Chicago Public Education Fund

“The Fund is acting as a fiscal agent for Chicago Public Schools (CPS) in connection with the CPS principal bonus plan which began in 2012. Under this agreement, The Fund has agreed to accept payment of pledges from various donors secured by CPS, and to process payments to school principals, as directed by CPS, for each of the four calendar years from 2012 through 2015. During 2014, $270,000 in pledge payments was collected and recorded to the statement of financial position as a liability. There were no disbursements during 2014 for principal bonus payments. Currently, there is a remaining balance of $429,000 to be disbursed under this agreement in future years. Additionally, during 2014, The Fund agreed to serve as fiscal agent on behalf of Crown Family Philanthropies (Crown) with respect to the CPS Principal Fellowship Program in partnership with Northwestern University. The first of two $200,000 payments was received in December 2014. These funds will be disbursed as direction is received from Crown over the term of the agreement, which ends in October 2016.”

“The Fund is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code and applicable state law. In addition, The Fund qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2). The accounting standard on accounting for uncertainty in income taxes addressed the determination of whether tax benefits claimed on a tax return should be recorded in the financial statements. Under this guidance, The Fund may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Examples of tax positions include the tax-exempt status of The Fund and the various positions related to the potential sources of unrelated business taxable income (UBTI). The tax benefits recognized in the financial statement from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Fund does not believe that there are any unrecognized tax benefits or tax liabilities that should be recorded for the reporting periods presented in these financial statements. The Fund is generally no longer subject to examination by the Internal Revenue Service for years before 2011.”