September 11, Internal Revenue Service P.O. Box Covington, KY

Transcription

1 September 11, 2014 Internal Revenue Service P.O. Box Covington, KY Re: Application for Recognition of Exempt Status under Section 501(c)(3) of the Internal Revenue Code Pennsylvania Public Education Foundation EIN Greetings: Enclosed for filing please find a completed original Form 1023, Application for Recognition of Exempt Status under Section 501(c)(3), filed on behalf of the Pennsylvania Public Education Foundation (EIN ). With it are the Form 23 checklist, our check for the user fee in the amount of $850, Schedules D, E and H, 14 explanatory continuation pages, 13 exhibits referred to in the form or the continuation pages, and a U.S. Postal Service certificate of mailing date September 11, Please note that this is a reapplication for exempt status by a foundation previously recognized as exempt under Section 501(c)(3) and in active operation from 1987 until In 2004 it became dormant and filed a final Form 990, but the underlying non-profit corporation continues to exist although inactive from 2004 until a few months ago. For this reason, some of our responses to the questions on the form may appear somewhat atypical, but all is explained in the continuation pages. Please do not hesitate to contact me if you have any questions or need further information. You may contact me by at stuart.knade@psba.org, or by telephone at (717) , extension Thank you for your assistance. Very truly yours, Stuart L. Knade General Counsel

2 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Form 1023 Checklist (Revised December 2013) Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code te. Retain a copy of the completed Form 1023 in your permanent records. Refer to the General Instructions regarding Public Inspection of approved applications. Check each box to finish your application (Form 1023). Send this completed Checklist with your filled-in application. If you have not answered all the items below, your application may be returned to you as incomplete. Assemble the application and materials in this order: Form 1023 Checklist Form 2848, Power of Attorney and Declaration of Representative (if filing) Form 8821, Tax Information Authorization (if filing) Expedite request (if requesting) Application (Form 1023 and Schedules A through H, as required) Articles of organization Amendments to articles of organization in chronological order Bylaws or other rules of operation and amendments Documentation of nondiscriminatory policy for schools, as required by Schedule B Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation (if filing) All other attachments, including explanations, financial data, and printed materials or publications. Label each page with name and EIN. User fee payment placed in envelope on top of checklist. DO NOT STAPLE or otherwise attach your check or money order to your application. Instead, just place it in the envelope. Employer Identification Number (EIN) Completed Parts I through XI of the application, including any requested information and any required Schedules A through H. You must provide specific details about your past, present, and planned activities. Generalizations or failure to answer questions in the Form 1023 application will prevent us from recognizing you as tax exempt. Describe your purposes and proposed activities in specific easily understood terms. Financial information should correspond with proposed activities. Schedules. Submit only those schedules that apply to you and check either or below. Schedule A Schedule E Schedule B Schedule C Schedule D Schedule F Schedule G Schedule H

3 An exact copy of your complete articles of organization (creating document). Absence of the proper purpose and dissolution clauses is the number one reason for delays in the issuance of determination letters. Location of Purpose Clause from Part III, line 1 (Page, Article and Paragraph Number) Pg. 1, Sec. 3, Para. 1 Location of Dissolution Clause from Part III, line 2b or 2c (Page, Article and Paragraph Number) or by operation of state law Pg. 1, Sec. 3, Para. 4 Signature of an officer, director, trustee, or other official who is authorized to sign the application. Signature at Part XI of Form Your name on the application must be the same as your legal name as it appears in your articles of organization. Send completed Form 1023, user fee payment, and all other required information, to: Internal Revenue Service P.O. Box 192 Covington, KY If you are using express mail or a delivery service, send Form 1023, user fee payment, and attachments to: Internal Revenue Service 201 West Rivercenter Blvd. Attn: Extracting Stop 312 Covington, KY 41011

4 Form 1023 (Rev. December 2013) Department of the Treasury Internal Revenue Service A new interactive version of Form 1023 is available at StayExempt.irs.gov. It includes prerequisite questions, auto-calculated fields, help buttons and links to relevant information. Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (Use with the June 2006 revision of the Instructions for Form 1023 and the current tice 1382) OMB te: If exempt status is approved, this application will be open for public inspection. Use the instructions to complete this application and for a definition of all bold items. For additional help, call IRS Exempt Organizations Customer Account Services toll-free at Visit our website at for forms and publications. If the required information and documents are not submitted with payment of the appropriate user fee, the application may be returned to you. Attach additional sheets to this application if you need more space to answer fully. Put your name and EIN on each sheet and identify each answer by Part and line number. Complete Parts I - XI of Form 1023 and submit only those Schedules (A through H) that apply to you. (00) Part I Identification of Applicant 1 Full name of organization (exactly as it appears in your organizing document) 2 c/o Name (if applicable) Pennsylvania Public Education Foundation 3 Mailing address (Number and street) (see instructions) Room/Suite Pennsylvania School Boards Association 4 Employer Identification Number (EIN) 400 Bent Creek Boulevard City or town, state or country, and ZIP Month the annual accounting period ends (01 12) Mechanicsburg, PA Primary contact (officer, director, trustee, or authorized representative) a Name: Stuart L. Knade, Director/General Counsel b Phone: ext c Fax: (optional) 7 Are you represented by an authorized representative, such as an attorney or accountant? If, provide the authorized representative s name, and the name and address of the authorized representative s firm. Include a completed Form 2848, Power of Attorney and Declaration of Representative, with your application if you would like us to communicate with your representative. 8 Was a person who is not one of your officers, directors, trustees, employees, or an authorized representative listed in line 7, paid, or promised payment, to help plan, manage, or advise you about the structure or activities of your organization, or about your financial or tax matters? If, provide the person s name, the name and address of the person s firm, the amounts paid or promised to be paid, and describe that person s role. 9a Organization s website: When operations resume, a page will be created on this site: b Organization s (optional) stuart.knade@psba.org 10 Certain organizations are not required to file an information return (Form 990 or Form 990-EZ). If you are granted tax-exemption, are you claiming to be excused from filing Form 990 or Form 990-EZ? If, explain. See the instructions for a description of organizations not required to file Form 990 or Form 990-EZ. 11 Date incorporated if a corporation, or formed, if other than a corporation. (MM/DD/YYYY) 07 / 14 / Were you formed under the laws of a foreign country? If, state the country. For Paperwork Reduction Act tice, see page 24 of the instructions. Cat K Form 1023 (Rev )

5 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 2 Part II Organizational Structure You must be a corporation (including a limited liability company), an unincorporated association, or a trust to be tax exempt. (See instructions.) DO NOT file this form unless you can check on lines 1, 2, 3, or 4. 1 Are you a corporation? If, attach a copy of your articles of incorporation showing certification of filing with the appropriate state agency. Include copies of any amendments to your articles and be sure they also show state filing certification. 2 3 Are you a limited liability company (LLC)? If, attach a copy of your articles of organization showing certification of filing with the appropriate state agency. Also, if you adopted an operating agreement, attach a copy. Include copies of any amendments to your articles and be sure they show state filing certification. Refer to the instructions for circumstances when an LLC should not file its own exemption application. Are you an unincorporated association? If, attach a copy of your articles of association, constitution, or other similar organizing document that is dated and includes at least two signatures. Include signed and dated copies of any amendments. 4a Are you a trust? If, attach a signed and dated copy of your trust agreement. Include signed and dated copies of any amendments. b Have you been funded? If, explain how you are formed without anything of value placed in trust. 5 Have you adopted bylaws? If, attach a current copy showing date of adoption. If, explain how your officers, directors, or trustees are selected. Part III Required Provisions in Your Organizing Document The following questions are designed to ensure that when you file this application, your organizing document contains the required provisions to meet the organizational test under section 501(c)(3). Unless you can check the boxes in both lines 1 and 2, your organizing document does not meet the organizational test. DO NOT file this application until you have amended your organizing document. Submit your original and amended organizing documents (showing state filing certification if you are a corporation or an LLC) with your application. 1 2a Section 501(c)(3) requires that your organizing document state your exempt purpose(s), such as charitable, religious, educational, and/or scientific purposes. Check the box to confirm that your organizing document meets this requirement. Describe specifically where your organizing document meets this requirement, such as a reference to a particular article or section in your organizing document. Refer to the instructions for exempt purpose language. Location of Purpose Clause (Page, Article, and Paragraph): Section 501(c)(3) requires that upon dissolution of your organization, your remaining assets must be used exclusively for exempt purposes, such as charitable, religious, educational, and/or scientific purposes. Check the box on line 2a to confirm that your organizing document meets this requirement by express provision for the distribution of assets upon dissolution. If you rely on state law for your dissolution provision, do not check the box on line 2a and go to line 2c. 2b If you checked the box on line 2a, specify the location of your dissolution clause (Page, Article, and Paragraph). Do not complete line 2c if you checked box 2a. 2c See the instructions for information about the operation of state law in your particular state. Check this box if you rely on operation of state law for your dissolution provision and indicate the state: Part IV Narrative Description of Your Activities Using an attachment, describe your past, present, and planned activities in a narrative. If you believe that you have already provided some of this information in response to other parts of this application, you may summarize that information here and refer to the specific parts of the application for supporting details. You may also attach representative copies of newsletters, brochures, or similar documents for supporting details to this narrative. Remember that if this application is approved, it will be open for public inspection. Therefore, your narrative description of activities should be thorough and accurate. Refer to the instructions for information that must be included in your description. Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Part V Employees, and Independent Contractors 1a List the names, titles, and mailing addresses of all of your officers, directors, and trustees. For each person listed, state their total annual compensation, or proposed compensation, for all services to the organization, whether as an officer, employee, or other position. Use actual figures, if available. Enter none if no compensation is or will be paid. If additional space is needed, attach a separate sheet. Refer to the instructions for information on what to include as compensation. Name Title Mailing address Compensation amount (annual actual or estimated) (see continuation pages) Form 1023 (Rev )

6 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 3 Part V Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continued) b List the names, titles, and mailing addresses of each of your five highest compensated employees who receive or will receive compensation of more than $50,000 per year. Use the actual figure, if available. Refer to the instructions for information on what to include as compensation. Do not include officers, directors, or trustees listed in line 1a. Name Title Mailing address Compensation amount (annual actual or estimated) NONE c List the names, names of businesses, and mailing addresses of your five highest compensated independent contractors that receive or will receive compensation of more than $50,000 per year. Use the actual figure, if available. Refer to the instructions for information on what to include as compensation. Name Title Mailing address Compensation amount (annual actual or estimated) NONE The following or questions relate to past, present, or planned relationships, transactions, or agreements with your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in lines 1a, 1b, and 1c. 2a Are any of your officers, directors, or trustees related to each other through family or business relationships? If, identify the individuals and explain the relationship. b Do you have a business relationship with any of your officers, directors, or trustees other than through their position as an officer, director, or trustee? If, identify the individuals and describe the business relationship with each of your officers, directors, or trustees. c Are any of your officers, directors, or trustees related to your highest compensated employees or highest compensated independent contractors listed on lines 1b or 1c through family or business relationships? If, identify the individuals and explain the relationship. 3a For each of your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines 1a, 1b, or 1c, attach a list showing their name, qualifications, average hours worked, and duties. b Do any of your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines 1a, 1b, or 1c receive compensation from any other organizations, whether tax exempt or taxable, that are related to you through common control? If, identify the individuals, explain the relationship between you and the other organization, and describe the compensation arrangement. 4 a b c In establishing the compensation for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines 1a, 1b, and 1c, the following practices are recommended, although they are not required to obtain exemption. Answer to all the practices you use. Do you or will the individuals that approve compensation arrangements follow a conflict of interest policy? Do you or will you approve compensation arrangements in advance of paying compensation? Do you or will you document in writing the date and terms of approved compensation arrangements? Form 1023 (Rev )

7 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 4 Part V Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continued) d Do you or will you record in writing the decision made by each individual who decided or voted on compensation arrangements? e Do you or will you approve compensation arrangements based on information about compensation paid by similarly situated taxable or tax-exempt organizations for similar services, current compensation surveys compiled by independent firms, or actual written offers from similarly situated organizations? Refer to the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation. f g 5a b c Do you or will you record in writing both the information on which you relied to base your decision and its source? If you answered to any item on lines 4a through 4f, describe how you set compensation that is reasonable for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in Part V, lines 1a, 1b, and 1c. Have you adopted a conflict of interest policy consistent with the sample conflict of interest policy in Appendix A to the instructions? If, provide a copy of the policy and explain how the policy has been adopted, such as by resolution of your governing board. If, answer lines 5b and 5c. What procedures will you follow to assure that persons who have a conflict of interest will not have influence over you for setting their own compensation? What procedures will you follow to assure that persons who have a conflict of interest will not have influence over you regarding business deals with themselves? te: A conflict of interest policy is recommended though it is not required to obtain exemption. Hospitals, see Schedule C, Section I, line 14. 6a b Do you or will you compensate any of your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in lines 1a, 1b, or 1c through non-fixed payments, such as discretionary bonuses or revenue-based payments? If, describe all non-fixed compensation arrangements, including how the amounts are determined, who is eligible for such arrangements, whether you place a limitation on total compensation, and how you determine or will determine that you pay no more than reasonable compensation for services. Refer to the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation. Do you or will you compensate any of your employees, other than your officers, directors, trustees, or your five highest compensated employees who receive or will receive compensation of more than $50,000 per year, through non-fixed payments, such as discretionary bonuses or revenue-based payments? If, describe all non-fixed compensation arrangements, including how the amounts are or will be determined, who is or will be eligible for such arrangements, whether you place or will place a limitation on total compensation, and how you determine or will determine that you pay no more than reasonable compensation for services. Refer to the instructions for Part V, lines 1a, 1b, and 1c, for information on what to include as compensation. 7a b Do you or will you purchase any goods, services, or assets from any of your officers, directors, trustees, highest compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If, describe any such purchase that you made or intend to make, from whom you make or will make such purchases, how the terms are or will be negotiated at arm s length, and explain how you determine or will determine that you pay no more than fair market value. Attach copies of any written contracts or other agreements relating to such purchases. Do you or will you sell any goods, services, or assets to any of your officers, directors, trustees, highest compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If, describe any such sales that you made or intend to make, to whom you make or will make such sales, how the terms are or will be negotiated at arm s length, and explain how you determine or will determine you are or will be paid at least fair market value. Attach copies of any written contracts or other agreements relating to such sales. 8a Do you or will you have any leases, contracts, loans, or other agreements with your officers, directors, trustees, highest compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If, provide the information requested in lines 8b through 8f. b c d e f Describe any written or oral arrangements that you made or intend to make. Identify with whom you have or will have such arrangements. Explain how the terms are or will be negotiated at arm s length. Explain how you determine you pay no more than fair market value or you are paid at least fair market value. Attach copies of any signed leases, contracts, loans, or other agreements relating to such arrangements. 9a Do you or will you have any leases, contracts, loans, or other agreements with any organization in which any of your officers, directors, or trustees are also officers, directors, or trustees, or in which any individual officer, director, or trustee owns more than a 35% interest? If, provide the information requested in lines 9b through 9f Form 1023 (Rev ) )

8 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 5 Part V Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continued) b c d e f Describe any written or oral arrangements you made or intend to make. Identify with whom you have or will have such arrangements. Explain how the terms are or will be negotiated at arm s length. Explain how you determine or will determine you pay no more than fair market value or that you are paid at least fair market value. Attach a copy of any signed leases, contracts, loans, or other agreements relating to such arrangements. Part VI Your Members and Other Individuals and Organizations That Receive Benefits From You The following or questions relate to goods, services, and funds you provide to individuals and organizations as part of your activities. Your answers should pertain to past, present, and planned activities. (See instructions.) 1a 2 b In carrying out your exempt purposes, do you provide goods, services, or funds to individuals? If, describe each program that provides goods, services, or funds to individuals. In carrying out your exempt purposes, do you provide goods, services, or funds to organizations? If, describe each program that provides goods, services, or funds to organizations. Do any of your programs limit the provision of goods, services, or funds to a specific individual or group of specific individuals? For example, answer, if goods, services, or funds are provided only for a particular individual, your members, individuals who work for a particular employer, or graduates of a particular school. If, explain the limitation and how recipients are selected for each program. 3 Do any individuals who receive goods, services, or funds through your programs have a family or business relationship with any officer, director, trustee, or with any of your highest compensated employees or highest compensated independent contractors listed in Part V, lines 1a, 1b, and 1c? If, explain how these related individuals are eligible for goods, services, or funds. Part VII Your History The following or questions relate to your history. (See instructions.) 1 Are you a successor to another organization? Answer, if you have taken or will take over the activities of another organization; you took over 25% or more of the fair market value of the net assets of another organization; or you were established upon the conversion of an organization from for-profit to non-profit status. If, complete Schedule G. 2 Are you submitting this application more than 27 months after the end of the month in which you were legally formed? If, complete Schedule E. Part VIII Your Specific Activities The following or questions relate to specific activities that you may conduct. Check the appropriate box. Your answers should pertain to past, present, and planned activities. (See instructions.) 1 Do you support or oppose candidates in political campaigns in any way? If, explain. 2a Do you attempt to influence legislation? If, explain how you attempt to influence legislation and complete line 2b. If, go to line 3a. b Have you made or are you making an election to have your legislative activities measured by expenditures by filing Form 5768? If, attach a copy of the Form 5768 that was already filed or attach a completed Form 5768 that you are filing with this application. If, describe whether your attempts to influence legislation are a substantial part of your activities. Include the time and money spent on your attempts to influence legislation as compared to your total activities. (see explanation accompanying Schedule E) 3a Do you or will you operate bingo or gaming activities? If, describe who conducts them, and list all revenue received or expected to be received and expenses paid or expected to be paid in operating these activities. Revenue and expenses should be provided for the time periods specified in Part IX, Financial Data. b Do you or will you enter into contracts or other agreements with individuals or organizations to conduct bingo or gaming for you? If, describe any written or oral arrangements that you made or intend to make, identify with whom you have or will have such arrangements, explain how the terms are or will be negotiated at arm s length, and explain how you determine or will determine you pay no more than fair market value or you will be paid at least fair market value. Attach copies or any written contracts or other agreements relating to such arrangements. c List the states and local jurisdictions, including Indian Reservations, in which you conduct or will conduct gaming or bingo Form 1023 (Rev ) )

9 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 6 Part VIII Your Specific Activities (Continued) 4a Do you or will you undertake fundraising? If, check all the fundraising programs you do or will conduct. (See instructions.) 5 mail solicitations solicitations personal solicitations vehicle, boat, plane, or similar donations foundation grant solicitations phone solicitations accept donations on your website receive donations from another organization s website government grant solicitations Other Attach a description of each fundraising program. b Do you or will you have written or oral contracts with any individuals or organizations to raise funds for you? If, describe these activities. Include all revenue and expenses from these activities and state who conducts them. Revenue and expenses should be provided for the time periods specified in Part IX, Financial Data. Also, attach a copy of any contracts or agreements. c d e 6a b 7a 8 b c Do you or will you engage in fundraising activities for other organizations? If, describe these arrangements. Include a description of the organizations for which you raise funds and attach copies of all contracts or agreements. List all states and local jurisdictions in which you conduct fundraising. For each state or local jurisdiction listed, specify whether you fundraise for your own organization, you fundraise for another organization, or another organization fundraises for you. Do you or will you maintain separate accounts for any contributor under which the contributor has the right to advise on the use or distribution of funds? Answer if the donor may provide advice on the types of investments, distributions from the types of investments, or the distribution from the donor s contribution account. If, describe this program, including the type of advice that may be provided and submit copies of any written materials provided to donors. Are you affiliated with a governmental unit? If, explain. Do you or will you engage in economic development? If, describe your program. Describe in full who benefits from your economic development activities and how the activities promote exempt purposes. Do or will persons other than your employees or volunteers develop your facilities? If, describe each facility, the role of the developer, and any business or family relationship(s) between the developer and your officers, directors, or trustees. Do or will persons other than your employees or volunteers manage your activities or facilities? If, describe each activity and facility, the role of the manager, and any business or family relationship(s) between the manager and your officers, directors, or trustees. If there is a business or family relationship between any manager or developer and your officers, directors, or trustees, identify the individuals, explain the relationship, describe how contracts are negotiated at arm s length so that you pay no more than fair market value, and submit a copy of any contracts or other agreements. Do you or will you enter into joint ventures, including partnerships or limited liability companies treated as partnerships, in which you share profits and losses with partners other than section 501(c)(3) organizations? If, describe the activities of these joint ventures in which you participate. 9a b c Are you applying for exemption as a childcare organization under section 501(k)? If, answer lines 9b through 9d. If, go to line 10. Do you provide child care so that parents or caretakers of children you care for can be gainfully employed (see instructions)? If, explain how you qualify as a childcare organization described in section 501(k). Of the children for whom you provide child care, are 85% or more of them cared for by you to enable their parents or caretakers to be gainfully employed (see instructions)? If, explain how you qualify as a childcare organization described in section 501(k). d Are your services available to the general public? If, describe the specific group of people for whom your activities are available. Also, see the instructions and explain how you qualify as a childcare organization described in section 501(k). 10 Do you or will you publish, own, or have rights in music, literature, tapes, artworks, choreography, scientific discoveries, or other intellectual property? If, explain. Describe who owns or will own any copyrights, patents, or trademarks, whether fees are or will be charged, how the fees are determined, and how any items are or will be produced, distributed, and marketed Form 1023 (Rev ) )

10 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 7 Part VIII Your Specific Activities (Continued) 11 Do you or will you accept contributions of: real property; conservation easements; closely held securities; intellectual property such as patents, trademarks, and copyrights; works of music or art; licenses; royalties; automobiles, boats, planes, or other vehicles; or collectibles of any type? If, describe each type of contribution, any conditions imposed by the donor on the contribution, and any agreements with the donor regarding the contribution. 12a b c d Do you or will you operate in a foreign country or countries? If, answer lines 12b through 12d. If, go to line 13a. Name the foreign countries and regions within the countries in which you operate. Describe your operations in each country and region in which you operate. Describe how your operations in each country and region further your exempt purposes. 13a Do you or will you make grants, loans, or other distributions to organization(s)? If, answer lines 13b through 13g. If, go to line 14a. b Describe how your grants, loans, or other distributions to organizations further your exempt purposes. c Do you have written contracts with each of these organizations? If, attach a copy of each contract. d Identify each recipient organization and any relationship between you and the recipient organization. e Describe the records you keep with respect to the grants, loans, or other distributions you make. f Describe your selection process, including whether you do any of the following: (i) Do you require an application form? If, attach a copy of the form. (ii) Do you require a grant proposal? If, describe whether the grant proposal specifies your responsibilities and those of the grantee, obligates the grantee to use the grant funds only for the purposes for which the grant was made, provides for periodic written reports concerning the use of grant funds, requires a final written report and an accounting of how grant funds were used, and acknowledges your authority to withhold and/or recover grant funds in case such funds are, or appear to be, misused. g Describe your procedures for oversight of distributions that assure you the resources are used to further your exempt purposes, including whether you require periodic and final reports on the use of resources. 14a b Do you or will you make grants, loans, or other distributions to foreign organizations? If, answer lines 14b through 14f. If, go to line 15. Provide the name of each foreign organization, the country and regions within a country in which each foreign organization operates, and describe any relationship you have with each foreign organization. c d Does any foreign organization listed in line 14b accept contributions earmarked for a specific country or specific organization? If, list all earmarked organizations or countries. Do your contributors know that you have ultimate authority to use contributions made to you at your discretion for purposes consistent with your exempt purposes? If, describe how you relay this information to contributors. e Do you or will you make pre-grant inquiries about the recipient organization? If, describe these inquiries, including whether you inquire about the recipient s financial status, its tax-exempt status under the Internal Revenue Code, its ability to accomplish the purpose for which the resources are provided, and other relevant information. f Do you or will you use any additional procedures to ensure that your distributions to foreign organizations are used in furtherance of your exempt purposes? If, describe these procedures, including site visits by your employees or compliance checks by impartial experts, to verify that grant funds are being used appropriately Form 1023 (Rev ) )

11 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 8 Part VIII Your Specific Activities (Continued) 15 Do you have a close connection with any organizations? If, explain. 16 Are you applying for exemption as a cooperative hospital service organization under section (e)? If, explain. Are you applying for exemption as a cooperative service organization of operating educational 18 organizations under section 501(f)? If, explain. Are you applying for exemption as a charitable risk pool under section 501(n)? If, explain. 19 Do you or will you operate a school? If, complete Schedule B. Answer, whether you operate a school as your main function or as a secondary activity. 20 Is your main function to provide hospital or medical care? If, complete Schedule C. 21 Do you or will you provide low-income housing or housing for the elderly or handicapped? If, complete Schedule F. 22 Do you or will you provide scholarships, fellowships, educational loans, or other educational grants to individuals, including grants for travel, study, or other similar purposes? If, complete Schedule H. te: Private foundations may use Schedule H to request advance approval of individual grant procedures Form 1023 (Rev ) )

12 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 9 Part IX Financial Data For purposes of this schedule, years in existence refer to completed tax years. If in existence 4 or more years, complete the schedule for the most recent 4 tax years. If in existence more than 1 year but less than 4 years, complete the statements for each year in existence and provide projections of your likely revenues and expenses based on a reasonable and good faith estimate of your future finances for a total of 3 years of financial information. If in existence less than 1 year, provide projections of your likely revenues and expenses for the current year and the 2 following years, based on a reasonable and good faith estimate of your future finances for a total of 3 years of financial information. (See instructions.) Revenues Expenses A. Statement of Revenues and Expenses Type of revenue or expense Current tax year 3 prior tax years or 2 succeeding tax years (a) From To 7/1/14 6/30/15 (b) From To 7/1/15 6/30/16 (c) From To 7/1/16 6/30/17 (d) From To Gifts, grants, and contributions received (do not include unusual grants) Membership fees received Gross investment income Net unrelated business income Taxes levied for your benefit Value of services or facilities furnished by a governmental unit without charge (not including the value of services generally furnished to the public without charge) Any revenue not otherwise listed above or in lines 9 12 below (attach an itemized list) Total of lines 1 through 7 Gross receipts from admissions, merchandise sold or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list) Total of lines 8 and 9 Net gain or loss on sale of capital assets (attach schedule and see instructions) Unusual grants Total Revenue Add lines 10 through 12 Fundraising expenses Contributions, gifts, grants, and similar amounts paid out (attach an itemized list) Disbursements to or for the benefit of members (attach an itemized list) Compensation of officers, directors, and trustees Other salaries and wages Interest expense Occupancy (rent, utilities, etc.) Depreciation and depletion Professional fees Any expense not otherwise classified, such as program services (attach itemized list) Total Expenses Add lines 14 through 23 (e) Provide Total for (a) through (d) (Projected---see explanation on continuation pages) Form 1023 (Rev ) )

13 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 10 Part IX Financial Data (Continued) B. Balance Sheet (for your most recently completed tax year) Year End: Assets (Whole dollars) 1 (See explanation on continuation pages) a b Cash Accounts receivable, net Inventories Bonds and notes receivable (attach an itemized list) Corporate stocks (attach an itemized list) Loans receivable (attach an itemized list) Other investments (attach an itemized list) Depreciable and depletable assets (attach an itemized list) Land Other assets (attach an itemized list) Total Assets (add lines 1 through 10) Liabilities Accounts payable Contributions, gifts, grants, etc. payable Mortgages and notes payable (attach an itemized list) Other liabilities (attach an itemized list) Total Liabilities (add lines 12 through 15) Fund Balances or Net Assets Total fund balances or net assets Total Liabilities and Fund Balances or Net Assets (add lines 16 and 17) Have there been any substantial changes in your assets or liabilities since the end of the period shown above? If, explain. Public Charity Status Part X Part X is designed to classify you as an organization that is either a private foundation or a public charity. Public charity status is a more favorable tax status than private foundation status. If you are a private foundation, Part X is designed to further determine whether you are a private operating foundation. (See instructions.) Are you a private foundation? If, go to line 1b. If, go to line 5 and proceed as instructed. If you are unsure, see the instructions. As a private foundation, section 508(e) requires special provisions in your organizing document in addition to those that apply to all organizations described in section 501(c)(3). Check the box to confirm that your organizing document meets this requirement, whether by express provision or by reliance on operation of state law. Attach a statement that describes specifically where your organizing document meets this requirement, such as a reference to a particular article or section in your organizing document or by operation of state law. See the instructions, including Appendix B, for information about the special provisions that need to be contained in your organizing document. Go to line 2. Are you a private operating foundation? To be a private operating foundation you must engage directly in the active conduct of charitable, religious, educational, and similar activities, as opposed to indirectly carrying out these activities by providing grants to individuals or other organizations. If, go to line 3. If, go to the signature section of Part XI. Have you existed for one or more years? If, attach financial information showing that you are a private operating foundation; go to the signature section of Part XI. If, continue to line 4. Have you attached either (1) an affidavit or opinion of counsel, (including a written affidavit or opinion from a certified public accountant or accounting firm with expertise regarding this tax law matter), that sets forth facts concerning your operations and support to demonstrate that you are likely to satisfy the requirements to be classified as a private operating foundation; or (2) a statement describing your proposed operations as a private operating foundation? a b c d If you answered to line 1a, indicate the type of public charity status you are requesting by checking one of the choices below. You may check only one box. The organization is not a private foundation because it is: 509(a)(1) and 170(b)(1)(A)(i) a church or a convention or association of churches. Complete and attach Schedule A. 509(a)(1) and 170(b)(1)(A)(ii) a school. Complete and attach Schedule B. 509(a)(1) and 170(b)(1)(A)(iii) a hospital, a cooperative hospital service organization, or a medical research organization operated in conjunction with a hospital. Complete and attach Schedule C. 509(a)(3) an organization supporting either one or more organizations described in line 5a through c, f, g, or h or a publicly supported section 501(c)(4), (5), or (6) organization. Complete and attach Schedule D Form 1023 (Rev ) )

14 (00) Pennsylvania Public Education Foundation Page 11 Public Charity Status (Continued) Form 1023 (Rev ) ) Name: EIN: Part X 6 e f g h i a 509(a)(4) an organization organized and operated exclusively for testing for public safety. 509(a)(1) and 170(b)(1)(A)(iv) an organization operated for the benefit of a college or university that is owned or operated by a governmental unit. 509(a)(1) and 170(b)(1)(A)(vi) an organization that receives a substantial part of its financial support in the form of contributions from publicly supported organizations, from a governmental unit, or from the general public. 509(a)(2) an organization that normally receives not more than one-third of its financial support from gross investment income and receives more than one-third of its financial support from contributions, membership fees, and gross receipts from activities related to its exempt functions (subject to certain exceptions). A publicly supported organization, but unsure if it is described in 5g or 5h. The organization would like the IRS to decide the correct status. If you checked box g, h, or i in question 5 above, you must request either an advance or a definitive ruling by selecting one of the boxes below. Refer to the instructions to determine which type of ruling you are eligible to receive. Request for Advance Ruling: By checking this box and signing the consent, pursuant to section 6501(c)(4) of the Code you request an advance ruling and agree to extend the statute of limitations on the assessment of excise tax under section 4940 of the Code. The tax will apply only if you do not establish public support status at the end of the 5-year advance ruling period. The assessment period will be extended for the 5 advance ruling years to 8 years, 4 months, and 15 days beyond the end of the first year. You have the right to refuse or limit the extension to a mutually agreed-upon period of time or issue(s). Publication 1035, Extending the Tax Assessment Period, provides a more detailed explanation of your rights and the consequences of the choices you make. You may obtain Publication 1035 free of charge from the IRS web site at or by calling toll-free Signing this consent will not deprive you of any appeal rights to which you would otherwise be entitled. If you decide not to extend the statute of limitations, you are not eligible for an advance ruling. Consent Fixing Period of Limitations Upon Assessment of Tax Under Section 4940 of the Internal Revenue Code For Organization (Signature of Officer, Director, Trustee, or other authorized official) (Type or print name of signer) (Type or print title or authority of signer) (Date) For IRS Use Only IRS Director, Exempt Organizations (Date) b Request for Definitive Ruling: Check this box if you have completed one tax year of at least 8 full months and you are requesting a definitive ruling. To confirm your public support status, answer line 6b(i) if you checked box g in line 5 above. Answer line 6b(ii) if you checked box h in line 5 above. If you checked box i in line 5 above, answer both lines 6b(i) and (ii). (i) (ii) (a) Enter 2% of line 8, column (e) on Part IX-A. Statement of Revenues and Expenses. (b) Attach a list showing the name and amount contributed by each person, company, or organization whose gifts totaled more than the 2% amount. If the answer is ne, check this box. (a) For each year amounts are included on lines 1, 2, and 9 of Part IX-A. Statement of Revenues and Expenses, attach a list showing the name of and amount received from each disqualified person. If the answer is ne, check this box. (b) For each year amounts are included on line 9 of Part IX-A. Statement of Revenues and Expenses, attach a list showing the name of and amount received from each payer, other than a disqualified person, whose payments were more than the larger of (1) 1% of line 10, Part IX-A. Statement of Revenues and Expenses, or (2) $5,000. If the answer is ne, check this box. 7 Did you receive any unusual grants during any of the years shown on Part IX-A. Statement of Revenues and Expenses? If, attach a list including the name of the contributor, the date and amount of the grant, a brief description of the grant, and explain why it is unusual Form 1023 (Rev ) )

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16 (00) Pennsylvania Public Education Foundation Page 18 Schedule D. Section 509(a)(3) Supporting Organizations Section I Identifying Information About the Supported Organization(s) 1 State the names, addresses, and EINs of the supported organizations. If additional space is needed, attach a separate sheet. Name Address EIN PENNSYLVANI SCHOOL BOARDS ASSN 400 BENT CREEK BLVD MECHANICSBURG, PA Form 1023 (Rev ) ) Name: EIN: 2 3 Are all supported organizations listed in line 1 public charities under section 509(a)(1) or (2)? If, go to Section II. If, go to line 3. Do the supported organizations have tax-exempt status under section 501(c)(4), 501(c)(5), or 501(c)(6)? If, for each 501(c)(4), (5), or (6) organization supported, provide the following financial information: Part IX-A. Statement of Revenues and Expenses, lines 1 13 and Part X, lines 6b(ii)(a), 6b(ii)(b), and 7. If, attach a statement describing how each organization you support is a public charity under section 509(a)(1) or (2). Section II Relationship with Supported Organization(s) Three Tests To be classified as a supporting organization, an organization must meet one of three relationship tests: Test 1: Operated, supervised, or controlled by one or more publicly supported organizations, or Test 2: Supervised or controlled in connection with one or more publicly supported organizations, or Test 3: Operated in connection with one or more publicly supported organizations. 1 Information to establish the operated, supervised, or controlled by relationship (Test 1) Is a majority of your governing board or officers elected or appointed by the supported organization(s)? If, describe the process by which your governing board is appointed and elected; go to Section III. If, continue to line 2. 2 Information to establish the supervised or controlled in connection with relationship (Test 2) Does a majority of your governing board consist of individuals who also serve on the governing board of the supported organization(s)? If, describe the process by which your governing board is appointed and elected; go to Section III. If, go to line 3. 3 Information to establish the operated in connection with responsiveness test (Test 3) Are you a trust from which the named supported organization(s) can enforce and compel an accounting under state law? If, explain whether you advised the supported organization(s) in writing of these rights and provide a copy of the written communication documenting this; go to Section II, line 5. If, go to line 4a. 4 a Information to establish the alternative operated in connection with responsiveness test (Test 3) Do the officers, directors, trustees, or members of the supported organization(s) elect or appoint one or more of your officers, directors, or trustees? If, explain and provide documentation; go to line 4d, below. If, go to line 4b. b Do one or more members of the governing body of the supported organization(s) also serve as your officers, directors, or trustees or hold other important offices with respect to you? If, explain and provide documentation; go to line 4d, below. If, go to line 4c. c Do your officers, directors, or trustees maintain a close and continuous working relationship with the officers, directors, or trustees of the supported organization(s)? If, explain and provide documentation. d Do the supported organization(s) have a significant voice in your investment policies, in the making and timing of grants, and in otherwise directing the use of your income or assets? If, explain and provide documentation. e Describe and provide copies of written communications documenting how you made the supported organization(s) aware of your supporting activities Form 1023 (Rev ) )

17 (00) Pennsylvania Public Education Foundation Page 19 Schedule D. Section 509(a)(3) Supporting Organizations (Continued) Section II Relationship with Supported Organization(s) Three Tests (Continued) 5 Information to establish the operated in connection with integral part test (Test 3) Do you conduct activities that would otherwise be carried out by the supported organization(s)? If, explain and go to Section III. If, continue to line 6a. Form 1023 (Rev ) ) Name: EIN: 6 a b c Information to establish the alternative operated in connection with integral part test (Test 3) Do you distribute at least 85% of your annual net income to the supported organization(s)? If, go to line 6b. (See instructions.) If, state the percentage of your income that you distribute to each supported organization. Also explain how you ensure that the supported organization(s) are attentive to your operations. How much do you contribute annually to each supported organization? Attach a schedule. What is the total annual revenue of each supported organization? If you need additional space, attach a list. d Do you or the supported organization(s) earmark your funds for support of a particular program or activity? If, explain. 7a Does your organizing document specify the supported organization(s) by name? If, state the article and paragraph number and go to Section III. If, answer line 7b. b Attach a statement describing whether there has been an historic and continuing relationship between you and the supported organization(s). Section III Organizational Test 1a If you met relationship Test 1 or Test 2 in Section II, your organizing document must specify the supported organization(s) by name, or by naming a similar purpose or charitable class of beneficiaries. If your organizing document complies with this requirement, answer. If your organizing document does not comply with this requirement, answer, and see the instructions. b If you met relationship Test 3 in Section II, your organizing document must generally specify the supported organization(s) by name. If your organizing document complies with this requirement, answer, and go to Section IV. If your organizing document does not comply with this requirement, answer, and see the instructions. Section IV Disqualified Person Test You do not qualify as a supporting organization if you are controlled directly or indirectly by one or more disqualified persons (as defined in section 4946) other than foundation managers or one or more organizations that you support. Foundation managers who are also disqualified persons for another reason are disqualified persons with respect to you. 1a Do any persons who are disqualified persons with respect to you, (except individuals who are disqualified persons only because they are foundation managers), appoint any of your foundation managers? If, (1) describe the process by which disqualified persons appoint any of your foundation managers, (2) provide the names of these disqualified persons and the foundation managers they appoint, and (3) explain how control is vested over your operations (including assets and activities) by persons other than disqualified persons. b c Do any persons who have a family or business relationship with any disqualified persons with respect to you, (except individuals who are disqualified persons only because they are foundation managers), appoint any of your foundation managers? If, (1) describe the process by which individuals with a family or business relationship with disqualified persons appoint any of your foundation managers, (2) provide the names of these disqualified persons, the individuals with a family or business relationship with disqualified persons, and the foundation managers appointed, and (3) explain how control is vested over your operations (including assets and activities) in individuals other than disqualified persons. Do any persons who are disqualified persons, (except individuals who are disqualified persons only because they are foundation managers), have any influence regarding your operations, including your assets or activities? If, (1) provide the names of these disqualified persons, (2) explain how influence is exerted over your operations (including assets and activities), and (3) explain how control is vested over your operations (including assets and activities) by individuals other than disqualified persons Form 1023 (Rev ) )

18 (00) Pennsylvania Public Education Foundation Page 20 Schedule E. Organizations t Filing Form 1023 Within 27 Months of Formation Form 1023 (Rev ) ) Name: EIN: Schedule E is intended to determine whether you are eligible for tax exemption under section 501(c)(3) from the postmark date of your application or from your date of incorporation or formation, whichever is earlier. If you are not eligible for tax exemption under section 501(c)(3) from your date of incorporation or formation, Schedule E is also intended to determine whether you are eligible for tax exemption under section 501(c)(4) for the period between your date of incorporation or formation and the postmark date of your application. 1 Are you a church, association of churches, or integrated auxiliary of a church? If, complete Schedule A and stop here. Do not complete the remainder of Schedule E. 2a b Are you a public charity with annual gross receipts that are normally $5,000 or less? If, stop here. Answer if you are a private foundation, regardless of your gross receipts. If your gross receipts were normally more than $5,000, are you filing this application within 90 days from the end of the tax year in which your gross receipts were normally more than $5,000? If, stop here. 3a Were you included as a subordinate in a group exemption application or letter? If, go to line 4. b If you were included as a subordinate in a group exemption letter, are you filing this application within 27 months from the date you were notified by the organization holding the group exemption letter or the Internal Revenue Service that you cease to be covered by the group exemption letter? If, stop here. c If you were included as a subordinate in a timely filed group exemption request that was denied, are you filing this application within 27 months from the postmark date of the Internal Revenue Service final adverse ruling letter? If, stop here. 4 Were you created on or before October 9, 1969? If, stop here. Do not complete the remainder of this schedule. 5 If you answered to lines 1 through 4, we cannot recognize you as tax exempt from your date of formation unless you qualify for an extension of time to apply for exemption. Do you wish to request an extension of time to apply to be recognized as exempt from the date you were formed? If, attach a statement explaining why you did not file this application within the 27-month period. Do not answer lines 6, 7, or 8. If, go to line 6a. (Explanation is set forth on continuation pages) 6a b If you answered to line 5, you can only be exempt under section 501(c)(3) from the postmark date of this application. Therefore, do you want us to treat this application as a request for tax exemption from the postmark date? If, you are eligible for an advance ruling. Complete Part X, line 6a. If, you will be treated as a private foundation. te. Be sure your ruling eligibility agrees with your answer to Part X, line 6. Do you anticipate significant changes in your sources of support in the future? If, complete line 7 below Form 1023 (Rev ) )

19 (00) Pennsylvania Public Education Foundation Page 21 Schedule E. Organizations t Filing Form 1023 Within 27 Months of Formation (Continued) Form 1023 (Rev ) ) Name: EIN: 7 Complete this item only if you answered to line 6b. Include projected revenue for the first two full years following the current tax year Type of Revenue Gifts, grants, and contributions received (do not include unusual grants) Membership fees received Gross investment income Net unrelated business income Taxes levied for your benefit Value of services or facilities furnished by a governmental unit without charge (not including the value of services generally furnished to the public without charge) Any revenue not otherwise listed above or in lines 9 12 below (attach an itemized list) Total of lines 1 through 7 Gross receipts from admissions, merchandise sold, or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list) Total of lines 8 and 9 Net gain or loss on sale of capital assets (attach an itemized list) Unusual grants Total revenue. Add lines 10 through 12 Projected revenue for 2 years following current tax year (a) From To (b) From To (c) Total 8 According to your answers, you are only eligible for tax exemption under section 501(c)(3) from the postmark date of your application. However, you may be eligible for tax exemption under section 501(c)(4) from your date of formation to the postmark date of the Form Tax exemption under section 501(c)(4) allows exemption from federal income tax, but generally not deductibility of contributions under Code section 170. Check the box at right if you want us to treat this as a request for exemption under 501(c)(4) from your date of formation to the postmark date. Attach a completed Page 1 of Form 1024, Application for Recognition of Exemption Under Section 501(a), to this application Form 1023 (Rev ) )

20 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 25 Schedule H. Organizations Providing Scholarships, Fellowships, Educational Loans, or Other Educational Grants to Individuals and Private Foundations Requesting Advance Approval of Individual Grant Procedures Section I Names of individual recipients are not required to be listed in Schedule H. Public charities and private foundations complete lines 1a through 7 of this section. See the instructions to Part X if you are not sure whether you are a public charity or a private foundation. 1a Describe the types of educational grants you provide to individuals, such as scholarships, fellowships, loans, etc. b Describe the purpose and amount of your scholarships, fellowships, and other educational grants and loans that you award. 2 3 c d e f 4a b c d If you award educational loans, explain the terms of the loans (interest rate, length, forgiveness, etc.). Specify how your program is publicized. Provide copies of any solicitation or announcement materials. Provide a sample copy of the application used. Do you maintain case histories showing recipients of your scholarships, fellowships, educational loans, or other educational grants, including names, addresses, purposes of awards, amount of each grant, manner of selection, and relationship (if any) to officers, trustees, or donors of funds to you? If, refer to the instructions. Describe the specific criteria you use to determine who is eligible for your program. (For example, eligibility selection criteria could consist of graduating high school students from a particular high school who will attend college, writers of scholarly works about American history, etc.) Describe the specific criteria you use to select recipients. (For example, specific selection criteria could consist of prior academic performance, financial need, etc.) Describe how you determine the number of grants that will be made annually. Describe how you determine the amount of each of your grants. Describe any requirement or condition that you impose on recipients to obtain, maintain, or qualify for renewal of a grant. (For example, specific requirements or conditions could consist of attendance at a four-year college, maintaining a certain grade point average, teaching in public school after graduation from college, etc.) 5 Describe your procedures for supervising the scholarships, fellowships, educational loans, or other educational grants. Describe whether you obtain reports and grade transcripts from recipients, or you pay grants directly to a school under an arrangement whereby the school will apply the grant funds only for enrolled students who are in good standing. Also, describe your procedures for taking action if the terms of the award are violated. 6 Who is on the selection committee for the awards made under your program, including names of current committee members, criteria for committee membership, and the method of replacing committee members? 7 Are relatives of members of the selection committee, or of your officers, directors, or substantial contributors eligible for awards made under your program? If, what measures are taken to ensure unbiased selections? te. If you are a private foundation, you are not permitted to provide educational grants to disqualified persons. Disqualified persons include your substantial contributors and foundation managers and certain family members of disqualified persons. Section II Private foundations complete lines 1a through 4f of this section. Public charities do not complete this section. 1a If we determine that you are a private foundation, do you want this application to be N/A considered as a request for advance approval of grant making procedures? b For which section(s) do you wish to be considered? 4945(g)(1) Scholarship or fellowship grant to an individual for study at an educational institution 4945(g)(3) Other grants, including loans, to an individual for travel, study, or other similar purposes, to enhance a particular skill of the grantee or to produce a specific product 2 Do you represent that you will (1) arrange to receive and review grantee reports annually and upon completion of the purpose for which the grant was awarded, (2) investigate diversions of funds from their intended purposes, and (3) take all reasonable and appropriate steps to recover diverted funds, ensure other grant funds held by a grantee are used for their intended purposes, and withhold further payments to grantees until you obtain grantees assurances that future diversions will not occur and that grantees will take extraordinary precautions to prevent future diversions from occurring? 3 Do you represent that you will maintain all records relating to individual grants, including information obtained to evaluate grantees, identify whether a grantee is a disqualified person, establish the amount and purpose of each grant, and establish that you undertook the supervision and investigation of grants described in line 2? 1023 Form 1023 (Rev ) )

21 Form 1023 (Rev ) ) (00) Name: Pennsylvania Public Education Foundation EIN: Page 26 Schedule H. Organizations Providing Scholarships, Fellowships, Educational Loans, or Other Educational Grants to Individuals and Private Foundations Requesting Advance Approval of Individual Grant Procedures (Continued) Section II Private foundations complete lines 1a through 4f of this section. Public charities do not complete this section. (Continued) 4a Do you or will you award scholarships, fellowships, and educational loans to attend an educational institution based on the status of an individual being an employee of a particular employer? If, complete lines 4b through 4f. b c d e Will you comply with the seven conditions and either the percentage tests or facts and circumstances test for scholarships, fellowships, and educational loans to attend an educational institution as set forth in Revenue Procedures 76-47, C.B. 670, and 80-39, C.B. 772, which apply to inducement, selection committee, eligibility requirements, objective basis of selection, employment, course of study, and other objectives? (See lines 4c, 4d, and 4e, regarding the percentage tests.) Do you or will you provide scholarships, fellowships, or educational loans to attend an educational institution to employees of a particular employer? If, will you award grants to 10% or fewer of the eligible applicants who were actually considered by the selection committee in selecting recipients of grants in that year as provided by Revenue Procedures and 80-39? Do you provide scholarships, fellowships, or educational loans to attend an educational institution to children of employees of a particular employer? If, will you award grants to 25% or fewer of the eligible applicants who were actually considered by the selection committee in selecting recipients of grants in that year as provided by Revenue Procedures and 80-39? If, go to line 4e. If you provide scholarships, fellowships, or educational loans to attend an educational institution to children of employees of a particular employer, will you award grants to 10% or fewer of the number of employees children who can be shown to be eligible for grants (whether or not they submitted an application) in that year, as provided by Revenue Procedures and 80-39? If, describe how you will determine who can be shown to be eligible for grants without submitting an application, such as by obtaining written statements or other information about the expectations of employees children to attend an educational institution. If, go to line 4f. N/A N/A N/A te. Statistical or sampling techniques are not acceptable. See Revenue Procedure 85-51, C.B. 717, for additional information. If you provide scholarships, fellowships, or educational loans to attend an educational institution to children of employees of a particular employer without regard to either the 25% limitation described in line 4d, or the 10% limitation described in line 4e, will you award grants based on facts and circumstances that demonstrate that the grants will not be considered compensation for past, present, or future services or otherwise provide a significant benefit to the particular employer? If, describe the facts and circumstances that you believe will demonstrate that the grants are neither compensatory nor a significant benefit to the particular employer. In your explanation, describe why you cannot satisfy either the 25% test described in line 4d or the 10% test described in line 4e. f 1023 Form 1023 (Rev ) )

22 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Part II Organizational Structure Articles of incorporation, a certificate of good standing and bylaws are enclosed as Exhibits 1, 2 & 3. Part IV - Narrative Description of Your Activities Background This is a reapplication for exempt status by a foundation previously recognized as exempt and in active operation from 1987 until The Pennsylvania Public Education Foundation (hereinafter the Foundation ) was established in 1987 as an outgrowth and extension of the Pennsylvania School Boards Association, Inc. (hereinafter PSBA ), intended as a vehicle for accomplishing important purposes of PSBA. PSBA is a Pennsylvania non-profit corporation exempt from tax under IRC Section 501(c)(4). PSBA itself is a membership association of Pennsylvania public school entities (school districts, intermediate units, career & technical schools and community colleges), each of which is a type of political subdivision or governmental agency. Membership of the entity confers individual membership upon the members of the entity s board of directors, board secretary and chief school administrator. PSBA provides an array of services to its entity and individual members aimed at promoting student achievement through effective governance and efficient school operations, and advocates on behalf of PSBA members on education policy issues. From the Foundation s formation in 1987 until 2004 it engaged in various fund raising and other activities of an educational and charitable nature. It raised and distributed funds for college scholarships for students, participated in research projects and the publication of materials about issues affecting public education, and engaged in other informational activities intended to assist public school systems in various aspects of their operations. The Foundation was funded primarily through corporate contributions and contributions from other charitable foundations, as well as some individual donations. A brief summary of organizational history (circa 2000) highlighting major initiatives during this period is enclosed as Exhibit 4. By 2004, efforts to newly ramp up the Foundation s activities had been unsuccessful, and its then board of directors directed that its operations and financial affairs be wound up. During the fiscal year ending June 30, 2004, the Foundation exhausted its assets in furtherance of its remaining projects and ceased active operations. A final Form 990 Information Return was filed on December 18, 2005 for the taxable year ending June 30, 2004, upon which the Final Return 1

23 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code box was checked (copy enclosed as Exhibit 5. However, the underlying corporation was not dissolved and remains recognized as in good standing by the Commonwealth of Pennsylvania. The Foundation now is being reactivated, and anticipates that it will plan, sponsor, fund and/or operate the kinds of programs and activities described below and in response to Part VIII of Form Anticipated Future Activities Future activities of the reactivated Foundation are currently in the conceptual and planning stages. At this time, it is anticipated that the bulk of the Foundation s activities will be in three main areas: 1. Supporting study and public awareness of education issues, challenges and trends. The Foundation would develop, commission or otherwise fund the development of publications in print and or electronic form reflecting scholarly research and analysis on important issues and trends relating to matters such as educational leadership, school system governance and strategic management, adequacy of school funding, and the impact of those factors on student achievement and career success. Related activities also will include activities supporting and promoting the distribution of and awareness among education leaders and the public about the information resulting from such studies, as well as the development of models, templates, standards and other guidance to assist school leaders in emulating best practices. Support for such activities may also take the form of acquisition and/or development of data sets, software, equipment and other resources needed to conduct such studies, analysis and to accomplish the distribution thereof. 2. Promoting excellence in educational leadership by supporting and promoting continuing professional development for school system leaders and sharing of best practices. Although some continuing educational requirements exist for professional educators, it is not mandated for elected school directors in Pennsylvania, who are unpaid, lay volunteers. Thus, the pursuit of professional development and other continuing education in the leadership, governance and strategic management of public school systems remains mostly voluntary and discretionary. At the same time, public schools in general face severe funding shortages that make it difficult to divert funding away from classrooms to pay for other important but nonetheless discretionary expenditures such as for professional development and continuing education. Consequently, the percentage of school leaders actually taking advantage of opportunities for professional development, collaboration and consultation with sources of expertise is unacceptably low. And yet, research has demonstrated that excellence in educational 2

24 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code leadership and governance has a significant correlation with higher levels of student achievement. For these reasons, it is anticipated that the Foundation will pursue a variety of strategies aimed at promoting the availability of high quality professional development and collaboration opportunities for school directors, school administrators and other public school leaders. Such strategies will include: a. Developing, commissioning or otherwise funding the development and delivery of training and education programs and supporting materials, as well as distance learning approaches and modalities and related software or other electronic resources; b. Creating and/or funding the creation and delivery of opportunities for collaboration and sharing of best practices; c. Making it feasible for greater numbers of education leaders to take advantage of such opportunities through programs that assist public school entities in defraying the cost of programs, materials and access to distance learning channels; and d. Promoting the availability of high-quality, accessible consultative and reference resources from which or whom school leaders can obtain guidance on specific issues, challenges or problems as they arise, and in connection with the planning and execution of strategic initiatives. 3. Informing the general public about education issues, challenges and needs, and promoting public support for public schools and adequate funding for them. It is anticipated that activities in this area will include conducting or funding public awareness campaigns, public opinion research, and developing resources and strategies to assist public school leaders in engaging their communities and stakeholders to foster synergies that enhance educational opportunities. In combination such strategies will train, inform and assist individual leaders in their roles and functions, and help organizations, including boards of directors as bodies, to help maximize their effectiveness in governing, decision-making, strategic thinking and harnessing public support. Initially, the Foundation is most likely to commission or fund such activities and participate in their planning rather than conduct them directly. Direct execution then would be carried out by PSBA or other sources with the necessary expertise and staff resources pursuant to grants or 3

25 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code other agreements. The vast majority of these activities will take place in locations throughout Pennsylvania, although occasionally the Foundation may fund opportunities in connection with national conferences in other states. Some of these activities are of a nature that is ongoing, some will be one-time occurrences, and some may become recurring events with a regular schedule. Funding sources will vary, as described in response to Part VIII, Line 4a. alternative names for the Foundation s activities are known at this time. However, as explained in response to Part VIII, Line 10, certain campaigns, strategies, events, programs, methodologies or information products developed or funded by the Foundation may lend themselves to the creation of a brand, theme or other special name. netheless, it is anticipated that in such cases the involvement of the Foundation will always be prominently visible. Part V - Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees and Independent Contractors Line 1a Name Title Address Compensation Otto W. Voit III Director & 400 Bent Creek Blvd. ne President Mechanicsburg, PA Richard L. Frerichs Director & 400 Bent Creek Blvd. ne Vice President Mechanicsburg, PA Nathan G. Mains Director & 400 Bent Creek Blvd. ne Secretary Treasurer Mechanicsburg, PA William S. LaCoff Director 400 Bent Creek Blvd. ne Mechanicsburg, PA Stuart L. Knade Director & 400 Bent Creek Blvd. ne General Counsel Mechanicsburg, PA John Anthony II Director 400 Bent Creek Blvd. ne Mechanicsburg, PA J. Kenneth Long Director 400 Bent Creek Blvd. ne Mechanicsburg, PA

26 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Line 2b The Foundation has a close connection with PSBA. The Foundation s seven directors are appointed annually by the Governing Board of PSBA. The Foundation s board of directors elects the Foundation s officers. Three of the Foundation s directors, including the Foundation s President and Vice President, also are officers of PSBA: respectively, the PSBA Treasurer, PSBA President and PSBA President-Elect. The current Secretary/Treasurer of the Foundation is a salaried employee of PSBA holding the position of PSBA Executive Director. Another director of the Foundation also is a salaried employee of PSBA holding the position of in-house General Counsel. The two remaining directors of the Foundation are individual members of PSBA at large, who serve on the board of school directors of PSBA member school districts, but who do not currently serve on the PSBA Governing Board. The salary and benefits for the PSBA Executive Director are determined pursuant to an individual employment contract and policies adopted by the PSBA Governing Board. The salary and benefits for the PSBA General Counsel are determined in accordance with a compensation plan and policies applicable to all other PSBA employees. In earlier years of the Foundation s existence the Foundation employed a part-time managing and development director. It does not now have such an employee, and there are no immediate plans to hire one at this time, nor for the Foundation to employ other permanent staff. This may change in the future as the Foundation s activities expand. In the near term, it is anticipated that services necessary to carry out the routine administrative and operating affairs of the Foundation will be performed by PSBA staff on a donated basis, without reimbursement from the Foundation. Such services will be performed principally by the PSBA Executive Director (also Secretary Treasurer of the Foundation), the PSBA General Counsel (also a director of the Foundation), and the PSBA Chief of Staff. The effort of other PSBA staff may be furnished from time to time as needed on the same basis. In addition to the possibility of retaining a managing/development director, in the event that a particular project of the Foundation involves substantial labor requirements, consideration will be given to hiring temporary staff or furnishing those services with existing PSBA employees if available pursuant to a reimbursement agreement between PSBA and the Foundation. 5

27 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Line 3a Name Otto W. Voit III Richard L. Frerichs Title & Qualifications Director & President (MBA, PSBA Treasurer) Director & Vice President (Ed.D., PSBA President) Duties Plan and chair meetings, approve agendas, review and comment on plans, materials, policies and activities, provide fiduciary oversight. Plan and chair board meetings in absence of president; approve agendas; review and comment on plans, materials, policies and activities; provide fiduciary oversight. Average Monthly Hours Worked* 2 1 Nathan G. Mains William S. LaCoff Stuart L. Knade John Anthony II J. Kenneth Long Director & Secretary/Treasurer (BA, PSBA Executive Director) Director (BA, PSBA President-elect and past president) Director & General Counsel (JD, PSBA General Counsel) Director (BA, School Director) Director (BA, SEC, School Director) Plan/attend meetings and develop agendas; maintain minutes and other corporate records; manage financial affairs; carry out executive, administrative and operating functions; supervise staff assistance donated by PSBA; review and comment on plans, materials, policies and activities; provide fiduciary oversight. Attend meetings; review and comment on plans, materials, policies and activities; provide fiduciary oversight. Manage routine legal affairs of the Foundation; attend meetings; review and comment on plans, materials, policies and activities; provide fiduciary oversight. Attend meetings; review and comment on plans, materials, policies and activities; provide fiduciary oversight. Attend meetings; review and comment on plans, materials, policies and activities; provide fiduciary oversight *Hours indicated are a forward looking estimate. 6

28 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Line 3b The current Secretary/Treasurer of the Foundation is a salaried employee of PSBA holding the position of PSBA Executive Director. Another director of the Foundation also is a salaried employee of PSBA holding the position of in-house General Counsel. The salary and benefits for the PSBA Executive Director are determined pursuant to an individual employment contract and policies adopted by the PSBA Governing Board. The salary and benefits for the PSBA General Counsel are determined in accordance with a compensation plan and policies applicable to all other PSBA employees. For additional background, please see response to Line 2b. Line 4 Although there are no current plans for the Foundation to compensate any Foundation officer, director or employee, in the event this were to happen, the Foundation would follow practices consistent with those described in lines 4a-g. Such practices are used by PSBA with respect to employees of PSBA. Line 5 The next meeting of the Foundation Board of Directors will include action by the Board to adopt by reference and make applicable to the Foundation a conflict of interest policy and a whistleblower policy previously adopted by the PSBA Governing Board: PSBA Policy 409 (Joint Code of Business Ethics and Conduct) and PSBA Policy 410 (Joint Policy on Reporting of Concerns). Due to a postponement of that meeting this action this action had not yet occurred at the time this application is being filed. However, a copy of each policy is enclosed as Exhibits 6 & 7. Line 9 In the event that a project of the Foundation involves substantial labor requirements, consideration will be given to hiring temporary staff or furnishing those services with existing PSBA employees if available pursuant to a reimbursement agreement between PSBA and the Foundation. It is anticipated that from time to time there will be agreements relating to cooperation, assistance and sharing of resources from and between the Foundation and PSBA, but none are in existence at this time. 7

29 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Part VI. Your Members and Other Individuals and Organizations That Receive Benefits From You Line 1a-b As explained in response to Line 2b, PSBA is a membership organization of school districts and other public school entities (intermediate units, career and technical education centers and community colleges), whose entity membership confers individual membership upon the members of their governing boards and their chief school administrator. In addition, there are five related subgroups within PSBA made up of school board secretaries, educational office personnel, career and technical administrators, pupil transportation administrators and school solicitors (local legal counsel), whose individual members are associate members of PSBA. The Foundation s activities in furtherance of PSBA s purposes and other support of PSBA will include professional development programs, publications and other services designed to be consumed by and for the benefit of the individual members, which in turn are calculated to promote student achievement through more effective educational leadership and operational efficiency. The Foundation will conduct and/or fund activities such as research and analysis on pertinent topics and trends, development and distribution of issue updates, reference materials and other information products, creating opportunities for collaboration and sharing of best practices, and promoting the availability of high-quality, accessible consultative resources. Consequently, the Foundation s activities will benefit the member school entities primarily by training, informing and assisting the individual leaders in their roles and functions, as well as by working with their boards of directors as bodies to help maximize their effectiveness in governing and decision-making. Although the Foundation will from time to time make funds available to public school entities to finance the participation of their employees and school board members in such programs, it is not anticipated at this time that the Foundation will provide funds directly to individuals (please see Schedule H for further explanation). Line 2 It is anticipated that many programs supported or conducted by the Foundation will be targeted at the individuals and organizations that are members of PSBA, or will be offered in connection with circumstances normally open only to members or distributed through channels normally available only to members. netheless, some programs will be aimed at informing other 8

30 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code community leaders and stakeholders in relation to public education, and to promote the general public interest in education. Part VIII Your Specific Activities Line 4a Fund raising activities are currently in the planning stages. It is anticipated that the Foundation will seek donations from the general public, educators and other individuals involved in education-related businesses, school districts or other local government entities, corporations, and other foundations. The Foundation also will seek government grants at the state, local and national levels when available for appropriate activities consistent with the strategies described earlier in Part IV. The Foundation s relationship with PSBA offers numerous possibilities for the Foundation s fundraising to piggyback on PSBA activities and communication channels. Donations will be solicited or invited in a variety of ways, beginning with disseminating to individual PSBA members, their boards of directors and the general public information about the existence, purposes and activities of the Foundation. This will be accomplished via information on the PSBA website, articles and notices in other PSBA publications, featured sessions or events at PSBA conferences and programs, exhibit booths at education-related trade fairs and brochures distributed by hand programs or mailed or ed. PSBA will host a website for the Foundation, through which donations will be sought and can be made, and to which there will be hyperlinks in other areas of the PSBA website, on the websites of other cooperating organizations, in other PSBA periodic communications, in PSBA signature block banners, and the like. As corporate or other foundation donors are identified as potential sources for general support or sponsorship of particular activities or campaigns, donations will be solicited via letters, telephone calls, and in personal conversations during networking events at which key executives are present. Member school directors, administrators and existing business partners will be asked to consider whether they have connections with potential corporate or other foundation donors, and if so to assist in introducing Foundation representatives to key executives of donor organizations. It is also anticipated that the Foundation will, on a regular or occasional basis, operate or be the beneficiary of special events that would create opportunities for corporate sponsorship or donor contacts, whether planned specifically for fundraising purposes or for purposes otherwise consistent with the strategies described earlier in Part IV. For example, a kickoff event for the 9

31 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Foundation already being planned is a special reception to be held at the PSBA annual school leadership conference to introduce the Foundation to key education and business leaders and to obtain seed money for further resource development. Corporate sponsorship will be sought for the event itself and there will be a significant charge for individual admission, both to raise funds for the Foundation. Line 4b In the future, the Foundation is likely to require the services of a part-time or full-time managing/development director, although there are no immediate plans to hire one or to contract with an organization other than PSBA to implement fundraising strategies. In the near term, it is anticipated that such services will be provided by PSBA employees on an informal donated basis or possibly under contract with PSBA. such contracts or agreements exist yet, there is not yet any revenue or expense history. Line 4d Fundraising activities will take place mainly in Pennsylvania. However, it is anticipated that some potential corporate and foundation donors will be located outside Pennsylvania. In addition, there are some national events which take place in other states at which the Foundation may have a presence for exposure and fundraising purposes. The Foundation will conduct fundraising only for itself, with the assistance of PSBA. It is not anticipated that the Foundation will conduct fundraising for any other organizations. Line 7b Please see response to Line 2b. Line 10 At present the intellectual property owned by the Foundation, other than its registered corporate insignia, consists only of the publications it produced in its early years, for which any current value is primarily archival in nature. However, it is anticipated that the Foundation will develop, commission or otherwise fund the development of publications in print and or electronic form reflecting research and analysis on education and governance-related topics, as well as training materials and related software. The Foundation normally would endeavor to retain and hold ownership in the copyright for such works. Sale or licensing of such works from time to time in appropriate circumstances is an anticipated source of revenue for the Foundation. It is likely 10

32 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code such materials will be marketed and distributed with the assistance of PSBA using communication channels established by PSBA or to which PSBA has access nationally, with the particular manner and pricing to be determined on a case by case basis appropriate to the product. In addition, certain campaigns, strategies, methodologies developed or funded by the Foundation may result in the establishment of a brand, theme or other mark amenable to trademark protection. The Foundation normally would endeavor to retain and hold ownership of such trademarks, and where appropriate license their use by other organizations as source of revenue and/or in order to maintain control over the use of the brand. Line 11 The Foundation to date has not received donations of intellectual property, but would accept such donations in circumstances relevant and appropriate to the Foundation s purposes. What agreements with donors or conditions might exist with respect to any particular donation would have to be determined on a case by case basis. Line 13 It is not anticipated that the Foundation will make grants to other organizations for their general purposes, or to fund particular activities of other organizations other than PSBA. The Foundation does intend to operate programs from time to time pursuant to which grants would be made available to member school entities for the purpose of funding particular training, collaboration or other professional development opportunities for their school boards, individual members of those boards and school administrators. Although such grants may sometimes be referred to as scholarships, conceptually, their function would be to reimburse the school entities to defray costs that otherwise would be paid by those entities from public funds, including registration fees, travel expenses, resource materials and other related expenses. In all such cases, such funding would be managed on a reimbursable basis, with actual participation in a sponsored activity, commitment to do so or documentation of incurred expenses required as a condition of disbursement. Funded activities will be of a nature that participation can be verified. Applications forms and selection criteria/processes do not yet exist but would be developed as appropriate to particular categories of funded activity. 11

33 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Line 15 The Foundation has a close connection with the Pennsylvania School Boards Association, Inc. ( PSBA ), a Pennsylvania non-profit corporation exempt from tax under IRC Section 501(c)(4). It is anticipated that the Foundation and PSBA will cooperate closely to further their respective organizational purposes, which align in many ways. Further explanation is provided in response to Part IV, Part V Line 2b and above in Part VIII. Part IX Financial Data As of the date this is filed, the Foundation has been in existence for more than five tax years, but currently has no assets or liabilities, and has had no revenue or expenses for the corporation s past five tax years. The information provided in data table A is a projection of income and expenses for the current and two subsequent tax years. Schedule D Section 509(a)(3) Supporting Organizations Section I, Line 3 Financial information for PSBA is set forth on the schedules enclosed as Exhibit 8. Section II, Line 1 The Foundation s seven directors are appointed annually by the Governing Board of the supported organization (PSBA). The Foundation s board of directors elects the Foundation s officers. Three of the Foundation s directors, including the Foundation s President and Vice President, also are officers of PSBA: respectively, the PSBA Treasurer, PSBA President and PSBA President-Elect. The current Secretary/Treasurer of the Foundation is a salaried employee of PSBA holding the position of PSBA Executive Director. Another director of the Foundation also is a salaried employee of PSBA holding the position of in-house General Counsel. The two remaining directors of the Foundation are individual members of PSBA at large, who serve on the board of school directors of PSBA member school districts, but who do not currently serve on the PSBA Governing Board. Section III, Line 1a The Foundation was established as an outgrowth and extension of the Pennsylvania School Boards Association, intended as a vehicle for accomplishing important purposes of PSBA. The 12

34 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Foundation s articles of incorporation list the supported organization (PSBA) as the incorporator of the Foundation, and the Foundation s bylaws identify the Executive Board (now Governing Board) of PSBA as the entity that appoints the directors of the Foundation. All of the purposes of the Foundation as stated in its bylaws and articles of incorporation are encompassed within the stated purposes of PSBA as stated in PSBA S amended corporate charter (copy enclosed as Exhibit 9). Schedule E Organizations t Filing Form 1023 Within 27 Months of Formation Line 5 Explanation for not filing form within 27 months of organization s formation: This application is being filed in connection with the reactivation of an organization that previously held 501(c)(3) exemption, but which suspended operations and became dormant in The Foundation was incorporated on July 14, An application for recognition of tax exemption under Section 501(c)(3) was filed on August 20, 1987 (copy enclosed as Exhibit 10). By 2003, the Foundation had become largely inactive, and its board of directors concluded that it should formally cease its activities and wind up its operations. Accordingly, during the fiscal year ending June 30, 2004, remaining activities of the Foundation were completed or abandoned, and its assets were exhausted in furtherance of the Foundation s purposes. A final return on IRS Form 990 was filed for that year (copy enclosed) and its original 501(c)(3) tax exempt status subsequently lapsed. From 2004 until April 2014, when its board of directors was reconstituted, the foundation has engaged in no activities, and to date has had no revenues, expenses or assets. Consequently, the Foundation has not filed a Form 990 or other return for subsequent tax years in the belief that no return was required until such time as the Foundation resumed operations. However, the underlying non-profit corporation was not dissolved, and remains in good standing as a Pennsylvania non-profit corporation. This Form 1023 is being filed as a new application for recognition of tax exempt status under Section 501(c)(3), rather than a reinstatement pursuant to Revenue Procedure Because returns were not required, the former status was not revoked for failure to file required returns, and it therefore appears that Revenue Procedure does not apply. Accordingly, the Foundation requests an extension of time to apply in order to be recognized as exempt from the time of formation, rather than only from the postmark date of this application. 13

35 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Continuation Pages for Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code Schedule H Organizations Providing Scholarships, Fellowships, Educational Loans or Other Educational Grants to Individuals In the early years of the Foundation s existence, it maintained a program pursuant to which higher education scholarships were awarded to academically successful students planning to enter the teaching profession. This program eventually was discontinued largely due to the difficulty of attracting sufficient donations for that purpose. The Foundation instead shifted its focus to other projects furthering the Foundation s other stated charitable purposes, There are no current plans for the Foundation to operate a program providing higher education scholarships to individuals.*(see note below) However, Schedule H is included with this application for the sake of completeness because doing so remains one of the purposes stated in the Foundation s articles of incorporation and bylaws, because it has been an activity of the Foundation in the past, and because the possibility exists that such a scholarship program may again in the future become one of the Foundation s activities. The information requested in lines 1-6 of Schedule H is contained within three documents enclosed as Exhibits 11, 12 & 13. These documents describe how the Foundation s scholarship program was operated in the past when it was active. One is a brochure explaining the program s purpose, procedures and eligibility and selection criteria. The second document sets forth guidelines for the local school district selection committees that did the work of nominating finalists from among local applicants. The third is the application form. If in the future the Foundation resumes a higher education scholarship program these materials and guidelines will be reviewed and updated as appropriate to reflect the chosen structure and focus of the new program and to assure fairness, transparency and effectiveness. *NOTE: As explained in relation to Part VIII of Form 1023, the Foundation does anticipate that its activities will include programs pursuant to which grants would be made to member school entities for the purpose of funding particular training and collaboration opportunities for their school boards, individual members of those boards and school administrators. Although such grants may sometimes be referred to as scholarships, conceptually, their function would be to reimburse the school entities to defray costs that otherwise would be paid by those entities from public funds. 14

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40 Pennsylvania Public Education Foundation Bylaws Adopted May 15, 1987; Amended July 17, 1992 Amended S jjtembete It; /79<; j}~r;d&j vu~ 17; /9? t, 774 Limekiln Rd, New Cumberland, PA

41 BYLAWS OF PENNSYLVANIA PUBLIC EDUCATION FOUNDATION (Adopted May 15,1987; amended July 15,1992) ARTICLE I - NAME AND PURPOSES SECTION 1. Name. The name of the corporation is Pennsylvania Public Education Foundation. SECTION 2. Purposes. The Foundation is organized exclusively for charitable and educational purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code (or the corresponding provision of any future United States Internal Revenue law) and to the extent compatible with these purposes and lawfully permissible to: A. Make scholarship grants or loans for post high school education leading to a baccalaureate or more advanced degrees; B. Engage in and conduct studies, surveys, research, training and other programs to increase the quality and efficiency of public school governance, foster public awareness and generally improve the system of public education. C. Solicit, establish, maintain and administer funds necessary to accomplish these purposes; and D. Do all things lawfully necessary or appropriate to complete establishment of these purposes in their broadest permissible sense. SECTION 3. Prohibited Use of Funds. part of the net earnings of the Foundation shall inure to the benefit of, or be distributable to its members, directors, trustees, officers, or other private persons, except that the Foundation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments

42 and distributions in furtherance of the purposes set forth in Section 2 hereof. substantial part of the activities of the Foundation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Foundation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidatejor public office. twithstanding any other provision of these Bylaws, the Foundation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under Section 501 (c)(3) of the Internal Revenue Code (or the corresponding provision of any future United States Internal Revenue law) or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Internal Revenue Code (or the corresponding provision of any future United States Internal Revenue law).. SECTION 3. Composition. The Board of Directors shall consist of seven members, three of whom shall be the officers. SECTION 4. Qualification. To qualify for appointment as a Director, an individual must be either (1) a locally elected or appointed school director in the Commonwealth of Pennsylvania; or (2) an officer, former officer or employee of the Pennsylvania School Boards Association or the Pennsylvania School Boards Association Insurance Trust; or (3) an individual employed full time in the general field of public education in the Commonwealth of Pennsylvania. SECTION 5. Term. The term of each Director shall be one year from January immediately after the date of appointment and shall continue until that member's successor has been appointed and qualifies. ARTICLE II - OFFICES SECTION 6. Vacancies. Vacancies occurring on the Board of Directors shall be filled for the unexpired term by the Executive Board of the Pennsylvania School Boards Association. SECTION 1. Location. The registered office of the Foundation shall be at 774 Limekiln Road, New Cumberland, Pennsylvania, SECTION 2. Other Offices. The Foundation may also have offices at such other places as the Board of Directors may from time to time determine or the activities of the corporation may require. ARTICLE III - BOARD OF DIRECTORS SECTION 1. Powers and Duties. The Board of Directors shall manage the Foundation, its property, its business and its affairs, appoint the officers and define the responsibilities of the officers and, except as otherwise stated in the Articles of Incorporation, these Bylaws or applicable public law, possess all power and responsibility necessary or appropriate to the accomplishment of the purposes of the Foundation. SECTION 2. Appointment. The Executive Board of the Pennsylvania School Boards Association shall appoint the Board of Directors of the Foundation. 2 SECTION 7. Removal. Any Director may be removed for conduct which would justify removal of the Director in accordance with the laws of the Commonwealth of Pennsylvania. A Director may also be removed whenever five members of the Board of Directors shall determine at a properly conducted meeting that the best interests of. the corporation would be served by the removal of the Director, and when such a determination is noted on the minutes of the corporation a vacancy shall thereupon exist which shall be filed in accordance with the provisions of these bylaws. SECTION 8. Compensation. Director may receive any compensation from the Foundation or have any pecuniary interest in any Foundation property, business or affair. However, this section shall not be construed to prohibit reimbursement to Directors for expenses incurred. SECTION 9. Meetings. A. The Board shall meet annually, at such date, time and place determined by the Board. B. The President may call a special meeting at any time. C. One or more Directors may participate in the meeting of the 3

43 Board by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person and attendance at such~eeting. D. tice of every meeting of the Directors shall be given to each Director at least five (5) days before the day of the meeting. tice may be given to Directors either by sending a copy thereof by first class mail, postage prepaid, or by telegram, charges prepaid, to the Director's address supplied by the Director to the Foundation for purpose of notice. If notice is sent by mail or by telegraph, it shall be deemed to have been given to the Director entitled thereto when deposited in the United States mail or with a telegraph office for transmission to the Director. The notice shall specify the place, day and hour of the meeting. E. Whenever any written notice is required to be given under the provisions of this statute or the Articles or Bylaws of this Foundation, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Except as otherwise required by statute, neither the business to be transacted at nor the purpose of a meeting need be specified in the waiver of notice of such meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except where a person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened.. SECTION 10. Quorum. A majority of the Directors, one of whom shall be the President or Vice President, shall constitute a quorum. The acts of a majority of the Directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors. Any action which may be taken at a meeting of the Directors may be taken without a meeting, if a consent or consents in writing setting forth the action so taken shall be signed by all of the Directors in office and shall be filed with the Secretary of the Foundation. 4 ARTICLE IV - OFFICERS SECTION 1. Officers. The executive officers of the Foundation shall be appointed by the Board of Directors from among its membership, and shall be a President, Vice President and Secretaryffreasurer, and such other officers and assistant officers as the needs of the Foundation may require. They shall have such authority and shall perform such duties as are provided by the Bylaws and as shall from time to time be prescribed by the Board of Directors. SECTION 2. Term. The term of each officer shall be one year. An officer's term shall commence upon appointment and continue until a successor is appointed or until the officer's resignation, death or removal. SECTION 3. Removal. Any officer may be removed by the Board of Directors of the Foundation whenever in its judgment the best interests of the Foundation will be served thereby. SECTION 4. Vacancies. All vacancies shall be filled by the Board of Directors of the Foundation at the next meeting after the vacancy occurs. SECTION 5. Powers and Duties. Except as the Board of Directors may otherwise determine, each officer shall possess such powers and responsibility as generally attached to his or her office. A. President. The President shall be the chief executive officer of the Foundation. The President shall: preside at all meetings of the Directors; have general and active management of the affairs of the Foundation; see that all orders and resolutions of the Board are carried into effect, subject, however, to the right of the Directors to delegate any specific powers, except such as may be by statute exclusively conferred on the President, to any other officer or officers of the Foundation; execute bonds, moltgages and other documents requiring a seal, under the seal of the Foundation; be ex officio a member of all committees; and have the general powers and duties of supervision and management usually vested in the office of the President. B. Vice President. In the absence of the President, the Vice President shall assume the duties as specified in Section 5(A). 5

44 c. Secretaryrrreasurer. The Secretaryrrreasurer shall attend all sessions of the Board and act as clerk thereof, and record all of the votes of the Foundation and the minutes of all its transactions to be kept for that purpose; and shall perform like duties for all committyes of the Board of Directors when required. The Secretaryrrreasurer shall give, or cause to be given, notice of all meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. The Secretaryrrreasurer shall keep in safe custody the seal of the Foundation, and when authorized by the Board, affix the same to any instrument requiring it. The Secretaryrrreasurer shall have custody of the funds of the Foundation and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Foundation, and shall keep the moneys of the Foundation in a separate account to the credit of the Foundation, shall disburse the funds of the Foundation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and Directors, at the regular meetings of the Board, or whenever they may require it, an account of all of his. or her transactions as Treasurer and of the financial condition of the Foundation. may be made that would have the result of placing in jeopardy or depriving the Foundation of its tax exempt status under the Internal Revenue Code, or the conesponding provision of any future United States Internal Revenue law. amendment to those Bylaws shall be valid unless it has first been submitted to the Board at least thirty (30) days prior to the date of the meeting at which the vote thereon will be taken, unless this requirement is waived in writing and is signed by the members of the Board. ARTICLE VII - DISSOLUTION Upon the dissolution of the Foundation, the assets shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, or the conesponding section of any future federal tax code, or shall be distributed to the federal government or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by the court of common pleas of the county in which the principal office of the Foundation is then located, exclusively for such purposes or to such organization or organizations, as said court shall determine, which are organized and operated exclusively for such purposes. ARTICLE V - FISCAL YEAR The fiscal year of the Foundation shall begin on July 1 and end on June 30. ARTICLE VI - AMENDMENTS These Bylaws may be amended at any meeting of the Board of Directors by a two-thirds vote ofthe members of the Board at that time, except that no amendment may be made to Article III, Section 2 and Section 7 (relating to appointment and removal of Directors) and Article VI if such amendment would reduce the requisite two-thirds vote for amendment of the within Bylaws. Fmther, no aj;nendment 6 The Pennsylvania Public Education Foundation is recognized as a fully qualified charitable organization under IRe 501(c)(3), classified as a private foundation under IRe 509(a). Accordingly, deductability of contributions by individuals may be limited under IRe 170(b)(1 )(3). 7

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63 . 409 PSBA and Insurance Services Joint Code of Business Ethics and Conduct Leadership Teamwork Excellence Respect Commitment Integrity Adopted: January 25, 2014

64 Joint Code of Business Ethics and Conduct Table of Contents Description Page About the Joint Code of Business Ethics and Conduct... 3 About the Joint Policy on Reporting of Concerns... 5 Open Door Policy... 6 Business Accounting Practices... 7 Conflicts of Interest... 8 Relations with Business Partners Environment, Health, and Safety Fair Employment Practices Protecting Confidential Information Protecting Organization Assets Use of Technology Resources Copyrights Government Relations and Political Activities Ethics Compliance... Conflict of Interest Disclosure Statement Joint Code of Business Ethics and Conduct Certification Page 2

65 About the Joint Code of Business Ethics and Conduct Joint Statement from the PSBA and SBIC Boards of Directors This Joint Code of Business Ethics and Conduct has been adopted by the Boards of Directors of Pennsylvania School Boards Association ( PSBA ) and School Boards Insurance Company of Pennsylvania ( SBIC ). It applies to all directors, officers, employees and volunteers of PSBA and School Board Services, LLC (collectively PSBA ) and Insurance Services, which includes, without limitation, SBIC, PSBA Insurance Trust and School Claims Services, LLC ( SCS ). Collectively, PSBA and Insurance Services will be referred to as the Organization. References within the Code to you, your, we, our, employees, people and individual(s) are intended to include all directors, officers, employees and volunteers of the Organization. Our fundamental policy is that all business conducted by the Organization must comply with applicable laws and regulations and meet high ethical standards. The purpose of the Code is to: Prevent unethical or unlawful behavior; Discover and stop any such behavior that may occur as soon as possible; and Discipline those who violate the standards contained in the Code and related policies. This Code will be followed and enforced in conjunction with the Joint Policy on Reporting of Concerns ( Reporting Policy ). The Reporting Policy is more fully discussed in the next section and can also be found at Board Policy 410. The Reporting Policy provides for designation of an Ombudsperson and describes the Ombudsperson s duties and responsibilities. These include ensuring that the Code and the Reporting Policy are implemented and communicated throughout the Organization. A Culture of Compliance This Code outlines considerations applicable to situations most likely to be encountered by employees at one time or another as they conduct business Our reputation is an important strategic asset. It is up to all of us to protect it as building it is difficult, and losing it is easy. To keep our reputation intact, we strive to maintain a culture of compliance by operating our business with honesty, integrity, reliability, and the highest level of ethical conduct. We recognize that it is merely not enough just to comply with laws and regulations but it is essential to abide by high ethical standards while serving our qualified member school entities and working with our business partners. Code can be expected to specify exact responses to the numerous ethical issues that impact our Organization every day in countless business situations. This Code tries to foster a working environment in which a Code such as this will always be unnecessary because of the simple example of committed employees who, in the course of their daily responsibilities, routinely and without fanfare exceed its expectations. This Code outlines considerations applicable to situations most likely to be encountered by our people at one time or another as they conduct business. Inevitably, situations will arise where no written guidance is available. In such cases, the best course is to contact your supervisor, a member of Human Page 3

66 Resources, or follow any of the other reporting options set forth in the Reporting Policy. Any of these resources have the responsibility to find the proper answers. All forms of retaliation for making a Report or cooperating in the investigation of a Report are prohibited All concerns deserve proper attention, no matter how small they may appear. If you suspect that fraud or business integrity issues are occurring, you should immediately contact your supervisor, follow any of the other reporting options set forth in the Reporting Policy, or call the Third Party Fraud Hotline maintained by our Organization. The toll free number is or through the internet at Our policies forbid any form of retaliation for doing the right thing by fulfilling your obligations to the Organization, including making a Report and cooperating in the investigation of a Report. Page 4

67 About the Joint Policy on Reporting of Concerns The Joint Code of Business Ethics and Conduct should be read and adhered to in conjunction with the Joint Policy on Reporting of Concerns The Director of Human Resources has been designated as the Ombudsperson Retaliation will not be tolerated Clear reporting lines have been established; anonymous reports are welcome The Joint Code of Business Ethics and Conduct should be read and adhered to in conjunction with the Joint Policy on Reporting of Concerns ( Reporting Policy ). The Reporting Policy discusses the responsibility of directors, officers, volunteers and employees to comply with the Code and to report violations or suspected violations of the Code or concerns related to the Code or questionable or improper accounting or auditing matters, and provides for specific reporting avenues. This includes, without limitation, reporting of fraud or suspected fraud of any type, such as accounting or other financial improprieties, internal insurance practices and/or conduct, and third party practices and/or conduct related to insurance coverage, claims, claims payment or any other matter covered or suggested by this Code. The Reporting Policy includes provisions prohibiting retaliation against any one who raises a concern or cooperates in an investigation. It also identifies the Director of Human Resources as the Ombudsperson for purposes of receiving, assessing and following through on Reports, sets forth multiple reporting options and clear reporting paths, and provides for the means by which the Organization will investigate and resolve issues as they arise. Both the Reporting Policy and this Code address our Organization s open door policy and suggest that individuals share their questions, concerns, suggestions or complaints with someone who can address them properly. In most cases, an individual's supervisor is in the best position to address an area of concern. However, if the individual is not comfortable speaking with his or her supervisor or is not satisfied with the supervisor's response, or if the supervisor is the subject of the concern, the individual is encouraged to speak directly with any of the following: a member of the Human Resources Department the Ombudsperson the CEO of Insurances Services the Executive Director of PSBA the Audit Chair of PSBA the Audit Chair of Insurance Services The nature of the report will determine the nature of the investigation. Concerns may also be submitted anonymously through the Third Party Fraud Hotline maintained by PSBA and Insurance Services: The toll free number is or through the internet at The Ombudsperson has the responsibility to assess and investigate all Reports and is required to bring them directly to the Audit Chairs Supervisors and managers are required to report suspected fraud, suspected violations of the Code of Conduct and questionable accounting or auditing practices to the Ombudsperson, who has specific responsibility to assess and investigate all Reports and to bring them directly to the Audit Chairs. Page 5

68 Open Door Policy Keys to Compliance Our Organization welcomes the opportunity to consider employee suggestions or problems. Accordingly, we maintain an open-door policy. You are encouraged to speak with your supervisor if you have a question or concern. Your supervisor is the person in the best position to respond quickly and accurately. The Director of Human Resources/Ombudsperson also is available to talk with you about particular suggestions or problems and will be glad to offer guidance. Naturally all consultations are handled discreetly and confidentially, as appropriate. Working together in an atmosphere of trust and cooperation provides the most productive work environment. Question: I have some ideas about how to make my job more efficient. Should I share my thoughts with Management? Question: Whenever I point out problems in my department, my supervisor either ignores me or doesn t follow up. How can I communicate if nobody is listening? Answer: Some of our best ideas come from employees who see a better way of doing things. In today s competitive marketplace, it is increasingly important to be thinking about and acting upon ideas that can make us more efficient. Even small ideas, when applied to our Organization can yield significant benefits. Do not hesitate to share your ideas with your immediate supervisor and manager. Answer: First, make sure that your communications are effective. Always be prepared, know what you want to say, why you are saying it, and be sure your listener is ready to listen and not distracted or preoccupied with other concerns. Use plain, simple language and phrase your requests or suggestions positively. Finally, ask for feedback. Make sure your message was sent and received as you intended. If you have tried and honestly believe your communications are being ignored, then pursue other outlets, including but not limited to the Reporting Policy. Talk with your supervisor s manager or Human Resources. Everyone has the right and is encouraged to contribute their thoughts and ideas to make our Organization better. Remember that, for a variety of reasons, not all ideas can be adopted, but suggestions are always welcome. Page 6

69 Business Accounting Practices Keys to Compliance Falsification of records will not be tolerated. All individuals have a responsibility to report improper practices or other improprieties; retaliation against an individual who has reported a concern in good faith will not be tolerated Disclosures Know what records to keep and for how long Did you know that Our Organization s employees, business partners, qualified member school entities, and other stakeholders rely upon the integrity of our accounting and business records. Adequate records must be kept in a complete, accurate, and timely manner to meet our financial, legal, regulatory, and operational objectives. Significant penalties may be imposed on us for failure to comply with required business records and accounting procedures. In the course of employment, every employee records and submits information that will be entered into our Organization s records. Whether you are filling out a time card, expense report, or reporting on the financial status of our Organization, you must follow all procedures, including but not limited to, the accounting, reporting, and control procedures that we have put in place. Falsification of records or unauthorized record entries will not be tolerated. If you become aware of a situation where accounting, recordkeeping or other practices are not being followed, or where you believe improprieties may be occurring, you have the responsibility to report them using the Reporting Policy procedures discussed on page 5 and in the Reporting Policy. Once a Report is received, the Organization will follow the procedures set forth in the Reporting Policy. Under no circumstances will retaliation against any employee who has reported a concern in good faith be tolerated. Disclosures in any financial report must be full, fair, accurate, timely, and understandable. Record retention practices can be challenging. Our requirements are frequently based upon specific statutory and regulatory requirements unique to the insurance industry. Failing to comply with our records retention policy, even innocently, can cause serious business or legal repercussions. Such requirements include electronic records such as . failing to keep documentation could subject the Organization to penalties. willful recording of incorrect information could be considered a false claim. Page 7

70 Conflicts of Interest Keys to Compliance Avoid conflicts of interest, whether in appearance or in fact What is a conflict of interest? We respect your right to manage your personal affairs and investments. However, care must be taken to avoid situations that might conflict with your responsibilities to our Organization or with the interests of business partners or qualified member school entities with whom we do business. We strive to do business without favoritism. Accordingly, neither you nor any member of your immediate family should have a direct interest in, or relationship with, any organization where such a relationship might affect the objectivity and independence of your judgment or conduct in carrying out your duties and responsibilities. You should not take additional employment with outside organizations if such employment will create an actual or perceived conflict of interest. A potential or actual conflict of interest may arise when an individual or a member of his or her family: Has a personal interest that impairs or appears to impair the individual s independent judgment; Receives a benefit from the use of the Organization s assets or private information; or Engages in outside activities that could interfere with the individual s obligations to the Organization. For example, a conflict of interest may arise when an individual: Holds an ownership interest of 5% or more, or is employed by or has any other financial interest in a third party dealing with any aspect of the Organization, including, without limitation, entities that are or seek to be, clients, customers, competitors and vendors of the Organization; Receives payment for individual services provided to the Organization that are outside of the scope of his or her duties as a director, officer, employee or volunteer of the Organization; Takes an opportunity for him- or herself personally that is discovered through the use of any of the Organization s assets, property, information, or position; Uses any of the Organization s time, employees, equipment, or supplies for personal purposes; Receives gifts valued at over $25 from third parties dealing with any part of the Organization. Page 8

71 Conflicts can arise in numerous areas and this list should not be considered exhaustive. All actual or potential conflicts must be disclosed through the following procedures even though it may be determined that a conflict is not sufficiently material to be adverse to the interests of the Organization. Please also refer to the following Sections: Relations With Business Partners at page 12; Protecting Organization Assets at page 16; and Government Relations at page 19: What are the procedures for safeguarding against a conflict of interest? The Conflict of Interest Disclosure Form (Exhibit A) must be submitted at the time of initial appointment or employment, and must be updated annually Disclosure must occur before the individual engages in the activity or transaction in question Each individual who serves as a director, officer, employee or volunteer is required to submit the Conflict of Interest Disclosure Form (Exhibit A) at the time of initial appointment or employment, and to submit an updated form annually. Directors and officers are required to return completed forms to the Chairman of the Board upon which they serve, who will review and maintain the documents. Directors and officers are required to continuously scrutinize their transactions, outside business interests, and relationships for conflicts of interests. When an individual becomes aware of a potential or actual conflict of interest that was not disclosed on the Form, the interested individual must promptly bring it to the attention of the Chairman of the Board upon which they serve; disclosure must occur before the individual engages in the activity or transaction in question. When a potential conflict is disclosed, the Chairman of the relevant board will review and make a recommendation to the board on whether a conflict exists and if so, whether the contemplated activity is sufficiently material to be adverse to the interests of the Organization. The relevant board will make the ultimate determination on the matter. The decision of the board is final and will rest in its sole discretion. Although an interested individual may participate in the information-gathering process regarding the potential conflict of interest, the individual cannot be present for the final deliberations and/or the decision on the matter. Employees and volunteers are required to return the completed forms to the Ombudsperson, who will review and maintain the documents. Employees and volunteers are required to continuously scrutinize their transactions, outside business interests, and relationships for conflicts of interests. When an individual becomes aware of a potential or actual conflict of interest that was not disclosed on the Form, the interested individual must promptly bring it to the attention of the Ombudsperson; disclosure must occur before the individual engages in the activity or transaction in question. When a potential conflict is disclosed, the Ombudsperson will bring the matter to the appropriate Audit Chair, who will review and make a recommendation on whether a conflict exists and if so, whether the contemplated activity is sufficiently material to be adverse to the interests of the Organization. If an individual believes that any other individual has failed to disclose an actual or potential conflict of interest, he or she shall inform the Ombudsperson in writing of the alleged failure, and the Ombudsperson will direct the matter to the appropriate Audit Chair. If it is determined that the interested individual has failed to disclose as required by this Policy, appropriate corrective and/or disciplinary action will be taken. Page 9

72 Individuals may not threaten, coerce or intimidate a colleague All instances of concurrent employment of family members or unrelated significant others must be reported to the Director of Human Resources Professional Relationships - Individuals may not use coercive means or promise special treatment to influence professional decisions of colleagues nor are they permitted to threaten, coerce or intimidate a colleague who in good faith is carrying out their responsibilities under this Policy. Employment of Relatives/Unrelated Significant Others - Employment of family members or unrelated significant others must be assessed to determine whether there is a supervisory relationship between the positions or any other direct relationship which would create a conflict of interest or be potentially disruptive to the workplace. All instances of concurrent employment of family members or unrelated significant others must be reported to the Director of Human Resources for review and possible action. Honorariums independent assignment, whether to member or affiliated groups, or to nonmember, nonaffiliated groups, may be accepted without prior approval. Employees are available to serve as speakers for regional, county and departmental meetings. Employees assigned to such service are reimbursed out of Organization funds for all legitimate expense incurred in connection with the assignment. If an honorarium and/or payment of expenses is offered by the group for whom the service is provided, the Employee may accept the payment; however, in such event, the Employee may only retain the payment in lieu of expenses payable by the Organization. If the payment represents an amount over and above the expenses incurred, the payment must be submitted to the Organization and a form submitted for expense reimbursement. Don't let community activities conflict with the Organization s interests Under no circumstances will retaliation against any employee who has reported a concern in good faith be tolerated Question: My spouse works for a local vendor that supplies our facility. Sometimes I am responsible for purchasing supplies from them. What should I do? Question: May I hire my brother to do some contract work for our Organization if his rates are the best rates We strongly encourage our people to participate in their communities. Such participation, however, carries with it the responsibility to avoid actual or apparent conflicts of interest. For example, using company time or assets for community activities should not be done without authorization from your Department Manager and Managing Director. If you become aware of a situation where accounting, recordkeeping or other practices are not being followed, or where you believe improprieties may be occurring, you have the responsibility to report them using the Reporting Policy procedures discussed above. Once a Report is received, the Organization will follow the procedures set forth in the Reporting Policy. Under no circumstances will retaliation against any employee who has reported a concern in good faith be tolerated. Answer: Advise your manager of the circumstances. A competitor of your spouse s company could claim that you are biased in his or her favor. Depending on the circumstances, another employee may be assigned to handle the transactions involving your spouse s company. Answer: Regardless of your brother s rates, our Organization should not hire him to perform services under a contract if he will be working under your supervision or if you will have any influence over the decision to employ him. The hiring should be approved by a higher manager in writing and should be Page 10

73 available? Question: My spouse works for another insurance company that sells insurance products to qualified member school entities. Is this a conflict of interest? disclosed to that manager before the decision is made. Answer: t necessarily. However, you should discuss this relationship with the Manager of your department to assure that you are not given assignments that would create a conflict of interest. In no event should you disclose confidential information to your spouse or solicit confidential information from your spouse. Page 11

74 Relations with Business Partners Keys to Compliance Gifts and entertainment Expense reimbursement and loans from business partners Kickbacks Question: A vendor continuously provides me with nominal gifts. Is this appropriate? Question: Ask yourself if a gift you received is being provided because your position enables you to influence a decision in favor of the business partner Striving to maintain straightforward business relationships with our qualified member school entities and business partners should be everyone s goal. These relationships should be based on the quality and cost of the services and goods, rather than on personal relationships. Neither the Organization nor any individual affiliated with the Organization shall take unfair advantage of these relationships though manipulation, coercion, or misrepresentation of information. The purpose of business entertainment and gifts is to create good will and sound working relationships, not to gain unfair advantage with customers, those soliciting business with the Organization, or business partners of the Organization. gift or entertainment should ever be offered, given, provided or accepted by any officer, director, employee or volunteer of the Organization, or any of your family members, unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is of a nominal value (i.e. normally less than a value of $25), (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. Please discuss with your supervisor or the Ombudsperson any gifts or proposed gifts which you are not certain are appropriate. See also the Government Relations and Political Activities section of this Policy concerning gifts to individuals covered by the Ethics Act. Reimbursement of your travel or business related expenses is prohibited. An occasional business lunch or dinner is permitted. Never accept loans or other personal services from suppliers or those soliciting business with the Organization - - they are prohibited. employee may offer, give, request, receive or participate in any way in the payment of a kickback or other improper payment to influence a business decision. If you become aware of such a situation, or where you believe improprieties may be occurring, you have the responsibility to report them using the Reporting Policy procedures discussed on page 5 and at Board Policy 410. Once a Report is received, the Organization will follow the procedures set forth in the Reporting Policy. Answer: Generally the answer is no, as repetitive gifts are perceived to be an attempt to create an obligation to the giver and are therefore inappropriate. Answer: If you answered yes, then declining the gift may be the appropriate answer. Because each offering is different, your decision should be carefully evaluated on a case-by-case basis. Page 12

75 Environment, Health, and Safety Keys to Compliance Know the law Handle hazardous materials properly We are committed to being an environmentally responsible Organization, and to providing a safe and healthy workplace for our employees and the public. Our Organization must comply with federal, state and local laws and regulations, not only because failure to do so can result in substantial penalties and heavy fines for the Organization and fines and imprisonment for employees responsible for violations, but because it is our social responsibility and our commitment to being a responsible member of the community. We have an obligation to learn and comply with all environmental and occupational health and safety laws and regulations applicable to our work. If you are uncertain about laws and regulations concerning your job, contact your manager or Human Resources. The handling, storage, manufacture, transportation, and disposal of any hazardous material or waste must meet all applicable legal requirements. Failure to do so can pose serious harm to employees, the community, and the environment, and can have serious civil and criminal consequences that may damage our reputation and business. Page 13

76 Fair Employment Practices Keys to Compliance Do not engage in discriminatory conduct Do not engage in harassment of others Treat everyone with respect Know the policies, practices, and applicable laws Realizing that our continued success depends on the development and contribution of our employees, we are committed to equal employment opportunity and a work environment that recognizes and respects employee contribution and diversity. It is our continuing policy to afford equal employment opportunity to qualified individuals regardless of their race, color, religion, sex, national origin, age, physical handicap or disability, veteran status or other protected classification and to comply with the applicable laws and regulations. Employees expect to be treated fairly on the basis of job performance and other business-related criteria. This encompasses all aspects of the employment relationship, including application and hiring, promotion and transfer, selection for training, compensation, disciplinary action, termination, and retirement. Our policy and the law prohibit verbal and other harassment of any employee on the basis of race, color, religion, sex, national origin, age, physical handicap or disability, veteran status or other protected classification. Such conduct destroys the cohesiveness and teamwork so vital to our Organization's success, and is counter to the respectful work environment that our Organization requires in all of its operations. Our Organization's prohibitions against discrimination and harassment also apply to its selection of, and relationships with, customers, contract personnel, and vendors, as well as treatment of visitors and others with whom employees come in contact in the work environment. Management employees have an additional responsibility to communicate, carry out, and enforce the fair employment policies and practices of the Company. Your immediate supervisor or Human Resources can provide or obtain answers to any questions regarding those policies and practices, or their application to specific circumstances. For further guidance see the PSBA Employee Handbook. Page 14

77 Protecting Confidential Information Keys to Compliance Privacy and Confidentiality Guard against inadvertent disclosure Former employees remain obligated One of our most important assets is the information that we generate in the course of business. Any information you encounter while working or serving on behalf of the Organization is the property of our Organization. Improper disclosure can create serious financial or competitive losses or disadvantages to the Organization, and legal liabilities to the Organization and individual employees. When handling financial and personal information about employees, policy holders, business partners or others with whom our Organization has dealings, observe the following principles: Collect, use, and retain only the personal information necessary for your job function or role within the Organization. Retain information only for as long as necessary or as required by law or our record retention policy. Limit internal access to personal information to those employees who have a legitimate business reason for seeking that information. Release of any confidential information outside of our Organization requires proper authorization by executive leadership and an approved confidentiality agreement signed by the recipient unless legal or contractual obligations provide otherwise. You should exercise caution when discussing business where conversations can be overheard such as in the hallway or at a restaurant. Care must be taken not to leave confidential information in open areas such as photocopiers or the fax machine. Even obsolete or prior versions of confidential information must be properly safeguarded. You are obligated to keep information you obtained during your service confidential, even after you leave. Employees and others leaving our Organization must safeguard and return confidential information in their possession. Page 15

78 Protecting Organization Assets Keys to Compliance Do not appropriate, borrow or loan property without permission Follow all security regulations By efficiently using our assets for business related purposes, we can deliver our products and services with responsible pricing. Both tangible and intangible assets have been acquired through the hard work and investment of many stakeholders. We need to protect our assets and ensure their efficient and proper use. Misappropriating our property or converting it to personal use for yourself or another is regarded as outright theft and can result in termination of your service to the Organization. Directors, officers, employees and volunteers are prohibited from taking for themselves, personally, opportunities that are discovered through the use of our Organization s property or information. An employee's paid working time is also an Organization asset which should not be put to personal use without proper authorization. Rules pertaining to security of facilities, material, information, and equipment may sometimes seem burdensome, but they are necessary. Do not ignore or skip safeguards designed to protect computers. Do not fail to secure sensitive information or easily transportable tools and equipment when you are done with them. Do not neglect fire and other safety precautions. Page 16

79 Use of Technology Resources Keys to Compliance You are responsible for systems accessed under your passwords Only use your computer for valid reasons Privacy Question: I have received an offensive message. What should I do? At all times, we should use good judgment and common sense; conduct ourselves ethically, lawfully, and professionally; and follow applicable authorization protocols while accessing and using information technology and contents provided by our Organization. In using these assets and systems, we do not create, access, store, print, solicit, or send any material that is intimidating, harassing, threatening, abusive, sexually explicit, or otherwise offensive or inappropriate, nor do we send any false, derogatory, or malicious communications. It is important to maintain the confidentiality of passwords, as they are unique to you and promote accountability. If someone signs into a system with your User ID and password that you gave them, you are responsible. This means you should not share with anyone including your supervisor or manager. You should not leave your user IDs and passwords in an area where someone can find and use them. To allow others access to your work files while away from the office, move them to a shared or public drive. Use of the Internet and for personal reasons is permissible on a limited basis as per the Employee Handbook. However, as s are the property of the Organization, use good judgment and do not access, send a message, or store any information that you would not want to be seen or heard by others. Never use computer resources for illegal purposes such as downloading or forwarding copyrighted materials (e.g., music and movies, unlicensed proprietary software programs). You should have no expectation of privacy regarding information technology resources. Unless prohibited by law, we reserve the right to access and disclose all information on these resources, at any time for any reason. Answer: Ask the sender to stop transmitting offensive s to you and advise the Ombudsperson and your Department Manager. If the sender is an employee and he or she persists in sending offensive material, you should promptly report this to your manager, or to Human Resources. If the sender is from outside of our Organization, contact the IT Department so that future message from this source can be blocked. Page 17

80 Copyrights Keys to Compliance Use only legitimately purchased software Get permission to use copyrighted materials Copyright laws provide the author of a work with the exclusive right to copy, distribute, adapt, and perform the work. Copyright applies to materials such as computer programs, books, articles, reports, drawings, presentation handouts, music, music recordings, and audio and video tapes. Unfortunately, the accessibility of copying machines and personal computers has made copyright infringement commonplace; but we are committed to respecting the rights of others by obeying the laws, and we are steadfast in the protection of our own copyrights. Only legitimately purchased software may be loaded onto a computer. Use of bootleg software not only creates a legal liability for the Organization, but exposes our computers to other risks, including computer viruses. Copying or adapting copyrighted materials should be done only with the permission of the author. The Fair Use Doctrine allows small excerpts of copyrighted materials to be used for editorial or research purposes without prior approval. The extent of such copying must be kept to a minimum. Should you be uncertain, discuss the matter with your Department Manager or the IT manager. Page 18

81 Government Relations and Political Activities Keys to Compliance All of our people must conduct themselves in a manner to avoid any dealing that might be perceived as an attempt to inappropriately influence a public official in the performance of his or her official duties. Federal and state government officials may rely upon the accuracy of verbal and written statements made by our Organization and/or its employees. It is a violation of the law for any employee to knowingly make a false and misleading statement to a government official or auditor. In every instance, we need to provide accurate and complete statements to the government. Know and obey the law Do not use the Organization s money for political contributions Gratuities, other things of value and donations may not be based on an understanding that the recipient s vote, official action or judgment is to be influenced by the donation We need to follow the law, both in letter and in spirit. We must understand all applicable laws and regulations including, without limitation, employment, discrimination and insurance laws, as well as laws pertaining to lobbying public officials, such as the Lobbying Disclosure Act and the Public Official and Employee Ethics Act. Employees and others may not offer or give to a public official, public employee, nominee or candidate for public office, or a member of the immediate family of the above or a business associated with the above, anything of monetary value based on an understanding that the recipient s vote, official action or judgment would be influenced. Employees involved in lobbying will report lobbying activities in compliance with PSBA Policy 406 Lobbying Registration and Regulation. Under federal and most state statutes, it is unlawful and prohibited for our Organization, or any employee, to use funds from the Organization to make any direct or indirect contributions (financial or in-kind) to parties, candidates, or lawful Political Action Committees. Gratuities or other things of value may be donated to people covered by the Ethics Act only when the donation is not based on an understanding that the recipient s vote, official action or judgment is to be influenced by the donation. Meals may be purchased for business meetings or gatherings only where it is not practical to schedule the meeting or gathering at a time other than a mealtime. Items of monetary value may be given to people covered by the Ethics Act so long as: 1) the purpose of the donation is limited to promoting or advertising a message of the Organization; or 2) the logo or other identifying mark of PSBA, SBIC, SBS, SCS, the PSBA Insurance Trust, or one of the insurance carriers with whom the PSBA Insurance Trust conducts business, is clearly identified on the donated item; or 3) the giving of the item will enhance and/or stimulate social interchange of individuals interested in promoting and/or improving the interests of public school affairs. Employees may not enlarge upon the kinds of items given to public officials or employees or the circumstances under which they are given beyond current Organization practices without first obtaining approval from the Executive Director of PSBA or the President of SBIC. The relevant individual shall obtain a legal opinion from the Organization s General Counsel when deemed prudent prior to initiating any new practices individual may speak for or on behalf of the Organization on any matter unless authorized to do so individual may speak for or on behalf of the Organization on any matter unless authorized to do so. Moreover, if any individual is speaking in his/her individual capacity on any issue and there is any chance for confusion by the public or state or federal governmental officials whether the individual is authorized to speak for or on Page 19

82 behalf of the Organization, such individual shall state that he/she is speaking in his/her individual capacity and not as a representative of the Organization Keep personal political activities separate from the Organization s business Question: I strongly support a candidate for office in the upcoming election. May I hand out campaign literature on the job? Question: May I make personal political contributions? Seeking or holding any public office may give rise to situations where an individual's obligation to the community and obligation to the Organization may conflict. In such situations, individuals should avoid participating in decisions, whether as employees or public officeholders, which present such conflicts. Answer:. Distribution of such materials during work time or in work areas is an unacceptable use of company property and time and could create the mistaken impression that the Organization is endorsing a particular candidate. Answer:. Personal political contributions are not prohibited. This is a matter of personal choice. Page 20

83 Ethics Compliance Keys to Compliance Management of our Organization has an important and elevated role in corporate governance and is empowered to ensure that stakeholders interests are appropriately balanced, protected and preserved. It is their responsibility not only to communicate and train employees in the ethical values and requirements outlined in this Code, but to lead by example. Employees have parallel responsibilities to act in compliance with this Code, to maintain high business ethics standards, and to perpetuate a work environment of trust and respect of which employees and stakeholders can be proud. Report ethics and business integrity violations Cooperate with Code of Business Ethics and Conduct investigations and auditors All of our people are obligated to report known or suspected ethics or business integrity violations. If you become aware of a situation where improprieties are occurring or you believe improprieties may be occurring, you have the responsibility to report them using the Reporting Policy procedures discussed above. Once a Report is received, the Organization will follow the procedures set forth in the Reporting Policy, including ensuring that the protections of the Reporting Policy are extended to anyone reporting a suspected violation. All of our people have a duty to cooperate fully with ethics investigations and audits. You should answer questions posed by investigators or auditors truthfully and to the best of your ability. Depending on the matter being audited or investigated, those assigned to the task may include personnel with the requisite skills or experience, including, but not limited to, Human Resources, members of the Organization s audit committees, and other outside personnel. Where an audit or investigation reveals the need to take corrective measures, individuals have an obligation to cooperate in implementing changes in systems, practices, or procedures to avoid future problems. The determination of whether a Code of Business Ethics and Conduct infraction warrants disciplinary action will be made based on the facts and circumstances of each case. Such action may involve penalties up to and including termination of employment or removal from Board or volunteer service for serious, repeated, or multiple violations. Never cover up ethics violations Concealing or covering up an ethics violation is itself a major violation of this Code. individual is authorized or required to carry out any order or request to conceal or cover up an ethics violation. Page 21

84 Appendix A CONFLICT OF INTEREST DISCLOSURE STATEMENT As a director, officer, employee, and/or volunteer of PSBA, which includes the Pennsylvania School Boards Association and School Board Services, LLC ( SBS ), and/or of the Insurance Services, which includes School Boards Insurance Company of Pennsylvania ( SBIC ), PSBA Insurance Trust (Trust), and School Claims Services, LLC ( SCS ), who performs duties for or on behalf of PSBA and/or the Insurance Services (collectively, the Organization ), you are required to complete this Conflict of Interest Disclosure Statement when you become a director, officer, employee or volunteer for any entity or entities within the Organization, and each year thereafter during which you serve as such, with respect to yourself or a Related Person. As used herein, a Related Person includes your spouse, domestic partner, children, parents, brothers and sisters, and your spouse s or domestic partner's parents, brothers and sisters. 1. (Check status and entity) Director, officer, employee or volunteer of: PSBA SBS SBIC Trust SCS 2. In the past year, have you or any Related Person provided services or property to or purchased services or property from the Organization, other than as a director, officer, employee or volunteer? 3. In the past year, have you or any Related Persons had any direct or indirect interest in or association with (a) any business transaction(s) to which the Organization was or is a party or (b) any vendor or organization that has sold supplies merchandise, property, services or goods to the Organization? 4. In the past year, were you or any Related Persons indebted to pay money to the Organization at any time or have an interest in any pending legal proceedings involving the Organization? 5. In the past year, have you or any Related Person, as a result of your position with the Organization (a) received or become entitled to receive, directly or indirectly, any personal benefits other than compensation directly related to your duties for the Organization or (b) accepted, solicited or offered any material gift, entertainment or other benefit from or to any person or organization that does or is seeking to do business with or is a competitor of the Organization? (For purposes of this question, material shall mean having a value equal to or greater than $25.) Page 22

85 6. Do you or any Related Person have a financial interest in, or hold office in, serve on the board or participate in management of, or hold an employed position in or otherwise receive compensation from, an organization that competes with the Organization, including any of its affiliated entities? (For purposes of this question, financial interest with respect to ownership of an organization shall mean an ownership interest of 5% or more.) 7. Are you aware of any other event, transaction, arrangement or other situation that has occurred or may occur in the future that you believe should be disclosed in accordance with the terms of the Organization s conflict of interest policy? If you answered yes to any of the above items, please describe the situation(s) and, if a Related Person is involved, the name of the Related Person and your relationship with that person: I hereby confirm that I have received and reviewed the PSBA and Insurance Services Joint Code of Business Ethics and Conduct, including the Organization s Conflict of Interest Policy; that I am in compliance with the Policy; and that the disclosures made on this form are full and complete to the best of my knowledge as of the date that I sign this form. I hereby agree to report promptly any situation or transaction that may arise during the forthcoming year that might conceivably raise a potential conflict of interest. Date: Signature Printed Name: Title: Page 23

86 PSBA and Insurance Services Joint Code of Business Ethics and Conduct Certification I have received, read and understand the Joint Code of Business Ethics and Conduct. As a director, officer, employee, and/or volunteer of PSBA and/or the Insurance Services, who performs duties for or on behalf of PSBA and/or the Insurance Services, I certify that I understand and agree to abide by the underlying principles. I acknowledge that I can perform my duties in compliance with the Code and all relevant policies. I acknowledge that it is my duty to report actual or suspected violations of the Code to my supervisor or other officials as specified in the Code and the Joint Policy on Reporting of Concerns. Except as I have described below, I am not aware of any violation or suspected violation of the Code, PSBA or Insurance Services policies, or any other policies of the Organization. Name (Printed) Signature Date Please fold this Certification in half, staple it and return via interoffice mail to the attention of the Ombudsperson (Director of Human Resources). If you do not have access to interoffice mail, please sign and return this certificate to the following address: PSBA Attention: Director of Human Resources (Ombudsperson) PO Box 2009 Mechanicsburg, PA Page 24

87 . 410 Adopted: vember 15, 2013 Revised: Purpose 410. JOINT POLICY ON REPORTING OF CONCERNS This Policy applies to all directors, officers, employees and volunteers of Pennsylvania School Boards Association and School Board Services, LLC (collectively PSBA ), and all directors, officers, employees and volunteers of Insurance Services. Insurance Services includes, without limitation, School Boards Insurance Company of Pennsylvania, Inc. ( SBIC ), School Claims Services, LLC ( SCS ) and Pennsylvania School Boards Association Insurance Trust ( Trust ). Both PSBA and Insurance Services maintain business ethics policies entitled, Code of Business Ethics and Conduct. The policies are equivalent in their application, intent and goals. These goals include, but are not limited to, safeguarding financial and accounting integrity, preventing and eliminating fraud, and creating organizational transparency. For purposes of this Policy, the business ethics policies will be treated as one policy and referred to as the Code. Pursuant to the Code, all directors, officers, volunteers and employees of PSBA and Insurance Services are required to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. All employees and representatives of PSBA and Insurance Services must practice honesty and integrity in fulfilling their responsibilities and must comply with all applicable laws and regulations. Reporting Responsibility It is the responsibility of all directors, officers, volunteers and employees to comply with the Code and to report violations or suspected violations of the Code or concerns related to the Code or questionable or improper accounting or auditing matters in accordance with this policy on Reporting of Concerns ( Report(s) ). This includes, without limitation, reporting of fraud or suspected fraud of any type, such as accounting or other financial improprieties, internal insurance practices and/or conduct, and third party practices and/or conduct related to insurance coverage, claims, claims payment or any other matter.

88 410. JOINT POLICY ON REPORTING OF CONCERNS - Pg. 2 Retaliation This Policy is intended to encourage and enable individuals to raise serious concerns within PSBA and Insurance Services prior to seeking resolution outside of either organization. director, officer, volunteer or employee ("Reporter") who in good faith reports violations, suspected violations or other concerns related to the Code, who reports fraud or suspected fraud, or who reports questionable or improper accounting or auditing matters, shall suffer harassment, retaliation or adverse employment consequence as a result of their good faith reporting. Further, no one who participates in any related investigation shall suffer harassment, retaliation or adverse employment consequence because of their participation. Anyone who engages in such retaliation will be subject to discipline up to and including termination of employment or dismissal from the Board or volunteer position. Reporters and others who believe they have been subject to retaliation for reporting a concern or participating in an investigation should promptly report such matters to the Ombudsperson. The Director of Human Resources of PSBA has been designated as the Ombudsperson for purposes of this Policy. Reporting Violations The Code addresses PSBA s and Insurance Services open door policy and suggests that individuals share their questions, concerns, suggestions or complaints with someone who can address them properly. In most cases, an individual's supervisor is in the best position to address an area of concern. However, if the individual is not comfortable speaking with his or her supervisor or is not satisfied with the supervisor's response, or if the supervisor is the subject of the concern, the individual is encouraged to speak directly with any of the following: A member of the Human Resources Department; The Ombudsperson; The CEO of Insurances Services; The Executive Director of PSBA; The Audit Chair of PSBA; The Audit Chair of Insurance Services. The nature of the report will determine the nature of the investigation. Concerns may also be submitted anonymously through the Third Party Fraud Hotline maintained by PSBA and Insurance Services: The toll free number is or through the internet at Supervisors and managers are required to report suspected fraud, suspected violations of the Code of Conduct and questionable accounting or auditing practices to the Ombudsperson, who has specific responsibility to assess and investigate all Reports and to bring them directly to the Audit Chairs. Page 2 of 4

89 410. JOINT POLICY ON REPORTING OF CONCERNS - Pg. 3 Acting in Good Faith PSBA and Insurance Services will presume that anyone reporting a concern is acting in good faith and has reasonable grounds for believing the information disclosed indicates fraud, a violation of the Code or an improper accounting or auditing practice. Making a Report which proves to have been made maliciously or knowingly to be false will be viewed as a serious offense which could result in discipline up to and including removal from the organization. Confidentiality Violations or suspected violations may be submitted on a confidential basis by the Reporter or may be submitted anonymously through the Third Party Fraud Hotline. Reports of violations or suspected violations, and investigations pertaining thereto, will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation. Intentional disclosure of reports of concerns to individuals not involved in the investigation will be viewed as a serious breach of confidentiality and could result in discipline up to and including removal from the organization. Ombudsperson (Compliance Officer) The Ombudsperson will serve as the Compliance Officer for purposes of this Policy. The Ombudsperson will function independent of line management and will be empowered to conduct objective investigations that are not geared toward reaching a conclusion favored by management. The Director of Human Resources of PSBA has been designated as the Ombudsperson. The Ombudsperson is responsible for causing the investigation and resolution of all Reports concerning violations of the Code and questionable or improper accounting or auditing matters. The Ombudsperson shall advise the Audit Chairs of both PSBA and Insurance Services of Reports and the status of investigations and resolutions of those Reports. In his or her role as the Ombudsperson, s/he will also have responsibility to the Governing Boards. Handling of Reported Violations When a Report has been received, the Ombudsperson will notify the sender by mail and/or to acknowledge receipt of the reported violation or suspected violation within five business days. All Reports will be promptly investigated and appropriate corrective action will be taken if warranted by the investigation. The Ombudsperson will assess whether a Report should be referred to the Audit Chairs for action. If the Report relates to concerns or complaints regarding accounting practices, internal controls or auditing, the Ombudsperson shall immediately notify the Audit Chairs and then work with the Chair and Audit Committee involved in the matter until it is resolved. Page 3 of 4

90 410. JOINT POLICY ON REPORTING OF CONCERNS - Pg. 4 The Audit Review Committees have the authority to retain legal counsel, accountants, private investigators, or other resources deemed necessary to conduct an appropriate investigation of allegations. The Chair of the Audit Review Committee involved in the matter shall recommend appropriate corrective action to the Executive Director or CEO and the President of the Governing Board. The investigation and resulting corrective action will be reported to the relevant Board or Boards of Directors. The Ombudsperson shall report quarterly to the Audit Review Committees as to the status of all Reports involving accounting practices, internal controls or audit concerns and shall also provide the Committee with a summary of the status of other Reports not involving accounting practices, internal controls or audit concerns. Training All new Board members, management, staff and volunteers will receive training on this Policy as part of their orientation to the organization; thereafter, all Board members, management, staff and volunteers will receive periodic training on this Policy. The Ombudsperson shall be responsible for this training. Coordination With Other Policies Questions pertaining to application of this policy, perceived conflicts among or between this policy and other policies, or uncertainty as to whom concerns should be reported should not deter anyone from reporting violations or suspected violations of the Code, fraud or suspected fraud, or any other concerns relating to the Code, fraud or questionable or improper accounting or auditing matters in accordance with this Policy. If you have any questions whatsoever regarding applicability of this Policy, please discuss them with your supervisor, a member of the Human Resources Department, the Ombudsperson, the Executive Director of PSBA, the CEO of Insurance Services or the Audit Chairs. Page 4 of 4

91 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Schedule D (Supporting Organizations), Section 1, Line 3 A. Statement of Revenues and Expenses for Supported Organization (PSBA) Type of revenue or expense Current Tax Year 4 prior tax years (a) 7/1/2014 (b) 7/1/2013 (c) 7/1/2012 (d) 7/1/2011 thru 6/30/2015 thru 6/30/2014 thru 6/30/2013 thru 6/30/ Gifts, grants and contributions received (not including unusual grants) 2. Membership fees received (e) 7/1/2010 thru 6/30/2011 (f) Total for (a) thru (e) ,382,180 4,352,463 4,351,845 4,254,275 4,258,060 21,598, Gross investment income 1,465 41,138 27,732 38,784 40, , Net unrelated business income Taxes levied for your benefit Value of services or facilities furnished by a governmental unit without charge (not including value of services generally furnished to the public at large) Any revenue not listed above or in lines 9-12 below (attach itemized list) 253,294 2,776,337 1,859,592 1,370,470 1,298,327 7,558, Total of lines 1 thru 7 4,636,493 7,169,938 6,239,168 5,663,529 5,596,393 14,959, Gross receipts from admissions, merchandise sold or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list) 1,208,493 3,561,980 3,425,409 3,338,898 3,424,824 14,959, Total of lines 8 and 9 5,845,432 10,731,918 9,664,578 9,002,427 9,021,217 44,265,572

92 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Net gain or loss on sale of capital assets (attach schedule and see instructions) 0 0 (3,407) 0 0 (3,407) 12. Unusual grants Total Revenue (Lines 10 through 12) 5,845,432 10,731,918 9,661,171 9,002,427 9,021,217 44,262,165 Figure 2. Part IX A. Statement of Revenues and Expenses for Supported Organization (PSBA) Line 11. Net Gain or Loss Schedule for Supported Organization (PSBA) Period 7/1/2014 thru 6/30/2015 Categories (A) Real Estate (B) Securities (C) Other 1. Gross sales price of assets (other than inventory) by category Less: Cost or other basis and sales expenses Gain or (loss). Subtract line 2 from line Net gain or (loss) Add lines 3 of columns (A), (B) and (C). Enter here and on line Period 7/1/2013 thru 6/30/2014 Categories (A) Real Estate (B) Securities (C) Other 1. Gross sales price of assets (other than inventory) by category Less: Cost or other basis and sales expenses Gain or (loss). Subtract line 2 from line Net gain or (loss) Add lines 3 of columns (A), (B) and (C). Enter here and on line 11. 0

93 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Period 7/1/2012 thru 6/30/2013 Categories (A) Real Estate (B) Securities (C) Other 1. Gross sales price of assets (other than inventory) by category , Less: Cost or other basis and sales expenses , Gain or (loss). Subtract line 2 from line (3,407) 4. Net gain or (loss) Add lines 3 of columns (A), (B) and (C). Enter here and on line 11. (3,407) Period 7/1/2011 thru 6/30/2012 Categories (A) Real Estate (B) Securities (C) Other 1. Gross sales price of assets (other than inventory) by category Less: Cost or other basis and sales expenses Gain or (loss). Subtract line 2 from line Net gain or (loss) Add lines 3 of columns (A), (B) and (C). Enter here and on line Period 7/1/2010 thru 6/30/2011 Categories (A) Real Estate (B) Securities (C) Other 1. Gross sales price of assets (other than inventory) by category Less: Cost or other basis and sales expenses Gain or (loss). Subtract line 2 from line Net gain or (loss) Add lines 3 of columns (A), (B) and (C). Enter here and on line 11. 0

94 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Part X, Line 6b (ii)(a). Name of and amount supported organization (PSBA) received from each disqualified person for each year amounts are included on lines 1, 2, and 9 of Part IX-A. Statement of Revenues and Expenses. Tax year Name of disqualified person (or none if none) Amount paid 7/1/2014 through 6/30/2015 ne 7/1/2013 through 6/30/2014 7/1/2012 through 6/30/2013 7/1/2011 through 6/30/2012 7/1/2010 through 6/30/2011 ne ne ne ne (ii)(b). Name of and amount supported organization (PSBA) received from each payer, other than a disqualified person, whose payments were more than the larger of (1) 1% of line 10, Part IX-A. Statement of Revenues and Expenses, or (2) $5,000, f or each year amounts are included on line 9 of Part IX-A. Statement of Revenues and Expenses. Tax year Name(s) of paying person or organization (or none if none) Amount paid 7/1/2014 through 6/30/2015 Pennsylvania School Boards Association Insurance Trust Pennsylvania School District Liquid Asset Fund 330,335 12,566 7/1/2013 through 6/30/2014 Pennsylvania School Boards Association Insurance Trust Pennsylvania School District Liquid Asset Fund 3,471, ,442 7/1/2012 through 6/30/2013 Pennsylvania School Boards Association Insurance Trust Pennsylvania School District Liquid Asset Fund 2,556, ,670 7/1/2011 through 6/30/2012 Pennsylvania School Boards Association Insurance Trust Pennsylvania School District Liquid Asset Fund 2,063, ,473 7/1/2010 through 6/30/2011 Pennsylvania School Boards Association Insurance Trust Pennsylvania School District Liquid Asset Fund 1,972, ,287

95 PENNSYLVANIA PUBLIC EDUCATION FOUNDATION EIN Part X, Line 7. Unusual grants supported organization (PSBA) received during any of the years shown on Part IX-A. Statement of Revenues and Expenses. Tax year 7/1/2014 through 6/30/2015 Name of contributor (or none if none) ne Amount paid Description and explanation of why unusual 7/1/2013 through 6/30/2014 ne 7/1/2012 through 6/30/2013 ne 7/1/2011 through 6/30/2012 ne 7/1/2010 through 6/30/2011 ne

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