The Omidyar-Tufts Active Citizenship Trust

“MICHAEL MOHR AND PIERRE M. OMIDYAR - Business relationship”

“The trustees of tufts college's in-house tax department prepared the tax return. A comprehensive draft form 990 was submitted for review by management. The return was then provided to the full governing body prior to filing the return with the irs.”

“The omidyar-tufts microfinance fund (otmf), being a related organization of trustees of tufts college (tufts), adheres to the same tufts compliance policy for conflicts of interest disclosures. Regarding the otmf governing body, two of the trustees are current members of tufts governing body and the cio of otmf is also the cio and a highly compensated employee for tufts. After the fiscal-year end, all officers, highly compensated employees, key employees and governing board members are provided with an electronic annual disclosure questionnaire form which is used to reveal conflicts of interest. Each member is required, after reading the conflict of interest policy, to disclose any potential conflicts that may exist with the organization or a related organization in a statement that is electronically signed and dated. Additionally, for all other remaining disclosable persons, including the director of investments, investment officer and other trustees, the same request for conflicts of interest disclosures are made prior to the filing of the form 990. As part of the annual monitoring process, conflict disclosures are reported to the tufts audit committee, via the tufts executive vp or tufts secretary of the corporation. The audit committee is notified and reviews such disclosures and advises any actions. Thereafter, if a disclosure is deemed to be a conflict, the individual would then confirm that they will not participate in any decisions relating to the specific disclosed conflict.”

“In addition to the governing board of trustees, the omidyar-tufts microfinance fund (otmf) has one key employee, tryfan evans, director of investments, who manages the daily investment operations of the fund. As an employee of trustees of tufts college his compensation is paid directly by trustees of tufts college. The otmf reimburses trustees of tufts college as part of the operating costs of the fund. The process for determining compensation includes using compensation surveys and comparable local market data which is maintained by human resources. Lastly, the cio and chief investment officer of otmf are employees of, and compensated by, trustees of tufts college.”

“Omidyar-tufts microfinance fund makes its governing documents, conflict of interest policy and financial statements available to the public. All are available upon request. Additionally, the company's audited financial statements and its conflict of interest and business conduct policies are available upon request by contacting, via email, the tufts university, executive director of public relations at [email protected].”

“A) trustee's name: anthony p. Monaco b) name of related organization: trustees of tufts college c) relationship between organizations: supported organization d)compensation description: anthony p. Monaco is the current president of the university. He serves as a member of the board of trustees for the trustees of tufts college. He is also compensated by the trustees of tufts college for that role. A) key employee's name: sally dungan b) name of related organization: trustees of tufts college c) relationship between organizations: supported organization d)compensation description: sally dungan, the fund's chief investment officer, is a full time employee of the trustees of tufts college. She also serves as the trustees of tufts college cio and is compensated by the trustees of tufts college for that role. A) key employee name: tryfan d. Evans b) name of related organization: trustees of tufts college c) relationship between organizations: supported organization d) compensation description: tryfan d. Evans, director of investments, works full time on the daily investment operations of the fund. However, he is an employee of the trustees of tufts college (tufts) and is compensated by tufts. He also participates in an incentive plan for both tufts and the fund.”

“Tryfan d. Evans, the omidyar-tufts microfinance fund director of investments is compensated as an employee of the trustees of tufts college. However, his salary and benefits have been charged to the omidyar-tufts microfinance fund as tryfan services the fund in a full-time capacity. His compensation is also listed as an operating cost on part ix, statement of functional expenses.”

“Seth merrin has stepped down as chairperson as of 10/30/2015, and remains on otmf's board as a trustee for fy16.”

“The purpose of the fund is to support, benefit, and carry out the purposes of its public charity beneficiaries, including the Trustees of Tufts College, by engaging in two activities: promoting the relief of the poor and distressed through microfinance investments, and promoting education through grants. During the year ended June 30, 2016, the Omidyar-Tufts Microfinance Fund disbursed over $14 million in microfinance investments. At June 30, 2016 the fund had made 16 investments and $152 million in commitments since inception. To date, the fund has provided investment capital for microfinance in Latin America, Africa, Eastern and Central Europe and Central Asia. The fund currently has investments in over 50 countries. Microfinance Investments. The Fund's governing document defines "microfinance" as the delivery of financial services, such as credit, equity savings, insurance, remittances and payment services, that economically empower and benefit the poor, low-income households, and micro and small enterprises. All capital assets of the Fund will be used exclusively for one or both of the following purposes: (i) investment in microfinance-related ventures, and (ii) the credit enhancement of microfinance-related ventures, such as by providing loan guarantees. These microfinance investments are intended to benefit poor and low-income individuals, both as members of households and as owners of micro and small enterprises. Poor and Low-Income Households The vast majority of the world's poorest people lack access to even the most basic financial services. The poor are shut out of the system for two primary reasons. First, traditional banking systems require borrowers to have property - to use financial terms, "collateral" - in order to receive a loan, and the extremely poor have no such collateral. Second, traditional banks believe it is difficult to make a commercially reasonable rate of return on small loans of the type sought by people who are extremely poor (usually between $50 and $150) because the interest benefits do not exceed the transaction costs. Without access to such services, the world's poorest people are unable to break out of the cycle of poverty that keeps them trapped at subsistence standards of living. They lack the ability to borrow and save, and without insurance, their livelihoods are always in danger of being wiped out by natural or other disasters. Microfinance programs address these problems. They have helped millions of people in developing countries raise their standards of living and protect themselves from crippling economic setbacks. Microfinance products such as savings accounts, microcredit loans of small amounts, and affordable health insurance empower the poor to lift themselves out of poverty by enabling them to secure better nutrition, education, healthcare and housing for their families. Microfinance institutions ("MFIs") differ from traditional banks in several significant ways. First, for example, rather than solely focusing on individual borrowers and individual collateral, MFIs sometimes lend to groups of borrowers, relying on social capital to ensure loan repayment. Another significant difference between MFIs and traditional banks is that the loan cycles offered by MFIs are usually shorter than traditional commercial loans - typically six months to a year, with payments plus interest due weekly or monthly. The transaction-intense nature of weekly payment collections, often in rural areas, is more expensive than running a bank branch that provides large loans to economically secure borrowers in metropolitan areas. As a result, MFIs must charge interest rates that may seem high - often 30 percent to 70 percent annually - in order to cover their costs. However, these interest rates are significantly lower than the market rates for the only other credit that is available to very poor borrowers - namely, the 300 percent to 3,000 percent annual rates charged by local money lenders. Finally, MFI”

“The omidyar-tufts microfinance fund does not have its own employees. The salary expense reported in the statement of functional expenses represent an expense reimbursement to the trustees of tufts college for use of its employees.”

“The omidyar-tufts microfinance fund does not have any unrelated business gross income of $1,000 or more. However, in order to meet its disclosure requirements, a form 990-t is filed with the irs as a result of the various foreign investments held during the fiscal year.”