Foundation for the Arts

“FORM 990, SCHEDULE D, PART III, LINE 1a: The Foundation accounts for artistic and historic items as collection items if they meet the definition of a collection. The criteria states that to be a collection, the assets are (1) held for public exhibition,(2) protected and preserved, and (3) are subject to an organizational policy that requires proceeds from the sale of artifacts to be used to acquire other items for collections absent any donor-imposed restrictions or for the direct care of existing collections. The Foundation defines direct care of collections as any activity that involves the protection and preservation of the collection. Collections acquired either through purchase or donations are not capitalized and therefore are not reported as assets in the accompanying statements of financial position.”

“Form 990, schedule d, part iii, line 4: the foundation's collection is made up of numerous and various works of art. Pursuant to a contract between the foundation and the museum, all art owned by the foundation is for the sole use of the museum so long as the museum complies with the contract. The museum is responsible for implementing procedures that require each item in the collection to be cataloged, preserved and cared for, and the museum staff regularly performs activities verifying their existence and assessing their condition. The museum is also responsible for purchasing adequate insurance on the collection. The collection is subject to a policy that proceeds from sales of works of art must be used to acquire other items for the collection or for the direct care of the existing collection. The foundation defines direct care of collections as any activity that involves the protection and preservation of the collection.”

“FORM 990, SCHEDULE D, PART v, line 4: The intended uses of the endowment funds is for the acquisition of works of art.”

“PART X, LINE 2: The foundation has been classified as an entity that is exempt from income taxes under section 501 (c)(3) of the internal revenue code and is not considered a private foundation within the meaning of section 509(a)(3). the foundation is also exempt from state income taxes. Accordingly, no provision has been made for federal income or state franchise taxes in the accompanying financial statements.”