Upward Unlimited Foundation

“The corporation shall have one voting member, which shall be Upward Unlimited, a South Carolina nonprofit corporation recognized as a tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code.”

“The voting member shall be entitled to elect the directors of the corporation.”

“The voting member shall be entitled to vote on any other matter requiring membership approval under the Act, the articles of incorporation, or the bylaws. The voting member shall also be entitled to vote on any other matter submitted to a member vote by resolution of the Board of directors.”

“Form 990 is prepared by an independent CPA firm and reviewed in detail by top management. The return is then forwarded to the audit committee for review and approval. The reviewed Form 990 is also forwarded to the Board of Directors prior to filing.”

“The Foundation uses Upward Unlimited's conflict of interest policy. The policy is reviewed and approved anually. All Board members, officers, and Vice Presidents are required to agree to and sign the policy annually. The policy is detailed in the team member guidebook, which every employee is required to read and indicate by signature that he/she understands the policy.”

“Line 15a) The Foundation relies on Upward Unlimited's compensation procedures and policies. Upward Unlimited's non-salaried Board of Directors works with an independent third party to ensure reasonable compensation of Upward employees. This Firm also conducts a bi-annual compensation analysis comparing Upward officers' compensation to similar organizations, and recommends to the Board annual compensation for all officers. During the Board's compensation discussion and vote, no employee, including the President or family of any employee is present. The compensation vote is documented in the Board minutes upon approval. Line 15b) The organization does not compensate officers or key employees, other than the executive director, and therefore this line was answered no in accordance with the instructions.”

“The audited financial statements are made available to the public on Upward Unlimited's website at www.upward.org. The governing documents and conflict of interest policy are made available upon request.”

“To partially fund the construction of the new sports complex, The Upward Star Center, Upward Unlimited entered into a New Markets Tax Credit (NMTC) financing arrangement on January 23, 2015. The NMTC Program was established under federal law by the Community Renewal Tax Relief Act of 2000. The program is designed to spur new or increased investments into operating businesses and real estate projects located in low-income communities by offering investors a federal tax credit in exchange for the investments. To earn the tax credit, the NMTC investor must remain invested for a seven-year period, which will end in 2022 for our project. As part of this financing arrangement, the Foundation issued $10.2 million as a note receivable to an investment fund, Upward Spartanburg Investment Fund, LLC, becoming a leveraged lender. Of this amount, $2 million was acquired from a financial institution as a bridge loan. The investor, a financial institution, provided approximately $4.8 million to the fund as a note receivable representing the value of tax credits to be realized over the seven-year period. This investment fund in turn made investments in two Community Development Entities (CDEs) and holds 99.99% investor member interests in the CDEs. The CDEs made loans totaling $15 million to the Upward Star Center project. As part of this financing arrangement Upward has entered into a put and call agreement to take place at the end of the seven-year tax credit period. Under this agreement, the NMTC investor can exercise an option to sell its interest in the investment fund to Upward for $1,500. At that point, the investor will have realized the full benefit of the tax credits. Upon exercise of this option, the investor note of approximately $4.8 million is to be cancelled providing a future benefit to Upward of that amount. The note receivable with the investment fund mentioned above for the Foundation is receiving quarterly interest only payments for the first seven years at an interest rate of 3.5% per annum and matures on January 23, 2039. Upward determined the allowance for estimated losses on the note by looking at historic payment information. Upward has not established an allowance for estimated losses, because, based upon historical payments and the nature of the affiliated organizations involved, all amounts are collectible. Upward monitors the credit quality of its note annually. As of May 31, 2015, the full amount of the loan is current and performing.”

“Though not required by law to have a financial audit, the Foundation Board chooses to conduct an annual audit. Further, the parent organization has an audit committee that assumes responsibility for oversight of the audit of its financial statements and selection of its independent accountant. This process has not changed since the prior year.”

“Part IX, Line 7 includes reimbursed costs to Upward Unlimited, a related tax-exempt organization, for shared employees.”