Indian Creek Caring Foundation

Schedule D, Page 2, Part V, Line 4

“The board of directors has established an endowment fund for the support of the organization's charitable mission over the long term. As a result, the primary objectives are to (1) preserve and increase the real value of foundation assets, and (2) provide a stable source of perpetual financial support for foundation programs in accordance with foundation spending policy. To achieve these objectives, the caring foundation has adopted an investment policy that attempts to preserve the real purchasing power of the principal and provide a stable source of perpetual financial support. Endowment assets are invested in a broadly diversified portfolio, including equity and debt securities, which are intended to achieve the return objectives of inflation plus 3%. Actual returns in any given year may vary from this amount. Investment risk should be within prudent limits but adequate to allow for the attainment of the rate of return objective. The caring foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: (1) the duration and preservation of the various funds, (2) the purposes of the donor-restricted endowment funds, (3) general economic conditions, (4) the possible effect of inflation and deflation, (5) the expected total return from income and the appreciation of investments, (6) other resources of the organization, and (7) the organization's investment policies. The caring foundation has a discretionary spending policy of appropriating for distribution or expenditure each year 3% of the arithmetic mean (average) of the market value of the fund for the previous three fiscal years. However, no withdrawals shall be made prior to the fund reaching 1,000,000. In establishing this policy, the caring foundation considered the long-term expected investment return on its endowment. Accordingly, over the long term, the caring foundation expects the current spending policy to allow its endowment fund to grow at an average of inflation plus 3%. This is consistent with the caring foundation's objectives of providing current programs with a predictable, stable stream of revenues, ensuring that the purchasing power of this revenue stream does not decline over time, and ensuring that the purchasing power or real value of the endowment does not decline over time. In 2020 54,059 was withdrawn for indian creek's covid-19 expenses. In 2019 27,867 was withdrawn for use in indian creek residential programs. The board of directors has interpreted the commonwealth of pennsylvania law 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 caring foundation classifies as net assets with donor restrictions (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to 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. Absent specific donor restrictions beyond the preservation of principal, the donor restricted endowment funds are governed by the same guidelines as the board designated portion of the fund. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the board of directors, are classified and reported based on the existence or absence of donor-imposed restrictions. Net assets designated by the board for endowment, including any unrestricted accumulated earnings arising from donor restricted contributions, are classified and reported as net assets without donor restrictions.”