Vatican Observatory Foundation Attn Brother Tom Williams

“The Foundation is subject to the "Management of Charitable Funds Act" (Arizona's version of the Uniform Prudent Management of Institutional Funds Act of 2006 "UPMIFA) and, thus, classifies amounts in its donorrestricted endowment funds as net assets with donor restrictions because those net assets are time restricted until the Board of Directors appropriates such amounts for expenditure. The Board of Directors has interpreted the Management of Charitable Funds Act as not requiring the maintenance of purchasing power of the original gift amount contributed to an endowment fund, unless a donor stipulates the contrary. As a result of this interpretation, when reviewing its donor-restricted endowment funds, the Foundation considers a fund to be underwater if the fair value of the fund is less than the sum of (a) the original value of initial and subsequent gift amounts donated to the fund and (b) any accumulations to the fund that are required to be maintained in perpetuity in accordance with the direction of the applicable donor gift instrument. The Foundation has interpreted the Management of Charitable Funds Act to permit spending from underwater funds in accordance with the prudent measures required under the law. Additionally, in accordance with the Management of Charitable Funds Act, the Foundation considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: The duration and preservation of the fund. The purposes of the Foundation and the donor-restricted endowment fund. General economic conditions. The possible effect of inflation and deflation. The expected total return from income and the appreciation of investments. Other resources of the Foundation. The Foundation's investment policies.”

“The Foundation is an Internal Revenue Code ("IRC") Section 501(c)(3) organization, exempt from taxes by application of IRC Section 501(a) and is a public charity by application of IRC Section 509(a)(1). Accordingly, no provision for federal or state income taxes is recorded in the accompanying financial statements. Income from certain activities not directly related to the Foundation's tax-exempt purpose, however, may be subject to taxation as unrelated business income. Management has considered its tax positions in accordance with the accounting standard for uncertainty in income taxes and believes that all of the positions taken in its federal and state exempt organization returns are more likely than not to be sustained upon examination. In addition, Management is not aware of any matters which would cause the Foundation to lose its tax-exempt status. The Foundation's returns are subject to examination by federal and state taxing authorities, generally for three and four years, respectively, after they are filed. The Foundation recognizes interest and penalties related to unrecognized tax benefits in general and administrative expenses in the accompanying financial statements. During the year ended December 31, 2018 and 2017, the Foundation did not recognize any interest and penalties.”

“Fees 24,661. Taxes 1,177.”

“Fees 24,661. Taxes 1,177.”