Coast Guard Foundation Inc.

“The coast guard foundation, inc. (the "foundation") became aware of a significant diversion of funds in january of 2020. The nature of the diversion is as follows: the foundation's charitable purpose is to support the coast guard, including its effort to enhance boater safety. As part of its charitable activities, the foundation makes grants to other tax-exempt charitable organizations. One particular grantee organization (the "grantee organization") serves similar purposes with respect to boater safety. The foundation therefore decided to support the grantee organization's boater safety activities, which was an appropriate use of the foundation's resources. The foundation granted $510,216 to the grantee organization for boater safety activities and grantee organization support during 2017 to 2019. The grantee organization misused $302,716 of the granted funds by providing those funds to an individual donor. It is our understanding that the grantee organization reimbursed the individual donor for the individual donor's personal expenditures of purchasing sponsorships of foundation events. This was an unintended and inappropriate use of the funds granted by the foundation to the grantee organization. The foundation is taking corrective actions both with respect to this diversion of funds and with respect to ensuring such diversions do not happen again. The foundation has ceased making grants to the grantee organization. The foundation has demanded the return of the diverted funds from the grantee organization and will continue to attempt to reclaim the diverted funds from the grantee organization. In addition, the foundation has updated its procedures for monitoring the use of funds granted to third-party organizations to prevent a reoccurrence and ensure that foundation funds are used by grant recipients as intended by the foundation. These updated procedures will be modelled roughly after the expenditure responsibility procedures applicable to private foundations.”

“Prior to filing, a copy of the 990 is sent to the audit committee for review. After audit committee approval, and prior to filing, a copy of the 990 is distributed to the governing board.”

“Trustee conflict of interest policy is clearly stated in our by-laws. Each year two forms are sent to the trustees asking them to indicate whether they are related or non-related parties and if so to disclose the relationship. They must also disclose any conflicts of interest. The forms are then signed by the trustee and filed at the office.”

“The compensation of the foundation's president is reviewed and set by the chairman of the board. The chairman takes into consideration independent compensation studies, the recommendation of the human resources committee of the board of directors, and benchmarking data from similar organizations to ensure that the president's compensation is within the range of that paid to nonprofit executives with comparable responsibilites. Compensation of other officers and key employees is reviewed by the president using the same method.”

“Financial statements are included in the annual report. Audited financial statements and tax returns are available on the website. Governing documents and conflict of interest policy are available upon request.”

“The novel strain of coronavirus was declared a pandemic march 11, 2020. The foundation derives significant revenues from hosting special events and from engaging donors in person. Given regulatory restrictions and concern for public safety, events and staff travel were canceled. The resulting impacts on the foundation's fundraising and operations in 2020, which included decreased fundraising and program support, are contained in this filing. The extent of covid-19's impact on the foundation's operational and financial performance in 2021 will depend on certain developments, including the continued duration and spread of the virus, the ability to safely host events, the ability for staff travel, and the impact on customers, employees and vendors. These impacts remain uncertain at the time of this filing.”