The David Belk Cannon Foundation

“B. Frank matthews, ii and betty c. Matthews are the parents of eugene r. Matthews, ii, harriet m. Jackson, and mary m. Vaughn (all independent adults).”

“A copy of form 990 is delivered or mailed to the full board before the form is filed.”

“The conflict of interest policy is reviewed on an annual basis with the directors. In the event of a potential conflict of interest, the director with the potential conflict of interest recuses him or herself from all related discussion and voting.”

“The independent directors compare ceo and officer compensation based on reports of comparable entities from the community foundation of gaston county, guidestar and the council on foundations. Family members recuse themselves from discussions and approval of other family members' compensation. All discussions and approvals are documented in meeting minutes.”

“The organization makes its governing documents, conflict of interest policy, and financial statements available to the public upon request.”

“Book tax difference in investment: the organization holds stock in a company that is independently valued each year by a qualified appraiser. The organization holds a sufficient number of shares of the company's stock that the same appraiser has also now issued a separate appraisal report for the organization, opining that a 14% blockage discount should apply to its holdings in the company. The organization recognizes that section 4942(e) approves this type of value reduction in general but also limits the same to 10% for certain purposes, and the organization has therefore limited the blockage discount reflected in its 990 to 10%. In 2012, an underlying appraised value of $90,000,000 of the company stock, a 10% blockage discount results in a value reduction of $9,000,000, or a net value of $81,000,000. This valuation adjustment was first reflected as a reconciling item in the 2012 990. In the current year, a 10% blockage discount of the fair value of the stock (which is $85,618,000) results in a net value of $77,056,200. The net change from 2012 to 2013 is $438,200 and this is reflected as an "other change" in net assets, which when combined with a separate increase of $412,400 resulting from a change in beneficial interest in investment pool, results in a net appreciation of $850,600. The valuation adjustment is also directly reflected in schedule d, part vii, line 2, in a stand-alone declaration of the applicable stock and in form 990, part x, line 12, which reflects the total investments otherwise itemized in schedule d, part vii, line 2.”

“Change in beneficial interest in investment pool 412,400. Book/tax difference in investments 438,200.”