Note 1. Summary of Significant Accounting Policies: 
Nature of Activities:
The Foundation, a nonprofit California corporation, was founded on December 15, 1967 by Mrs. Mary C. Skaggs and Mr. L.J. Skaggs.

The Foundation was founded to receive and maintain funds, including real or personal property, and, subject to certain restrictions and limitations, to use and apply the whole or any part of the income therefrom and the principal thereof exclusively for charitable purposes either directly or by contributions to organizations that qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code and its regulations.

Basis of Presentation:
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Foundation and changes therein are classified and reported as follows:

Unrestricted net assets ó Net assets that are not subject to donor-imposed stipulations. 

Temporarily restricted net assets ó Net assets subject to donor-imposed stipulations that may or will be met, by the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. 

Contributions:
Contributions, including unconditional promises to give, are recorded as made. All contributions are available for unrestricted use unless specifically restricted by the donor. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Unconditional promises to give due in the next year are recorded at their net realizable value. Unconditional promises to give due in subsequent years are reported at the present value of their net realizable value, using risk-free interest rates applicable to the years in which the promises are to be received.

Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other:
Grants by the Foundation are recorded in the year in which the funding is committed.

Securities are reported at fair market value. Securities transactions are recognized on the trade date (date the order to buy or sell is executed). Dividend income is recognized when received; interest income is accrued as earned. Realized gains and losses are calculated on the basis of actual cost.

Cash equivalents consist of money market funds which are considered to be part of the Foundation’s cash management activities.

Note 2. Contribution Receivable:
Mrs. Skaggs has committed to a $314,000 gift to the Foundation for 2008. Mrs. Skaggs’ unconditional promise to give is deemed to be fully collectible.

Note 3. Securities:
Securities consist of the following:

Note 4. Federal Excise Tax - Minimum Distribution Requirements:
The Internal Revenue Service has notified the Foundation that it is considered to be a private foundation. The Internal Revenue Code imposes an annual excise tax on the net investment income of a private foundation.

Under the Internal Revenue Service regulations, the Foundation is required to make certain minimum distributions. The minimum distribution is a percentage of the value of the Foundation's noncharitable assets. As of December 31, 2007, the Foundation has exceeded the minimum distribution requirements.

Note 5. Pension Plan:
The Foundation contributes to a retirement annuity plan for its Foundation Manager. Contributions to the plan are made annually and are based on 20% of participants’ salaries. The contributions were $24,000 for both 2007 and 2006.

Note 6. Related Party Transactions:
The Secretary and Foundation Manager is a partner in the law firm of Fitzgerald, Abbott & Beardsley LLP. The law firm provides office space, secretarial and support services, and legal services to the Foundation and obtains reimbursement from the Foundation for expenses paid on its behalf.

Two members of the Foundation’s Board of Directors also serve as Board members for certain grantees. The grantees received grants totaling $10,000 in 2007 and 2006 and have been authorized to receive grants totaling $10,000 in 2008.