The Basic Fund

“June McCarthy and James McCarthy have a family relationship.”

“The Executive President and Treasurer, Mr. J. William Morris III, reviewed in detail the Form 990 and provided a complete copy of the Form 990 to the Board prior to filing the return with the Internal Revenue Service. The audit committee will review the Form 990 subsequent to filing form 990 with the Internal Revenue Service.”

“EVP J. William Morris III and Executive Director Rachel Elginsmith regularly monitor the activities of the organization and its board to ensure there is no conflict of interest. It is mandated by policy, that all directors and officers must notify the board of potential conflicts on a no less than annual basis. Our Conflicts of Interest Policy (the "Policy") covers all Directors, Officers, and members of board committees with board delegated powers, and family members of such persons. In connection with any actual or potential conflict of interest, any person covered under the policy must annually disclose the existence of his or her financial interest and all material facts to the director(s) and officer(s) delegated by the board, currently the Executive Director and Treasurer, to consider the transaction or arrangement. Should the potential conflict warrant review by the board, the designated officer(s) alert the Chairman and other board committee chairs, to consider the transaction and determine whether there is a potential conflict. An investigation and special meeting may be called to aid in the determination, if necessary. A conflict must not exist within the organization at any time. If it is determined that a transaction will result in a conflict of interest the board must take steps to ensure that the conflict of interest does not arise. Should an already existing conflict of interest be brought to the attention of the board, necessary steps to eliminate the conflict must be taken. If there is reasonable cause to believe that an individual has failed to disclose a potential conflict, the board shall take appropriate disciplinary and corrective action. In the case of a transaction that could be characterized as an excess benefit to a Director or voting officer, special procedures ("Sanctions") are undertaken prior to such a transaction. These Sanctions include board approval of such transaction, and investigations and data gathering is to happen prior to such a vote. The vote occurs without the participation of the Director or Officer in question, or their family members. Any approved transactions are duly recorded. recorded.”

“In 2009, the board made up of independent members approved the use of a search company to fill the newly created Executive Director role. The search firm provided comparable compensation data for similarly qualified persons in functionally comparable positions at similarly situated organizations. the salary range determined for the Executive Director position and the deliberations and decsion were documented contemporaneously. The documentation included the list of the members present at the time, how the members voted and a description of the comparable data relied upon by the board and how it was obtained, etc. as required by the intermediate sanctions regulations. THE BOARD HAS DETERMINED THAT THE RELEVANT MARKET CONDITIONS HAVE NOT CHANGED MATERIALLY, AND IT POSSESSES NO OTHER INFORMATION INDICATING THAT THE RESULTS OF THE PRIOR YEAR'S COMPARABILITY DATA ARE NO LONGER VALID. THUS, OTHER THAN A SMALL COST OF LIVING INCREASE, THERE HAS BEEN NO SUBDEQUENT CHANGE IN THE EXECUTIVE DIRECTOR'S COMPENSATION PACKAGE. THE ORGANIZATION DOES NOT HAVE ANY OTHER COMPENSATED OFFICERS OR KEY EMPLOYEES.”

“Federal Tax laws do not mandate that the organization's governing documents, conflict of interest policy and financial statements be made available for public inspection. The organization makes its financial statements available on its website and upon request.”

“Prior Period Pledge Adjustment ($65,000)”