Financial Statements Together with
Report of Independent Certified Public Accountants
GREEK ORTHODOX ARCHDIOCESE OF AMERICA
December 31, 2008 and 2007

GREEK ORTHODOX ARCHDIOCESE OF AMERICATABLE OF CONTENTS

Page(s)Report of Independent Certified Public Accountants

1

Financial Statements:
Statements of Financial Position as of December 31, 2008 and 2007

2

Statements of Activities for the years ended December 31, 2008 and 2007

3

Statements of Cash Flows for the years ended December 31, 2008 and 2007

4

Notes to Financial Statements

5 - 20Audit  Tax  Advisory
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To His Eminence Archbishop Demetrios of America
and the Members of the Archdiocesan Council of the
Greek Orthodox Archdiocese of America:
We have audited the accompanying statements of financial position of the Greek Orthodox Archdiocese of
America (the “Archdiocese”) as of December 31, 2008 and 2007, and the related statements of activities
and cash flows for the years then ended. These financial statements are the responsibility of theArchdiocese’s management. Our responsibility is to express an opinion on these financial statements basedon our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica established by the American Institute of Certified Public Accountants. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Archdiocese’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As explained in Note 1, the financial statements presented are only for the Archdiocese as referred to above
and do not include the financial position, changes in net assets and cash flows of any affiliates of theArchdiocese. Accordingly, the accompanying financial statements are not intended to present the combined
financial position of the Archdiocese and affiliates as of December 31, 2008 and 2007, or the changes intheir combined net assets, or their combined cash flows for the years then ended.
In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the Greek Orthodox Archdiocese of America as of December 31, 2008 and 2007, andthe changes in its net assets and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

New York, New York
July 31, 2012
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Statements of Financial Position
As of December 31, 2008 and 2007

2007

2008

ASSETSCash and cash equivalents
Investments, at fair value
Inventory
Due from related entities, net of allowance for doubtful accounts of$1,210,738 and $1,138,903 at December 31, 2008 and 2007, respectively
Miscellaneous receivables and other assets
Deferred expenses
Prepaid expenses
Land, buildings and equipment, net
Beneficial interest in trust held by others
Investments held for others
Total assets$

1,808,992
11,419,856
682,149$

4,716,386
14,797,005
726,952

382,243
162,435
23,0393,188,865
294,927
5,146,111$ 23,108,617

362,479
71,47562,401
14,9562,898,792
367,952
4,724,155$ 28,742,553$$

LIABILITIES AND NET ASSETSLIABILITIES
Accounts payable and accrued expenses
Deferred revenue
Grants payable
Line of credit
Other accrued retirement benefits
Due to related entities
Custody funds held for others
Total liabilities

4,850,626
2,267
350,000
1,974,674
1,472,737
72,541
5,146,111
13,868,956

4,896,818
8,107
1,974,674
1,528,461
37,925
4,724,155
13,170,140

Commitments and contingencies
NET (DEFICIT) ASSETS
Unrestricted
Temporarily restricted
Permanently restricted
Total net assets
Total liabilities and net assets

The accompanying notes are an integral part of these statements.
-2-(1,048,022)
8,002,313
2,285,370
9,239,661

1,293,498
11,929,672
2,349,243
15,572,413$ 23,108,617$ 28,742,553

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Statements of Activities
For the years ended December 31, 2008 and 2007

2008
Temporarily
Restricted

Unrestricted
REVENUES AND OTHER SUPPORT
Total commitment
Contributions and grants
Leadership 100 grants
Faith Endowment grant
Ministries, publications and registry
Department of Religious Education – sales
Department of Religious Education – other
Other income
Investment (loss) income
Change in fair value of beneficial interest in trust held by others
Gain on sale of fixed assets
Clergy Laity conference$

16,785,974
3,990,887
1,487,693
556,93138,08331,606(1,074,553)
980,527$458,943849,300
750,000(822,855)-

2007
Permanently
Restricted

$

5,000
4,152
(73,025)-

15,042,948
7,795,845
1,683,453
492,579
21,246
20,314804,4872,774,479-$

2,954,603
1,079,835
500,000
179,716
-

$

5,000
6,176
11,169-$15,042,948
10,755,448
1,079,835
500,000
1,683,453
492,579
21,246
20,314990,379
11,1692,774,479-

23,968,663

30,010,294

3,339,211

22,34533,371,850-

5,016,551
4,938,058
1,404,675
3,691,068
3,203,909
2,252,748
1,280,026

4,045,476
5,390,411
1,308,542
671,500
2,624,413
1,859,986---

4,045,476
5,390,411
1,308,542
671,500
2,624,413
1,859,986---

635,804

449,122--449,122

22,422,839--

22,422,839

16,349,450--

16,349,450

27,959,895(3,927,359)(63,873)

5,016,551
4,938,058
1,404,675
3,691,068
3,203,909
2,252,748
1,280,026-

Retirement and clergy benefit expenses

635,804

Total program services
Fundraising

$

Total

-

-

EXPENSES
Program services:
Education
Metropolis ministries
Orthodoxy in the World
Affiliate distributions
Communications
Community services
Clergy Laity conference

16,785,974
4,454,830
849,300
750,000
1,487,693
556,93138,08331,606(1,893,256)(73,025)
980,527

Permanently
Restricted(1,374,943)(5,162,747)

Total revenues and other support$

Unrestricted1,374,943

5,162,747

Net assets released from restrictions

Total

Temporarily
Restricted--

197,944--

197,944431,964--

431,964

7,680,632--

7,680,632

6,540,182--

6,540,182

Total expenses

30,301,415--

30,301,415

23,321,596--

23,321,596

Changes in net assets(2,341,520)(3,927,359)(63,873)(6,332,752)

6,688,698

3,339,211

22,345

10,050,254

General and administrative expenses

Net (deficit) assets, beginning of year
Net (deficit) assets, end of year

1,293,498$(1,048,022)

11,929,672$

8,002,313

2,349,243$

2,285,370

The accompanying notes are an integral part of these statements.
-3-

15,572,413$

9,239,661(5,395,200)$

1,293,498

8,590,461$

11,929,672

5,522,159

2,326,898$

2,349,243$

15,572,413

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Statements of Cash Flows
For the years ended December 31, 2008 and 2007

CASH FLOWS FROM OPERATING ACTIVITIES
Changes in net assets
Adjustments to reconcile changes in net assets to net cash used in (provided by)operating activities:
Depreciation
Contributions restricted for endowment
Net depreciation (appreciation) in fair value of investments
Change in fair value of beneficial interest in trust held by others
Gain on sale of fixed assets
Changes in assets and liabilities:
Inventory
Due from related entities
Miscellaneous receivables and other assets
Deferred expenses
Prepaid expenses
Accounts payable and accrued expenses
Deferred revenue
Grants payable
Due to related entities
Other accrued retirement benefits
Net cash used in (provided by) operating activities$

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments
Proceeds from sales and maturities of investments
Purchases of fixed assets
Proceeds from sale of fixed assets
Net cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIESContributions restricted for endowment
Principal payments on notes payable
Net cash provided by (used in) financing activities
Net (decrease) increase in cash and cash equivalents

2008

2007

(6,332,752)$ 10,050,254

207,024(5,000)2,330,866
73,025-

222,340(5,000)(411,119)(11,169)(2,774,479)

44,803(19,764)(90,960)
62,401(8,083)(46,192)(5,840)350,000
34,616(55,724)(3,461,580)(56,625)(49,288)(1,227)(60,966)
3,270(1,881,175)
2,824(1,576,151)
956
752,068
4,204,513(16,999,570)
18,045,853(497,097)
549,186(10,819,873)
10,128,606(263,832)
2,825,406
1,870,307

5,000
5,000

5,000
(2,701,584)(2,696,584)(2,907,394)

3,378,236$

1,338,150
4,716,386$

256,728

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

4,716,386
1,808,992

Supplemental disclosure of cash flow information:
Cash paid for interest$

121,685

The accompanying notes are an integral part of these statements.
-4-

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

1.

ORGANIZATION AND NATURE OF ACTIVITIESThe Greek Orthodox Archdiocese of America (the “Archdiocese”) is the administrative body of the Greek
Orthodox Church in America. The Archdiocese relies primarily on funding from its parishes locatedthroughout the United States.
The Archdiocese is exempt from Federal income taxes under Section 501(c)(3) of the Internal Revenue
Code and similar state and local provisions. Therefore, no provision for income taxes has been made in theaccompanying financial statements. In addition, the Archdiocese has not been determined to be a private
foundation within the meaning of Section 509(a) of the Internal Revenue Code.
The Archdiocese is related to a number of other entities by virtue of its charter with the Ecumenical
Patriarchate, and by common board membership. The accompanying financial statements do not include
the financial position, changes in net assets and cash flows of the following affiliated organizations:
•
•
•
•
•
•
•
•
•
•

2.

Holy Metropolises of Atlanta, Boston, Chicago, Denver, Detroit, New Jersey, Pittsburgh and San
FranciscoHellenic College, Inc.
The Cathedral School
Greek Orthodox Archdiocesan Cathedral of the Holy Trinity (“Cathedral”)
Saint Basil Academy
Greek Ladies Philoptochos Society, Inc.
St. Michael’s Home, Inc.
Order of Saint Andrew the Apostle Archons of the Ecumenical Patriarchate
The Archbishop Iakovos Leadership 100 Endowment Fund, Inc.
FAITH: An Endowment for Orthodoxy & Hellenism

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America using the accrual basis of accounting.
Classifications of Net Assets
The net assets of the Archdiocese and changes therein are classified and reported based upon the existenceor absence of donor-imposed restrictions as follows:•

Unrestricted – Net assets that are not subject to donor-imposed stipulations and that may be expended
for any purpose in performing the primary objectives of the Archdiocese. Included withinunrestricted net assets is a board designated fund, the Cathedral Fund, that was designated byArchbishop Iakovos, to be used, upon approval, for the benefit of the Greek Orthodox Archdiocesan
Cathedral of the Holy Trinity (“Cathedral”) and Cathedral-related projects. As of December 31, 2008
and 2007, the Cathedral Fund was $2,957,588 and $2,994,999, respectively, and is included as part of
the Archdiocese’s investments in the accompanying statements of financial position.

-5-

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

Temporarily Restricted – Net assets resulting from contributions and other inflows of assets whose
use by the Archdiocese is limited by donor-imposed stipulations that either expire by the passage oftime or can be fulfilled and removed by the actions of the Archdiocese pursuant to those stipulations.
When such stipulations end or are fulfilled, such temporarily restricted net assets are reclassified tounrestricted net assets and reported in the accompanying statements of activities.
Permanently Restricted – Net assets resulting from contributions whereby the principal has been
restricted by the donor to be held and invested in perpetuity and the income used in accordance withthe donor’s stipulations, if any.
Cash and Cash Equivalents
The Archdiocese considers all highly liquid investments with original maturities of three months or lessfrom the date of purchase to be cash and cash equivalents, except for those cash equivalents which areincluded in the Archdiocese’s investment portfolio which are held for long-term investment purposes.
Investments
Investments in equity securities with readily determinable fair values are reported at fair value based onquoted market prices. Investments in debt securities are measured using quoted market prices whereavailable. If quoted market prices for debt securities are not available, the fair value is determined using an
income approach valuation technique that considers, among other things, rates currently observed inpublicly traded markets for debt with similar terms to companies with comparable credit risk, the issuer’s
credit spread, and illiquidity by sector and maturity. All investments are managed by outside investment
advisors subject to the review, approval, and control by the Archdiocese. Such valuations involve
assumptions and methods that are reviewed by the Archdiocese.
Purchases and sales of securities are reflected on a trade-date basis. Gains and losses on sales of securities
are determined based on average cost and are recorded in the statement of activities in the period in which
the securities are sold. Dividends and interest are recognized as earned. Contributed investments are valued
at their fair market value on the date received.
Investment securities, in general, are exposed to various risks, such as interest rate, credit and overallmarket volatility. Due to the level of risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in the near term and such changes
could materially affect the amounts reported in the accompanying financial statements.
Fair Value Measurements
Effective January 1, 2008, the Archdiocese adopted guidance that defines fair value, establishes aframework for measuring fair value, establishes a fair value hierarchy based on the inputs used to measurefair value and enhances disclosure requirements for fair value measurements. This guidance maximizes theuse of observable inputs and minimizes the use of unobservable inputs by requiring that the observable
inputs be used when available.

-6-GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

Observable inputs are inputs that market participants would use in pricing the asset or liability based onmarket data obtained from independent sources. Unobservable inputs reflect assumptions that market
participants would use in pricing the asset or liability based on the best information available in thecircumstances. The hierarchy is broken down into three levels based on the transparency of inputs asfollows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of themeasurement date. A quoted price for an identical asset or liability in an active market provides the mostreliable fair value measurement because it is directly observable to the market.
Level 2 - Pricing inputs other than quoted prices in active markets, which are either directly or indirectly
observable as of the measurement date. The nature of these securities include investments for whichquoted prices are available but traded less frequently and investments that are fair valued using othersecurities, the parameters of which can be directly observed.
Level 3 - Securities that have little to no pricing observability as of the measurement date. These
securities are measured using management’s best estimate of fair value, where the inputs into thedetermination of fair value are not observable and require significant management judgment or
estimation.
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions thatmarket participants use to make valuation decisions, including assumptions about risk. Inputs may include
price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A
financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that issignificant to the fair value measurement. However, the determination of what constitutes “observable”
requires significant judgment by the Archdiocese. The Archdiocese considers observable data to be thatmarket data that is readily available, regularly distributed or updated, reliable and verifiable, notproprietary, and provided by independent sources that are actively involved in the relevant market. The
categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the
instrument and does not necessarily correspond to the Archdiocese’s perceived risk of that instrument.
Inventory
Inventory is valued at the lower of cost or market. Such inventory consists primarily religious books,
publications and other program-related literature and materials.
Receivables
Due to the uncertainty surrounding collection, management provides an allowance for doubtful accounts
based on the consideration of the type of receivable, responsible party, the known financial condition of therespective party, historical collection patterns and comparative aging. These allowances are maintained at alevel management considers adequate to provide for subsequent adjustments and potential uncollectible-7-

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

accounts. These estimates are reviewed periodically and, if the financial condition of a party changes
significantly, management will evaluate the recoverability of any receivables from that organization andwrite off any amounts that are no longer considered to be recoverable. Any payments subsequently
collected on such receivables are recorded as income in the period received.
Land, Buildings and Equipment, Net
Land, buildings and equipment, net are recorded at cost or, if donated, at fair market value, at the date of thegift, less accumulated depreciation. The Archdiocese capitalizes land, buildings and equipment costing$1,000 or more, which have a useful life of more than one year. Depreciation is calculated on a straightline basis over the estimated useful lives of the related assets, ranging from 3 to 50 years. Works of art are
not depreciated.
Due To/From Related Entities
Amounts due to/from related entities represent amounts loaned to/from and or expenses paid on behalf ofArchdiocesan affiliates.
Beneficial Interest in Trust Held by Others
The Archdiocese is the beneficiary of a perpetual trust whereby the donor contributed assets to a third-party
trustee. The trustee distributes investment income annually to the Archdiocese and the other named
beneficiaries in the percentages specified in the trust documents. These distributions are reported as anincrease in unrestricted net assets.
The Archdiocese values the trust at its fair value, which is represented by the percentage ownership of theassets in the trust. Changes in the fair value of the trust’s assets are reported in the accompanying
statements of activities as increases (decreases) in permanently restricted net assets.
Investments Held for Others
The Archdiocese holds investments on behalf of others to be distributed in accordance with their direction.
As these funds cannot be used or directed by the Archdiocese, a corresponding liability is recorded for thevalue of these investments and any unrealized gain or loss on these investments is recognized as an increasein the investments and an increase in the custody funds held for others liability.
Grants Payable
Grants payable represent unconditional promises to give that are expected to be paid within one year.
Conditional Asset Retirement Obligation
Asset retirement obligations include, but are not limited to, certain types of environmental issues that arelegally required for remediation upon an asset’s retirement as well as contractually required asset retirement
obligations. Conditional asset retirement obligations (“CARO”) are legal obligations associated with theretirement of tangible long-lived assets in which the timing and/or method of settlement is conditional on a-8-

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

future event that may or may not be within the control of the entity. An entity is required to recognize aliability for the fair value of a conditional asset retirement obligation if the fair value of the liability can bereasonably estimated, even if conditional on a future event. The Archdiocese has conditional asset
retirement obligations primarily associated with the eventual remediation and abatement of asbestos locatedwithin the construct of their administration buildings. As of December 31, 2008 and 2007, the Archdiocese
recorded a CARO of approximately $32,000 for both years.
Contributions and Grants
The Archdiocese records contributions of cash and other assets when an unconditional promise to give such
assets is received from a donor. Contributions are recorded at the fair value of the assets received and areclassified as either unrestricted, temporarily restricted or permanently restricted, depending on whether thedonor has imposed a restriction on the use of such assets.
Contributions not expected to be received within one year are recognized as temporarily restricted support
and are discounted using a credit-adjusted discount rate assigned in the year the pledge originates.
Amortization of the discount is recorded as additional contribution revenue in accordance with the donorimposed restrictions, if any, on the contributions.
Contributions are reported as an increase in unrestricted net assets unless use of the related assets is limitedby donor-imposed restrictions. Contributions that are permanently restricted by donors for use as
endowments are invested in perpetuity. The income is used for operating purposes when expendituressatisfy the donors’ restrictions and such amounts are appropriated for expenditure by the ArchdiocesanCouncil. Income amounts that exceed related expenditures during a fiscal period remain as temporarily
restricted net assets.
The Archdiocese reports gifts of property, plant and equipment as unrestricted support unless explicit donor
stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit
restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used toacquire assets are reported as restricted support. Absent explicit donor stipulations about how long such
assets must be maintained, the Archdiocese reports expirations of donor restrictions when the donated or
acquired long-lived assets are placed in service.
Total Commitment
Every parish with the Archdiocese is given a suggested annual financial assessment to help support themission of the Church. Due to the uncertainty of collection, such assessments are recognized as revenue inthe period they are received.

-9-GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

Other Revenue
The Archdiocese generates revenue from programs and the sales of religious books, publications and otherprogram related literature and materials. Such income is recorded in the period the services are performed
or upon the date of sale. Clergy Laity conference income is earned in the period which the conference takes
place.
Functional Allocation of Expenses
Costs related to the various programs and activities of the Archdiocese have been summarized on afunctional basis in the accompanying statements of activities.
Concentration of Credit Risk
Financial instruments that potentially subject the Archdiocese to concentrations of credit and market risk
consist principally of cash and cash equivalents and investments on deposit with financial institutions,which from time to time may exceed the Federal Deposit Insurance Corporation (“FDIC”) limit.
Management does not believe that a significant risk of loss due to the failure of a financial institution theArchdiocese utilizes is likely.
Fair Value of Financial Instruments
The carrying value of cash, cash equivalents, receivables, prepaid expenses and other assets, line of credit
and accounts payable and accrued expenses is a reasonable estimate of their fair value due to their shortterm nature. The carrying value of the Archdiocese’s beneficial interest in trusts held by others is estimatedbased on the present value of expected future cash flows, and thus approximates fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
New Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board (“FASB”) issued guidance which establishes thecriterion that an individual tax position has to meet for some or all the benefits of that position to berecognized in an entity’s financial statements. The cumulative effect of applying this guidance will bereported as an adjustment to net assets at the beginning of the period in which it is adopted, if an adjustment
is concluded to be necessary. The effective date of adopting this guidance for non-public entities was-10-GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

deferred until fiscal years beginning after December 15, 2008. As a non-public entity, the Archdiocese has
elected to defer the adoption and is currently assessing the impact, if any, it will have on its financial
statements. The Archdiocese has processes presently in place to ensure the maintenance of its tax-exempt
status; to identify and report unrelated income; and to assess other matters that may be considered tax
positions. Accordingly, a loss contingency is recognized when it is probable that a liability has been
incurred as of the date of the financial statements and the amount of the loss can reasonably be estimated.
3.

INVESTMENTS, AT FAIR VALUE
As of December 31, 2008 and 2007, investments, at fair value, consisted of the following:
2008
Cash and cash equivalents
Common stock
Preferred stock
Mutual funds
Corporate bonds
Municipal bonds
U.S. government and agency securities$

2,704,765
2,124,644
250,000
561,669
1,721,767
2,345,998
1,711,013$ 11,419,856

2007$

227,419
3,935,680
700,000
848,726
170,311
7,675,000
1,239,869$ 14,797,005

The following table prioritizes the inputs used by the Archdiocese as of December 31, 2008 to report thefair value of investments in accordance with the fair value hierarchy:
Level 1
Cash and cash equivalents
Common stock
Preferred stock
Mutual funds
Corporate bonds
Municipal bonds
U.S. government and agency securities$ 2,704,765
2,124,644
561,669$ 5,391,078-11-

Level 3

Total

1,133,890
884,295$ 2,018,185$ 2,704,765
2,124,644
250,000
561,669
1,721,767
2,345,998
1,711,013$ 11,419,856

Level 2$250,000
1,721,767
1,212,108826,718$ 4,010,593$

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

The following table summarizes the changes in the Archdiocese’s Level 3 investments for the year ended
December 31, 2008:
Balance as of January 1, 2008
Transfer from Level 2 (a) (b)Purchases
Net depreciation of investments
Balance as of December 31, 2008$

2,225,000
300,000(506,815)$ 2,018,185(a) Transferred from Level 2 to Level 3 as a result of the lack of pricing observability experienced in 2008 due to failure of theauction rate securities market (i.e. investors declined to bid on securities).
(b) The Archdiocese’s policy is to recognize transfers between the levels as of the actual date of the event or change incircumstances that caused the transfer.

Investment income consisted of the following for the years ended December 31, 2008 and 2007:
2008
Interest and dividends
Net realized and unrealized (depreciation) appreciation

$
$

4.

2007

437,610 $(2,330,866)(1,893,256) $579,260
411,119
990,379

LAND, BUILDINGS AND EQUIPMENT, NET
Land, buildings and equipment, net, consisted of the following at December 31, 2008 and 2007:
2008
Land
Building and improvements
Furniture, fixtures and equipment
Website development costs
Fine arts$

471,223
4,499,313
2,246,516
464,263
8,910
7,690,225(4,501,360)$ 3,188,865

Less: Accumulated depreciation

2007$

471,223
4,118,792
2,129,940
464,263
8,910
7,193,128(4,294,336)$ 2,898,792

Depreciation expense amounted to $207,024 and $222,340 for the years ended December 31, 2008 and2007, respectively.

-12-

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

5.

LINE OF CREDIT
The Archdiocese has available a $2,000,000 unsecured revolving line of credit facility with a financial
institution which matures on July 31, 2009. Interest on amounts outstanding accrues at a rate of prime plus
25 basis points (3.5% and 7.5% as of December 31, 2008 and 2007, respectively). As of December 31,
2008 and 2007, outstanding borrowings on this line of credit totaled $1,974,674.
On July 31, 2009, the Archdiocese converted the existing line of credit facility to a term loan ofapproximately $1,967,000. Principal and interest of $12,480 are payable monthly commencing on August
31, 2009 with the remaining balance due at maturity on July 31, 2011. Effective July 31, 2011, the termloan was extended to July 31, 2012. The interest rate of this loan is fixed at 5.75%.

6.

INVESTMENTS AND CUSTODY FUNDS HELD FOR OTHERSAt December 31, 2008 and 2007, investments held for others consisted of the following:
2008
Cash and cash equivalents
Common stock
Mutual funds
Corporate bonds
Municipal bonds
U.S. government and agency securities

$

$

2007

346,742
222,728
942,061
513,057
512,2122,609,311
5,146,111$$

153,652
392,767
1,361,919
281,398
950,000
1,584,419
4,724,155

The following table prioritizes the inputs used by the Archdiocese as of December 31, 2008 to report thefair value of investments held for others in accordance with the fair value hierarchy:
Level 1
Cash and cash equivalents
Common stock
Mutual funds
Corporate bonds
Municipal bonds
U.S. government and agency securities

Level 3

Level 2$346,742
222,728
942,061
1,913,252$ 3,424,783

-13-

$

513,057
512,212
696,059$ 1,721,328

$

-

$

-

Total
$

346,742
222,728
942,061
513,057
512,2122,609,311$ 5,146,111

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

Additions, investment income (loss) and distributions of such accounts, which are excluded from theaccompanying statements of activities, are shown below:
Balance atJanuary 1,
2008
Archbishop Iakovos Library Trust
St. Basil Spyropoulos Fund
Orthodox Health Plan Dividend Fund

Additions

Balance at
December 31,
2008

1,249,279
615,459
1,306,967
1,552,450$

1,050,144-$

36,759(131,577)
61,040(472,087)$(4,148)(118,175)$

1,286,038
479,734
2,418,151
962,188

$4,724,155$

1,050,144$(505,865)$(122,323)$

5,146,111

Additions

Net
Investment
IncomeRelease ofFunds toThird Parties

Balance at
December 31,
2007

Balance atJanuary 1,
2007$

1,257,363
572,384
1,244,711
1,544,575$-$

61,91647,541
69,045
111,039$(70,000)(4,466)(6,789)(103,164)$

1,249,279
615,459
1,306,967
1,552,450$

4,619,033$-$

289,541$(184,419)$

4,724,155

Spyridon Trust IM

7.

Release ofFunds toThird Parties$

Spyridon Trust IM

Archbishop Iakovos Library Trust
St. Basil Spyropoulos Fund
Orthodox Health Plan Dividend FundNet
Investment
Income (Loss)EMPLOYEE BENEFIT PLANS
Pension Plan
The Archdiocese participates in a noncontributory defined benefit pension plan covering substantially all
full-time lay employees and clergy. Retirement benefits are based on years of service and the employees’
compensation during those years of service. Plan assets are held by third party investment managers andare invested in various marketable debt, equity and money market accounts. Minimum funding
requirements are determined by an independent actuary.
The plan is considered a church plan and is therefore exempt from the provisions of the Employee
Retirement Income Security Act of 1974 (“ERISA”), as amended. Due to the nature of the plan, it is notpracticable to determine the extent to which the assets of the plan cover the actuarially computed value ofvested benefits for the Archdiocese, on a standalone basis. In addition, because the plan is considered amulti-employer plan, it is only subject to certain minimum reporting requirements. Pension expense
allocated to the Archdiocese for the years ended December 31, 2008 and 2007 amounted to approximately$497,000 and $439,000, respectively.

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GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

Other Retirement Benefits
The Archdiocese also provides supplemental retirement benefits to certain hierarchs outside of the plan
noted above. As of December 31, 2008 and 2007, the Archdiocese has recorded a liability of approximately$1,473,000 and $1,528,000, respectively, for these benefits.
8.

TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets, at December 31, 2008 and 2007, consisted of the following:
2007

2008
Taylor Scholarship Fund
St. Nicholas Relief Fund
Katrina Hurricane Fund
Katina Malta Scholarship Fund
Miscellaneous Leadership 100 Grants
Hellenic College Scholarship Fund
Teacher Training Program
OCF Campus Ministry
Niarchos Archival Grant FundHalki Theological School Fund
Florida Hurricane Fund
Educational Scholarship Fund
Gioles Scholarship Fund
Greek Fire Relief Fund
Greece Hurricane Relief FundJames Tembelis Scholarship
Asian Disaster Fund
Clergy 100
St. John Chrysostom Fund
Xanthippi Stavros Fund
Niarchos Greek Education Fundth
September 11 Relief Fund
Faith : An Endowment for Orthodoxy and Hellenism
Palelogos Scholarship fundIonian Village Capital Fund
Archbishop Iakovos Writing – Niarchos Grant
Various other funds

$

$

-15-

1,690,680
2,810,363
5,369
16,268
802,503
314,817
10,07011,527
296,814381
81,635
201,691
119,337
4,570
1,000
116,034
100,000
17,341
25,903533,654
60,0005,000
42,500734,856
8,002,313$

2,473,905
2,823,347
5,369
173,522
1,539,500
315,538
10,07021,527335,199381
81,635
201,691
60,8082,398,832
119,337
109,279
4,570
1,000
118,073
100,000
17,341
25,903
296,497
30,00067,500598,848$ 11,929,672

GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

9.

NET ASSETS RELEASED FROM RESTRICTIONS
Temporarily restricted net assets were released from donor-restrictions by either incurring expenses orsatisfying the restricted purpose during the years ended December 31, 2008 and 2007 as follows:2008
Miscellaneous Leadership 100 Grants
Taylor Scholarship Fund
Archbishop Iakovos Writing – Niarchos Grant
St.Nicholas Relief Fund
Katina Malta Scholarship Fund
OFC Campus Ministry
Niarchos Archival Grant Fund
Gioles Scholarship Fund
Faith : An Endowment for Orthodoxy and Hellenism
Niarchos Greek Education Fund
Hellenic College Scholarship FundJames Tembelis Scholarship Fund
Greek Fire Relief Fund
St John Chrysostom Fund
Other

$

1,586,297
265,880
25,00043,29424,293
10,00038,38516,000512,843721
593
2,626,703
12,738
5,162,747

$

10.

2007
$

$

343,920
157,494
13,50091,474
23,22020,533
20,65815,000203,42230,0004,487
443,3436,515
1,377
1,374,943

PERMANENTLY RESTRICTED NET ASSETS
Permanently restricted net assets are restricted to investment in perpetuity. At December 31, 2008 and2007, the Archdiocese’s permanently restricted net assets consisted of the following:
2008
Taylor Scholarship Fund
Gioles Scholarship Fund*
Beneficial interest in George Marinos perpetual trust
James J. Tembelis Scholarship Fund*
Katina Malta Scholarship Fund*
Vlisidis Scholarship Fund
Other

$

$

1,000,000
241,752
294,927
506,540
91,60038,261
112,290
2,285,370

2007
$

$

1,000,000
240,747
367,952
504,752
91,12032,383112,289
2,349,243* Pursuant to the donor gift instrument, 90% of net income from the fund is to be distributed for individual
scholarships and the remaining 10% of net income shall become permanently restricted and added to the
corpus of the scholarship fund.
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GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

11.

ENDOWMENTThe Archdiocese’s donor-restricted (gifted) endowment consists of 7 individuals funds established for avariety of purposes, principally in support of the Archdiocese’s mission; it excludes permanently restricted
beneficial interests in trusts held by others. Net assets associated with endowment funds are classified andreported based on the existence or absence of donor-imposed restrictions.
The Uniform Management of Institutional Funds Acts (“UMIFA”) as enacted by the State of New York in
1978 applies to all the institutional funds of the Archdiocese unless the donor has specifically directed
otherwise. The Archdiocese has interpreted UMIFA and New York State Laws as requiring thepreservation of the original gift of the donor restricted endowment fund absent explicit donor stipulations tothe contrary. As a result of this interpretation, the Archdiocese classifies as permanently restricted net
assets: (a) the original value of gifts donated to its endowment funds, (b) the original value of subsequent
gifts to such endowment funds, and (c) accumulations to such endowment funds made in accordance withthe direction of the applicable donor gift instrument at the time the accumulation is added to the fund.
The remaining portion of the donor-restricted endowment fund not classified in permanently restricted net
assets is classified either as unrestricted or temporarily restricted net assets, depending on the intent of theendowment fund until those amounts are appropriated for expenditure by the Archdiocese in a mannerconsistent with the uses, benefits, purposes and duration for which the endowment is established and thestandard of prudence prescribed by UMIFA.
The Archdiocese has adopted investment and spending policies for endowment assets that support theobjective of providing a sustainable and increasing level of endowment income distribution to support theArchdiocese’s activities while seeking to maintain the purchasing power of the endowment assets. The
Archdiocese’s primary investment objective is to maximize total return within reasonable and prudent
levels of risk while maintaining sufficient liquidity to meet disbursement needs and ensure preservation ofcapital.
To satisfy its long-term rate-of-return objectives, the Archdiocese relies on a total return strategy, theobjective of which is to achieve a return consisting of a combination of current income and capital
appreciation, without regard to an emphasis on either, recognizing that changes in market conditions andinterest rates will result in varying strategies in an attempt to optimize results. The endowment portfolio isdiversified among various net asset classes and strategies to help reduce risk.
In August 2008, the FASB issued FASB Staff Position (“FSP”) 117-1, “Endowments of Not-For-Profit
Organizations: Net Asset Classifications of Funds Subject to an Enacted Version of the Uniform Prudent
Management of Institutional Funds Act and Enhanced Disclosures for All Endowment Funds.” FSP 117-1
addresses the net asset classification of donor restricted endowment funds for organizations subject to anenacted version of the 2006 Uniform Prudent Management of Institutional Funds Act (“UPMIFA”). In
addition, FSP 117-1 requires new disclosures about an organization’s donor-restricted and board-designatedendowment funds. The Archdiocese adopted the disclosure requirements of FSP 117-1 as of January 1,
2008, as required.

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GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

2008
Composition of Endowment
Net Assets by Type of Fund
Donor-restricted endowment funds
Total

Unrestricted

Temporarily Permanently
Restricted Restricted

$

-

$

-

$ 1,990,443$ 1,990,443

$

-

$

-

$ 1,990,443$ 1,990,443$-$ 912,862$ 1,981,291$ 2,894,153-

52,864(875,719)

4,152-

57,016(875,719)-(90,007)-(90,007)

-

-

5,000

5,000

-

$ 1,990,443$ 1,990,443

Total

Changes in Endowment Net Assets
Endowment net assets, beginning of year
Investment return:
Investment income
Net depreciation (realized and unrealized)
Appropriation of endowment assets for
expenditure
Contributions
Endowment net assets, end of year

$

-

$

In September 2010, the State of New York passed legislation for UPMIFA. This act will replace UMIFA.
UPMIFA states that assets should be invested prudently in diversified investments seeking both growth andincome. It eliminates the “historic dollar value” approach of UMIFA and provides guidance that eliminates
the need for a floor on spending. Specifically, UPMIFA states that the Archdiocese “may appropriate for
expenditure or accumulate so much of an endowment fund as the institution determines to be prudent for
uses, benefits, purposes and duration for which the endowment fund is established.”
12.

RELATED PARTY TRANSACTIONSThe Archdiocese provided $1,200,000 per annum to support the operations of Hellenic College in 2008 and2007. As of December 31, 2008 and 2007, remaining amounts due to Hellenic College were $350,000 and$0, respectively, and are included as grants payable in the accompanying statements of financial position.
The Archdiocese also pays the salaries and health insurance expenses of certain employees within eachmetropolis. In addition, the Archdiocese provides monthly grants to eligible metropolises to cover otheroperating expenses. Total Metropolis Ministries expenses for the years ended December 31, 2008 and 2007
were $4,938,058 and $5,390,411, respectively, as reflected on the accompanying statements of activities.

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GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

13.

GRANTS REVENUE
The Archbishop Iakovos Leadership 100 Endowment Fund, Inc. (“Leadership 100”) provides grants to theArchdiocese in support of the national ministries of the Archdiocese. For the years ended December 31,
2008 and 2007, Leadership 100 provided grants totaling $849,300 and $1,079,835, respectively, for thefollowing purposes:
Grant Name

2008

Department of Youth and Young Adult Ministry-Youth Technology
Office of Inter-Church, Ecumenical & Interfaith Relations
Department of Outreach & Evangelism
Center for Family Care (Clergy Family Critical Care Fund)Center for Family Care
Archives-Digitization/Preservation Grant
Youth Ministry – Orthodox Christian Fellowship (OCF)
Parish Development - Research & Writing Services
Preparing for Marriage & Beyond
St .Basil Academy (The Archpastorate of Archbishop Michael)
Parish Stewardship Improvement Practices
Greek Edu.Direct District Professional Teacher Development
Correspndence Tracking System
Home Mission Parish Program$$

150,000
250,000
105,000
175,000
100,000
69,300849,300

2007$

22,300262,900
100,000
90,00039,930141,930
101,275
135,000
84,500102,000$ 1,079,835

As of December 31, 2008 and 2007, amounts not yet received by the Archdiocese under these grants
approximated $268,000 and $348,000, respectively, and are included in due from related entities in theaccompanying statements of financial position.
14.

COMMITMENTS AND CONTINGENCIESThe Archdiocese is involved in various lawsuits, which it is prepared to vigorously defend. The ultimate
outcome of these matters cannot be determined at this time. Accordingly, no provision for any liability that
may result from these matters has been made in the accompanying financial statements. Management
believes that the liability, if any, resulting from these matters would not have a material effect on theaccompanying financial statements.
The accompanying financial statements do, however, include a liability of approximately $2,450,000 and$3,250,000 as of December 31, 2008 and 2007, respectively, for lawsuits settled and paid subsequent toyear-end and are included in accounts payable and accrued expenses in the accompanying statements offinancial position. These expenses are not reflected in the accompanying statements of activities for theyears ended December 31, 2008 and 2007 as they pertained to and would be reflected in periods prior to
January 1, 2007.

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GREEK ORTHODOX ARCHDIOCESE OF AMERICA
Notes to Financial Statements
December 31, 2008 and 2007

The Archdiocese has entered into various noncancellable operating leases primarily for office equipment.
Future minimum lease payments due under these arrangements are as follows:Year Ending December 31:
2009
2010
2011
2012

$

$

303,897
140,638
84,091
5,375
534,001

Rent expense amounted to approximately $270,000 and $248,000 for the years ended December 31, 2008
and 2007, respectively.
15.

SUBSEQUENT EVENTSThe Archdiocese evaluated its December 31, 2008 financial statements for subsequent events through July
31, 2012, the date the financial statements were available to be issued. The Archdiocese is not aware of any
material subsequent events which would require recognition or disclosure in the accompanying financial
statement except as disclosed in Notes 5 and 14.

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