Pec United Charities Inc.

“Membership in pec united charities, inc. Consists of permanent full-time employees of pedernales electric cooperative, inc. Who participate by making monthly monetary contributions to the organization. All members of the organization are also members of a cooperative chapter as designated by their work location.”

“The members within each chapter nominate and elect, by majority vote, two employee-members, to serve as the chapter representatives on the board.”

“Under state nonprofit law, a member vote is required for an amendment of a certificate of formation, and certain other actions including a merger, a winding up of the corporation, or a sale of all assets. Additionally, the bylaws specify that members, through vote to specify the beneficiaries and amounts to be distributed, and the treasurer "shall" draft and forward funds for distribution according to these recommendations.”

“The organization engages an outside accounting firm to prepare the form 990. Once prepared, the organization's internal accountants and the board of directors reveiw the return prior to its filing.”

“The organization does not have any employees and does not compensate any individuals.”

“The organization makes its governing documents, conflict of interest policy, if applicable, and financial statements available to the public upon request.”

“10a - under the bylaws, the membership of the organization is divided into chapters based on the service districts of the employer of all members. 10b - the chapters are then operated according to the bylaws for the purpose of voting to select directors, and voting to determine how chapter funds are to be disbursed. The organization's website available to members includes the bylaws as well as uniform instructions and sources of information about chapter activities, processes, and deadlines.”

“Pec united charities, inc. Has historically not reported pedernales electric cooperative, inc. (pec) as a related organization. The organization has taken this position due to the fact that it was organized soley by the employees of pec and has a self-perpetuating board of directors. Pec matches the contributions made to the organization by the organization's members but does not exercise control over decisions made by the organization's board of directors. Additionally, pec provides accounting support but does not have the ability to replace or appoint directors to the organization's board of directors. But for the fact a majority of the board is comprised of employees of pec, the organization is not regarded as being affiliated or related to pec. In order to insure that the organization is not controlled by pec, the bylaws were amended subsequent to year end so that not more than 50% of its board of directors is comprised of employees of pec. Because of this change in governance, the organization has continued its historical position of not reporting pec on schedule r as a related organization.”