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      <GeneralExplanation>
        <ReturnReference>FORM 990, PART I, LETTER K, PRINCIPAL OFFICER:</ReturnReference>
        <Explanation>CAROL COLETTA, THE PRINCIPAL OFFICER DURING 2010, LEFT THE ORGANIZATION IN EARLY 2011. SHE WAS REPLACED BY LEE FISHER.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>PROGRAM SERVICE STATEMENT</Identifier>
        <ReturnReference>FORM 990, PART III, LINE 4B</ReturnReference>
        <Explanation>EXPLORING THE FUTURE OF CITIES THROUGH THE U.S. INITIATIVE: THE ORGANIZATION IS LEADING A FIVE-YEAR CAMPAIGN TO IMAGINE A NEW KIND OF FUTURE FOR URBAN LIFE IN AMERICA. AN AMBITIOUS AND URGENT MOVEMENT TO DEFINE A NEW AMERICAN DREAM, THE ORGANIZATION CALLS THIS EFFORT THE U.S. INITIATIVE: AN INITIATIVE TO CREATE CITIES THAT ARE OF, BY AND FOR US. THE PROJECT ARTICULATES A "DECLARATION OF INTERDEPENDENCE" WITH VALUES THAT DEFINE CITIES OF TOMORROW, TODAY. WE HOLD THESE VALUES TO BE SELF-SUSTAINING: OPPORTUNITY: WE CAN DEVELOP ALL OF OUR TALENT AND PUT ALL OF OUR TALENT TO WORK. COMMUNITY: WE CAN ENGAGE IN A ROBUST PUBLIC LIFE. LIVABILITY: WE CAN ENJOY BEAUTY, NATURE AND ART EVERY DAY. CONNECTIVITY: WE CAN GO WHERE WE NEED TO GO WITHOUT OWNING A CAR. OPTIMISM: WE CAN IMAGINE A BETTER FUTURE FOR EVERYONE. A KEY COMPONENT OF THE U.S. INITIATIVE ARE FIVE CHALLENGE EVENTS THAT EACH TACKLES A SINGLE AMBITION WITH A NATIONAL EXPERT TEAM, A LOCAL HOST COMMITTEE AND CITIZENS WORKING TOGETHER OVER 2.5 DAYS TO PRODUCE BIG IDEAS FOR ACHIEVING THE AMBITION AND A SERIES OF QUICK WINS TO GAIN MOMENTUM AND SCALE. IN 2010, THE ORGANIZATION HOSTED THE COMMUNITY CHALLENGE IN DETROIT, CONNECTIVITY CHALLENGE IN CHICAGO AND LIVABILITY CHALLENGE IN INDIANAPOLIS. IN ADDITION, THE ORGANIZATION HOSTED A BRAIN TRUST EVENT IN SAN JOSE THAT CONVENED A GROUP OF 50 CROSS-SECTOR URBAN LEADERS TO ENGAGE IN A ROBUST, LOCAL DISCUSSION OF THE U.S. INITIATIVE AMBITIONS. THE OPPORTUNITY CHALLENGE, OPTIMISM CHALLENGE AND FIVE ADDITIONAL BRAIN TRUST EVENTS WILL BE HELD IN 2011. A BOOK ON THE U.S. INITIATIVE WILL BE DEVELOPED AND RELEASED IN 2011.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>PROGRAM SERVICE STATEMENT</Identifier>
        <ReturnReference>FORM 990, PART III, LINE 4C</ReturnReference>
        <Explanation>ACHIEVING THE CITY DIVIDENDS: BUILDING UPON ITS 2008-2009 CITY DIVIDENDS WORK, THE ORGANIZATION COMPLETED ITS TALENT DIVIDEND TOUR IN 2010. THIS TOUR ENTAILED PRESENTING THE TALENT DIVIDEND RESEARCH TO LOCAL CROSS-SECTOR GROUPS AND INITIATING DIALOGUES ON INCREASING COLLEGE ATTAINMENT RATES BY ONE PERCENTAGE POINT IN 30 CITIES ACROSS THE COUNTRY. IT FORMED THE NATIONAL TALENT DIVIDEND NETWORK COMPOSED OF 23 CITIES COMMITTED TO ACHIEVING THE TALENT DIVIDEND IN THE NEXT 48 MONTHS. THIS NETWORK MET TWICE IN 2010 TO DISCUSS STRATEGIES FOR INCREASING COLLEGE ATTAINMENT. TO BETTER UNDERSTAND ADULTS WITH SOME COLLEGE, BUT NO DEGREE, THE ORGANIZATION RELEASED THE REPORT 101 WACKY IDEAS: RECLAIMING A NATION OF PRE-GRADUATES. THE TALENT DIVIDEND PRIZE, A $1 MILLION PROMOTIONAL PRIZE TO BE AWARDED TO THE CITY THAT EXHIBITS THE GREATEST INCREASE IN THE NUMBER OF POST SECONDARY DEGREES GRANTED PER ONE THOUSAND POPULATION THROUGH 2013, WAS CONCEIVED AND DEVELOPED IN 2010 AND WILL LAUNCH IN 2011.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>FORM 990, PART VI, SECTION B, LINE 11</Identifier>
        <Explanation>THE ORGANIZATION'S PRESIDENT/CEO AND PROGRAM DIRECTOR REVIEW THE DRAFT FORM 990, THEN EMAIL THE DRAFT RETURN TO THE BOARD OF DIRECTORS FOR THEIR REVIEW. THEIR QUESTIONS OR COMMENTS ARE DIRECTED BACK TO THE PRESIDENT/CEO AND PROGRAM DIRECTOR AND THE RETURN IS FINALIZED WITH ANY NECESSARY REVISIONS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 12C</ReturnReference>
        <Explanation>THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY BY REQUIRING ANNUAL FULL DISCLOSURE, IN WRITING, OF ALL POTENTIAL CONFLICTS OF INTEREST INVOLVING INTERESTED PARTIES TO THE ORGANIZATION. ALL POTENTIAL CONFLICTS OF INTEREST REPORTED TO THE BOARD SHALL BE REVIEWED AND VOTED ON AS TO WHETHER ANY FURTHER ACTION IS REQUIRED.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 15A</ReturnReference>
        <Explanation>THE BOARD OF DIRECTORS REVIEWED COMPENSATION PACKAGES OF 11 COMPARABLE EXECUTIVE DIRECTORS/PRESIDENTS OF CEO LEADERSHIP GROUPS IN CITIES ACROSS THE COUNTRY PRIOR TO OUR DECEMBER BOARD MEETING. DURING THE PORTION OF THE DECEMBER BOARD MEETING THAT THE BOARD MEMBERS DISCUSSED PRESIDENT &amp; CEO'S COMPENSATION, SHE WAS NOT PART OF THE CONVERSATION. UPON COMPLETION OF THE DISCUSSION, THE BOARD CHAIRMAN ISSUED A MEMO TO THE BOARD ON THE AGREED UPON COMPENSATION PACKAGE. CEOS FOR CITIES DID NOT HAVE ANY KEY EMPLOYEES IN 2010.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION C, LINE 19</ReturnReference>
        <Explanation>GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC UPON REQUEST.</Explanation>
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