FDD 1023

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1023

Fotm

{Rev. September 1996)

I U 1 ;2!1;2;2121?01 '3 1

I-'.0::S/25

................

OMS No. 1545-0056

Application for Recognition of Exemption

Note: If ucmpt st~lii/J is approve
Under Section 501(c)(3) of the Internal Revenue Code

wm

' rlmcnl d !he ll'ea5UTY

'' R.euenue Sl!f\Cce

Read ttte instructions for each Part carefully. A User Fee must be attached to thiS application. If the required information and appropriate documents are not submitted along with Form 8718 (with payment of the appropriate user fee), the application may be returned to you . Complete the Procedural Checklist on page 8 of the Instructions.

l Part I 1a

Identification of Applicant 2 Employer identification number (EIN) (If none, see page J of the S~c lnatn.lctlons.)

Full name of organization (as ~hown In organi~ng document)

FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. 1b c/o Name (if applicable)

is needed

Clifford D. May, President 1c Address (number and street)

1020 19th Street, N.W.

13-4174402 3 Name and telephone number of person to be contacted if additional information

Room/Suite

340

1d City. town, or post office, state, and ZIP 0 4. If you have a foreign address, see Specific Instructions for Part I, page 3.

Joseph M. Yohlin,Sec . /Treas . (2l5) 542 - 1222 4 Month the annual accounting period ends

December 5 Date incorporated or formed

Washington, DC 20036

6 Check here if applying under section:

1e Web site address

www.defenddemocracy.org

r

April 24, 2001 ;t\0501(e)

b0501(f)

cQ(501(k) d0501(n)

Did the organization previously apply for recognition of exemption under this Code seet1on or under any other section of the Code? .. . .. .. . . . . . ... . .. . .. .... .. .. •. .. - - .... - . .. . . ........ - . . . . . . . . . If "Yes, • attach an explanation.

[ZJ

8

Is the organization requirecl to file Form 990 (or Form 990-EZ)? . . . . . . . . . . . . . • . . . . . . • . • . • . • . If ~No," attach an explanation (see page 3 of tha Specific ln~ctions).

9

Has the organization filed Federal income tax returns or exempt organization Information return::;? . .• .•. , . • If -ves," state the form numbers, years filed, and Internal Revenue office where filed.

10

NIA

0

Yes

(dg

No

0

Yes

0

No

O

Ye$ [ZI No

Check the box for the type of organization. ATTACH A CONFORMED COPY OF THE CORRESPONDING ORGANIZING DOCUMENTS TO THE APPLICATION BEFORE MAILING. (See Specific Instructions for Part I, Line 10, on page 3.) See also Pub. 557 for examples of organizational documents.)

a

IZJ

Corporation -Attach a copy of the Articles of Incorporation (including amendments and restatements) showing approval by the appropriate state official: also include a copy of the bylaws.

b

0

Trust-

c

0

Association -Attach a copy of the Articles of Association, Constitution, or other creating document, with a declaration {see instructions) or other evidence the organization was formed by adoption of the document by more than one person: also indude a copy of the bylaws.

Attach a copy of the Trust indenture or Agreement, Including all appropriate signatures and dates.

If the organization is a corporation or an unincorporated association that has not yet adopted bylaws, check here Ill" I declare un~er the pen~llies of perjury thai I am aull'lorl;::ed to sign ihis ~ppllcation on behalf of lhe above organization and the accompanymg s.cnedut..,. aM attachments, and !() the be$\ of my knowledge il l$ true. correct. and complete .

.,lease .:iign

Here For Paperwork ReductiO_!! ISA

Sll' FeD212SF.1

O

lhst I haw examined this ~pplication, including

Clifford D. May, President (Twa or print name end title or aulhority o( slgoer)

•/, J IJ.v J J. , (Date)

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Page

" orm 1023 (Rev. 1).98)

~art II

I

2

Activities and Oporationallnformatlon

rovide a detailed narrative description of all the activities of the organization - past, present, and planned. Do not merely refer to or repeat the language In the organizational document. List each activity separately in the order of Importance 0

based on the relative time and other resources devoted to the activity. lndlcatG the percentage of time for each activity. Each descripl.lon should include, as a minimum, the following: (a) a detailed description of the activity Including its purpose and how each activity furthers your exempt purpose; (b) when the activity was or will be initiated; and (c) where and by whom the activity Will be conducted.

SEE ATTACHED SUPPLEMENTAL STATEMENT

2

What are or will be the organization's sources of financial support? Ust In order of size.

SEE ATTACHED SUPPLEMENTAL STATEMENT 3

Describe the organization's fundraising program both ct 1 d 1 lnclude_details of fundraising activities such as s'electiv: ~=ili~~s P,~:::~~:~ ~xp!al~ ~o what extent it has been put into effect. professional fundraisers, etc. Attach representative copies of sol'c::' 'tatl f. fi n .ra,ISing committees, use of volunteers or 1 1

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$ 1T- FED212l1F .z

ons or

111anc1a

support.

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Page

3

Form 1023 (Rev. 9·96)

[Part II

I·

Acti"ltles and Operational Information (Continued)

a Names, addresses, and titles of officers, directors, trustees, etc.

b Annual compensation

SEE ATTACHED SUPPLEMENTAL STATEMENT

c Do any of the above persons serve as members of the governing body by reason of being public officials or being appointed by public officials? .. . ..... .......•............ - .... - · . · • · · · · · · • · • · · • - • • · · · If "Yes,· name those persons and explain the basis of their selection or appointment.

D Yes

[Zl

No

(XI

Yes

0

No

Does the organization control or is it controlled by any other organization? ..............•......•. - ..•

0

Yes

IZJ

No

Is the organization the outgrowth of (or successor to) another organization, or does It have a special relationship with another organization by reason of interlocking directorates or other factors?. • • . . . • . • • . • . If either of these questions is answered MYes,• explain.

0

Yei [ZJ No

d Are any members of the organization's governing bOdy Mdisqualified persons" with respect to the organization (other than by reason of being a member of the governing body) or do any of the members have either a business or family relationship with "disqualified persons"? (See Specific Instructions for Part II, Line 4d, on page 3.) .. - ... . - .• - .•...... -- ..••.. - ..• - . . •. - ... - ••.••...•••.. - ... - - ... - - .• .. - .. . . If "Yes,· explain . ~EE

5

6

7

ATTACHED SUPPLEMENTAL STATEMENT

Does or will the organization directly or Indirectly engage in any of the following transactions with any political organization or other exempt organization (other than a 501 (c)(3) organization): (a) grants: {b) purchases or sales of assets; (c) rental of fadlities or equipment; {d) loans or loan guarantees: (e) reimbursement arrangements; (f) performance of services, membership, or fundrai:~ing solicitations; or (g) sharing of facilities. equipment, mailing lists or other assets, or paid employees? .......... . ...... .. . . .... .. _.... _.... If "Yes," explain fully and identify the other organizations involved.

Is the organization financially accountable to any other organization? ..... ... _ ...... __ ....... _. . . . . . If MYes." explain and identify the other organization. Include details concerning accountebility or attach copi~ of reports if any have been submitted.

SW' FED2129F.l

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Yes ~ No

0

YelS

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No

.... ._.,,

... ._.

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~ Form 1023 (Rflv. 9·98)

[Pa!!!!J

Activltie$ and Operational Information (Continued)

What assets does the organization have that are used in the performance o.f its exempt function? (Do not include pro~erty producing investment income.) If any assets are not fully operational, explam their status, what additional steps rematn to be completed, and when such final steps will be taken. If none, Indicate MN/A. • ·

SEE ATTACHED SUPPLEMENTAL STATEMENT 9

0

Ye$

0 !ZJ

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No

Yes

00

No

Ye&

O

No

O

Yes

00

No

0

Yes

0

No

~f..~!~!~!~~n·h~~ th~ ;~ipl~~t; ~~ b~~~ft~i;~i~ ~~~~~~-iii b~ ·s~i~t~.' · · · · · · · · · · · · · · · · · · · · [ZJ NIA 0

Yes

0

No

Yes

[XJ

No

Will the organization be the beneficiary of tax-exempt bond financing within the next 2 years? . . . . . . . . . . . .

10a Will any of the organization's facilities or operations be managed by another organization or Individual under a contractual agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . • • • . . . . • . . • • . • . . . . . • . . . . . . . • . . . . . . b Is the organization a party to any leases? ..•.••.• , . . . . . . . . . . • . . . . . . . • . . . . . . . . . • . • • . . . . . . . . . . . If either of these questions is answered "Yes; attach a copy of the contracts and explain the relationship between the applicant and the other parties.

A COPY OF THE LEASE FOR FDD'S OFFICE IS ATTACHED. FDD JS NOT RELATED IN ANYWAY TO THE LESSOR. 11

Is the organization a membership organi;zation? .. ...... .. . . .. .. . . ...... . .......•. • ...... . _ .. . . If ·vas," complete the following: a Describe the organization's membership requirements and attach a schedule of membership fees and dues.

b Describe the organization's present and proposed efforts to attract members and attach a copy of any descriptive literature or promotional material used for this purpose.

c What benefits do (or will) the members receive In exchange for their payment of dues?

12a If the organization provides benefits, seJVices, or products, are the recipients required, or Will they be required, to pay for them? . . . . . . • • . . . . . . • . • • . . . • • . . . . . . . . . • . . . . • • . . . . • . . . • • . • • • . • • ~ N/A If •ves." explain how the charges are determined and attach a copy of the current fee schedule.

b Does or will the organization limit Its benefits, services, or products to specific Individuals or classes

13

14

Does or will the organization ettempt to influence legislation? . If "Yes," explain. Also, give an estimate of the percentage of th~ or plans to devote to this activity.

0

~~g~~i~t·i~~·~ u~ ~ ~~d ·f~~d~ th~t.It d~~~t~'

~oes or .Will the organization intervene in any way in political campaigns ' including the publication or d1str\but1on of statements? If MYes, • explain fully. . · · .· ·· ·· · ···· ·· · ·· ····· · ···· ··· ··· ·· ·· ·· · ·· ·· ·•·· · · · ·· ·· · · ·· · ··

0

Yes [ZJ No

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JUN 16 2005 11:15 FR 00

215542'('(11 IU 1~1:1~~l:::J"(I::H '.:H

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Page

=onn 1023 (Rev. 9-98)

_Par£![)

Technical Requirements

Are you filing Form 1023 Within 15 months frem the end of tile month in which your organization was created or formed? . _........ .. . 0

•

•••••••••••••••

•

••

0

••

••

•••••••••••

•

•

••

•••

-

•

•

•

•

•

·

•

•

•

•

•

•

•

.

2

5

[Xl I

Yes

0

No

If you answer -ves.~ do not answer questions on lines 2 through 6 below. If one o(the exceptions to the 15-month filing requirement shown below applies, check the appropriate box and proceed to question 7. Exception~J -

3

You are not requifed to file an exemption application within 15 months If the organization:

O

a

Is a church, Interchurch organization of local units of a ehuroh, a convention or association of churches, or an integrated auXIliary of a church. See Specific Instructions, Line 2a, on page 4;

O O

b

Is not a private foundation and normally has gross receipts of not more than $5,000 in each tax year; or

c

Is a subordinate organization covered by a group exemption letter, but only if the parent or supervisory organization timely submitted a notice covering the subordinate.

If the organization does not meet any of the exceptions on line 2 above. are you filing Form 1023 within 27 month:;; from the end of the month in which the organization was created or formed? • . • . . . . . . . . . . • . . . . .

0

Yes

0

No

0

Yes

O

No

O

Yes

0

No

If "Yes," your organization qualifies under Regulation section 301 .9100-2, for an automatic 12-month extension of the 15-month filing requirement. Do not answer questions 4 through 5. If "No,~ answer question 4. 4

If you answer "No" to question 3, does the organi~llon wish to request an extension of time lo apply under the "reasonable action and good faith~ and the "no prejudice to the interest of the gover'nment• requirements of Regulations section 301.910Q-.3? ...•...•.........•... - . .............•..•..... - .. .. .. . . ..

If "Yes," give the reasons for not filing this application within the 27-month period described in question 3. See Specific Instructions, Part Ill, line 4, before completing this item. Do not answer questions 5 and 6. If "No." answer qJestions 5 and 6. 5

If you answer ·No• to question 4. your organization's qualification as a section 501 (c)(3) organization can be recognized only from the date this application is filed. Tflerefore, do you want us to consider the application as a request for recognition of exemption as a section 501(c)(3) organization from the date the application is received and not retroactively to the date the organization was created or formed? •• .• 0

6

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

If you answer ·yes• to_ question 5 above and wish to request recognition of section 501 (c)(4) status for the period beginning with the date the organization was formed and ending with the date the Form 1023 application was received (the effective date of the organization's section 501(c)(3) status), check here.,. 0 and attach a completed page 1 of Form 1024 to this application.

STF FED2 1l9F.:;

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Page

'orm 1023 (~ev. 9-98)

Part Ill

I

Technical Requirements (Continued)

,s the organization a private foundation? Yes (Answer question 8.) No (Answer question 9 and proceed as instructed.)

lZ!

O

a

If you answer •yes" to question 7, does the organization claim to be a private operating foundation? ~ Yes (Complete Schedule E.)

0

No

After answering question 8 on this line, go to line 14 on page 7. 9

If you answer "No" to question 7. indicate the public charity classification the organization is requesting by checking the box below that most appropriately applies: THE ORGANIZATION IS NOT A PRIVATE FOUNDATION BECAUSE IT QUALIFIES:

a

b

c

0

As a church or a convention or association Of churches

0 0

fvf.

(CHURCHES MUST COMPLETE SCHEDULE A.)

a school (MUST COMPLETE SCHEDULE B.)

Sections 509(a)(1) and 170(b}{1 )(A)(i) Sections S09(a)(1) and 170(b)(1 )(A){ii)

As a hospital or cooperative hospital service organization, or a medical research organization opere~ted in conjunction with a hospital (These organizations, except for hospital service organizations, MUST COMPLETE SCHEDULE C.)

Sections 509(a)( 1) and 170(b)(1)(A)(iii)

As a governmental unit described in section 170(c)(1).

Sections 509(a)(1) and 170(b)(1)(A)(v)

As being operated solely for the benefit of, or in connection with, one or more of the organizations described in a through d, g, h, or i (MUST COMPLETE SCHEDULE D.)

Section 509(a)(3}

e

0 0

f

0

As being organized and operated exclusively for testing for public safety.

Section 509(a)(4)

g

0

As being operated for the benefit of a college or univen;ity that is owned or operated by a governmental unit.

Sections 509(a)(1) and 170(b)(1 )(A)(vi)

h

0

As receiving a substantial part of its support in the form of contributions from publicly supported ol'ganizations, from a governmental unit, or from the general public.

Sections 509(a)(1) and 170(b)(1 )(A)(vi)

0

As normally receiving not more than one-third of its support from gross investment income and more than one-third of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions (subject to certain exceptions).

Section 509(a)(2)

0

The organization is a publicly supported organization but is not sure whether it meets the public support test of h or i. The organization would like the IRS to decide the proper classification .

Sections 509(a)(1) and 170(b){, )(A)(vi) or Section 509(a)(2)

d

j

If you checked one of the boxes a through fin question 9. go to question 14. If you checked box g In question 9, go to questions 11 and 12. If you checked box h, I, or j, in question 9, go to question 10.

S'I'F FW2129F.6

6

orm 1023 (Rav. 9.Q8)

Part Ill

I

Technical

Requirements (Continued)

f you checked box h, 1, or JIn question 9, has the organization completed a tax year of at least 8 months?

0

0

Yes -

Indicate whether you are requesting:

O A definitive ruling. (Answer questions 11 through 14.) O An advance ruling. (Answer questions 11 and 14 and attach two Forms 872-C completed end signed.) No -You must request Form 1023.

an advance ruling by completing and signing two Forms 872-G and attaching them to the

11

If the organization received any unusual grants during any of the tax years shown in Part IV-A, Statement of Revenue and Expenses, attach a list for each year showing the name of the contributor; the date and the amount of the grant; and a brief description of the nature of the grant.

12

If you are requesting e definitive ruling under section 170(b)(1 )(A)(iv) or (vi), check here~

0

and:

a Enter 2% of line 8, column (e), Total, of Part IV-A .. .. ... ........ ... . .......... .. .. .... ... . .• b Attach a list showing the name and amount contributed by each person (other than a govemmeotal unit or "publicly supported" organgation) whose total gifts, grants, contributions, etc., were more than the amount entered on line 12a above.

0

If you are requesting a definitive ruling under section S09(a)(2), check here.,.. and: a For each of the years included on lines 1, 2, and 9 of Part IV-A, attach a fist showing the name of and amount received from each ~disqualified person." (For a definition of "disqualified person," see Specific Instructions, Part II, Line 4d, on page 3.)

13

b For each of the years included on line 9 of Part IV·A, attach a list showing the name of and amount received from each payer (other than a "disqualified person") whose payments to the organization were more than $5,000. For this purpose, "payer" includes, but is not limited to, any organization described in sections 170(b)(1 )(A)(I) through (vi) and any governmental agency or bureau ~

14

Indicate if your organization is one of the following. If so, complete the required schedule. (Submit only those schedules that apply to .y our organization. Do not submit blank schedules.)

No

lf .. Yes," c:omplata Schedule:

Is the organization a church? ..• .....•. , ..•........•. . .... .. .....••..•.•.•.••..•..•.•..

X

A

Is the organization. or any part of it, a school? ............•...•••••..•...• __ ... • ... _ •......

X

B

.......... -- .......

X

c

X

D

Is the organization. or eny part of it, a hospital or medical research organization?

YK

Is the organization a section 509(a)(3) supporting organization?_ . ... _. .....•.•...•......•.• _.. _ Is the organization a private operating foundation? _........•...•.... . .••..•..••.•.•..•••..• •

X

E

Is the organization, or any part of it, a home for the aged or handicapped?. _••.•.. _. . •..• . .....••.

X

F

Is the organization, or any part of it, a child care organization?_ ....• . ..... . _•...... . ........ . _.

X

G

X

H

X

I

' Does the organization provide or administer any scholarship benefits, student aid, etc.?

••

-

•••

0

••

•

---

Has the organization taken over, or will it take over, the facilities of a "for profit• institution? ...•.••... .

STF FEm1291'.7

2155427711 TO 1202212l'll:1l'.:ll

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Page =onn 1023 (Rev. 9-98)

Part IV

-

I

8

Flnanclai .Data '

;mplete the financial statements for the current year snd for each of the 3 years Immediately before it. If In .existence kiss than 4 years, complete the statements for each year in existence. If In exh;tenc::e less than 1 year, also provide proposed bUdgets for the 2 years follOWing the c;urrent year.

A. s ta t ement ofRavenue an dExcpenses

3 prior tax years or proposed budget for 2 years

Current

tax year 1 Gifts, grants, and contributions received (not Including unusual grants - see page 6 of the

(c) 2003 4/24 (b) 20Q2 FYE.12/31 FYE 12/31 12/31/01 2 200.000 2.200.000 1.100 000

(a) From

to

instructions).. __ .. _.. .•.. , .. _

(e} TOTAL

(d) I

5 500.000.00

2 Membership fees received ..... 3 Gross investment Income (see instructions for definition) .••••. 4 Net income from organization's unrelated business activities not included on line 3 ... _...... _ . 5 Tax revenues levied for and either paid to or spent on behalf of the organization ... _ ... _•.. • .. _ .

Cl.l

:::1

c ~ CD

0::

6 Value of services or facilities furnished by a governmental unit to the organization without charge (not including the value of services or facilities generally furnished the public without charge) •..••.. _ • 7 Other income (not including gain or loss from sale of capital assets) (attach schedule) ..••.••.•.• _ 8 Total (add lines 1 through 7) . .• . 9 Gross receipts from admissions, sales of merchandise or services, or furnishing of fadlities in any activity that is not an unrelated business within the meaning of section 513. Include related cost of sales on line 22 ..........•. 10 Total (add lines 8 and 9). __ • ... 11 Gain or loss from sale of eapital assets (attach schedule) .•. .•.. 12 Unusual grants _ . • _ . . . . . _ . . . . 13 Total revenue (add lines 10 through 12) .. _ .•.• _••.••.. _ .

14 Fundraising expenses .. _... _ .. 15 Contributions, gifts, grants, and similar amounts paid (attach schedule) _.•.. _.... _.... • ..

16

Disbursements to or for benefit of members (attach schedule) . . •..

17 Ill

Compensation of officers, directors, and trustees (attach

Ill

schedule) ... _... __ • ... _•. . •

Ql

...c

0..

25.000

56211.00

1 106 211.00 2,225 000.00 2 225 000.00

5 556 211.00

1 106,211.00 2,225 000.00 2 225 000.00

s 556 211.00

1,106.211.00 2.225.000.00 2 225.000.00 0

5,556.211.00

6211

25.000

0 0 70 582

18 Other salaries ond wages •.••..

.3j 19 · Interest 20 Occupancy (rent, utilities, etc.) _ .

9189

21 Depreciation and depletion .. .. . 22 Other (attach schedule)

548 923

I

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If

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I

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•

I

23

f

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I.

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•

•

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Total expenses (add lir:tes 14 through 22) ....••.. __ .•.. _..

2.209.082

2 179 906

628,694.00 2 209 082.00 2 179 906.00

24 Excess of revenue over expenses (line '13 minus line 23) ..• _ ••.. STF FEO;i!129F.e

-

477,517.00

15 918.00

45.094.00

2002 E xp enses Se e A ttached Budget approved at 12/19/01 D t ~003 Expenses - see Attached Proposed Budget 1rec ors• Meeting

I

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9

1023 (Rev. 9--98)

Part IV

I

Financial Data (Continued) Current tal' year · Pate 12 /3 1/2 0 0 1

B. Balance Sheet (at the end of the period shown)

Assets

56,304

1

1

Cash ...... . . .. . .. .. . ... • .. · · . • · · · · · · · · · · · · · · · • · · · · · · · · · · · · · • · · · · · · · · · · · · · • ·

2

Accounts receivable, net

3

Inventories .. .• .•. •. . . .. .. . · . . . · .. - · · · · · · • · · • · · · · · · · · · · · · · · · • · • · · · · · · · · · · · · · · ·

4

Bonds and notes receivable {attach schedule) . . .. .•.. ... . · .. . · · · · · · · • · · · · • · • • • • · · · · • •

5

Corporate stocks (attach schedule) . . . .. . .. . ... - · · · · · · · · · · · · · · · · · · · · · · · · · · · · • · · · · · ·

6

Mortgage loans (attach schedule) . .•. . . .• . .. ... . .. . · .. · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

6

7

Other investments (attach schedule)

.I:1?.r:~Y:. ~~~~.e:~ · ~C:~.C?'l:1~~ · · · · · · · · · · · · · · · · · · ·

7

8

Depreciable and depletable assets (attach schedule) .. ... . . •..... .. .. .. ...• •• .. · . . · · · • ·

8

9

Land . .. . .. .. .. ... . .. . . . .. ... . .. . · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·- · · · · · · · · ·

9

10

Other assets (attach schedule) ..... .. .. .. .. . • . . .. .. . . .. . . . · . . . . . .... .. .. . · . - - - · · · .

.. .• .• . .• .. · · . · · · · · · · · · • · i ·

2 • • • · • • •· • • • • • • • · • • • • • • • · • • • · ·

Office Equipment/furniture

Total

11

assots

3 4 5

10

367/7 1 0

37 506

(add lines 1 through 10 . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f--!-11!-f-._...:4~6;..:1:.1,:...:5:..:2::.:0::.:.:.. . ;::;,0;;..0

Liabilities I

12

Accounts payable : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . ....,.:..1=-2-+--------

13

Contributions, gifts, grants, etc., payable . . .... . .. . .. ... .. ... . . . .. . . . . .....• . . .... .. . ~1=-3+----~--

14

Mortgages and notes payable (attach schedule) •.. • ..• . • . . . .. ..... .. ... .....•. ........

15

Other liabilities (attach schedule) . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . r-.:.1~5+-------

16

Total liabilities (add lines 12 through 15) ... .. . . ... .. . . . ... ..... .. ... .... . .•.. 1--.!1-=-G+--------

~14

4_ _ _ _ _ __

Fund Balances or Net Assets 17

Total fund balances or

18

net assets •... . ... .. ... ... .. .... . .. ..... . ...... . . . ..•...... .

Total liabilities and fund balances or net assets (add line 16 and line 17) . . • . . . . . . .

r-.:.1~7+---4~6,.:l;.L..!5~2~0

18

461, 520 . 00

If ttlere has been any substantial change in any aspect of the organiutlon's financial activities since the end of the period shown above, check the box and attach a detailed explanation . .. ... ..... . . . .... ... . •...••. •.• .. ••.•..•. . ...•... .• • • ,..

STF FEC21291= -~

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2155427711 TO 12022070191 '

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21

Form 10:<.! (Rev. s-ea)

Schedule E. Private Operating Found~tiqns .. Most recent

Income Test

tax vear

I

1a Adjusted net Income, as defined in Regulations section 53.4942(a)-2(d) .. •• ..• · .• • · · · • · · · · • b Minimum Investment return. as defined in Regulations section 53.4942(a)-2(c) . · · • . • · · · • · · · •

2

1a 1b

6 211 26,503

2a

581,521

2b

37,506

2c

0 619 027.00

Qualifying distributions:

a Amounts (lnch.Jdlng administrative expenses) paid directly for the active conduct of the activities for which organized and operated under section 501 (c)(3) (attach schedule)· . . · · · . - · · · · - · · · • b Amounts paid to acquire assets to be used (or held for ose) directly In carrying out purposes described In section 170(c}(1) or 170(e)(2}(B) (attach schedule) •. • ... • ... · · .•. · · · ·- • · · · • ·

c Amounts set aside for specific projects that are for purpose$ described in section 170(c)(1) or 170(c)(2)(8) (attach schedule) ..•••.... ..... ••. - . .. · · .. · · · · · • · • - · · • · - · · · · · • · · • • · · d Total qualifying distributions (add lines 2a, b, and c) ...•.. - ... · • ..• · · · - - · · · - · · · · - · • · · • Percentages: 3 a Percentage of qualifying distributions to adjusted net Income (divide line 2d by line 1a) • - • .. . . b Percentage of qualifying distributi()ns to minimum investment return (divide line 2d by line 1b) .•. (Percentage must be as least 85% for 3a or 3b}

2d 3a

3b

100+ 100+

% %

Assots Test

4 5 6 7 8

Value of organization's assets used In activities that directly carry out the exempt purposes. Do not include assets held merely for investment or production of Income (attach schedule) - •.•. - Value of any stock of a corp()ration that is controlled by applicant organization and carries out its exempt purposes (attach statement describing corporation) ..•..• ... ..• .. ....• . ....•.. . . Value of all qualifying assets (add lines 4 and 5) ............................ - - ...• - . - . Value of applicant organization's total assets ............ . .... .. .. .......... .... - •... Percentage of qualifying assets lo total assets (divide line 6 by line 7 -percentage must exceed 65%} .•.••.••..

Endowment Test Value of assets not used (or held for use) directly in carrying Ollt exempt purposes: 9 a Monthly average of Investment securities at fair market value ...•..•. ••. _ ..•..• - ••••••.•• b Monthly average of cash balances •....••.• .. ... : •.• - • •..• ...•• • .•.. - - •.... - - .••. c Fair mart
13

14

-

........

-

..

6

....

.........

Support Test Applicant organization's support as defined in section 509(d) . ... ..... . . . .. ..•. .......•.•

4

37,506

5

0 3 7_L 506. 00 567 562 % 6 . 61

6 7 8

493,561 36,495

9a

9b 9c 9d 10

530,056.00

11

530,056.00

12

17,668.36

13

1,1061211

14 15

6,211 1 100 000.00

16

700,000

17 18 19

0 700 000.00 63.64 %

18

Gross investment income as defined in section 509(e) ••.. ..• .• ••. .•••.. •..... - ...•.... Support for purposes or section 4942(j)(3)(B)(Iii) (subtract line 14 from line 13) .............• Support received from the general public, five or more exempt organizations , or a combination of these sources (attach schedule) . . .. .•..•••••.. ... •..• . •.•.. .. .• .... ..... .. •...... For persons (other than exempt organizations) contributing more than 1% of line 15, enter the total amounts that are more than 1% of line 15 Subtract line 17 from line 16 ••. . ••. ••.. .• .• . . .......•.•..........................

19

Percentage of total support (divide line 16

20

Does hne 16 •nclude support from an exempt orgamzation that is more than 25% of the amount of line 15? •••...•• •...••.• •. - •• ... - ... . - .... ...... - - ..• .. - ...•.•... - ••..•..•.• •.•. .• - - .

15

16 17

...

0.-

.......

0

••

•

-

........

-.-

......

----

......

by line 15- must be at least 85%) ... . ...........

D

Yes

rn No

21

Ne~ly created ~rganizations with less than 1 year's experience: Attach a statement explaining how the organization is planning to satrsfy the reqUire~ ants of section 49420)(3) for the income test and one of the supplemental tests during its first year's operation. Include a description of plans and arrangements, press clippings, public announcements, solicitations for funds, etc.

22

Does the amount entered on line 2a above include any grants that the applicant organization made? .•... _ • If "Yes.ft attach a statement explaining how those grants satisfy the criteria for "significant lnvolvemenr grants d~cribed in section 53.4942(b)--1(b)(2) of the regulations.

For mora Information, see back of Schedule E. STF FED2121i1',1!;1

D

Yes

Q:g No

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 50l(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT

PART IT.

Question 1:

Foundation for the Defense of Democracies, Inc. (''FDD") was incorporated in New York on April 24, 2001 as EMET: An Educational Initiative, Inc. (..EMET''). The initial purpose of EMET was to provide education meant to enhance Israel's image in North America and the public's understanding ofissues affecting Israeli-Arab relations. The attached brochure illustrates EMET's initial purposes, and the methods by which EMET was to attain such goals. These goals continue as part ofFDD's purpose. As a result of the terrorist attacks on Tuesday, September 11, 2001, the Board of Directors determined that EMET' smission should be expanded. The Board has recognized the sad fact that Israel is no longer the only democracy in the world facing the scourge of terrorism. The United States and other democratic countries all over the world are all at risk. In addition, freedomloving countries are currently ill-equipped to deal with this menace, as the concept of purposely destroying innocent lives is completely foreign to the ideas and beliefs which we hold so dear. Accordingly, the name and focus ofthe organization were changed to reflect these unfortunate times. The Board ofDirectors has determined that the organization would better serve this country and all other democratic societies by developing research in the area of global terrorism and providing such research to the public. By serving as a "think tank" on terrorism, the organization will strive to strengthen American resolve and increase the general knowledge regarding terrorism, develop educational materials on the eradication of terrorism everywhere in the world, to achieve peace in the Middle East and elsewhere. On October 22, 2001, the Board of Directors therefore authorized the organization to change its name to Foundation for the Defense of Democracies, Inc. and developed the following mission statement: Foundation for the Defense of Democracies conducts research and provides education on international terrorism - the most serious threat to the United States and other free, democratic nations. FDD produces independent analyses of global terrorism's intentions and capabilities, as well as of the historical, cultural, philosophical and ideological factors that drive terrorism, and which threaten democracies and the individual freedoms guaranteed within democratic societies. Non-partisan and non-profit, FDD promotes informed debate about policies and positions that will most effectively eradicate the scourge of international terrorism. In addition, FDD works to improve education about democracies, and to help promote democracy in the Middle East and other troubled regions. Page 1 of 13 ···-- -

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT

The Board of Directors and Officers ofFDD believe that: ~ Terrorism -which can most precisely be defined as deliberate acts

of violence undertaken against unarmed civilians for the purpose of instilling terror- is a crime against humanity. It is never justifiable, and must never be condoned or tolerated by civilized peoples. Terrorism de-legitimizes the cause of those who employ it. }>

Those who employ terrorism to destroy the American way oflife, and those who seek to destroy freedom and democracy elsewhere in the world, must be decisively defeated.

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Regimes that financet host or otherwise aid and abet terrorism are in a state ofhostili ty with all free and democratic nations, and with all civilized peoples, whatever their religion or nationality, and wh~rev.er they live.

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Israel is part of the solution to fighting terrorism, not part of the problem. For decades, Israel has been on the front line of the war against terrorism. Given its experience and intelligence-gathering capabilities, Israel is America's most reliable and valuable ally in this conflict.

)- The way to achieve peace in the Middle East is not by compromising Israel's existence as the only democracy in the region, but rather by defeating terrorism. Until terrorism is eradicated, any Arab leader who dares attempt to enter into a realistic, lasting peace agreement with Israel can expect to suffer the same fate as Egyptian President Anwar Sadat.

FDD is a nonprofit organization. and is not organized for the private gain of any individual. The activities to be undertaken by FDD will be developed by its professional staff, with the support and guidance of its philanthropic leadership. FDD will strive to communicate a clear, concise and focused message, which once established will be adhered to consistently. By way of illustration only, FDD initiatives may include a speakers' bureau, discussion forums, creation of oped pieces, educational outreach to Jewish and non-Jewish communities as well as college campuses and secondary schools, creation of fiction and/or nonfiction books, a play, television programs and/or a film. Topics to be explored may include, among others, a study of Jihadism, the militant and radical fonn of Islam, the fomtS of tenorism to which we may be exposed, m~thods which we can utilize to eradicate terrorism, the Israeli-Arab conflict in general, the spirit and image ofisrael, the Page 2 of 13

JUN 16 2005 11=16 FR 00

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FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. c/o Clifford D. May, President

APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT importance of a Jewish state, the unique relationship between Israel and the United States, and Israel's status as the only democracy in the Middle East. On April 24, 2001, FDD announced the creation of its frrst initiative, the EMET Fe1Jows Program, which was conducted in cooperation with Tel Aviv University and Hillel, The Foundation for Jewish Campus Life. The Program sponsored the education of 40 college students representing 26 North American campuses at The Jaffe Center for Strategic Studies at Tel Aviv University. The goal of the Program was to enable the Fellows to provide educational outreach on their own college campuses throughout the United States upon their return. The Program is anticipated to be expanded for the Swnmer of2002, to include Jewish as well as Christian students. The EMET Fellows Program has initiated a secondary program, entitled Caravan For Democracy, which will be conducted in cooperation with The Jewish National Fund and Mediawatch. The Caravan For Democracy will sponsor speakers and other programs on various college campuses in North America. FDD has budgeted $100,000 during fiscal year 2002 for this program.

In January, 2002 FDD undertook an educational mission to Israel by several board members, including former Housing and Urban Development Secretary Jack Kemp and former Senator Frank Lautenberg. This trip will be followed by a media tour in the United States in furtherance ofFDD's message. The officers and directors of FDD have appeared on various radio and television programs and have been interviewed by several of the nation•s top journalists, in order to promote FDD's message; a list of such appearances through December 19, 2001 is attached hereto. In addition, FDD has prepared a number of "White Papers", ..Decision Memoranda'• and "Devil's Advocate Analyses" for distribution to various media and opinion leaders, in order to frame the current debates regarding terrorism and to maintain FDD's media visibility. Sample copies of such documents are attached.

FDD has produced its first "VNR" (video news release), which featured an Israeli

hospital where, even during the intifada, doctors perfonn state-of-the-art heart surgery on infants from around the world - including infants from Palestinian territories. The VNR was released to various local news organizations throughout the country, and, as of December 19, 2001. was broadcast in 14 different metropolitan areas, reaching an estimated 441,500 households; a Broadcast Monitoring Report as ofDecember 24, 2001 is attached. FDD is in the process of producing at least three other VNRs, which are scheduled to be released during 2002. Finally, FDD is considering the development of a television series or movie, currently titled 'The Roots of Terror" to be broadcast on PBS, and/or in classrooms throughout the country. Robert Chitester, creator of many other PBS specials, may direct the project. Page 3 ofl3

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 50l(c)(3) OF Tiffi INTERNAL REVENUE CODE FORM 1023 SUPPLEMENTAL STATEMENT

fu order to reinforce FDD's message and provide educational materials to the entire world, FDD is in the process of developing its website, www .defenddemocracy.org. Through the web site, FDD will post new infonnation, provide press releases and, perhaps, solicit contributions.

FDD is organized and shall be operated exclusively for charitable, scientific and educational purposes within the meaning of Section 501 ( c)(3) of the Internal Revenue Code of1986, as amended (or the corresponding provision of any future United States Internal Revenue Law, the "Code''). FDD shall not carry on any activities not permitted to be carried on (a) by a corporation exempt from federal income tax under Section 501(c)(3) of the Code, or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Code. It is intended that transfers to FDD shall qualify for deduction under Sections 170, 2055 and 2522 of the Code and that FDD shall be exempt from Federal income taxation under Section 50l(a) of the Code as an organization described in Section 501 (c)(3) of the Code and which is a private foundation by reason of being described in Section 509 of the Code. In addition, FDD intends to qualify as a private operating foundation, as described in Section 4942(j)(3) of the Code. I

.

No part of FDD' s net earnings shall inure to the benefit of or be distributable to its directors, officers, or other private persons, except that FDD shall be authorized and empowered to pay reasonable compensation for services rendered by its officers and directors and to make payments and distributions in furtherance of its charitable purposes. No substantial part ofFDD's activities shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and FDD shall not participate in, or intervene in (including the publishing or distributing of statements) any political campaign on behalf of(or in opposition to) any candidate for public office. FDD will exercise expenditure responsibility to the extent required by Section 4945 of the Code, including, in the case of any grant to an individual for travel, study. or other similar purposes. obtaining advance approval of scholarship procedures as provided in Code Sections 4945(d) and (g) and the regulations thereunder.

Page 4 of13

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT

PART II.

Question 2:

The main sources of financial support ofFDD will be annual contributions from some of the members of the Board of Directors and/or entities controlled by them (hereinafter referred to as the "Contributing Directors"), as follows:

BOARD MEMBER Leonard Abramson Edgar Bronfman Jeffrey R. Solomon

Leonard Barrack Bernard Marcus Ronald Rubin Lynn Schustennan Michael Steinhardt Peter May Joseph Weber Dalck Feith David Cutler TOTAL

EXPECTED ANNUAL COMMITMENT Up to $2,000,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $3,100,000

FDD may in the future seek additional funding from other donors; however, it is anticipated that the vast majority ofFDD,s funding will be provided by the Contributing Directors, their families and/or entities controlled by them.

Page 5 of

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FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. c/o Clifford D. May, President

APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 50l(c){3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT PART II.

Questions 4(a) and 4(b): Compensation

Names, Addresses and Titles of Officers and Directors Jack Kemp ~ Chairman 7904 Greentree Road Bethesda, MD 20817 Frank La.utenberg- Director 201 West Passaic Street Rochelle Parl<., NJ 07662 Jeanne Kirkpatrick - Director 1301 Delaware Avenue, SW Washington, DC 20024·3917 Steve Forbes- Director .. Forbes, Inc. 60 Fifth Avenue New Yorlc, NY 10011 Leonard Abramson - Director C/o The Abramson Family Foundation 376 Regatta Drive Jupiter, FL 33477 Edgar Bronfinan - Director C/o Samuel Bronfman Foundation 3 7 5 Park Avenue New York, NY 10152 Jeffrey R. Solomon- Director C/o Samuel Bronfman Foundation 375 Park Avenue New York, NY 10152 Michael Steinhardt - Director C/o Steinhardt Partners 650 Madison Avenue- 17th Floor New York, NY 10022 Leonard Barrack Director 3300 Two Commerce Square 2001 Market Street Philadelphia, P A 191 03

$100,000

NONE NONE

NONE

NONE

NONE

NONE

NONE

NONE

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION SOI(c)(3) OF THE .INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT

Bernard Marcus- Director 2455 Paces Ferry Road Atlanta, GA 30339 Ronald Rubin - Director 200 S. Broad Street Philadelphia, P A 19102 Lynn Schustennan - Director 4011 South Yorktown Place Tulsa. OK 74105 Peter May - Director 280 Park Avenue New York, NY 10017 Joseph W cber- Director 1912 Montreal Road Tucker, Georgia 30084 Lewis S. Ranieri - Director 50 Charles Lindbergh Boulevard Suite 500 Uniondale, NY 11 553 Dalck Feith - Director 8134 High School Road Elkins Park, PA 19027 David Cutler -Director Five Sentry Parkway West Suite 100 Blue Bell, PA 19422 Clifford D. May- President and Executive Director 1020 191h Street, N.W. Ste. 340 Washington, DC 20036 Nir Borns- Vice President Program Director

102019111 Street, N.W. Ste. 340 W ashingto~ DC 20036 Joseph M. Yohlin -Secretary and Treasurer 1086 Penllyn Pike Blue Bell, P A 19422

Page 7 of13

NONE NONE

NONE NONE

NONE

NONE

NONE

NONE

$250,000

$80,275

NONE

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023 SUPPLEMENTAL STATEMENT

PART II.

Question 4(d):

The Contributing Directors are disqualified persons by reason of being substantial contributors to FDD. PART II.

QuestionS:

FDD has purchased some furniture, office supplies and office equipment, such as several computers. a copier, fax machine, etc.

Page 8 of 13

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FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. c/o Clifford D. May, President

APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 50l(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT PART IV.

Line 17:

Compensation of officers, directors and trustees for period ending December 31, 2001:

Clifford D. May, President:

PART IV.

Line 22:

$70,582.00

Other Expenses:

I

A.

FDD retained the seJVices of a media consulting firm, Creative Response Concepts, at a monthly cost of $42,500.00.

Total media strategist, counsel and liaison expenditures during the period ending December 31, 2001: B.

$315,508.00.

The Expenses associated with The EMET Fellows Program were:

4.

Airfareffravel expenses .for students: Lodging for students: Advertising/brochure development: Syllabus, books. and materials:

5.

Fund Set-aside•:

6.

Fees to consultant:

1.

2. 3.

TOTAL:

$84,000.00 $72,000.00 $8,400.00 $1,500.00 $3,600.00 $8,000.00

$177,500.00

* A total of $25,000 will be set aside for purpose of enabling students to develop an Israel advocacy plan on campus following their return. The costs associated with the EMET Fellows Program are expected to double for the Program scheduled for the Summer of 2002.

C. The costs of office supplies, furniture and equipment during the period ending December 31, 2001 were as follows:

1. 2. 3.

Office/Computer Equipment: Furniture: Telephone:

TOTAL:

$26,245.00 $11,261.00 $1,394.00 $38,900.00

Page 9 of 13

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FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. c/o Clifford D. May, President APPLICATION FOR RECOGNITION OF EXEMPTION UNDER

SECTION 50l(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023 SUPPLEMENTAL STATEMENT

D. Travel, shlpping fees, filing fees and other miscellaneous expenses for operations during the period ending December 31, 2001 were as follows: 1.

2.

Shipping/Postage:

3.

Legal: Filing Fees: Does/Subscriptions: Health insurance: Office Operations:

3. 4. 5. 6.

$5,677.00

Travel/Meals:

$306.00 $3,906.00

$2,110.00

$301.00 $812.00

$3,425.00 $16,537.00

TOTAL:

E. FDD is currently developing its website, www.defenddemocracy.org, and has engaged KESEM Technology to provide t~chnological support. The costs associated with this engagement are $25,450. In addition~ FDD will incur substantial costs in operating the website, creating and broadcasting emails, drafting press releases and updating the site periodically.

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c/o Clifford D. May, President APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023 SUPPLEMENTAL STATEMENT SCHEDULEE

PRIVATE OPERATING FOUNDATIONS

Line 2a: organized:

Amounts paid directly for the active conduct ofthe activities for which FDD is

Salary, Clifford D. May, President: Media strategist, counsel and liaison expenditures: EMET Fellows Program: Travel/Meals: Shipping/Postage: Legal: Filing Fees: Dues/Subscriptions: Health insurance; Office Operations: Telephone: Total:

Line 2b: purposes:

$70,582.00 $315,508.00 $177,500.00 $5,677.00 $306.00 $3,906.00 $2,110.00 $301.00 . $812.00 $3,425.00 $1.394.00 $581,521.00

Amounts paid to acquire assets to be used directly in carrying out FDD's

Office/Computer Equipment: Fumiture: Total:

$26,245.00 $11.261.00 $37,506.00

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 50l(c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT SCHEDULEE PRIVATE OPERATING FOUNDATIONS

Line 21. FDD has satisfied the requirements of Section 4942(j)(3) of the Internal Revenue Code for the Income Test and for the Endowment Test for its first fiscal year ending December 31, 2001 by making qualifying distributions directly for the active conduct of its charitable activities which greatly exceeded FDD's adjusted net income and minimum investment return for the year. FDD intends to continue to satisfy both tests in the future by making qualifying distributions directly for the active conduct of its charitable activities which will approximate the total contributions made to FDD ·d uring each year. FDD has already completed and fully funded its first program, the EMET Fellows Program. A second Program is in development. In addition, through the course of its first year, several of the officers and directors ofFDD have appeared on radio and television programs and have authored newspaper op-ed pieces and articles, a list of which are attached hereto. FDD's first VNR has been released to numerous loca) news organizations throughout the country and has been broadcast in 14 different cities. Three additional VNR's are currently in production. FDD's ftrst television series/movie, tentatively entitled, ''The Roots of Terror,. is in development. Finally, FDD is currently developing a website which will provide valuable and educational information to the public. The attached brochures, press releases and media presentation illustrate FDD's desire to actively enhance the public's understanding of terrorism and how to cope with it, as well as other issues affecting Israeli-Arab relations. The scope of FDD activities towards satisfaction of the requirements of Section 4942{j)(3) is discussed in greater detail in the response to Part IT, Question 1, hereinabove.

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APPLICATION FOR RECOGNITION OF EXEMPTION UNDER SECTION 501 (c)(3) OF THE INTERNAL REVENUE CODE FORM 1023

SUPPLEMENTAL STATEMENT EXHIBIT "A" CERTfl"'CATION I, Clifford D. May, the President ofFDDt do hereby certify that attached hereto is a tme and correct copy of the Certificate oflncorporation, the Certificate of Amendment and Bylaws ofFDD, and that the same have not been subsequently amended, modified, or supplemented.

Page 13 ofl3

- - - -·.-·-----------** TOTAL PAGE.25 **