1. PCI - Media Impact, Inc.
Financial Statements
December 31, 2011

2. Independent Auditors' Report
To the Board of Directors
PCI - Media Impact, Inc.
We have audited the accompanying statement of financial position of PCI - Media Impact, Inc.
(“Media Impact”) as of December 31, 2011, and the related statements of activities, functional
expenses and cash flows for the year then ended. These financial statements are the
responsibility of Media Impact's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The prior year summarized comparative information has
been derived from Media Impact’s 2010 financial statements, and, in our report dated April 12,
2011, we expressed an unqualified opinion on those financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that 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 Media Impact’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 the significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of PCI - Media Impact, Inc. as of December 31, 2011 and the changes in its net
assets and its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
New York, New York
May 16, 2012
O’CONNOR DAVIES, LLP
nd th
60 East 42 Street, 36 Fl., New York, NY 10165 I Tel: 212.286.2600 I Fax: 212.286.4080 I www.odpkf.com
O’Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or
inactions on the part of any other individual member firm or firms.

3. PCI - Media Impact, Inc.
Statement of Financial Position
December 31, 2011
(with comparative amounts at December 31, 2010)
2011 2010
ASSETS
Cash and cash equivalents $ 208,748 $ 129,448
Contributions receivable 31,289 291,672
Prepaid expenses and other assets 41,927 37,110
Investments 1,349,155 1,433,959
Beneficial interest in charitable remainder trust 14,833 14,833
Leasehold improvements and equipment, net 36,550 23,949
$ 1,682,502 $ 1,930,971
LIABILITIES AND NET ASSETS
Liabilities
Accounts payable and accrued expenses $ 63,280 $ 40,849
Advances payable 159,326 -
Capital lease obligations 12,867 -
Annuities payable 48,641 51,310
Total Liabilities 284,114 92,159
Net assets
Unrestricted
Operating 54,208 105,349
Board designated 1,322,648 1,684,463
1,376,856 1,789,812
Temporarily restricted 21,532 49,000
Total Net Assets 1,398,388 1,838,812
$ 1,682,502 $ 1,930,971
See notes to financial statements
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4. PCI - Media Impact, Inc.
Statement of Activities
Year Ended December 31, 2011
(with summarized totals for the year ended December 31, 2011)
2011
Temporarily 2010
Unrestricted Restricted Total Total
OPERATING REVENUE AND SUPPORT
Contributions and grants $ 961,890 $ 437,037 1,398,927 $ 1,121,197
Investment return (loss) (1,723) - (1,723) 9,920
Other income 61,439 - 61,439 64,941
1,021,606 437,037 1,458,643 1,196,058
Net assets released from restrictions 464,505 (464,505) - -
Total Operating Revenue and Support 1,486,111 (27,468) 1,458,643 1,196,058
EXPENSES
Program services 1,486,434 - 1,486,434 1,478,168
Administrative 237,167 - 237,167 181,356
Fundraising 209,246 - 209,246 315,235
Total Expenses 1,932,847 - 1,932,847 1,974,759
Excess of Operating Revenue and
Support over Expenses (446,736) (27,468) (474,204) (778,701)
NON-OPERATING ACTIVITIES
Bequests 38,130 - 38,130 315,338
Change in value of
split interest agreements (4,350) - (4,350) (4,565)
Non-operating Activities 33,780 - 33,780 310,773
Change In Net Assets (412,956) (27,468) (440,424) (467,928)
NET ASSETS
Beginning of year 1,789,812 49,000 1,838,812 2,306,740
End of year $ 1,376,856 $ 21,532 $ 1,398,388 $ 1,838,812
See notes to financial statements
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5. PCI - Media Impact, Inc.
Statement of Functional Expenses
Year Ended December 31, 2011
(with summarized totals for 2010)
2011
Program Adminis- Fund 2010
Services trative Raising Total Total
Salaries $ 371,879 $ 90,000 $ 107,939 $ 569,818 $ 672,744
Payroll taxes and employee benefits 72,894 32,853 18,671 124,418 125,171
Total Salaries and Related Expenses 444,773 122,853 126,610 694,236 797,915
Consulting fees (includes $16,720 of in-kind consulting fees in 2011) 270,538 16,062 4,811 291,411 206,964
Professional fees (includes $1,330 and $1,993 of in-kind
legal services) 3,000 41,816 - 44,816 32,491
Broadcast production/airtime
(includes $97,218 and $193,065 of in-kind broadcast production/airtime) 390,661 601 - 391,262 397,144
Temporary personnel 3,550 - 500 4,050 36,648
Travel (includes $29,830 and $18,913 of in-kind travel) 173,270 969 3,118 177,357 121,798
Rent 98,908 18,688 38,644 156,240 152,040
Telecommunications 19,277 1,329 - 20,606 16,447
Printing and duplicating 11,669
11 669 - 2,787
2 787 14,456
14 456 25,317
25 317
Mailing services - - - - 8,796
Public representation and outreach 17,149 - - 17,149 7,622
Postage 1,905 653 3,810 6,368 9,506
Office supplies 18,687 9,702 538 28,927 26,157
Meetings and conferences 3,091 - - 3,091 59,762
Tapes and films - - - - 740
Equipment rentals, repairs and maintenance 8,443 6,386 12,585 27,414 25,473
Registration dues and fees 5,056 35 9,797 14,888 13,089
Insurance 4,365 14,681 - 19,046 18,821
Depreciation 12,092 2,015 6,046 20,153 17,395
Interest - 1,377 - 1,377 631
Total Expenses $ 1,486,434 $ 237,167 $ 209,246 $ 1,932,847 $ 1,974,756
See notes to financial statements
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6. PCI - Media Impact, Inc.
Statement of Cash Flows
Year Ended December 31, 2011
(with comparative amounts for the year ended December 31, 2010)
2011 2010
CASH FLOWS FROM OPERATING ACTIVITES
Change in net assets $ (440,424) $ (467,928)
Adjustments to reconcile change in net assets
to net cash from operating activities
Depreciation 20,153 17,395
Net realized and unrealized (gain) loss on investments 1,867 (8,241)
Changes in operating assets and liabilities
Contributions receivable 260,383 (230,254)
Prepaid expenses and other assets (4,817) (2,488)
Accounts payable and accrued expenses 22,431 4,960
Advances payable 159,326 -
Net Cash from Operating Activities 18,919 (686,556)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (16,329) (11,849)
Proceeds from sale of investments 91,383 730,281
Purchase of investment (8,446) -
Annuities payments (2,669)
(2 669) (2,455)
(2 455)
Net Cash from Investing Activities 63,939 715,977
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on capital lease obligations (3,558) (7,743)
Net Change in Cash and Cash Equivalents 79,300 21,678
CASH AND CASH EQUIVALENTS
Beginning of year 129,448 107,770
End of year $ 208,748 $ 129,448
SUPPLEMENTAL CASH FLOW INFORMATION
Non cash financing activities
Equipment purchased through capital lease $ 16,425 $ -
Cash paid for interest 1,377 631
See notes to financial statements
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7. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
1. Organization and Tax Status
PCI - Media Impact, Inc.’s (“Media Impact”) unique approach to communications combines
the principles of Entertainment-Education with the reach of mass media to mobilize individual
and community action and catalyze positive change. Entertainment-Education is a form of
entertainment designed to educate and amuse audiences and can be done with a variety of
formats, ranging from comic books, to TV, radio productions, and street theatre. Our
programs primarily focus on promoting sexual and reproductive health, prevention of
HIV/AIDS, biodiversity conservation, sustainable development, human rights and democracy.
Media Impact is a not-for-profit organization exempt from income taxes under Sections
501(c)(3) and 509(a)(1) of the Internal Revenue Code.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires the Media Impact’s management to make
certain estimates and assumptions relating to the reporting of assets and liabilities and 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.
Operating Measure
Media Impact has elected to present an operating measure in its statement of activities.
Accordingly, items not affecting operations are segregated from those affecting operations.
Items not affecting operations include bequests and other planned giving.
Basis of Presentation
Unrestricted net assets include funds having no restriction as to use or purpose imposed by
donors. Temporarily restricted net assets are those whose use is limited by donors to a
specific time period or purpose. Permanently restricted net assets are limited by donors for
investment in perpetuity.
Cash and Cash Equivalents
For statement of cash flows purposes, Media Impact considers investments in highly liquid
debt instruments with a maturity of three months or less at the time of purchase to be cash
equivalents, except for those held for investment purposes.
Contributions and Grants
Contributions are recognized as revenue when an unconditional promise to give is made
and the gift is subject to reasonable valuation. Contributions are considered to be available
for unrestricted use unless specifically restricted by the donor. Contributions receivable
consist of gifts pledged. Grant awards received for specific purposes are recognized as
support and revenue to the extent related expenses are incurred in compliance with the
specific grants terms.
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8. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
2. Summary of Significant Accounting Policies (continued)
Contributions and Grants (continued)
The unexpended funds are considered refundable advances and reported as advances
payable. Media Impact believes that all grants and other receivables are collectible.
Contributed Services
Contributed services are reported as contributions at their fair value if such services create or
enhance non-financial assets, or would have been provided by donation, require specialized
skills, and are provided by individuals possessing such specialized skills.
Fair Value Measurements
Media Impact follows Financial Accounting Standards Board (FASB) guidance on Fair Value
Measurements which defines fair value and establishes a fair value hierarchy organized into
three levels based upon the input assumptions used in pricing assets. Level 1 inputs have
the highest reliability and are related to assets with unadjusted quoted prices in active
markets. Level 2 inputs relate to assets with other than quoted prices in active markets
which may include quoted prices for similar assets or liabilities or other inputs which can be
corroborated by observable market data. Level 3 inputs are unobservable inputs and are
used to the extent that observable inputs do not exist.
Investment Income Recognition
Purchases and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis and dividends are recorded on the ex-dividend date. Realized
and unrealized gains and losses are included in the determination of the change in net
assets.
Leasehold Improvements and Equipment
Media Impact capitalizes all expenditures for property and equipment in excess of $1,000.
Leasehold improvements and equipment are stated at cost or fair value on the date of
donation. Depreciation is computed on the straight-line method over the estimated useful
lives of the related assets. Office furniture and computer equipment are deemed to have a
useful life of between five and seven years. Leasehold improvements are capitalized and
amortized over the period of the lease and expected renewal. Equipment leased under capital
leases is amortized over their economic useful lives.
Functional Allocation of Expenses
Expenses have been charged to program and supporting services, either directly when
identifiable to a specific program, or indirectly based on management's estimate of the
functional area benefited.
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9. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
2. Summary of Significant Accounting Policies (continued)
Split-Interest Agreements
Split-interest agreements with donors consist primarily of charitable gift annuities and a
charitable remainder unitrust. A charitable gift annuity provides for payments of fixed
amounts to the donor or other designated beneficiaries over the annuity's term (usually the
designated beneficiary's lifetime). The assets received are recorded at fair value when
received and a payment liability is recognized for the present value of the future cash flows
expected to be paid to the donor's designated beneficiary. The difference between these
two amounts is recorded as unrestricted contribution revenue unless the donor restricts the
use of the gift. The initial present value of the estimated future payments is determined
using appropriate discount rates and mortality tables. On an annual basis, Media Impact
revalues the gift annuity liability for principal payments made, the amortization of the initial
discount associated with the gift annuity, and revaluations of expected future payments to
beneficiaries, based on changes in life expectancy and other actuarial assumptions.
Media Impact has a beneficial interest in a charitable remainder trust, which is a time-
restricted contribution not available to Media Impact until after the death of the donor, who,
while living, receives an annual payout from the trust based on a fixed percentage of the
market value of the invested funds. The value of Media Impact’s beneficial interest in the
charitable trust is estimated to be equivalent to the discounted present value of Media
Impact’s future cash flows from the trust. The underlying assets in the trust are principally
marketable securities.
Accounting for Uncertainty in Income Taxes
Media Impact recognizes the effect of income tax positions only if those positions are more
likely than not of being sustained. Management has determined that the Organization had
no uncertain tax positions that would require financial statement recognition. The
Organization is no longer subject to audits by the applicable taxing jurisdictions for periods
prior to December 31, 2008.
Subsequent Events Evaluation by Management
Management has evaluated subsequent events for disclosure and/or recognition in the
financial statements through the date that the financial statements were available to be issued,
which date is May 16, 2012.
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10. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
3. Leasehold Improvements and Equipment
Leasehold improvements and equipment consist of the following at December 31:
2011 2010
Leasehold improvements $ - $ 24,950
Equipment 52,695 60,168
52,695 85,118
Accumulated depreciation and amortization (16,145) (61,169)
$ 36,550 $ 23,949
Leased capital assets included in equipment are as follows:
2011 2010
Equipment under capital leases $ 16,425 $ 26,215
Accumulated depreciation (3,285) (22,001)
$ 13,140 $ 4,214
4. Investments and Investment Return
The following are major categories of investments measured at fair value on a recurring basis
at December 31, grouped by the fair value hierarchy:
Level 1 Level 2 Total
Money market funds $ 1,258,958 $ - $ 1,258,958
Equities - international stock 24,796 - 24,796
Fixed income 32,701 32,700 65,401
$ 1,316,455 $ 32,700 $ 1,349,155
Investment return (loss) for 2011 consists of the following:
Interest and dividends from investments, net $ 144
Net realized and unrealized loss on investments (1,867)
Investment loss $ (1,723)
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11. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
4. Investments and Investment Return (continued)
As a result of the economic downturn in the last quarter of 2008, Media Impact liquidated all
of its equity funds held in the board designated fund. Since May 2009, the entire board
designed fund has been invested in cash and government securities. In subsequent
meetings during the last three years, the Board has re-affirmed this decision.
5. Annuities Payable
Changes in actuarial liability under the gift annuity program at December 31, 2011 and 2010,
consist of annuity payments of $2,669 and $2,455.
6. Board Designated Net Assets
Media Impact established a board designated fund into which gifts and contributions received
through Media Impact’s planned giving program are placed, as well as certain other assets
and liabilities. The components of these board designated net assets at December 31, are as
follows:
2011 2010
Investments
General investment account $ 1,105,147 $ 1,275,003
Gift annuity accounts 97,498 99,349
Cash held for investments 153,811 75,338
Bequests receivable - 271,250
Beneficial interest in charitable remainder trust 14,833 14,833
Gift annuity payable (48,641) (51,310)
$ 1,322,648 $ 1,684,463
The changes in board designated net assets for the years ended December 31, are as
follows:
2011 2010
Balance, beginning of year $ 1,684,463 $ 2,155,643
Contributions designated for investment 47,051 315,340
Investment return (1,535) 10,025
Regular budgeted operating release - (88,723)
Release to fund general operations (400,000) (710,277)
Other (7,331) 2,455
Balance, end of year $ 1,322,648 $ 1,684,463
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12. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
7. Temporarily Restricted Net Assets and Net Assets Released from Restrictions
Temporarily restricted net assets and their related purposes and net assets released from
restrictions are as follows:
Released from Net Assets at
Restrictions December 31,
during 2011 2011
International
International Mass Media $ 20,000 $ -
For programs in Latin America
My Community Latin America 194,713 -
World Bank 10,143 -
For programs in the Caribbean 163,731 -
For programs in Africa
Ghana 47,700 -
Mobilize for Africa - 16,000
Gabon 4,468 5,532
For programs in the USA 23,750 -
$ 464,505 $ 21,532
8. Lease Commitments
Media Impact leases office space in New York City. The lease contains clauses for
escalations for Media Impact’s share of increased building costs and expires on April 30,
2015.
Future minimum annual lease payments for capital leases and non-cancellable operating
leases and the related capital lease payments at December 31, 2011 are as follows:
Capital Operating
Lease Leases
2012 $ 5,283 $ 154,067
2013 5,973 155,080
2014 1,611 155,080
2015 - 51,694
Total minimum annual lease payments $ 12,867 $ 515,921
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13. PCI - Media Impact, Inc.
Notes to Financial Statements
December 31, 2011
9. Concentrations of Credit Risk
Financial instruments that potentially subject Media Impact to concentrations of credit risk
consist principally of cash and cash equivalents, contributions receivable and investments.
Media Impact maintains its cash with high credit quality financial institutions and its policy is
designed to limit exposure to any one institution. At times, cash balances may be in excess
of balances insured by the FDIC.
10. Retirement Plans
Media Impact maintains a Simplified Employee Pension Plan (the “Plan”) for the benefit of
eligible employees. Media Impact’s contribution rate, determined by its Board, was 6% for
2011 and 2010. Plan expense was $26,565 and $27,555 for 2011 and 2010.
11. Donated Services
Donated services for the years ended December 31, consisted of the following:
2011 2010
Legal $ 1,330 $ 1,993
Broadcast production/airtime 97,218 193,065
Consulting 16,720 -
Travel 29,830 18,913
$ 145,098 $ 213,971
12. Prior Year Information
The financial statements include certain prior year summarized comparative information in
total but not by net asset class. Such information does not include sufficient detail to
constitute a presentation in conformity with accounting principles generally accepted in the
United States of America. Accordingly, such information should be read in conjunction with
Media Impact's financial statements for 2010, from which the summarized information was
derived.
13. Management Plans to Reduce Operating Deficits
The Board of Directors continues to evaluate the reasons for the operating deficits during
recent years. Media Impact has taken measures to manage costs, and expand fundraising
efforts with the organizational goal to achieve no drawdown from the board designated fund
in future years. Future plans and budgets are being developed to produce a positive change
in net assets.
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