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Notes to Financial Statements
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1. |
Investments |
Investments
are carried at fair market value and at December 31, 1998 and 1997 consists
of the following:
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1998 |
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1997 |
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Equity securities |
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$ 75,315,467 |
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$
89,203,223 |
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U.S. Treasury securities |
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30,227,092 |
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30,424,030 |
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Money market fund |
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623,480 |
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4,631,710 |
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Total |
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$ 106,166,039 |
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$ 124,258,963 |
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Investment
fees totaled $206,660 and $252,899 for the years ended December 31, 1998 and
1997, respectively and are deducted from the money market fund. |
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The following schedule
represents the investment return: |
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1998 |
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1997 |
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Investment
return |
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Unrealized (losses) gains |
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$ (15,551,984) |
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$ 21,281,612 |
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Dividends and interest |
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4,475,519 |
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5,749,099 |
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Realized gains |
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1,083,124 |
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268,852 |
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Total
investment (loss) return |
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$ (9,993,341) |
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$ 27,299,563 |
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| 2. |
Note Receivable |
Note
receivable relates to an uncollateralized loan to a third party. The loan has
a progressive rate of interest ranging from 1% to 7% over five years. The term of the loan includes, among
other things, a series of loans to be made by the Fund through April 2000.
The total of the Fund’s loans to the third party will be $2,300,000. The
maturity date of the loan is October 2003. Interest is due on a monthly basis
and principal payments commence on November 15, 2001. All unpaid principal
and accrued interest is due on the maturity date. |
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3. |
Federal
Excise Taxes |
In
accordance with the applicable provisions of IRC Section 4940, the Fund is
subject to an excise tax on net investment income, including realized gains,
as defined. In 1998, the Fund
paid $92,068 for estimated taxes.
Actual tax expense totaled $107,005 and $112,893 for the years ended
December 31, 1998 and 1997, respectively, and is included in management and
general expense in the accompanying statement of activities. |
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4. |
Leases |
In
May 1997, the Fund entered into a ten year non-cancelable operating lease for
its office facility requiring rent of $75,697 annually. Under the current leasing
arrangement, the Fund shares space and general office expenses with another
private foundation. |
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| 5. |
Pension Plan |
The
Fund has two pension plans, a money purchase defined contribution plan
covering all employees and a tax-deferred annuity plan. Under the money purchase plan,
pension costs representing 7% of salaries are funded on a monthly basis. For the year ended December 31,
1998 and 1997, employer contributions amounted to $28,618 and $24,382, respectively. Under the tax-deferred annuity plan, employees
may opt for salary deductions not to exceed 10% of their salary within limits
as defined by IRC section 403(b).
In addition, the Fund offers a 25% match on salary deductions subject
to the same IRC limitations.
These matching contributions totaled $8,146 and $7,075 for the years
ended December 31, 1998 and 1997, respectively. |
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| 6. |
Year 2000
(unaudited) |
Like
other organizations, the Fund could be adversely affected if the computer
systems they or their suppliers use do not properly process and calculate
date-related information and data from the period surrounding and including
January 1, 2000. This is commonly know as the “Year 2000” issue.
Additionally, this issue could impact non-computer systems and devices such
as office equipment, elevators, etc. At this time, because of the
complexities involved in the issue, management cannot provide assurances that
the Year 2000 issue will not have an impact, however, the Fund has and will
continue to study and evaluate all of its critical computer systems. The Fund
has not found any Year 2000 issues in any of the computer systems it has
studied and evaluated. |
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