2024-04-29T08:37:44-05:00 2023-06-30 420714325 RSM US LLP 100 INTERNATIONAL DRIVE SUITE 1400 BALTIMORE MD 21202 990 2022-07-01 237003516 US NAVAL ACADEMY FOUNDATION INC USNA 4102954000 301 KING GEORGE STREET ANNAPOLIS MD 21402 JEFFREY WEBB CEO 4102954000 2024-04-23 1 JEFFREY WEBB 237003516 0 JULIA FLANNERY P00928918 4102469300 2024-04-23 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z X JEFFREY WEBB 301 KING GEORGE STREET ANNAPOLIS MD 21402 141576897 0 X WWW.USNA.COM X 1969 MD TO SUPPORT, PROMOTE, AND ADVANCE THE MISSION OF THE NAVAL ACADEMY. 48 47 58 53 13958 0 30294351 32873297 3776417 3580805 13532851 6266494 0 0 47603619 42720596 39006774 33310642 0 0 6079732 6687255 351416 271119 9987285 3499144 3838204 48937066 44107220 -1333447 -1386624 305968176 327456944 10754679 11627488 295213497 315829456 X SEE SCHEDULE O. 0 0 33324153 33310642 3580805 SUPPORT INCLUDED DIRECT AND INDIRECT SUPPORT FOR USNA ENDOWED POSITIONS AND PROGRAM SUPPORT FOR CYBER SECURITY, ATHLETIC EXCELLENCE, STEM, MINORITY OUTREACH, LEADERSHIP DEVELOPMENT AND INTERNATIONAL PROGRAMS. GRANTS TO USNA ALSO SUPPORTED PROJECT BASED LEARNING, ADMISSIONS SUPPORT, THE ACADEMIC CENTER AND THE CENTER OF ETHICAL LEADERSHIP. GRANTS TO THE ALUMNI ASSOCIATION WERE IN SUPPORT OF OPERATIONS. 33324153 1 1 0 0 0 0 0 0 0 1 1 1 0 0 1 1 0 1 0 0 1 0 1 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 1 18 0 1 58 1 1 1 0 0 0 0 0 0 0 0 0 0 0 X 48 47 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 MD OH X X X LISA STROBEL SR DIRECTOR OF FINANCE & TREASURY OPS 4102954000 301 KING GEORGE STREET ANNAPOLIS MD 21402 X AMB RICHARD L ARMITAGE DIRECTOR 2.00 X 0 0 0 DR LYNNE ATKINSON DIRECTOR 2.00 X 0 0 0 MR WILLIAM A BASTIAN II DIRECTOR 2.00 X 0 0 0 MR JIM BELL DIRECTOR 2.00 X 0 0 0 MAJGEN CHARLES F BOLDEN JR USMC R DIRECTOR 2.00 X 0 0 0 MR CHARLES H CANNON JR DIRECTOR 2.00 X 0 0 0 MR HARRY COKER JR DIRECTOR 2.00 X 0 0 0 MR JOHN F CROWLEY DIRECTOR 2.00 X 0 0 0 MR DAVID DAWSON DIRECTOR 2.00 X 0 0 0 CDR JOHN M DILLON USNR RET DIRECTOR 2.00 X 0 0 0 ADM JAMES O ELLIS JR USN RET DIRECTOR 2.00 X 0 0 0 ADM MARK E FERGUSON III USN RET DIRECTOR 2.00 X 0 0 0 MR ALFRED E FESTA DIRECTOR 2.00 X 0 0 0 MR MATTHEW R GIBSON DIRECTOR 2.00 X 0 0 0 ADM CECIL D HANEY USN RET DIRECTOR 2.00 X 0 0 0 MR MICHAEL HEMOCOVICH DIRECTOR 2.00 X 0 0 0 VADM MARY JACKSON DIRECTOR 2.00 X 0 0 0 MR RICHARD L KEYSER DIRECTOR 2.00 X 0 0 0 MR THOMAS C KNUDSON DIRECTOR 2.00 X 0 0 0 MR TIG H KREKEL DIRECTOR 2.00 X 0 0 0 MS GREER O LAUTRUP DIRECTOR 2.00 X 0 0 0 MRS MARY LOOKER DIRECTOR 2.00 X 0 0 0 RADM THOMAS C LYNCH USN RET DIRECTOR 2.00 X 0 0 0 MR JERROLD L MILLER DIRECTOR 2.00 X 0 0 0 MR CHARLEY MOORE DIRECTOR 2.00 X 0 0 0 ADM MICHAEL G MULLEN USN RET DIRECTOR 2.00 X 0 0 0 ADM ROBERT J NATTER USN RET DIRECTOR 2.00 X 0 0 0 LCDR RONALD L NICOL USNR DIRECTOR 2.00 X 0 0 0 MR DAVID T PERRY DIRECTOR 2.00 X 0 0 0 MR C MICHAEL PETTERS DIRECTOR 2.00 X 0 0 0 MR ROBERT V PRAGADA DIRECTOR 2.00 X 0 0 0 MR PAUL G PRAGER DIRECTOR 2.00 X 0 0 0 MR STEVEN S REINEMUND DIRECTOR 2.00 X 0 0 0 MR DAVID B RICH DIRECTOR 2.00 X 0 0 0 VADM JOHN R RYAN USN RET DIRECTOR 2.00 X 0 0 0 MR KEVIN W SHARER DIRECTOR 2.00 X 0 0 0 MS JOANNA SOHOVICH DIRECTOR 2.00 X 0 0 0 MR PATRICK SULLIVAN DIRECTOR 2.00 X 0 0 0 MR TIMOTHY P SULLIVAN DIRECTOR 2.00 X 0 0 0 MR MICHAEL W TAYLOR DIRECTOR 2.00 X 0 0 0 MR J RONALD TERWILLIGER DIRECTOR 2.00 X 0 0 0 RADM CYNTHIA M THEBAUD USN RET DIRECTOR 2.00 X 0 0 0 VADM JAN TIGHE USN DIRECTOR 2.00 X 0 0 0 MR JEFFREY R WEBB PRES/CEO (BEG 6/13/22)(SEE SCH J) 36.00 24.00 X X 187555 125037 31610 MS MARY KAY WEGNER DIRECTOR 2.00 X 0 0 0 MR SCOTT W WINE DIRECTOR 2.00 X 0 0 0 MR J MICHAEL YEAGER DIRECTOR 2.00 X 0 0 0 MR JOHN F YOUNG DIRECTOR 2.00 X 0 0 0 ROBERT W GAST CFO/TREAS (SEE SCH J) 33.00 27.00 X 184475 150934 36590 WILLIAM O'CONNOR SEC/EVP DEV (SEE SCH J) 50.00 X 422728 0 48868 LISA STROBEL SR DIR FIN & TREAS OPS (SEE SCH J) 27.50 22.50 X 109102 89264 20669 DONALD HUGHES VP ATHLETIC & SCHOLARSHIP PR (SEE SCH J) 50.00 X 238556 0 10886 JOHN RUDDER VP DEVELOPMENT (SEE SCH J) 50.00 X 174861 0 39348 MIKE HOFFMAN ED, REGIONAL DEV (SEE SCH J) 50.00 X 163570 0 40861 PATRICIA BENDER SR DIR, PLANNED GIVING (SEE SCH J) 50.00 X 150462 0 20232 HARRY YEISER SEN DIR, ANNUAL PROGRAMS (SEE SCH J) 50.00 X 148568 0 9838 TIMOTHY SMITH DIR, FINANCIAL REPORTING (SEE SCH J) 33.00 27.00 X 82107 67180 17414 BYRON F MARCHANT FORMER PRES/CEO (THRU 3/22) (SEE SCH J) 36.00 24.00 X 588497 392331 11878 2450481 824746 288194 19 1 1 0 RUFFALO NOEL LEVITZ LLC 5249 NORTH PARK PLACE NE 1061 CEDAR RAPIDS IA 52402 ENROLLMENT PLANNING 267520 HONORCRAFT LLC 292 PAGE ST STOUGHTON MA 02072 DONOR RECOGNITION PRODUCTS/SERVICES 252908 NAVAL ACADEMY CATERING 2 TRUXTON ROAD ANNAPOLIS MD 21402 CATERING 141218 MARTIN'S - BO BROOKS LLC 511 TAYLOR AVE ANNAPOLIS MD 21041 CATERING 134003 SIGNCRAFT ANNAPOLIS 2012 RENARD CT STE O ANNAPOLIS MD 21401 SIGN FABRICATION 117317 8 32873297 2891099 32873297 FUND ADMIN. FEE 900099 3477962 3477962 MISCELLANEOUS FEES & S 900099 102843 102843 3580805 1686950 13958 1672992 101986708 1449137 98406523 449778 3580185 999359 4579544 4579544 42720596 3580805 13958 6252536 32839671 32839671 359275 359275 111696 111696 1295973 78872 1217101 4336608 262806 4073802 316803 20515 296288 374214 24233 349981 363657 23550 340107 32911 5111 27800 121045 1904 23670 95471 271119 271119 229474 229474 554126 21010 533116 496426 253 6954 489219 84290 2391 15965 65934 180413 45 19817 160551 127548 150 127398 281067 4074 35000 241993 84497 4839 17975 61683 BAD DEBT 952202 952202 DONOR CULTIVATION 235453 5663 229790 TRAINING 45513 500 45013 LICENSES AND DUES 11393 295 11098 401846 5 4222 397619 44107220 33324153 795782 9987285 62799131 41277489 53001071 56197231 8796 236050 12104291 5248932 3886007 1984953 1362925 11568982 40786411 173271417 172438043 3106572 3281758 305968176 327456944 437940 637982 480210 372000 9836529 10617506 10754679 11627488 X 26585513 39961987 268627984 275867469 295213497 315829456 305968176 327456944 X -1386624 10320306 11760422 -78145 X X 0 1 X 1 0 X 46819790 51532087 43013806 30294351 32873297 204533331 11760422 11760422 46819790 51532087 43013806 30294351 44633719 216293753 32171024 184122729 2012793 1050422 725871 827981 1686950 6304017 222597770 16598380 0.82720 0.75610 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 140101252 362267 3021773 3535105 1002580 138947607 150486340 65439 -7157111 2169349 1124067 140101252 120269726 7117350 25646501 1645781 901456 150486340 94564645 23372973 4340370 1127515 880747 120269726 92390326 118974 5142434 2226581 860508 94564645 1.00000 0 1 1 544316 544316 3109059 2342601 766458 601874 551604 50270 993683 991802 1881 1362925 INVESTMENTS IN PARTNERSHIPS, HEDGE FUNDS, OTHER 60127660 F THE TIFF CENTERSTONE FUND, LP 93618179 F TIFF DIVERSIFYING STRATEGIES FUND 18692204 F 172438043 SPLIT INTEREST AGREEMENTS 6765967 INTERCOMPANY PAYABLE 3851539 10617506 X 90346688 10320306 12492630 30556904 53369840 36976848 229474 5514274 5743748 42720596 53606379 732208 14510699 15242907 38363472 229474 5514274 5743748 44107220 PART V, LINE 4: THE ENDOWMENT CONSISTS OF OVER 100 INDIVIDUAL FUNDS ESTABLISHED FOR A VARIETY OF PURPOSES. THESE ENDOWMENT FUNDS ARE DONOR-RESTRICTED. THE FOUNDATION DOES NOT HAVE ANY BOARD-DESIGNATED ENDOWMENT FUNDS. AS REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, NET ASSETS ASSOCIATED WITH ENDOWMENT FUNDS ARE CLASSIFIED AND REPORTED BASED ON THE EXISTENCE OR ABSENCE OF DONOR-IMPOSED RESTRICTIONS. PART X, LINE 2: THE ASSOCIATIONS HAVE ADOPTED THE ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, WHICH ADDRESSES THE DETERMINATION OF WHETHER TAX BENEFITS CLAIMED OR EXPECTED TO BE CLAIMED ON A TAX RETURN SHOULD BE RECORDED IN THE FINANCIAL STATEMENTS. UNDER THIS POLICY, THE ASSOCIATIONS MAY RECOGNIZE THE TAX BENEFIT FROM AN UNCERTAIN TAX POSITION ONLY IF IT IS MORE-LIKELY-THAN-NOT THAT THE TAX POSITION WOULD BE SUSTAINED ON EXAMINATION BY TAXING AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. MANAGEMENT HAS EVALUATED THE ASSOCIATIONS' TAX POSITIONS AND HAS CONCLUDED THAT THE ASSOCIATIONS HAVE TAKEN NO UNCERTAIN TAX POSITIONS THAT REQUIRE ADJUSTMENT TO THE CONSOLIDATED FINANCIAL STATEMENTS TO COMPLY WITH PROVISIONS OF THIS GUIDANCE. AS OF JUNE 30, 2023, THERE ARE NO MATERIAL UNRECOGNIZED/DERECOGNIZED TAX BENEFITS OR TAX PENALTIES OR INTEREST. THE ASSOCIATIONS ARE NO LONGER SUBJECT TO U.S. FEDERAL, STATE OR LOCAL TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS ENDED BEFORE JUNE 30, 2020. PART XI, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN VALUE OF SPLIT INTEREST AGREEMENTS -78,145. REVENUE OF AFFILIATE INCLUDED ON CONSOLIDATED FINANCIAL STATEMENTS 30,635,049. PART XI, LINE 4B - OTHER ADJUSTMENTS: GRANT TO NAVAL ACADEMY ALUMNI ASSOCIATION 5,514,274. PART XII, LINE 2D - OTHER ADJUSTMENTS: EXPENSES OF AFFILIATE INCLUDED ON CONSOLIDATED FINANCIAL STATEMENTS 14,510,699. PART XII, LINE 4B - OTHER ADJUSTMENTS: GRANT TO NAVAL ACADEMY ALUMNI ASSOCIATION 5,514,274. 1 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 PROGRAM SERVICES & GRANTMAKING SCHOLARSHIPS 111696 0 0 0 0 0 0 111696 0 111696 SCHOLARSHIP EUROPE (INCLUDING ICELAND & GREENLAND) 3 111696 FOREIGN DRAFT 0 1 0 1 1 1 0 PART I, LINE 2: THE U.S. NAVAL ACADEMY DETERMINES WHO RECEIVES THE SCHOLARSHIP FUNDS. THE U.S. NAVAL ACADEMY FOUNDATION VERIFIES THAT THE SCHOLAR AND THEIR CHOICE OF HIGHER LEARNING ARE APPROPRIATE BASED ON THE U.S. NAVAL ACADEMY'S SCHOLAR SELECTION PROCESS. THE FUNDS ARE THEN TRANSFERRED DIRECTLY TO THE INSTITUTION OF HIGHER LEARNING. PART III ACCOUNTING METHOD: X X X X X 1 RNL SYNERGY 1025 KIRKWOOD PARKWAY SW CEDAR RAPIDS IA 52404 SOLICITATION 0 895308 271119 624189 895308 271119 624189 MD OH 1 US NAVAL ACADEMY ALUMNI ASSOCIATION INC 301 KING GEORGE STREET ANNAPOLIS MD 21402 520548411 501(C)(3) 6048928 0 GENERAL SUPPORT US NAVAL ACADEMY 121 BLAKE ROAD ANNAPOLIS MD 21402 311575142 GOVERNMENT ORG 26790743 0 GENERAL SUPPORT 2 0 SCHOLARSHIP SUPPORT 42 359275 PART I, LINE 2: THE FOUNDATION KEEPS DETAILED RECORDS OF GRANTS TO THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION AND THE U.S. NAVAL ACADEMY. ALL GRANTS ARE REVIEWED BY MANAGEMENT PRIOR TO PAYMENT. THE GRANT TO THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION IS BUDGETED FOR AND APPROVED BY THE BOARD OF DIRECTORS. THE UNRESTRICTED PORTION OF THE GRANT TO THE U.S. NAVAL ACADEMY IS BUDGETED FOR AND APPROVED BY THE BOARD OF DIRECTORS. ALL OTHER GRANTS TO THE U.S. NAVAL ACADEMY ARE BASED ON DONOR DIRECTION OF THEIR RESTRICTED GIFTS. THE FOUNDATION HAS ELECTED TO DISCLOSE THE JOINTLY ADMINISTERED PRIVATE PREPERATORY SCHOLARSHIP PROGRAM FOR INCREASED TRANSPARENCY. X 1 1 X X X X X 0 1 0 0 0 0 0 1 0 BYRON F MARCHANT FORMER PRES/CEO (THRU 3/22) (SEE SCH 112020 74680 320400 213600 156077 104051 3036 2024 4091 2727 595624 397082 71089 47393 WILLIAM O'CONNOR SEC/EVP DEV (SEE SCH J) 292596 0 115000 0 15132 0 14630 0 34238 0 471596 0 0 0 ROBERT W GAST CFO/TREAS (SEE SCH J) 119340 97641 57200 46800 7935 6493 3110 2544 17015 13921 204600 167399 0 0 MR JEFFREY R WEBB PRES/CEO (BEG 6/13/22)(SEE SCH J) 132404 88269 0 0 55151 36768 4884 3256 14082 9388 206521 137681 0 0 DONALD HUGHES VP ATHLETIC & SCHOLARSHIP PR (SEE SC 154654 0 60000 0 23902 0 7733 0 3153 0 249442 0 0 0 LISA STROBEL SR DIR FIN & TREAS OPS (SEE SCH J) 84447 69092 13376 10944 11279 9228 4222 3455 7146 5846 120470 98565 0 0 JOHN RUDDER VP DEVELOPMENT (SEE SCH J) 155000 0 23250 0 -3389 0 7750 0 31598 0 214209 0 0 0 MIKE HOFFMAN ED, REGIONAL DEV (SEE SCH J) 149973 0 22340 0 -8743 0 7499 0 33362 0 204431 0 0 0 PATRICIA BENDER SR DIR, PLANNED GIVING (SEE SCH J) 139296 0 16344 0 -5178 0 6548 0 13684 0 170694 0 0 0 TIMOTHY SMITH DIR, FINANCIAL REPORTING (SEE SCH J) 76153 62308 6710 5490 -756 -618 3808 3115 5770 4721 91685 75016 0 0 HARRY YEISER SEN DIR, ANNUAL PROGRAMS (SEE SCH J) 126103 0 16393 0 6072 0 6305 0 3533 0 158406 0 0 0 PART I, LINE 1A CEO, JEFFREY R. WEBB, RECEIVED GROSS UP PAYMENTS. THESE PAYMENTS ARE INCLUDED IN HIS TAXABLE COMPENSATION. PART I, LINE 4B BYRON MARCHANT PARTICIPATES IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. HE RECEIVED A PAYMENT OF $15,931 DURING 2022. THIS AMOUNT IS INCLUDED ON FORM 990, PART VII, COLUMN D AND E AND ON SCHEDULE J, PART II, COLUMN BIII. PART I, LINE 7 ON AN ANNUAL BASIS, THE COMPENSATION COMMITTEE REVIEWS THE PERFORMANCE OF CERTAIN PERSONS LISTED ON PART VII AND SCHEDULE J, AND IN ITS SOLE DISCRETION, AWARDS BONUSES BASED ON THEIR INTERNAL REVIEW. SOME YEARS BONUSES ARE NOT PAID AS WELL, PER THE SOLE DISCRETION OF THE COMPENSATION COMMITTEE. SUCH BONUSES AWARDED ARE PROPERLY LISTED AS PAID AND AS REPORTABLE COMPENSATION IN PART VII, COLUMN D, AND ON SCHEDULE J, PART II, COLUMN B(II). PART I, LINE 3: THE WRITTEN EMPLOYMENT CONTRACT IS AN INTERNAL CONTRACT ONLY. SCHEDULE J, PART II: TO PROVIDE CLARITY AS TO THE MAKEUP OF AMOUNT REPORTED FOR LISTED PERSONS ON SCHEDULE J, PART II, THE AMOUNTS ON COLUMNS B (I-III) REPORT INCOME TAXABLE TO THE ORGANIZATION'S PERSONS AND AS PROPERLY REPORTED ON FORM W-2 FOR THE YEAR ENDING ON DECEMBER 31ST WHICH OCCURS WITHIN THE ORGANIZATION'S TAX REPORTING PERIOD. THE AMOUNTS REPORTED IN COLUMN C REPORT INFORMATION RELATED TO CONTRIBUTIONS BY THE ORGANIZATION TO THE EMPLOYEE'S RETIREMENT PLANS PER AGREEMENTS IN PLACE, THE AMOUNTS REPORTED IN COLUMN D, REPORT ITEMS OF NONTAXABLE INCOME THAT ARE GENERALLY REPORTED ON OTHER TAX EXEMPT ORGANIZATION RETURNS, INCLUDING HEALTH INSURANCE, DENTAL INSURANCE, ETC. THESE AMOUNTS REPORTED IN COLUMN D ARE GENERALLY NONTAXABLE TO THE RECIPIENT'S PER OTHER CODE SECTIONS IN THE INTERNAL REVENUE CODE. THE AMOUNTS REPORTED IN COLUMN F REPORT 457(B) PLAN CONTRIBUTIONS THAT WERE REPORTED ON PRIOR YEAR FORMS 990. THESE AMOUNTS WERE PAID OUT DURING THE CALENDAR YEAR AND ARE ALSO INCLUDED IN COLUMN BIII. X 127 2729951 FAIR MARKET VALUE X SOFTWARE 1 161148 FAIR MARKET VALUE 0 0 1 0 PART I, COLUMN (B): REPORTING THE NUMBER OF CONTRIBUTIONS. FORM 990, PART III, LINE 1: TO SUPPORT, PROMOTE AND ADVANCE THE MISSION OF THE NAVAL ACADEMY BY WORKING IN CONJUNCTION WITH ACADEMY LEADERSHIP TO IDENTIFY STRATEGIC INSTITUTIONAL PRIORITIES AND BY RAISING, MANAGING AND DISBURSING PRIVATE GIFT FUNDS THAT PROVIDE A MARGIN OF EXCELLENCE IN SUPPORT OF THE NATION'S PREMIER LEADERSHIP INSTITUTION. THE MISSION STATEMENT OF THE RELATED ENTITY, THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION: TO SERVE AND SUPPORT THE UNITED STATES, THE NAVAL SERVICE, THE NAVAL ACADEMY AND ITS ALUMNI: BY FURTHERING THE HIGHEST STANDARDS AT THE NAVAL ACADEMY; BY SEEKING OUT, INFORMING, ENCOURAGING, AND ASSISTING OUTSTANDING, QUALIFIED YOUNG MEN AND WOMEN TO PURSUE CAREERS AS OFFICERS IN THE NAVY AND MARINE CORPS THROUGH THE NAVAL ACADEMY; AND BY INITIATING AND SPONSORING ACTIVITIES WHICH WILL PERPETUATE THE HISTORY, TRADITIONS, MEMORIES AND GROWTH OF THE NAVAL ACADEMY AND BIND ALUMNI TOGETHER IN SUPPORT OF THE HIGHEST IDEALS OF COMMAND, CITIZENSHIP AND GOVERNMENT. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 WAS REVIEWED BY MANAGEMENT AND MEMBERS OF THE JOINT FINANCE AND AUDIT COMMITTEE OF U.S. NAVAL ACADEMY ALUMNI ASSOCIATION AND U.S. NAVAL ACADEMY FOUNDATION WITH OUR TAX PREPARERS AND SENT TO MEMBERS OF THE BOARD OF DIRECTORS AND TO THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE CONFLICT OF INTEREST POLICY IS SENT TO EACH BOARD/TRUSTEE MEMBER AT THE BEGINNING OF THE CALENDAR YEAR WITH A SELF ADDRESSED ENVELOPE FOR RESPONDING. THE POLICY DETAILS POTENTIAL CONFLICTS OF INTEREST AND THE NEED TO DISCLOSE SUCH CONFLICTS. THE POLICY ALSO DEFINES THE BOARD/TRUSTEE'S MEMBER FIDUCIARY OBLIGATION TO THE ORGANIZATION. ALL CONFLICTS OF INTEREST STATEMENTS ARE RETURNED TO THE BOARD SECRETARY'S OFFICE AND KEPT ON FILE. THE COMPLETED SIGNED CONFLICTS OF INTEREST STATEMENTS ARE REVIEWED BY THE ORGANIZATION'S AUDIT FIRM DURING THE ANNUAL AUDIT FOR COMPLETENESS AND TO ENSURE THAT ALL BOARD/TRUSTEE MEMBERS ARE INCLUDED. UPON A DETERMINATION THAT A CONFLICT EXISTS, THE BOARD SHALL APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT TO WHICH THE CONFLICT RELATES. AFTER EXERCISING THIS DUE DILIGENCE, THE BOARD SHALL DETERMINE WHETHER THE FOUNDATION CAN OBTAIN WITH REASONABLE EFFORTS A MORE ADVANTAGEOUS TRANSACTION FROM A SOURCE THAT WOULD NOT GIVE RISE TO A CONFLICT. IF A MORE ADVANTAGEOUS TRANSACTION WHICH WOULD NOT CREATE A CONFLICT IS NOT REASONABLY POSSIBLE, THE BOARD SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS WHETHER THE TRANSACTION OR ARRANGEMENT IS FAIR, REASONABLE AND IN THE FOUNDATION'S BEST INTERESTS. IN CONFORMITY WITH THE ABOVE DETERMINATION, THE BOARD SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT. FORM 990, PART VI, SECTION B, LINE 15 THE PROCESS FOR DETERMINING COMPENSATION OF THE CEO, OTHER OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION "INCLUDES A REVIEW AND APPROVAL BY INDEPENDENT PERSONS, COMPARABILITY DATA, AND CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION." SPECIFICALLY, THE ORGANIZATION TAKES ALL OF THE STEPS NECESSARY TO ENSURE THAT THE COMPENSATION PACKAGES OF THESE INDIVIDUALS ARE NOT ONLY REASONABLE AND COMPETITIVE, BUT ARE DESIGNED AND DETERMINED IN THE PRECISE MANNER SPECIFIED IN THE INTERNAL REVENUE SERVICE'S "INTERMEDIATE SANCTIONS" REGULATIONS. THE PROCESS FOR DETERMINING THE COMPENSATION PACKAGES OF THESE INDIVIDUALS IS AS FOLLOWS: 1. A JOINT COMPENSATION COMMITTEE IS CONSTITUTED THAT IS COMPOSED ENTIRELY OF CURRENT AND FORMER TRUSTEES AND DIRECTORS MEETING A STRICT "NO CONFLICTS" INDEPENDENCE TEST SET FORTH IN THE IRS REGULATIONS. THE JOINT COMMITTEE IS CHARTERED BY THE BOARDS TO EVALUATE AND APPROVE THE COMPENSATION OF THE SENIOR EXECUTIVES. THE APPROVED COMPENSATION LEVELS ARE INCLUDED IN THE ANNUAL OPERATING BUDGET WHICH IS SUBSEQUENTLY APPROVED BY BOTH BOARDS. 2. THE COMMITTEE ACQUIRES APPROPRIATE, INDEPENDENT MARKET COMPARABILITY DATA FROM ITS PROFESSIONAL COMPENSATION CONSULTANT. 3. THE COMMITTEE REVIEWS THIS COMPARABILITY DATA IN DETAIL, POSING APPROPRIATE QUESTIONS TO ITS PROFESSIONAL COMPENSATION CONSULTANT. 4. THE COMMITTEE REVIEWS THE QUALIFICATIONS, EXPERIENCE AND PERFORMANCE OF EACH OF THE INDIVIDUALS AGAINST THE COMPARABILITY DATA ACQUIRED FROM THE PROFESSIONAL COMPENSATION CONSULTANT. 5. THE COMMITTEE DESIGNS A PROPOSED COMPENSATION PACKAGE FOR EACH OF THE INDIVIDUALS AND SEEKS A WRITTEN OPINION FROM THE PROFESSIONAL COMPENSATION CONSULTANT THAT THE PROPOSED COMPENSATION PACKAGE IS REASONABLE. (THE COMMITTEE MAKES ANY ADJUSTMENTS TO THE PROPOSAL REQUIRED IN ORDER FOR THE PROFESSIONAL COMPENSATION CONSULTANT TO CONCLUDE THAT THE PACKAGE IS REASONABLE.) 6. THE COMMITTEE MEMORIALIZES ALL OF ITS DELIBERATIONS IN DETAILED COMMITTEE MINUTES THAT ARE REVIEWED AND CORRECTED, IF NECESSARY AND APPROVED AT ITS FOLLOWING MEETING. 7. THE COMMITTEE ACQUIRES AN OPINION OF COUNSEL CONCLUDING THAT THE PROCESS FOLLOWED BY THE COMMITTEE MEETS THE REQUIREMENTS OF THE IRS REGULATIONS. 8. THE COMMITTEE REGULARLY REVIEWS ITS PROCESS TO ENSURE THAT IT CONTINUES TO MEET ALL OF THE REQUIREMENTS OF APPLICABLE LAW. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ALL NECESSARY AND REQUIRED GOVERNING DOCUMENTS, CONFLICTS OF INTEREST POLICIES, FINANCIAL STATEMENTS, FORM 990S AND ANNUAL REPORT AVAILABLE ON ITS WEBSITE: WWW.USNA.COM, FOR THE SAME PERIOD OF DISCLOSURE AS SET FORTH IN SECTION 6104(D). FORM 990, PART VII, LINE 1A, COLUMN B SEVERAL OFFICERS OF THE U.S. NAVAL ACADEMY FOUNDATION ARE DUALLY EMPLOYED BY A RELATED ORGANIZATION, THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION. HOURS DEVOTED TO THE ALUMNI ASSOCIATION ARE LISTED BELOW FOR THE OFFICERS INVOLVED IN BOTH ORGANIZATIONS: OFFICER - HOURS PER WEEK DEVOTED TO ALUMNI ASSOCIATION BYRON F. MARCHANT - 24 BOB GAST - 27 JEFFREY WEBB - 24 LISA STROBEL - 22.5 FORM 990, PART VII, SECTION A AND PART VII, SECTION B: ALL INFORMATION REPORTED ON THIS 2022 FORM 990 IS REPORTED ON A FISCAL YEAR BEGINNING JULY 1, 2022 AND ENDING JUNE 30, 2023, WITH THE EXCEPTION OF INFORMATION THAT IS REPORTED FOR COMPENSATION ON SCHEDULE J AND PART VII OF THE RETURN. COMPENSATION LISTED ON THESE SCHEDULES IS BASED ON CALENDAR YEAR REPORTED COMPENSATION (PER THE 990 INSTRUCTIONS) FOR THE CALENDAR YEAR JANUARY 1, 2022 AND ENDING DECEMBER 31, 2022. FORM 990, PART XI, LINE 9: CHANGE IN SPLIT INTEREST AGREEMENTS -78,145. 990, PART XI, QUESTION 2B - AUDITED FINANCIAL STATEMENTS: FOR GAAP PURPOSES, THE ORGANIZATION PRESENTS ITS ACTIVITY IN A CONSOLIDATED FORMAT WITH ITS RELATED ENTITY, THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION. THESE CONSOLIDATED FINANCIAL STATEMENTS ARE AUDITED BY INDEPENDENT AUDITORS. THE GAAP FINANCIAL STATEMENTS INCLUDE SUPPLEMENTARY INFORMATION THAT PRESENTS THE FINANCIAL POSITION AND THE CHANGES IN NET ASSETS OF THE FOUNDATION. FORM 990, PART I, LINE 5 AND FORM 990, PART V, LINE 2A THE U.S. NAVAL ACADEMY ALUMNI ASSOCIATION (A RELATED ORGANIZATION) IS THE PAYMASTER FOR BOTH THE ASSOCIATION AND THE U.S. NAVAL ACADEMY FOUNDATION. DUE TO THE ASSOCIATION'S ROLE AS PAYMASTER FOR BOTH ORGANIZATIONS, THE ASSOCIATION REPORTS BOTH ASSOCIATION AND FOUNDATION EMPLOYEES FOR W-3 PURPOSES. THE ASSOCIATION FILES ALL RELATED EMPLOYMENT TAX FORMS. ALL PAYROLL EXPENSES RELATED TO THE FOUNDATION ARE RECORDED AS A RECEIVABLE TO THE ASSOCIATION AND A PAYABLE FROM THE FOUNDATION. THE 40 FOUNDATION EMPLOYEES ARE REPORTED ON PART I, LINE 5 AND PART V, LINE 2A EVEN THOUGH THE FOUNDATION DOES NOT FILE A FORM W-3. US NAVAL ACADEMY ALUMNI ASSOCIATION INC 301 KING GEORGE STREET ANNAPOLIS MD 21402 520548411 SUPPORT OF U.S. NAVAL ACADEMY & ALUMNI MD 501(C)(3) LINE 7 N/A 0 1922 CLASS OF THE UNITED STATES NAVAL ACADEMY MEMORIAL SCHOLARSHIP FUND 116 ALLEGHENY CENTER MALL P8YB3502L PITTSBURGH PA 15212 526076146 SUPPORT OF U.S. NAVAL ACADEMY FOUNDATION, INC. MD 501(C)(3) LINE 12D, III-O N/A 0 CHARITABLE REMAINDER TRUSTS (5) INVESTMENT MD US NAVAL ACADEMY FOUNDATION INC T 1 CHARITABLE REMAINDER TRUSTS (2) INVESTMENT MD US NAVAL ACADEMY ALUMNI ASSOCIATION INC T 1 0 1 0 1 1 1 0 0 1 0 0 1 1 1 1 1 1 1 1 SCHEDULE R, PART II THE 1922 CLASS OF THE UNITED STATES NAVAL ACADEMY MEMORIAL SCHOLARSHIP FUND IS TRUST EXEMPT UNDER 501(C)(3) OF THE INTERNAL REVENUE CODE. IT IS CLASSIFIED AS A PUBLIC CHARITY UNDER SECTION 509(A)(3) AS A NON-FUNCTIONALLY INTEGRATED SUPPORTING ORGANIZATION TO THE U.S. NAVAL ACADEMY FOUNDATION.