Deadwood History Inc.

Schedule D, Page 2, Part V, Line 4

“The organization's endowment consists of two funds established to support the mission of the organization. Its endowment includes both donor-restricted endowment funds and funds designated by the board of directors to function as endowments. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the board of directors to function as endowments, are classified and reported based on the existence or absence of donor-imposed restrictions. Earnings from both the restricted funds and board designated funds are classified as unrestricted, undesignated net assets. The board's current policy is to allow the investment funds to grow and to eventually provide an income stream for annual operations from these funds. Interpretation of relevant law the organization has interpreted the state of south dakota uniform prudent management of institutional funds act (upmifa) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the organization classifies as permanently restricted net assets (a) the original value of the gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations of the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the organization in a manner consistent with the standard of prudence prescribed by upmifa. In accordance with upmifa, the organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: the duration and preservation of the fund; the purposes of the organization and the donor-restricted endowment fund; general economic conditions; the possible effects of inflation and deflation; the expected total return from the income and the appreciation of investments; other resources of the organization; the investment policies of the organization”