155
2,910
534
319

$

176,615

As of September 30, 2022, endowment net asset composition by type of fund and purpose consisted of thefollowing:With Donor
Restrictions

Without Donor
Restrictions
Donor-restricted endowment funds:
Scholarships and professional development
Scholar Rescue Fund
Fulbright Legacy Fund
Board-designated endowment funds:
IIE Initiatives Fund
Fulbright Legacy Fund
Scholar Rescue Fund
Gilman Impact and Innovation Fund
IIE's Children of Employee Program
Andrew Heiskell Endowment
Total

$

-

$

13,77039,307
9,138

70,3207,139
12,435
2,578
480
295
$

93,247

Total$$

62,215

13,77039,307
9,138
70,3207,139
12,435
2,578
480
295

$

155,462

Changes in endowment net assets for the years ended September 30, 2023 and 2022 consist of thefollowing:
Without Donor
Restrictions
Endowment net assets at September 30, 2021
Investment loss
Contributions
Appropriation of endowment assets for expenditure$

Endowment net assets at September 30, 2022
Investment gainContributions
Appropriation of endowment assets for expenditure
Endowment net assets at September 30, 2023

108,698(19,899)
6,001(1,553)

With Donor
Restrictions$

93,247
13,75652(1,840)$21

105,215

74,420(12,337)
3,239(3,107)

Total$

62,215
8,852
3,080(2,747)$

71,400183,118(32,236)
9,240(4,660)155,462
22,6083,132(4,587)$

176,615

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
NOTE 10 - SPONSORED PROGRAMS REVENUE
Sponsored programs revenue for the years ended September 30, 2023 and 2022 was derived from thefollowing major sponsor categories:
2022

2023
U.S. government agencies
Foundations and research organizations
Corporations
Foreign governments and international organizations$

239,134
64,506
4,052
17,958$233,493
48,797
4,835
17,239Total sponsored programs revenue$

325,650$

304,364

NOTE 11 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The Institute has real property leases for office space in the jurisdictions in which it operates. These leases
have original terms ranging from one year to approximately 20 years. Certain leases have available renewal
options, extending the terms of the underlying leases by between one and five years. Certain of theInstitute’s real property leases require monthly payments for variable operating expenses, which include
real estate taxes, insurance and other operating costs.
ROU assets represent the Institute's right to use an underlying asset for the lease term, while lease liabilities
represent the Institute's obligation to make lease payments arising from the lease. ROU assets and leaseliabilities are recognized at the commencement date of a lease based on the net present value of lease
payments over the lease term.
Certain of the Institute's leases include options to renew the lease. The exercise of lease renewal optionsis at the Institute's sole discretion. The Institute regularly evaluates the renewal options and when they arereasonably certain of exercise, the Institute includes such options in the lease term.
In determining the discount rate used to measure the ROU assets and lease liabilities, the Institute uses
the rate implicit in the lease, or if not readily available, the Institute uses a risk-free rate based on a U.S.
Treasury note or bond rate for a similar term.
ROU assets are assessed for impairment in accordance with the Institute's long-lived asset policy. The
Institute reassesses lease classification and remeasures ROU assets and lease liabilities when a lease ismodified and that modification is not accounted for as a separate new lease or upon certain other events
that require reassessment in accordance with Topic 842.
The Institute makes significant assumptions and judgments in evaluating its leases. In particular, theInstitute: Evaluated whether a contract contains a lease, by considering factors such as whether the Instituteobtained substantially all rights to control an identifiable underlying asset and whether the lessor has
substantive substitution rights; and,
 Determined whether contracts contain embedded leases.

22

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
The Institute does not have any material leasing transactions with related parties.
The following table summarizes the operating lease ROU assets and operating lease liabilities as of
September 30:
2022

2023
$

Operating lease ROU assets, net
Operating lease liabilities:
Current
Long-term

56,237$2,233
62,829$Total operating lease liabilities

65,06237,317
2,631
41,347$43,978Below is a summary of expenses incurred pertaining to leases for the years ended September 30:
2023
Operating lease expense
Short-term lease expense
Variable lease expense
Total operating lease expense

2022

$

5,549
164
166

$

5,468
121
261

$

5,879

$

5,850

The ROU assets and lease liabilities were calculated using a weighted average discount rate of 2.83% and1.95% as of September 30, 2023 and 2022, respectively. As of September 30, 2023 and 2022, the weighted
average remaining lease term was 16.39 and 16.32 years, respectively.
The table below summarizes IIE’s scheduled future minimum lease payments for years ending after
September 30, 2023:
Years Ending September 30:
2024
2025
2026
2027
2028
Thereafter$

Total lease payments

3,040
3,453
4,841
4,812
4,743
62,45883,347

Less: present value discount(18,285)

Total lease liabilities

65,062(2,233)

Less: current portion$Long-term lease liabilities

23

62,829

Institute of International Education, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2023 and 2022
(in thousands)
Other Commitments and Contingencies
From time to time, IIE is involved in litigation concerning its business affairs. As of September 30, 2023, IIE
was not facing any pending litigation.
IIE engages in activities which are subject to governmental audit from time to time. The ultimate outcomeof such audits could result in amounts due to government agencies, which expenses would be absorbed
by IIE. In IIE’s opinion, such amounts, if any, would not have a material effect on IIE’s financial condition,changes in net assets, or cash flows.
NOTE 12 - SUBSEQUENT EVENTSIIE has performed a review of events subsequent to the statement of financial position date through thedate on which the financial statements were available to be issued and determined that there were no
additional events requiring recognition or disclosure in the financial statements.

24