2024-08-14T17:40:08-05:00 2023-09-30 390859910 BAKER TILLY ADVISORY GROUP LP 6320 CANOGA AVE 17TH FLOOR WOODLAND HILLS CA 91367 990 2022-10-01 521509402 THE CATHERINE B REYNOLDS FOUNDATION INC CATH 7036744719 PO BOX 650157 STERLING VA 20165 MATTHEW MURRAY TREASURER 7036744719 2024-08-12 1 1 SHASHI MIRPURI P00874030 8189950090 2024-08-12 2022 2024-08-08 14:25:15Z X CATHERINE B REYNOLDS PO BOX 650157 STERLING VA 20165 1515828 0 X WWW.CBRF.ORG X 1986 MD SEE PART III, LINES 1, 4A AND 4B. X 5 3 8 0 -5959 0 247263 0 2585605 975642 572818 516186 24000 24000 3429686 1515828 1848100 1790020 0 0 2525420 1559404 0 0 0 3029702 13601771 7403222 16951195 -3973536 -15435367 60861527 27657565 20347821 132644 40513706 27524921 X TO HELP STUDENTS GAIN ACCESS TO FUNDS TO PAY FOR COLLEGE COSTS AND TO SUPPORT A VARIETY OF PHILANTHROPIC PROGRAMS INCLUDING BUT NOT LIMITED TO IN THE AREAS OF EDUCATION, THE ARTS, AND RESEARCH, THROUGH GRANT MAKING TO OTHER 501(C) ORGANIZATIONS. 0 1 8903579 965487 1. TO CARRY ON A VARIETY OF PROGRAMS RELATING TO, AMONG OTHER THINGS, THE LENDING OF FUNDS TO OR FOR THE BENEFIT OF STUDENTS, FACULTY AND STAFF OF EDUCATIONAL INSTITUTIONS AND OTHERS FOR EDUCATIONAL PURPOSES, INCLUDING SERVICING AND ADMINISTERING STUDENT LOAN PORTFOLIOS.2. TO ADMINISTER PROGRAMS WHEREBY OTHER GOVERNMENTAL OR NONGOVERNMENTAL ENTITIES LEND FUNDS TO OR FOR THE BENEFIT OF, AMONG OTHERS, STUDENTS, FACULTY AND STAFF OF EDUCATIONAL INSTITUTIONS AND NON-PROFIT INSTITUTIONS, IN FURTHERANCE OF RELIGIOUS, SCIENTIFIC, EDUCATIONAL OR CHARITABLE PURPOSES.3. TO DO ANY OTHER ACT OR THING INCIDENTAL TO OR CONNECTED WITH THE FOREGOING PURPOSES OR IN ADVANCEMENT THEREOF.EXEMPT PURPOSE ACHIEVEMENTS:A. THE ORGANIZATION HAS PROVIDED OVER $2,500,000,000 IN EDUCATIONAL LOANS TO OVER 350,000 AMERICANS. THESE FUNDS HAVE ALLOWED THESE INDIVIDUALS THE OPPORTUNITY TO FURTHER THEIR EDUCATION AND MEET THE RISING COST OF OBTAINING A HIGHER EDUCATION.PRIOR TO THE SALE OF ITS PORTFOLIO OF EDUCATIONAL LOANS IN FEBRUARY 2023, THE ORGANIZATION ADMINISTERED MULTIPLE LOAN PROGRAMS AND SERVICES THAT PROVIDED APPROXIMATELY $79,658,428 IN EDUCATIONAL LOANS FOR OVER 8,863 STUDENTS.IN ORDER TO RECEIVE A LOAN, THE STUDENT MUST BE ACCEPTED FOR ENROLLMENT FULL TIME OR PART TIME IN AN ACCREDITED COLLEGE, UNIVERSITY OR PRIVATE SECONDARY SCHOOL APPROVED BY EDUCAP INC. FOR THE LOAN PROGRAM UNDER WHICH THE APPLICATION IS BEING MADE.THE BORROWER OR COSIGNER MUST:BE CREDIT WORTHY AND BE A U.S. CITIZEN OR PERMANENT RESIDENT ALIEN OR HAVE A CREDITWORTHY COSIGNER WHO IS A U.S. CITIZEN OR PERMANENT RESIDENT ALIEN.BE 18 YEARS OF AGE OR OLDER AT THE TIME OF APPLICATION (19 IN ALABAMA AND NEBRASKA, 21 IN MISSISSIPPI AND PUERTO RICO).HAVE NO ADVERSE PUBLIC RECORDS (E.G., COLLECTIONS, TAX LIENS, ETC.) ON THEIR CREDIT REPORTS.HAVE AN ACCEPTABLE BANKRUPTCY SCORE ASSIGNED BY A CREDIT REPORTING AGENCY.HAVE AN ACCEPTABLE CREDIT SCORE (AS DETERMINED BY EDUCAP INC.'S CREDIT SCORING MODEL) FOR THE LOAN PROGRAM UNDER WHICH THE APPLICATION IS BEING MADE.HAVE NEVER DEFAULTED ON A STUDENT LOAN.SUBMIT INCOME VERIFICATION DOCUMENTS.MAXIMUM LOAN AMOUNTS ARE BASED ON:SCHOOL COSTSINCOME AND DEBT TO INCOME RATIO 1790020 1790020 TO MAKE GRANTS TO OTHER 501(C)(3) ORGANIZATIONS IN FURTHERANCE OF ITS MISSION, FOCUSED UPON FOSTERING AN EDUCATED CITIZENRY THROUGH SUPPORT OF EDUCATION, THE ARTS, RESEARCH AND A VARIETY OF OTHER CHARITABLE AND EDUCATIONAL ACTIVITIES.DURING ITS FISCAL YEAR ENDING SEPTEMBER 30, 2023, THE ORGANIZATION HAS MADE GRANTS TOTALING $1,790,020 AND HAS PAID OUT $2,490,000 IN CASH CONTRIBUTIONS TO 8 DIFFERENT CHARITABLE ORGANIZATIONS EXEMPT FROM FEDERAL INCOME TAXATION UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. 10693599 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 1 1 1 0 0 0 1 1 0 0 0 0 1 58 0 1 8 1 0 1 CJ 0 0 0 0 0 0 0 0 0 0 X 5 3 1 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X THE CATHERINE B REYNOLDS FOUNDATION INC 7036744719 PO BOX 650157 STERLING VA 20165 CATHERINE REYNOLDS CHAIRMAN OF THE BOARD & CE 40.00 X X 802748 0 53052 WAYNE REYNOLDS DIRECTOR 2.00 X 0 0 0 JOSEPH RALSTON DIRECTOR 2.00 X 0 0 0 STEPHEN GLOVER DIRECTOR 2.00 X 0 0 0 MARGERY KRAUS DIRECTOR 2.00 X 0 0 0 MATTHEW MURRAY CFO UNTIL 21623 TREASURER 40.00 X 471476 0 57666 STEVE CADY SECRETARY 2.00 X 0 0 0 PATRICIA JEAVONS UNTIL 21623 CONTROLLER 40.00 X 200369 0 35686 MARCUS MAIORCA UNTIL 21623 VICE PRESIDENT OF PORTFOLI 40.00 X 167318 0 35604 VANESSA MOORE EXECUTIVE ASSISTANT TO CHA 40.00 X 151659 0 21720 ETHEL TERRADO-LOWE DIRECTOR OF NEW MEDIA & DE 40.00 X 170263 0 8350 ZABRINA SHEPHERD UNTIL 21623 DIRECTOR, LEGAL 40.00 X 118560 0 19815 2082393 0 231893 7 0 1 0 VENABLE LLP PO BOX 62727 BALTIMORE MD 21264 LEGAL SERVICES 186097 NELNET 121 SOUTH 13TH STREET SUITE 201 LINCOLN NE 68508 PROCESSING SERVICES 131324 2 INTEREST ON LOANS 525990 965486 965486 ADMINISTRATION FEES 525990 10156 10156 975642 516186 -5959 522145 REIMBURSED EXPENSES 541900 24000 24000 24000 1515828 975642 -5959 546145 1790020 1790020 921588 737270 184318 359778 206352 153426 57507 32983 24524 152777 87626 65151 67754 38861 28893 463791 53934 409857 7886 4523 3363 95657 95657 77566 19969 57597 39613 22720 16893 48649 27903 20746 106858 61289 45569 145416 83404 62012 295357 295357 9068 5201 3867 187625 107613 80012 TRANSACTION EXPENSES 11734720 6730497 5004223 COLLECTION FEES 177077 177077 0 SERVICING FEES 143954 143954 0 PROGRAM SUPPORT 55188 55188 0 13346 11858 1488 16951195 10693599 6257596 0 122 122 4265168 4013289 69677 2000 34682683 1600000 114370 162211 658750 346527 322598 312223 14887010 15596189 6519899 5912386 0 59145 60861527 27657565 556780 73499 749980 0 19041061 0 0 59145 20347821 132644 X 40513706 27524921 40513706 27524921 60861527 27657565 -15435367 2446582 0 X X 1 X 0 1 0 X 247263 247263 5755787 4058210 2998350 2585605 975644 16373596 5755787 4058210 2998350 2832868 975644 16620859 0 0 0 16620859 623574 597881 608179 564322 516186 2910142 623574 597881 608179 564322 516186 2910142 8439 56432 -12643 -5438 -5959 40831 216771 243755 54362 24000 34156 573044 6604571 4956278 3648248 3415752 1520027 20144876 0.82510 0.85320 0.14450 0.11390 X SCHEDULE A, PART III, LINE 12, EXPLANATION OF OTHER INCOME: REIMBURSED EXPENSES - 2018 AMOUNT: $ 216,771. 2019 AMOUNT: $ 243,755. 2020 AMOUNT: $ 54,362. 2021 AMOUNT: $ 24,000. 2022 AMOUNT: $ 24,000. ADMINISTRATIVE FEES - 2022 AMOUNT: $ 10,156. 51725 51725 0 508653 196430 312223 98372 98372 0 312223 ABSOLUTE RETURN 2432637 F HEDGED EQUITY 1625154 F PRIVATE EQUITY LPS 1823342 F REAL ESTATE LP 31253 F 5912386 LEASE LIABILITY 59145 59145 X 2938409 1446581 1446581 1491828 24000 24000 1515828 16927196 0 16927196 24000 24000 16951196 PART X, LINE 2: THE ORGANIZATION IS EXEMPT FROM FEDERAL AND STATE INCOME TAX UNDER THE PROVISIONS OF IRC SECTION 501(C)(3), HOWEVER, ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA REQUIRE MANAGEMENT TO EVALUATE TAX POSITIONS TAKEN AND RECOGNIZE A TAX LIABILITY (OR ASSET) IF THE ORGANIZATION HAS TAKEN AN UNCERTAIN POSITION THAT MORE LIKELY THAN NOT WOULD NOT BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE ("IRS"). MANAGEMENT HAS ANALYZED THE TAX POSITIONS TAKEN BY THE ORGANIZATION, AND HAS CONCLUDED AS OF SEPTEMBER 30, 2023 AND 2022, THERE ARE NO POSITIONS TAKEN OR EXPECTED TO BE TAKEN THAT WOULD REQUIRE RECOGNITION OF THE LIABILITY (OR ASSET) OR DISCLOSURE IN THE CONSOLIDATED FINANCIAL STATEMENTS. PART XI, LINE 4B - OTHER ADJUSTMENTS: MISCELLANEOUS INCOME TREATED AS CONTRA EXPENSE ON FINANCIAL STATMENTS 24,000. PART XII, LINE 4B - OTHER ADJUSTMENTS: MISCELLANEOUS INCOME TREATED AS CONTRA EXPENSE ON FINANCIAL STATMENTS 24,000. 1 ALASKA AVIATION HERITAGE MUSEUM 4721 AIRCRAFT DRIVE ANCHORAGE AK 99502 920071852 501(C)(3) 10000 0 GENERAL SUPPORT AMERICAN ACADEMY OF ACHIEVEMENT 1222 16TH STREET NW WASHINGTON DC 20036 756042129 501(C)(3) 2350000 0 GENERAL SUPPORT CENTRONIA 1420 COLUMBIA ROAD NW WASHINGTON DC 20009 251689720 501(C)(3) 10000 0 GENERAL SUPPORT CLOSE UP FOUNDATION 1330 BRADDOCK PLACE SUITE 400 ALEXANDRIA VA 22314 237122882 501(C)(3) 10000 0 GENERAL SUPPORT JOHN F KENNEDY CENTER FOR THE PERFORMING ARTS 2700 F STREET NW WASHINGTON DC 20566 530245017 501(C)(3) 50000 0 GENERAL SUPPORT SMITHSONIAN INSTITUTION - NTL PORTRAIT GALLERY 750 NINTH ST NW SUITE 410 WASHINGTON DC 20001 530206027 501(C)(3) 50000 0 GENERAL SUPPORT WASHINGTON NATIONAL CATHEDRAL 3101 WISCONSIN AVE NW WASHINGTON DC 20016 530196604 501(C)(3) 5000 0 GENERAL SUPPORT WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS 1300 PENNSYLVANIA AVE NW WASHINGTON DC 20004 521067541 501(C)(3) 5000 0 GENERAL SUPPORT 8 PART I, LINE 2: THE ORGANIZATION MONITORS THE USE OF FUNDS IT GRANTS TO OTHER NON-PROFIT ORGANIZATIONS IN A VARIETY OF WAYS, INCLUDING FIRST-HAND MONITORING, BOARD AFFILIATIONS, AND REPUTATIONAL AND OTHER FEEDBACK. X 1 1 X X X X X X 0 0 0 0 0 0 0 0 0 CATHERINE REYNOLDS CHAIRMAN OF THE BOARD & CE 604824 0 180000 0 17924 0 27000 0 26052 0 855800 0 0 0 MATTHEW MURRAY CFO UNTIL 21623 TREASURER 312510 0 140000 0 18966 0 15625 0 42041 0 529142 0 0 0 PATRICIA JEAVONS UNTIL 21623 CONTROLLER 180600 0 17500 0 2269 0 9030 0 26656 0 236055 0 0 0 MARCUS MAIORCA UNTIL 21623 VICE PRESIDENT OF PORTFOLI 154722 0 12000 0 596 0 7736 0 27868 0 202922 0 0 0 ETHEL TERRADO-LOWE DIRECTOR OF NEW MEDIA & DE 162437 0 7500 0 326 0 8122 0 228 0 178613 0 0 0 VANESSA MOORE EXECUTIVE ASSISTANT TO CHA 146358 0 5000 0 301 0 7318 0 14402 0 173379 0 0 0 PART I, LINE 1A THE ORGANIZATION PROVIDES FIRST CLASS TRAVEL FOR ITS SENIOR EXECUTIVES WHEN APPROPRIATE PURSUANT TO THE ORGANIZATION'S TRAVEL POLICY. WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 2350000 GRANTS ARE PROVIDED FROM THE ORGANIZATION TO THE AMERICAN ACADEMY OF ACHIEVEMENT. 0 WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 86608 OFFICE RENT IS PAID BY THE ORGANIZATION TO THE AMERICAN ACADEMY OF ACHIEVEMENT FOR OFFICE SPACE LEASED TO THE ORGANIZATION. 0 WAYNE REYNOLDS THE AMERICAN ACADEMY OF ACHIEVEMENT'S PRESIDENT & CHAIRMAN IS MR. REYNOLDS 24000 ACCOUNTING AND ADMINISTRATIVE SERVICES ARE PROVIDED BY THE ORGANIZATION TO THE AMERICAN ACADEMY OF ACHIEVEMENT. 0 PORTFOLIO OF EDUCATIONAL LOANS 2023-02-16 4500000 INDEPENDENT EXPERTS AND ARMS LENGTH NEGOTIATIONS 921038858 SOUTHWOOD FINANCIAL LLC 2505 PECOS ST AUSTIN TX 78703 LLC 0 1 1 0 PART II, LINE 2E: PERSON(S) INVOLVED: CATHERINE REYNOLDS, MATTHEW MURRAY, PATRICIA JEAVONS, MARCUS MAIORCA, ZABRINA SHEPHARD, VANESSA MOORE PART II, LINE 2E: EXPLANATION OF INVOLVEMENT: SEE SCHEDULE N, PART III SCHEDULE N, PART III THE ORGANIZATION SOLD A PORTFOLIO OF EDUCATIONAL LOANS THAT REPRESENTED MORE THAN 25% OF THE VALUE OF THE ORGANIZATION'S NET ASSETS. THE PORTFOLIO WAS SOLD TO SOUTHWOOD FINANCIAL LLC IN FEBRUARY 2023. THE PORTFOLIO WAS VALUED USING AN INDEPENDENT VALUATION FIRM AND ARMS-LENGTH NEGOTIATION, OVERSEEN BY DISINTERESTED AND INDEPENDENT DIRECTORS OF THE ORGANIZATION OPERATING WITH THE BENEFIT OF APPROPRIATE VALUATION INFORMATION AND DISCLOSURES. AMONG THE DISCLOSURES WAS THAT, IN CONNECTION WITH THE LOAN SALE, CERTAIN EMPLOYEES OF THE ORGANIZATION WOULD BECOME EMPLOYEES OF SOUTHWOOD FINANCIAL LLC AND WOULD CONTINUE THEIR LOAN-SERVICING DUTIES AS EMPLOYEES OF SOUTHWOOD FINANCIAL LLC. THE EMPLOYEES ARE MATTHEW MURRAY, WHO SERVED AS THE ORGANIZATION'S CFO PRIOR TO THE PORTFOLIO SALE (AND WHO CONTINUES TO SERVE AS THE ORGANIZATION'S TREASURER); PATRICIA JEAVONS, WHO SERVED AS THE ORGANIZATION'S CONTROLLER PRIOR TO THE PORTFOLIO SALE ; MARCUS MAIORCA, WHO SERVED AS THE ORGANIZATION'S VICE PRESIDENT OF PORTFOLIO MANAGEMENT PRIOR TO THE PORTFOLIO SALE; AND ZABRINA SHEPHARD, WHO SERVED AS THE ORGANIZATION'S DIRECTOR OF LEGAL PRIOR TO THE PORTFOLIO SALE. MR. MURRAY HAS A POTENTIAL OWNERSHIP SHARE (5%) IN SOUTHWOOD FINANCIAL LLC, SUBJECT TO VESTING REQUIREMENTS. CATHERINE REYNOLDS AND VANESSA MOORE ALSO BECAME EMPLOYEES OF SOUTHWOOD FINANCIAL LLC FOR APPROXIMATELY 30 DAYS FOLLOWING THE PORTFOLIO SALE, THEN RETURNED TO THEIR ROLES AT THE ORGANIZATION. FORM 990, PART III, LINE 3 AS REPORTED IN FURTHER DETAIL IN PART II AND III OF SCHEDULE N, THE ORGANIZATION SOLD ITS PORTFOLIO OF EDUCATIONAL LOANS IN FEBRUARY 2023 AND THEREFORE NO LONGER PROVIDES AND/OR ADMINISTERS EDUCATIONAL LOANS. FOLLOWING THE SALE, THE ORGANIZATION'S PRIMARY PROGRAM SERVICE ACTIVITY IS THE MAKING OF GRANTS TO OTHER 501(C)(3) ORGANIZATIONS, INCLUDING IN THE AREAS OF EDUCATION, THE ARTS, AND RESEARCH. FORM 990, PART VI, SECTION A, LINE 2 CATHERINE REYNOLDS AND WAYNE REYNOLDS, FAMILY RELATIONSHIP. FORM 990, PART VI, SECTION A, LINE 4 IN AUGUST 2024, THE ORGANIZATION AMENDED ITS ARTICLES OF INCORPORATION TO CHANGE ITS NAME TO "THE CATHERINE B. REYNOLDS FOUNDATION, INC." THE ORGANIZATION HAS BEEN USING THIS NAME AS A D/B/A FOR MORE THAN 20 YEARS FOR ITS PHILANTHROPIC ACTIVITIES TO DISTINGUISH PHILANTHROPIC ACTIVITIES FROM ITS NONPROFIT EDUCATIONAL LOAN ACTIVITIES. AS REPORTED FURTHER IN DETAIL IN PART II AND III OF SCHEDULE N, THE ORGANIZATION SOLD ITS PORTFOLIO OF EDUCATIONAL LOANS IN FEBRUARY 2023, AND WITH THAT SALE THE BUYER REQUIRED THE RIGHT TO ACQUIRE THE EDUCAP INC. NAME, WHICH NECESSITATED THE NAME CHANGE. FORM 990, PART VI, SECTION B, LINE 11B THE ORGANIZATION'S FORM 990 REVIEW POLICY IS AS FOLLOWS: 1. THE ORGANIZATION PROVIDES ITS BOARD OF DIRECTORS WITH THE ORGANIZATION'S FORM 990 EACH YEAR PRIOR TO FILING THE FORM 990 WITH THE IRS. 2. THE AUDIT COMMITTEE OR A SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS REVIEWS AND APPROVES THE FORM 990 PRIOR TO ITS FILING WITH THE IRS. TO ASSIST THE AUDIT COMMITTEE OR A SPECIAL COMMITTEE WITH ITS REVIEW OF THE FORM 990, THE AUDIT COMMITTEE OR A SPECIAL COMMITTEE MAY, AMONG OTHER THINGS, SPEAK WITH THE ACCOUNTANT WHO PREPARED THE FORM 990 AND COUNSEL WHO REVIEWED THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C MONITORING, COMPLIANCE ENFORCEMENT, AND PROCEDURES FOR ADDRESSING THE CONFLICT OF INTEREST MONITORING AND COMPLIANCE ENFORCEMENT - EACH DIRECTOR, PRINCIPAL OFFICER, KEY EMPLOYEE, AND MEMBER OF A COMMITTEE WITH BOARD-DELEGATED POWERS SHALL ANNUALLY SIGN A STATEMENT WHICH AFFIRMS THAT SUCH PERSON: A. HAS RECEIVED A COPY OF THE CONFLICTS OF INTEREST POLICY. B. HAS READ AND UNDERSTANDS THE POLICY. C. HAS AGREED TO COMPLY WITH THE POLICY. D. UNDERSTANDS THAT THE ORGANIZATION IS A TAX-EXEMPT ORGANIZATION AND IN ORDER TO MAINTAIN ITS FEDERAL TAX EXEMPTION, IT MUST ENGAGE IN PRIMARILY ACTIVITIES THAT ACCOMPLISH ONE OR MORE OF ITS TAX-EXEMPT PURPOSES. TO ENSURE THAT THE ORGANIZATION OPERATES IN A MANNER CONSISTENT WITH TAX-EXEMPT PURPOSES AND DOES NOT ENGAGE IN ACTIVITIES THAT COULD JEOPARDIZE ITS TAX-EXEMPT STATUS, PERIODIC REVIEWS SHALL BE CONDUCTED. THE PERIODIC REVIEWS SHALL, AT A MINIMUM, INCLUDE THE FOLLOWING SUBJECTS: A. WHETHER COMPENSATION ARRANGEMENTS AND BENEFITS ARE REASONABLE, BASED ON COMPETENT SURVEY INFORMATION, AND THE RESULT OF ARM'S LENGTH BARGAINING. B. WHETHER PARTNERSHIPS, JOINT VENTURES, AND ARRANGEMENTS WITH MANAGEMENT ORGANIZATIONS CONFORM TO THE ORGANIZATION'S WRITTEN POLICIES, ARE PROPERLY RECORDED, REFLECT REASONABLE INVESTMENT OR PAYMENTS FOR GOODS AND SERVICES, FURTHER TAX-EXEMPT PURPOSES AND DO NOT RESULT IN INUREMENT, IMPERMISSIBLE PRIVATE BENEFIT OR IN AN EXCESS BENEFIT TRANSACTION. PROCEDURES FOR ADDRESSING THE CONFLICT OF INTEREST: A. AN INTERESTED PERSON MAY MAKE A PRESENTATION AT THE BOARD OR COMMITTEE MEETING, BUT AFTER THE PRESENTATION, HE/SHE SHALL LEAVE THE MEETING DURING THE DISCUSSION OF, AND THE VOTE ON, THE TRANSACTION OR ARRANGEMENT INVOLVING THE POSSIBLE CONFLICT OF INTEREST. B. THE CHAIRPERSON OF THE BOARD OR COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT. C. AFTER EXERCISING DUE DILIGENCE, THE BOARD OR COMMITTEE SHALL DETERMINE WHETHER THE ORGANIZATION CAN OBTAIN WITH REASONABLE EFFORTS A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT FROM A PERSON OR ENTITY THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. D. IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY POSSIBLE UNDER CIRCUMSTANCES NOT PRODUCING A CONFLICT OF INTEREST, THE BOARD OR COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS WHETHER THE TRANSACTION OR ARRANGEMENT IS IN THE ORGANIZATION'S BEST INTEREST, FOR ITS OWN BENEFIT, AND WHETHER IT IS FAIR AND REASONABLE. IN CONFORMITY WITH THE ABOVE DETERMINATION IT SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT. VIOLATIONS OF THE CONFLICTS OF INTEREST POLICY A. IF THE BOARD OR COMMITTEE HAS REASONABLE CAUSE TO BELIEVE THAT A BOARD MEMBER HAS FAILED TO DISCLOSE ACTUAL OR POSSIBLE CONFLICTS OF INTEREST, IT SHALL INFORM THE BOARD MEMBER OF THE BASIS FOR SUCH BELIEF AND AFFORD THE BOARD MEMBER AN OPPORTUNITY TO EXPLAIN THE ALLEGED FAILURE TO DISCLOSE. B. IF, AFTER HEARING THE BOARD MEMBER'S RESPONSE AND AFTER MAKING FURTHER INVESTIGATION AS WARRANTED BY THE CIRCUMSTANCES, THE BOARD OR COMMITTEE DETERMINES THE BOARD MEMBER HAS FAILED TO DISCLOSE AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, IT SHALL TAKE APPROPRIATE DISCIPLINARY AND CORRECTIVE ACTION. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION FOR OFFICERS IS APPROVED ANNUALLY BY THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS, COMPRISED OF INDEPENDENT BOARD MEMBERS. ADDITIONALLY, THE SPECIAL COMMITTEE MEMBERS UTILIZE THE EXPERTISE OF AN INDEPENDENT COMPENSATION EXPERT WHO MEETS WITH THE SPECIAL COMMITTEE MEMBERS AND PROVIDES AND REVIEWS A COMPENSATION COMPARABILITY REPORT, IN ACCORDANCE WITH BEST PRACTICES OUTLINED BY THE INTERNAL REVENUE SERVICE. FORM 990, PART VI, SECTION C, LINE 19 TO THE EXTENT REQUIRED BY LAW, THE FORM 990 AND FINANCIAL STATEMENTS ARE AVAILABLE BY REQUEST. FORM 990, PART XII, LINE 2C THE ORGANIZATION HAS AN AUDIT COMMITTEE, COMPRISED OF INDEPENDENT BOARD MEMBERS, THAT ASSUMES OVERSIGHT OF THE AUDIT. THIS PROCESS HAS NOT CHANGED FROM THE PRIOR FISCAL YEAR. L2L EDUCATION LOAN TRUST 2006-1 45610 WOODLAND ROAD SUITE 440 STERLING VA 20166 026182050 FINANCING THE PURCHASE OF STUDENT LOANS VA 718466 0 SOUTHWOOD FINANCIAL LLC L2L EDUCATION LOAN FUNDING LLC 45610 WOODLAND ROAD SUITE 440 STERLING VA 20166 205944194 FINANCING THE PURCHASE OF STUDENT LOANS VA 0 SOUTHWOOD FINANCIAL LLC