Abundance by Design - Rocky Mountain Institute

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From the Financial DirectorBehind the NumbersOFTENTIMES IT’S WHAT’Sbehind the numbers thatdrives an organization andgives it direction. At RMI,changes in our financial managementover the past yearwere made for the expresspurpose of improving futureoperations. Sales and purchasesof specific assets can be inferred by changesin the balance sheet and income statement, andreceipts or expenditures of large gifts have impactson the Institute’s profitability. Yet some of the mostcritical changes are difficult to discern when reviewingour financial statements.In February 2004 we began managing our internaloperations on a grants-expended basis (see sidebar).This change in management philosophy hasled to better accountability for all project managersat the Institute, though it may occasionally affectour bottom line—favorably or adversely. Grant-revenuereceipts can fluctuate dramatically from yearto year, but internal performance needs to begauged by staff time allocated to specific projectfunds.We recently established a “Grants Escrow Fund,”separately invested from our operating account.This fund, together with grants receivable, reflectsour commitment to protect gifts from donors andfoundations for future work or pending projects. Asnew grants are received, they are invested in theGrants Escrow Fund and are released to RMI’s operatingaccount only as work is completed on grantfundedprojects. To establish the Grants EscrowFund, we sold an underperforming asset, an OldSnowmass staff housing property affectionatelyknown as the “Cliffhouse.” Because of the boominglocal real estate market, we received a $591,841gain from the sale.This year, the Investment Subcommittee of ourBoard of Trustees reviewed the performance of ourCapital Reserve Fund, a quasi-endowment fundedby the sale of our E SOURCE spinoff in 1999. Duringthe past three years, annual investment returnshave exceeded ten percent—on par with the best inthe industry. Because of this excellent performance,we have chosen to continue our relationship withRyan Investment Management, which manages theCapital Reserve Fund. The InvestmentSubcommittee is now evaluating other assets toensure peak performance.Over the past several years we have alsoachieved stability in our expenses. To improveproject management, we decided that a new informationsystem was necessary. Our current systemis five years old and has significant shortcomingsfor project management. After extensive research,we selected Deltek Vision, an enterprise softwaresystem used largely by architects and engineers tomanage projects. Deltek Vision includes projectbudgeting and accounting, resource scheduling,and personnel management capabilities.Combined with last year’s purchase of the Raiser’sEdge software system for RMI’s Developmentteam, we believe that we will have state-of-the-arttools to manage our operations.Each of these improvements will be valuable aswe hire, train, and support Research & Consultingstaff during the next three years. Our Boulder operationshave grown significantly over the past year,and we are also adding to our Snowmass capabilities.We expect that enhancements for financialreporting, internal management controls, andaccountability will help the Institute achieve greatthings in the years to come.STEVE SWANSON14
BALANCESHEET – AUDITEDthousands of current dollarsASSETS6/30/056/30/04 6/30/03Cash and Marketable Securities $ 141 $ 244 $ 310Investments 4,565 5,290 5,926Grants Escrow Fund 653 - -Accounts Receivable 419 403 397Grants & Pledges Receivable 608 770 166Notes Receivable 311 - -Inventory 79 66 79Property & Equipment (Net) 1,620 2,195 1,717Assets Restricted for Endowment 696 691 687Other Assets 74 73 62TOTAL ASSETS $ 9,166 $ 9,732 $ 9,344LIABILITIES & NET ASSETSCurrent LiabilitiesAccounts Payable $ 212 $ 156 $ 125Compensated Absences 109 118 142Other Accrued Expenses 341 277 535Line of Credit 500 575 191Total Current Liabilities $ 1,162 $ 1,126 $ 993Long-Term Liabilities $ 1,388 $ 1,491 $ 1,596TOTAL LIABILITIES $ 2,550 $ 2,617 $ 2,589NET ASSETS $ 6,616 $ 7,115 $ 6,755TOTAL LIABILITIES & NET ASSETS $ 9,166 $ 9,732 $ 9,344Revenues by CategoryExpense by ActivityRental/Miscellaneous Income 2%Contributed Facilities/In Kind Donations 3%Publications/Royalties 3%Investment Income 4%Fundraising 8%Applied Research36%Restricted ResearchGrants 6%Gain on Sales ofAssets 10%Research &Consulting55%Education &Outreach15%General SupportGrants 18%General &Administrative19%Individual & CorporateContributions 18%Rocky Mountain Institute Annual Report: 2004–0515
Page 1 and 2: Abundance by DesignRocky Mountain I
Page 3 and 4: From the Executive DirectorRMI’s
Page 5 and 6: “trimtabs” in heavy trucks, mil
Page 7 and 8: helping to integrate supply and dem
Page 9 and 10: ing their persistent inefficiencies
Page 11 and 12: erature on how they do it, research
Page 13: National Solutions CouncilSolutions
Page 17 and 18: VISIONARIES -$100,000 & AboveRachel
Page 19 and 20: SupportersBarbara & Peter B. Flemin
Page 21 and 22: SupportersDale & Linda F. LevyJim &
Page 23 and 24: RMI StaffChief Executive OfficerAmo

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