Polly Klaas Foundation

“Presented to audit committee who reviews and then to the board.”

“The Board of Directors and the Audit Committee will review this Policy annually.”

“It shall be the policy of the Polly Klaas Foundation's Board of Directors to determine, approve and review the compensation of key staff.A. This process will be conducted when any of the following conditions occur:At hiring; when the employee is provided an adjustment in their salary; Annually when the budget is presented to the Board of Directors for review and approval.B. The Board will be provided with tools to make this determination as follows: The Annual Northern California Nonprofit Compensation and Benefits Report; The Polly Klaas Foundation Wage and Salary Schedule.The Board of Directors shall take action on this item at the annual meeting by a resolution which shallbe filed in the corporate record.”

“Upon request”

“Client Note 1 - FORM 990, PART 1, LINE 8C NET GAIN OR LOSS FROM SALE OF ASSETS OTHER THAN INVENTORYSCHEDULE A, PART II - COMPENSATION OF INDEPENDENT CONTRACTOR FOR PROFESSIONAL SERVICESThe Polly Klaas Foundation (PKF) has contracted with an independent contractor to operate an automobile donation program on its behalf as one of PKF's programs to generate funds necessary to carry on its charitable activities. During the past year, PKF had net receipts of $232,353 from this program.The automobile program is offered as a method by which individuals, who may otherwise not be willing or able to assist PKF through a direct cash donation, can provide much needed support to PKF by contributing their used vehicles. This property is resold by PKF (through an independent contractor as PKF's agent) and the cash proceeds, net of expenses, are directly used by PKF for PKF's charitable programs. PKF has determined that operating this program internally would divert the specialized personnel and support staff of the organization away from the at-risk children and families' who are the prime beneficiaries of PKF's charitable programs. PKF also realizes that it does not have the resources or operating capacity to conduct this program on its own, therefore this program is operated by a contractor for charitable purposes on PKF's behalf.The expenses that are associated with the program are fundamentally different from those incurred by a "traditional" direct mail or similar fundraising campaign. This is primarily because of the high costs associated with advertising for donations of property through more expensive mass media such as radio and television advertisements, not to mention the additional costs associated with used vehicles, such as towing, detailing, and selling the donated property. These costs differ from programs in which the charity receives its donations in a readily usable form such as cash.The internal revenue service has not issued specific guidelines regarding how a charity is to report the revenue and expenses associated with a program like an automobile donation program. PKF has attempted to work within the general reporting instructions for the Form 990 to complete this return. Following is a brief description of the manner in which the revenue and expenses are reported.PKF has reported the value of these non-cash contributions on Form 990 Part VIII on line 1(g) and included the amount in costs on line 7(b) of Form 990 as the exact amount received by the independent contractor for the resale of the property.Because the property is sold by PKF (through the contractor) after it is donated, PKF has reported at line 7(a), the gain or loss from the sale of the donated property. Line 7(b) includes the basis of the property equal to the resale amount, plus all expenses related to the acquisition, and processing a sale of the property. The inclusion of these expenses here results in a "reporting loss" at line 7(d), even though the organization receives an actual net cash increase from the program, which substantially benefits the organization to further PKF's charitable programs.Thus, all expenses associated with the automobile donation program are reflected at Form 990, line 7(c). This amount includes all expenses of the automobile program incurred by the independent professional contractor on behalf of PKF as determined by the contract it has with PKF. In an effort to provide notice regarding all of the expenses associated with the program, the professional contractor's individual expenses for the 2012-2013 fiscal year were as follows:Cost of sales $ 179,060 Professional contractor's fee 122,729 Advertisement 114,597 ----------Total expenses $ 416,386 ==========”

“rounding = -$1”