North Bend Community Scholarship Fund

“No review was or will be conducted.”

“No documents available to the public.”

“Client Note 1 - STATEMENT 4Schedule A (Form 990), Part III - Statements About ActivitiesLine 3 - Explanation of Methodology Used in Determining ThoseIndividuals or Organizations Qualified to Receive Grants or LoansTo be qualified for a scholarship from the North Bend CommunityScholarship Fund (NBSCF), an applicant must:1. Be a graduate of North Bend High School or be a senior at NorthBend High School at time of application.2. Have attended North Bend High School for a minimum of foursemesters during 9th - 12th grade.3. Complete the appropriate application form as developed by theselection committee and file the form by the established deadline.4. Sign statement that the award will be used for educationalpurposes and agree to inform NBCSF's selection committee about allother scholarships/aid monies received.5. Plan to enroll in a college/university or technical/vocationalschool eligible to accept federal PELL grant monies.6. Plan to enroll in a college/university or technical/vocationalschool within the timelines specified by the selection committee.NBCSF determines that individuals/students qualify to receive paymentby sending scholarships directly to the school in the student's name.These schools are instructed to return funds to NBCSF if the studentdoes not maintain eligibility.”

“Client Note 2 - Part IV-A - Support Schedule - Facts and CircumstancesTo qualify as a nonprivate foundation under IRC Sections 509(a)(1) and 170(b)(1)(a)(vi), the taxpayer must receive a substantial part of its support in gifts, grants and contributions from the general public and/or a governmental unit. A "substantial part of its support" is met if at least one-third of the total support normally received by the organization comes from gifts, grants and contributions. "Normally" generally means meeting this requirement for the preceding four taxable years. Contributions by any person (other than a governmental unit or 170(b)(1)(A)(vi) organization) are treated as "allowable support" from the general public only to the extent that the contributions by such persons during the four-year period do not exceed two percent of the organization's total support for such four-year period.An organization may exclude from its calculation of public support amounts that qualify as "unusual grants". Unusual grants are defined as substantial contributions or bequests from disinterested parties that:Are attracted by reason of the publicly supported nature of the organization;Are unusual or unexpected with respect to the amount thereof; andWould, by reason of their size, adversely affect the status of the organization as normally being publicly supported for the applicable period.For the year ended December 31, 2012, the organization does not meet the mechanical one-third public support test. However, the organization does qualify as a public charity under the 10% facts and circumstances test. North Bend Community Scholarship Fund normally receives more than 10% of its support from the general public. In addition, the following "facts and circumstance" requirements establishing that it serves broad-based public interests have been satisfied [Treas. Reg. 1.170A-9(e)(3)]. Attraction of Public Support - The organization is organized and operated to attract new and additional public and government support on a continuous basis. The organization maintains a continuous and bona fide program for soliciting funds from the general public. Representative Governing Body - The organization's governing body represents the broad interests of the public rather than the personal interests of a few donors. Sources of Support - Although the organization has received a number of large gifts that skew the public support test, the organization actively solicits contributions from the general public and receives a number of additional grants from the general public. Availability of Public Facilities or Services - The organization provides scholarships to any qualifying graduate of North Bend High School.For the previous 4 years, a high percentage (in excess of 12%)of the organization's support came form governmental units and the general public. (Please see Part IV-A of Schedule A.) This amount came from numerous unrelated donors. Therefore, based on the various facts and circumstances as enumerated in Reg 1.170A-9(e)(3) the organization should be considered as publicly supported.”

“Unrealized gain on securities = $674862”