United States Naval Academy Foundation Inc.

“The form 990 was reviewed by management and members of the joint finance and audit committee of u.s. Naval academy alumni association and u.s. Naval academy foundation with our tax preparers and sent to members of the board of directors and to the irs.”

“The conflict of interest policy is sent to each board/trustee member at the beginning of the calendar year with a self addressed envelope for responding. The policy details potential conflicts of interest and the need to disclose such conflicts. The policy also defines the board/trustee's member fiduciary obligation to the organization. All conflicts of interest statements are returned to the board secretary's office and kept on file. The completed signed conflicts of interest statements are reviewed by the organization's audit firm during the annual audit for completeness and to ensure that all board/trustee members are included. Upon a determination that a conflict exists, the board shall appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement to which the conflict relates. After exercising this due diligence, the board shall determine whether the foundation can obtain with reasonable efforts a more advantageous transaction from a source that would not give rise to a conflict. If a more advantageous transaction which would not create a conflict is not reasonably possible, the board shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is fair, reasonable and in the foundation's best interests. In conformity with the above determination, the board shall make its decision as to whether to enter into the transaction or arrangement.”

“The process for determining compensation of the ceo, other officers and key employees of the organization "includes a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision." specifically, the organization takes all of the steps necessary to ensure that the compensation packages of these individuals are not only reasonable and competitive, but are designed and determined in the precise manner specified in the internal revenue service's "intermediate sanctions" regulations. The process for determining the compensation packages of these individuals is as follows: 1. A joint compensation committee is constituted that is composed entirely of current and former trustees and directors meeting a strict "no conflicts" independence test set forth in the irs regulations. The joint committee is chartered by the boards to evaluate and approve the compensation of the senior executives. The approved compensation levels are included in the annual operating budget which is subsequently approved by both boards. 2. The committee acquires appropriate, independent market comparability data from its professional compensation consultant. 3. The committee reviews this comparability data in detail, posing appropriate questions to its professional compensation consultant. 4. The committee reviews the qualifications, experience and performance of each of the individuals against the comparability data acquired from the professional compensation consultant. 5. The committee designs a proposed compensation package for each of the individuals and seeks a written opinion from the professional compensation consultant that the proposed compensation package is reasonable. (the committee makes any adjustments to the proposal required in order for the professional compensation consultant to conclude that the package is reasonable.) 6. The committee memorializes all of its deliberations in detailed committee minutes that are reviewed and corrected, if necessary and approved at its following meeting. 7. The committee acquires an opinion of counsel concluding that the process followed by the committee meets the requirements of the irs regulations. 8. The committee regularly reviews its process to ensure that it continues to meet all of the requirements of applicable law.”

“The organization makes all necessary and required governing documents, conflicts of interest policies, financial statements, form 990s and annual report available on its website: www.usna.com, for the same period of disclosure as set forth in section 6104(d).”

“Several officers of the u.s. Naval academy foundation are dually employed by a related organization, the u.s. Naval academy alumni association. Hours devoted to the alumni association are listed below for the officers involved in both organizations: officer hours per week devoted to alumni association byron f. Marchant 24 henry j. Sanford 27 geraldine s. Farmer 27”

“All information reported on this 2014 form 990 is reported on a fiscal year beginning july 1, 2014 and ending june 30, 2015, with the exception of information that is reported for compensation on schedule j and part vii of the return. Compensation listed on these schedules is based on calendar year reported compensation (per the 990 instructions) for the calendar year january 1, 2014 and ending december 31, 2014.”

“To support, promote and advance the mission of the naval academy by working in conjunction with academy leadership to identify strategic institutional priorities and by raising, managing and disbursing private gift funds that provide a margin of excellence in support of the nation's premier leadership institution. The mission statement of the related entity, the u.s. Naval academy alumni association: to serve and support the united states, the naval service, the naval academy and its alumni: by furthering the highest standards at the naval academy; by seeking out, informing, encouraging, and assisting outstanding, qualified young men and women to pursue careers as officers in the navy and marine corps through the naval academy; and by initiating and sponsoring activities which will perpetuate the history, traditions, memories and growth of the naval academy and bind alumni together in support of the highest ideals of command, citizenship and government.”

“Compensation of current officers, directors, trustees, and key employees is reported on part ix, line 5 based on the accounting method and tax year used by the organization rather than the definitions and calendar year used on part vii or schedule j. The amounts on line 5 on the 2014 form 990 are higher than reported on line 5 of the 2013 form 990 because there was a change in the status of an employee from a highly compensated employee in 2013 to a key employee in 2014.”

“Change in split interest agreements 211,093.”

“For gaap purposes, the organization presents its activity in a consolidated format with its related entity, the u.s. Naval academy alumni association. These consolidated financial statements are audited by independent auditors. The gaap financial statements include supplementary information that presents the financial position and the changes in net assets of the foundation.”

“The u.s. Naval academy alumni association (a related organization) is the paymaster for both the association and the u.s. Naval academy foundation. Due to the association's role as paymaster for both organizations, the association reports both association and foundation employees for w-3 purposes. The association files all related employment tax forms. All payroll expenses related to the foundation are recorded as a receivable to the association and a payable from the foundation. The 36 foundation employees are reported on part i, line 5 and part v, line 2a even though the foundation does not file a form w-3.”