Notes to Financial Statements
7. Unpaid Grants
At December 31, 2006 the unpaid grant liability is expected to be paid in future years as follows (in thousands):
| 2007 | $156,249 |
|---|---|
| 2008 | 123,920 |
| 2009 | 78,258 |
| 2010 | 55,736 |
| 2011 and thereafter | 36,198 |
| 450,361 | |
| Less, discounted to present value | (45,093) |
| $405,268 |
Generally accepted accounting principles require the unpaid portion of future grant payments to be recorded at the present value of estimated future cash flows. As of December 31, 2006 the Foundation discounted the amount of unpaid grant liability by applying interest rate factors ranging from 4.4 percent to 6.5 percent and an estimated cancellation rate of 3 percent. At December 31, 2006 the unpaid grant liability was discounted to present value by approximately $45.1 million.
A significant component of the Foundation’s program activity is accomplished through Program Authorizations (“Authorizations”) and other appropriations. An Authorization is an approval of a designated amount to accomplish a specific programming objective through grant-making and other program-related activities. At December 31, 2006 and December 31, 2005 the gross unpaid grant liability and the remaining balance under approved authorizations and other appropriations were approximately $868 million and $865 million, respectively.