Stony Brook Foundation Inc.

“In the interest of clarity, the Foundation is providing context on the compensation reported in both Part VII and Schedule J of the Form 990. The Foundation's Executive Director, Dexter Bailey, is a State University employee who undertakes two different job responsibilities: SENIOR VICE PRESIDENT FOR UNIVERSITY ADVANCEMENT at the State University of Stony Brook and as Executive Director of the foundation. Mr. Bailey's compensation reported on Part VII of the Form 990 represents compensation paid by the Foundation for services rendered by Mr. Bailey in his capacity as Executive Director and not for any services he renders to the State University of Stony Brook. BENEFITS NOT DISCLOSED ON SCHEDULE J ARE PROVIDED BY THE STATE UNIVERSITY OF STONY BROOK. The funding to support State employee compensation is approved by the Foundations Board of Directors. Dr. Samuel Stanley, Ex-Officio Trustee, is a State University employee that participates in fundraising on behalf of the Foundation. Dr. Stanley's compensation reported on Part VII of the Form 990 is a PORTION OF HIS TOTAL COMPENSATION PACKAGE. DR. STANLEY'S TOTAL COMPENSATION IS ESTABLISHED AND APPROVED BY THE SUNY CHANCELLOR. BENEFITS ARE PROVIDED BY THE STATE UNIVERSITY OF STONY BROOK. The funding to support THE State employee compensation is approved by the Foundations Board of Directors. CFO & COO, Jason Hsueh, and CIO, Erin AbouZaid, spend 100% of their time engaged in activities that support the Foundation; however, their compensation is paid by an unrelated third party tax-exempt organization and not directly by the Foundation. Compensation paid by an unrelated organization for services rendered to the Foundation is required to be disclosed in Part VII, Column (d) as though it had been paid by the Foundation. CHIEF FINANCIAL OFFICER, LYLE GOMES, IS A STATE UNIVERSITY EMPLOYEE WHO OCCASIONALLY RENDERS SERVICE TO THE FOUNDATION. HIS COMPENSATION REPORTED ON PART VII REPRESENTS AN ALLOCATION OF HIS STATE COMPENSATION THAT IS ATTRIBUTABLE TO SERVICES RENDERED TO THE FOUNDATION. COMPENSATION PAID BY AN UNRELATED ORGANIZATION FOR SERVICES RENDERED TO THE FOUNDATION IS REQUIRED TO BE DISCLOSED IN PART VII, COLUMN (D) AS THOUGH IT HAD BEEN PAID BY THE FOUNDATION. There is a salary cap for certain state university employees: Dr. Assanis, Dr. Kaushansky, and Dr. Pasternak. IN RESPONSE TO THE UNIVERSITY'S OCCASIONAL REQUEST, THE STONY BROOK FOUNDATION'S BOARD DOES REVIEW AND APPROVE FUNDS FOR ADDITIONAL COMPENSATION TO THE UNIVERSITY EMPLOYEES SO THAT THE UNIVERSITY CAN RECRUIT THE BEST PEOPLE FOR THE JOB. INDIVIDUAL EMPLOYEES' CONTRACTS OUTLINE THE PORTION OF THEIR SALARY THAT WILL COME FROM STONY BROOK FOUNDATION AND ANOTHER PORTION FROM THE UNIVERSITY, CAUSING CERTAIN EMPLOYEES TO RECEIVE TWO W-2'S. BENEFITS ARE PROVIDED BY THE STATE UNIVERSITY OF STONY BROOK.”

“FORM 990, PART I, LINE 15 Salaries, other compensation, AND employee benefits are comprised of support for campus programs, administrative offices and fundraising offices. For fiscal year 2016, the total support of $9,209,283 includes $5,537,599 related to campus programs, $2,042,170 related to administrative offices and $1,629,514 related to fundraising offices. Other Program Services Form 990, Part III, line 4d Public Serv., Admin. Supp. & Student Support Stony Brook Foundation also aids in SUNY Stony Brook's firm commitment to providing a dedicated educational and social support system that enables all their students to thrive, by providing funding to improve student, administrative and public services across SUNY Stony Brook. Fin. Aid. Stony Brook Foundation provided various student financial support to SUNY Stony Brook as well as to SUNY Stony Brooks students to assist in their effort of delivering a world-class education at remarkably affordable prices and to keep recruiting the best young minds and future leaders from across the socioeconomic spectrum. Fiscal Agent The foundation holds funds as a trustee/disbursing agent for auxiliary agencies of stony brook university, which amounted to $30,853,857 as of June 30, 2016. Such amounts are included in cash and cash equivalents and other investments in the accompanying combined statements of financial position. The foundation charges fees to these agencies for administrative costs which amounted to $2,529,065 for fiscal year 2016, which is included in contracts and other support in the combined statements of activities. Delegation of AUTHORITY Form 990, part VI, section A, line 1 The following committees of the Foundation's Board of Trustees have been delegated authority by the Board of Trustees. The Foundation's executive committee has all the power and authority of the Foundation'S Board ("Board") when the Board is not in session, except for the authority to fill vacancies on the board or any board committee, fix, if any, compensation for board trustees (none is presently paid) including any board committees or to amend, repeal or adopt new foundation bylaws. The Executive committee will also carry out any other responsibilities and duties delegated to it FROM the Board from time to time. The executive committee is obliged to notify the full board in a responsible time frame in reference to the aforementioned. The foundation's audit committee is responsible for overseeing the foundation's accounting and financial reporting processes, administering the foundation's conflict of interest and whistleblower policies, reviewing compensation of all conflicts of interest, procurement or termination and overseeing the foundation's trustees and officers insurance coverage and will also carry out any other responsibilities and duties delegated to it by the board from time to time. THe Foundation's budget committee is responsible for the general supervision of the FOundation's financial affairs and annual budget and will also carry out any other responsibilities and duties delegated to it by the borad from time to time. The Foundation's governance committee develops, reviews and recommends to the board, foundation corporate governance principles and will also carry out any other responsibilities and duties delegated to it by the board from time to time. The foundation's investment committee is responsible for the supervision of the foundation's investments and any individuals or entities to which investment management responsibility is delegated, the review of compensation of foundation investment managers who are also trustees or officers of the foundation and will also carry out any other responsibilities and duties delegated to it by the board from time to time. The Foundation's nominating committee assists the Board by identifying individuals qualified to become trustees and selection, or recommending that the board select, the candidates for all trusteeships to be filled by the”

“Form 990, part VI, section A, line 8b The foundation adopted policies pursuant to which the board and all committees of the board will contemporaneously document in minutes the meetings held (other than in executive session) And written actions undertaken.”

“Form 990, Part VI, section B, Line 11 THE FORM 990 WAS PREPARED BY AN INDEPENDENT ACCOUNTING FIRM IN CONJUNCTION WITH THE ORGANIZATION'S FINANCIAL DEPARTMENT. THE FORM 990 IS THEN FORWARDED TO THE EXECUTIVE COMMITTEE FOR REVIEW, COMMENT AND FINAL APPROVAL. THE FINAL VERSION IS CIRCULATED TO THE BOARD OF TRUSTEES.”

“Form 990, Part VI, Section B, Line 12c Pursuant to the Foundation's bylaws (article IV, Section 11), all Board of Trustees Members, officers and key employees are required to complete an annual conflict of interest certification. The Internal Revenue Service requires that the Foundation disclose relationships among current and certain former members of the Board of Trustees, officers, certain employees, family members, certain independent contractors and entities in which these individuals have an ownership interest. The Annual Certification requires each Trustee, officer and key employee of the Foundation to disclose in writing the existence of any potential conflicts of interest, to certify compliance with the conflict of interest policy and to agree to abide by it. The signed Certifications shall be maintained by the CFO & COO of the Foundation. If an individual becomes aware that he or she may be involved in a potentially conflicted transaction, he or she will immediately disclose the existence and material facts of his or her interest in the conflicted transaction to the Audit Committee or the Board of Trustees, as applicable. Board discussions pertaining to the conflict (and its resolution) are documented in the Board Minutes.”

“Form 990, Part VI, Section B, Lines 15A The compensation paid to the Foundations top management official (the Executive Director) is determined by an unrelated third party: the State of New York. The State has established compensation guidelines whereby compensation is capped at a specific level. The Foundation has no discretion to modify the compensation thresholds established by the State; however, the Foundation may APPROVE A REQUEST FROM THE UNIVERSITY TO PROVIDE additional compensation in an effort to attract talent and pay these individuals at a market rate rendering services to the Foundation. SUCH ADDITIONAL COMPENSATION IS THEN APPROVED BY THE FOUNDATION BOARD. The compensation is memorialized in an employment contract noting that a portion of salary will come from Stony Brook Foundation and another portion from the University, causing certain employees to receive two W-2s. Form 990, Part VI, Section B, Line 15B The compensation paid to the Foundations other officers (COO, CFO and CIO) is recommended by the Foundations Executive Director, and is reviewed by an unrelated third party tax-exempt organization to determine if compensation is appropriate and within the guidelines of industry standards. The approved compensation is then memorialized in an employment contract.”

“Form 990, Part VI, Line 19 STONY BROOK FOUNDATION, INC. MAKES ITS FORM 990 AVAILABLE TO THE PUBLIC ON THE ORGANIZATION'S WEBSITE. The Form 990 is likewise published on the internet at www.guidestar.org. THE ORGANIZATION'S FINANCIAL STATEMENTS ARE MADE AVAILABLE ON THE ORGANIZATION'S WEBSITE. THE ORGANIZATION'S GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT ORDINARILY AVAILABLE TO THE PUBLIC, BUT, IF REQUESTED, WILL BE PROVIDED AT MANAGEMENT'S DISCRETION.”