CHILDREN'S DEFENSE FUND@ 2004 ANNUAL REPORT

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Knoxville News-Sentmel

Langston Riggio-Lynch Chapel Designed by Maya Lin Hughes CDF Haley Farm Freedom School Library Copy

The Mission of the Children's Defense Fund

he Children's Defense Fund's Leave No Child Behind® mission is to ensure every child a Healthy TStart, a Head Start, a Fair Start, a Safe Start, and a Moral Start in life and successful passage to adulthood with the help of caring families and communities. CDF provides a strong, effective voice for all the children of America who cannot vote, lobby,-or speak for themselves. We pay particular attention to the needs of poor and minority children and those with disabilities. CDF educates the nation about the needs of children and encourages preventive investment before they get sick or into trouble, drop out of school. or suffer family breakdown. CDF began in 1973 and is a private, nonprofit organization supported by foundation and corporate grants and individual donations. We have never taken government funds.

John Deardourff

e dedicate this annual report to our beloved friend and former CDF board W member John Deardourff who passed away December 24, 2004. John was a man of impeccable character, wisdom, and capacity for friendship. A moderate Republican, he was a pioneer political campaign consultant for many national and state campaigns including President Gerald Ford's. We miss him mightily and are very grateful for the many years we shared. Our prayers and thoughts continue for his wife, Betsy Griffith, Headmistress of the Madeira School, and for all of the Deardourff children.

2004 Annual Report I JjJ Children's Defense Fund Board of Directors

Robert F. Vagt, Chair Marian Wright Edelman Wendy Puriefoy President Founder and President Davidson College Chief Executive Officer Public Education Network (PEN) Davidson, NC Children's Defense Fund Washington, DC Washington, DC Angela Glover Blackwell Dennis Rivera • Vice Chair James Forbes, Jr. President Founder and Senior Minister 1199 SEIU-New York's Health Chief Executive Officer The Riverside Church and Human Services Union PolicyLink New York, NY New York, NY Oakland, CA James Forman, Jr. J. Michael Solar Geoffrey Canada Associate Professor Solar & Associates, LLP Vice Chair Georgetown Law School Houston, TX President and Co-Founder, Maya Angelou Thomas A. Troyer Chief Executive Officer Charter School Partner Harlem Children's Zone, Inc. Washington, DC Caplin & Drysdale New York, NY Winifred Green Washington, DC Maureen A. Cogan President Deborah Wright Vice Chair Southern Coalition President and Child Advocate for Educational Equity Chief Executive Officer New York, NY New Orleans, LA Carver Federal Savings Bank Carol Oughton Biondi New York, NY Dorothy Height Child Advocate Commissioner President Emerita and Los Angeles County Chair of Board Commission for Children National Council of Negro Board of Directors and Families Women, Inc. Emeritus Los Angeles, CA Washington, DC Kirbyjon Caldwell Lisle Carter, Jr. David W. Hornbeck Senior Pastor Chair 1973-1986 President The Windsor Village - Laura Rockefeller Chasin Children's Defense Fund St. John's United Methodist Washington, DC Hillary Rodham Clinton Churches Chair 1986-1992 Houston, TX Michael Klein Howard H. Haworth Leonard Coleman, Jr. Chief Executive Officer Cendant Corporation Global Banking for Citigroup, Inc. James Joseph New York, NY New York, NY Chair 1993-1994 Leslie Cornfeld William Lynch, Jr. Marylin Levitt President Child Advocate Charles E. Merrill, Jr. New York, NY Bill Lynch Associates, LLC New York, NY Leonard Riggio Leslee Dart President Katie McGrath Donna E. Shalala The Dart Group Child Advocate Chair 1992-1993 New York, NY Los Angeles, CA Susan P. Thomases

~ ii I Children's Defense Fund Table of Contents •

CDF Mission i

Dedication to Former Board Member John Deardourff i

CDF Board of Directors ii

Message from the Chief Executive Officer iv

Key 2004 CDF National Accomplishments 1

Key Regional, State and Local Office Achievements 4

2004 Donors 8

Foundation 8

Corporate 9

Individual 9

Organizations and Religious Networks 12

Memorials and Bequests 13

Report of Independent Auditors: PriceWaterhouseCoopers LLP 14

CDF Regional, State and Local Offices 30

Join the Leave No Child Behind® Movement! 31

I Want to Make a Contribution to Children's Defense Fund 32

2004 Annual Report I iii :JjJ Dear CDF Friend and Supporter: The year 2004 was a very challenging one for the Children's Defense Fund (CDF), for children, rhe poor, our nation, and our world. In our post 9/11 era of terrorism, our real threats and fears often have been manipular­ ed for partisan political gain and the wat in Iraq has been used to quell voices of dissent and deflect attention from radical domestic policies which are shifting government resources from the poor and middle class to the very rich. A huge federal revenue surplus has been dissipated by massive tax cuts to the super wealthy and two costly wars and growing budget deficits threaten decades of social progress. A breakdown in national bipartisan civility, numerous proposals to erode the rights ofand investments in children, minorities, women, the poor and the dis­ abled, judicial appointments which may change the nation's direction for decades to come, an entertainment ori­ ented and timid media, and an ideologically driven message and mission discipline among many current political • leaders in power and the "religious right" all have contributed to a negative national climate for children and the poor. The infant mortality rate increased for the first time in 44 years in 2002 and child poverty rates increased for three consecutive years among all racial groups. Health coverage continues to erode as employers export jobs and erode worker benefits and state budget cuts curtail health coverage for children and adults. The growing fed­ eral budget deficit and debt from irresponsible tax cuts will starve the nation of resources to invest in children now and in the future unless efforts to extend and make tax cuts permanent are prevented and new tax cuts for wealthy and powerful special interests are avoided. Despite this difficult climate, CDF has kept its eyes on the future. We have expanded our longstanding focus on building a strong successor generation ofyoung servant-leaders at Haley Farm; continued to expand our regional, state and local work; accelerated efforts to ensure mission and message discipline, eliminate internal silos, and foster interdisciplinary teamwork; better integrated our federal and state work to pursue pieces of a proactive national policy vision even as we worked and continued to hold on to existing child programs. In 2004, we trained nearly 2,000 young leaders and began to meld all ofCDF's youth development tracks into a more intentional and coherent ladder ofyouth leadership, expanded longstanding ties with faith communities through the annual interfaith National Observance of Children's Sabbaths® celebration, interfaith alliances for children in five cities, and greater engagement of women faith leaders, and reached out to and convened powerful women from every continent to begin to forge a more united voice for powerless women and children left behind. Providing a safe haven for seasoned and emerging leaders ofall generations, races, faiths and disciplines to connect, debate ideas, share best practices, and build or renew a sense of community and common purpose around children is an overarching goal. Haley Farm is CDF's movement building, leadership development and spiritual renewal center. The beautiful and simple ark-shaped Riggio-Lynch Chapel on the cover, named for its benefactor, Barnes & Noble Chair, Len Riggio, and his dear friend Bill Lynch, former Deputy Mayor of New York City, was dedicated with an inspiring amalgam of music, dance, preaching, and intellectual discourse on where we go from here to realize America's promise for children. Attended by over 600 people, it included a stim­ ulating symposium on Closing the Achievement Gap: Building the 21st Century MovementfOr Children. Symposium speakers included Bill Moyers; John Payton, Lead Counsel in the University ofMichigan affirmative action case; Ted Shaw, President and Director-Counsel of the NAACP Legal Defense and Education Fund; Tom Saenz of the Mexican-American Legal Defense Fund; Karen Narasaki, Executive Director of National Asian Pacific American Legal Consortium (NAPALC); Stewart Kwoh, Vice Chair, NAPALC; Roger Wilkins, Professor of History and American Culture, George Mason University; Dr. Dorothy Height; and Riverside Church's Reverend James Forbes. Chapel dedication speakers included Len Riggio, Bill Lynch, Mayor David Dinkins, and Elizabeth Edwards. Haley Farm is the only place in the world with two Maya Lin designed buildings-the Chapel and the Langston Hughes Library-both made possible by the extraordinary generosity of Len and Louise Riggio. We invite you to come and experience Haley. We thank all of you who support our independent advocacy voice for children. With your help, we will never give up until we truly leave no child behind.

Gratefully and hopefully, J!k.'-- lj,rn.,_._ Marian Wright Edelman Founder and CEO

~ iv Children's Defense Fund Key 2004 National Accomplishments

Training a New Generation ofEffective Servant-Leaders

Training a successor generation ofyoung leaders for the children's movement has been an overarching CDF focus since 1990. In 2004, CDF provided a week of intensive training for 627 college leaders and CDF Freedom SchoolssM community program sponsors at Haley Farm who conducted 58 CDF Freedom Schools in 18 states for more than 4,500 disadvantaged children ages 5 to 16 years old. We are proud that the CDF Freedom Schools program, which provides reading enrichment, parent workshops, and service and advocacy experiences to empower children to make a difference, received the firsr Excellence in Summer Learning Award from Johns Hopkins University. A multi-year Ewing Marion Kauffman Foundation grant has been given to local Kansas City Freedom Schools and to CDF to double the number of Freedom Schools in Kansas City and nationally over the next five years, to evaluate local Kansas City Freedom Schools, and to strengthen CDF's national infrastructure to expand and sustain this summer literacy and youth leadership model. The speaker for CDF Freedom Schools call to action night was Dr. Freeman Hrabowski, President of the University of Maryland at Baltimore County whose university and Davidson College became the first higher education CDF Freedom Schools sponsors in 2005. Lerone Bennett, Editor-in-Chief of Ebony Magazine, was the 2004 commencement speaker.

Emerging Leaders and Best Practices Institutes

CDF held CDF Emerging Leaders'M and Best Practices Institutes for early childhood leaders which bring together 35 new fellows each year through a competitive application process. We are beginning to expand the early childhood best practices institutes into all CDF program and policy issue areas: child welfare, mental health, education, youth development, and juvenile justice, and have laid the foundation for cross disci­ plinary emerging leader institutes to address the Cradle to Prison Pipeline'M crisis described below. At least one annual interdisciplinary institute will take place at Haley Farm beginning in 2005.

Affirming and Celebrating Youth Strengths

Every year CDF celebrates and provides scholarships to youths beating the odds in a number of cities. In 2004, we held our first reunion of 65 of 350 former Beat the Odds® scholarship winners with youths from other CDF youth networks. In a truly inspiring weekend, young people who have overcome daunting odds and have blossomed into educated, caring leaders, reviewed the Cradle to Prison Pipeline data and shared how they escaped or are still trying to escape its fate. This November 2004 gathering at Georgetown Law School in Washington, D.C. was the first of such meetings with young leaders from our various emerging policy, community and youth leader networks. These include CDF Freedom Schools, Beat the Odds, national and state offices interns, Scholastic Inc. corporate interns, Youth in the Movement (out of school, foster care and juvenile justice system youths), and CDF SHOUTSM and CDF SPROUTSM campus health and poverty reduction outreach chapters.

Labeling and Mobilizing to Dismantle the Cradle to Prison Pipeline

Two nationally distinguished award-winning investigative reporters, Julia Cass and Connie Curry, were hired to document in Ohio and Mississippi the alarming Cradle to Prison Pipeline that is snuffing out the hopes and dreams of hundreds of thousands of poor minority children across America. Prisons are the new slavery threatening the Black community. A Black boy born in 2001 has a 1 in 3 chance of going to prison during his lifetime. Black youths are 48 times and Latino youths are nine times more likely to be incarcerated than White youths for comparable drug offenses. An interdisciplinary and intergenerational policy, field, and communications team is being developed within CDF to design and implement strategies

2004 Annual Report I I JjJ [0 reroute children from the pipeline to jail to a pipeline to jobs or college and productive lives. Strengthening parent and community responsibility; preventing teen pregnancy; building a web of faith, community and systemic supporr for at-risk children (especially health, mental health, education and child welfare system supporr); challenging zero tolerance school discipline policies and the criminalization ofchildren at younger and younger ages; and combating destructive cultural messages which porrray violence, prison and abuse ofwomen as acceptable, are all crucial components ofthis major new initiative. COF will publish a major Cradle to Prison Pipeline reporr in October 2005 incorporating the Cass-Curry investigative reporring, other national research, and the input ofan advisory group and hundreds ofyouths. • Uniting Voices for Women and Children at Home and Globally

CDF convened women faith leaders and interfaith leaders from across the country to discuss strategies for strengthening the voice of faith leaders for children and expanding faith-based models for child service and advocacy. Building a stronger faith voice for children and the poor has long been reflected in COP's 15 years of religious action work. With Washington's Episcopal Bishop John Bryson Chane, COF issued a call in 2004 for an Interfaith Witness for Justice for Children and the Poor at the Washington National Cathedral which was attended by 2,300 people and endorsed by over 200 denominations and leaders of every faith. Our annual interfaith National Observance of Children's Sabbaths® celebration took place in thousands of con­ gregations across America during the third week of October using our National Observance ofChildren's Sabbaths manual which provided litanies, prayers, facts, and sample sermons. Our goal is 17,000 Children's Sabbath services in 2005 whose theme is Putting Our Faith into Action for Children.

Uniting Powerful Women's Voices for Powerless Women and Children

COF convened powerful women leaders from every continent who agreed to establish a Global Women's Action Nerwork for Children. Co-conveners were Mary Robinson, former President ofIreland and UN Human Rights Commissioner; former U.S. Secretary of State Madeleine Albright; Judith McHale, President and CEO of Discovery Communications; Mahnaz Afkhami, President of the Women's Learning Partnership and former Iranian Secretary of Women's Affairs; and Melanne Verveer, Chair of Vital Voices. Speakers included former South African First Lady Gra~a Machel (Mrs. Nelson Mandela), World Bank Managing Oirecror Mamphela Ramphele, and UNICEF head Carol Bellamy. Reducing maternal and new­ born morrality was chosen as the nerwork's first focus with girls' education as the other top priority. The net­ work's public launch will take place in February 2006 at the Dead Sea Conference Center in Jordan. COF believes it is long past time for the voices of powerful women to join with children's advocates to raise a strong and persistent voice for powerless women and children whose fates are inextricably interrwined.

Reducing Child Poverty

We are committed to ending child poverty in the richest nation on earth by 2015. As one step towards this end, CDF mounted a comprehensive tax and benefits outreach project to help poor working families and children get tax refunds and other benefits that the law provides. Working with faith nerworks and other community partners, CDF opened over 100 Volunteer Income Tax Assistance Clinics (VITA) sites thanks to significant support from the Prudential, Freddie Mac, Marguerite Casey, and Fannie Mae Foundarions. A grant from The Robin Hood Foundation enabled COF to work with New York City employers to inform and help employees get tax refunds. More than $65 million in tax refunds resulted from COP's direct and indirect coalition work. Building on the first year results, we expanded our tax and benefits work in all ofour regional, state and local offices to reduce child poverty which helped poor working families recoup over $105 million in 2005. According to an Urban Institute report, "Iffamilies with children participated fully in government programs designed to lift them out of poverty, poverty would decline by more than 20 percent and extreme poverty by 70 percent."

~ 2 I Children's Defense Fund Educating and Engaging the Public

CDF published eight national reports to raise public awareness about the needs ofchildren and what can be done, including our annual State ofAmerica's Children@ report. The CDF Action Council, a Section 501(c)(4) organization, also published an election year action guide, A Nation and Century Defining Time: Where Is America Going? and its annual non-partisan scorecard on how well members ofCongress protect chil­ dren. CDF state offices published a number ofstate specific reports including reports warning the poor about predatory lending practices and rapid anticipation loans in conjunction with our tax refund work.

Civic Engagement • The Field Division, working with the policy divisions, mobilized and trained youths, grandparents, and a range of local advocates on specific child issues to engage in long-term, sustained national and local advocacy. This included a national "Children Can't Vote. You Can." campaign that registered 25,000 new voters with a grant from American Families United (AFU), our first ever voter registration campaign. CDF also encouraged about a dozen state GrandRallies for grandparents and other relatives raising children across the country to provide monger supports for these families. A national GrandRally in Washington, D.C., co­ sponsored with AARP, the Child Welfare League of America, Generations United, and the National Committee ofGrandparents for Children's Rights, will take place September 14, 2005.

CDF continued efforts to prevent the dismantlement of federal Head Start, child welfare, child health and other safety net protections. Over the years, when people have asked us to list our proudest accomplishment, we often reply, "helping prevent all the bad things that might have happened without our early alert system and persistent, quiet, scur work in collaboration with others." Working with many organi­ zations through coalitions CDF has established, convened or co-convened and/or participated in, we seek to retain child progress while laying the groundwork for moving forward. The bulk of our attention over the past five years has been outside the beltway.

The work of CDF's 13 state, local and regional offices is a vital part of our long-term movement building efforts. Although many perceive CDF as only or primarily a federal policy organization, for over two decades we have been increasing our state and local presence, planting seeds in target states where a majority of all children, all poor children, and all minority children live, and reaching out to key faith, women, youth and minority group leaders. Our state, regional and local offices have been laboratories to inform and implement our federal policy work and bridges for building relationships with important state and local leaders and mainstream networks. Many of these state and local leaders are invited to Haley Farm for training to give them a sense ofconnectedness to a broader purpose, movement and best practices.

2004 Publications

• The State ofAmerica 5 Children® 2004 • Say That I'm a Child ofGod: AssuringJustice and Care to Leave No Child Behind (National Observance ofChildren's Sabbaths® Manual) • Using Subsidized Guardianship to Improve Outcomes fOr Children: Key Questions to Consider • Kinship Care Resource KitfOr Community and Faith-Based Organizations •A Closer Look: Lessons from Local Initiatives fOr Children • State Developments in Child Care, Early Education, and School-Age Care 2003 • Protect Children Instead ofGuns Report 2004 •A Nation and Century Defining Time: Where Is America Going? How You Can Make a Diffirence: - An Action Guide (CDF Action Co~ncil) • The 2003 Children 5Defense FundAction Council Nonpartisan Congressional Scorecard (CDF Action Council)

2004 Annual Report I 3 JjJ Key Regional, State and Local Office Achievements

CDF-Southern Regional Office (SRO) (Mississippi, Alabama, Arkansas, Florida, Georgia, Louisiana)

CDF-SRO is the regional administrative agency and Mississippi srare lead for the Southern Rural Black Women's Initiative for Economic and Social Justice (SRBWI), funded primarily by the Ford and Marguerite Casey Foundations. Formed in 2003, SRBWI promotes the first human rights agenda in the United States aimed at eradicating historical race, class, cultural, religious and gender barriers experienced by' southern rural Black women. SRBWI operates in 77 counties in the Black Belt regions of Alabama, Southwest Georgia and the Delta of Mississippi. Alabama's state lead organization is the Federation of Community Controlled Child Care Centers of Alabama (FOCAL) and Georgia's state lead organization is the Southwest Georgia Project for Community Education. SRBWI was one of four groups selected in 2004 to co-sponsor with the National Trust for Historic Preservation a "Share Your Heritage Workshop," an important step toward building a Heritage Corridor across the targeted 77 county region to create economic and asset development opportunities through the preservation, interpretation and promotion of local heritage and culture. CDF-SRO also is the Mississippi grantee for the W. K. Kellogg Foundation-funded Supporting Partnerships to Assure Ready Kids Initiative (SPARK) which seeks to create a seamless transition into school for 1,000 vulnerable children ages 3 through the second grade in five Mississippi school districts: Mound Bayou, North Bolivar, Cleveland, Hollandale and Pearl. SPARK staff provide early childhood intervention services ro children and families and assistance to early childhood education providers and teachers which informs early childhood education policy initiatives at the federal and state levels. To advance the accessibility of quality early childhood education for every Mississippi child, CDF­ SRO served on the Financing Universal Early Care and Education in Mississippi working committee led by Sharon Lynn Kagan, Co-Direcror, National Center for Children and Families at Teachers College, Columbia University, and Richard N. Brandon, Director, Human Services Policy Center, University ofWashingron, to design and cost our a universal, quality early childhood education system in Mississippi. CDF-SRO helped organize 27 Earned Income Tax Credit (EITC) Volunteer Income Tax Assistance (VITA) sites across the southern region-in Alabama, Georgia, Mississippi, Louisiana, Florida and Arkansas. Working families were able to recover over $2.7 million in tax credit refunds. Despite a huge budget deficit, cuts to children on Medicaid or the state Children's Health Insurance Program (CHIP) were kepr off the table in Mississippi in 2004. As part of a local Robert Wood Johnson Covering Kids Coalition, CDF worked with local Hinds County, Mississippi schools to enroll more than 1,000 children in CHIP and worked with other advocates to ensure a 20 percent transfer of nearly $20 million in Temporary Assistance for Needy Families (TANF) funds for child care subsidies for children of the working poor and to assure the state match necessary to draw down all federal child care funds. CDF-SRO also suc­ cessfully fought Mississippi policy changes to increase the number ofwork hours required offull time students receiving child care assistance and worked with children and education advocates to secure the first program­ matic and financial audits ofsub-contractors responsible for issuing child care certificates.

CDF-Texas (Austin, Houston and Rio Grande Valley)

CDF-Texas spearheaded the Campaign to Restore CHIP by convening a coalition of 256 diverse organizations and 2,500 individuals dedicated to full restoration of the Texas CHIP Program. Victories included exempting college scholarships, pre-paid burial accounts and pension plans from a CHIP asset test, and preventing 126,000 children from losing coverage because of increased monthly CHIP premiums. As a result of extensive media attention, the Governor waived increased cost-sharing requirements until a more

~ 4 I Children's Defense Fund equitable program can be developed. CDF recruited 10 regional coordinators to support the Campaign to Restore CHIP; organized six state-wide press conferences to unveil the Campaign; worked with the University ofTexas School of Public Health at Houston on a tracking study to follow 100 families that lost CHIP coverage and benefits; trained over 150 community leaders to be advocates; and secured extensive media coverage and editorial endorsements in every major region ofTexas. CDF-Houston organized a six-week Back to School campaign through the Robert Wood Johnson Foundation (RW]) Covering Kids and Families Initiative. Of 2,000 national RWJ outreach events, 437 were held in the Houston area. CDF-Houston recruited new business partnerships, including Houston McDonald's Restaurants which distributed CHIP tray-liners in 260 restaurants and hosted an entollm~nt drive at 50 restaurants in one day. It organized 11 Fiesta Supermarket enrollment drives which assisted over 16,000 Latino children in applying for health coverage, and reached 200,000 children in the Houston Independent School District through a district-wide outreach and training initiative funded by the Michael and Susan Dell Foundation. Children's health outreach activities included live radio broadcasts, front page newspaper stories, and participation from hospitals, banks, and shopping malls. CDF's Rio Grande Valley office assists two of the poorest counties in the United States. It has reached over 100,000 children in seven school districts in a CHIP/Medicaid outreach effort, trained 750 school district personnel to assist with application assistance, and won the strong support of superintendents for the effort. A data collection system will be established in each district to document the insurance status of all children so that progress can be measured year to year. CDF-Texas published a major study in collaboration with the School of Rural Public Health of the Texas A & M University System Health Science Center documenting the impact and benefits of children's health insurance on a population in Mission, Texas. As one of 17 national grantees of the Robert Wood Johnson Foundation, CDF-Houston launched a two-year research study to document the access barriers for children enrolled in CHIP and Medicaid. In partnership with the University ofTexas School of Public Health at Houston, CDF interviewed parents of 300 children on CHIP and Medicaid and surveyed 45 pharmacists and providers. The report has been shared with key stakeholders, and CDF is working to create policy changes on prescriptions, cost-sharing, wait times at health clinics and other access barriers. CDF-Texas leads the Texas Early Care and Education Coalition (TECEC) with 150 member organi­ zations. TECEC drafted a 10-year long-term public policy agenda in collaboration with the James A. Baker Institute for Public Policy at Rice University. It trained over 700 community leaders in every geographic area of the state and made over 40 presentations. TECEC has actively assisted the srate in implementing a landmark statewide demonstration project to identifY ways for increased coordination among Child Care, Head Start and pre-kindergarten providers to ensure children enter school with the necessary skills to succeed. Through interfaith networks, CDF-Texas launched new faith-based efforts to strengthen family economic security and more than doubled the number ofcongregations participating in Children's Sabbaths. Using the theme, "A Texas Healthy Child Weekend for CHIP: Enroll, Renew, Restore," over 200,000 indi­ viduals were reached through pulpit and bulletin announcements, 80,000 in Houston alone. CDF-Houston also held the first annual Interfaith Luncheon for Children, recruiting more than 200 faith leaders to support tax and benefits outreach work. CDF-Texas co-chaired the Financial Literacy Task Force and coordinated three VITA sites to help families apply for EITC and other benefits.

CDF-New York (New York City and Albany)

CDF-NY's poverty reduction tax and benefits outreach partnership with the NYC EITC Coalition helped leverage more than $45 million in tax refunds for families in 2004. The Robin Hood Foundation supported CDF's work with employers to share information with employees about the EITC and Child Tax Credits. It conducted community forums in upstate New York and formed Syracuse and Utica Child

2004 Annual Report I 5 J:J Poverty/EITC coalitions. The Utica Daily newspaper, in two series, addressed the impact ofpoverty and pos­ sible solutions, including more aggressive tax and benefits outreach activities. CDF-NY successfully advocated for a new mail-in renewal system for Child Health Plus, Medicaid and Family Health Plus, significantly reducing barriers that traditionally interrupt child health insurance coverage. On average, about 50 percent of children lost coverage when families were required to come in person to complete forms at renewal time. CDF also successfully advocated for reauthorization of the state's Health Care Reform Act that funds New York's Child Health Plus and other health insurance coverage pro­ grams for low-income families, and for the expansion of quality, affordable child care programs in New York as a part of the Child Care That Works Campaign. As a consequence of the aggressive enrollment efforts and. policy reforms put forward by CDF-NY and its Child Health Now! Coalition, more than 500,000 children have been enrolled into health insurance in the past five years, resulting in a 34 percent decrease in the number ofuninsured children in New York State. CDF-NY trained almost 1,000 NYC youths (many formerly in the foster care and juvenile justice systems); operated a Freedom School in partnership with PS 188 and Bard High School/Early College for 50 culturally diverse 4th and 5th graders; and conducted a nonpartisan voter registration and education project and get-out-the-vote campaign. Hundreds of youths registered nearly 11,000 new voters who are now part ofCDF-NY's movement building activities. CDF-NY issued 115 press releases on a wide range of state specific and national child issues and authored or co-authored several state publications: Giving New Yorks Children a Fair Start in Life: Supports for Working Families, Beyond Coverage: Enhancing Access to Healthcare for Children; and In Their Own Voices: A Report on Health Care from Low-Income Adolescents in New York City. It also launched a child nutrition project and published a report to encourage greater utilization ofthe school breakfast and summer meals program.

CDF-Minnesota (Minneapolis and St. Paul)

In 2004, CDF-Minnesota launched a statewide campaign for universal health care coverage for children. The legislative initiative, "The Children's Health Security Act," was introduced in the Minnesota House and Senate. Non-partisan election materials describing the proposal were developed for candidates' use, and a statewide coalition ofmore than 30 organizations supported this groundbreaking initiative. The Minnesota CDF office partnered with AccountAbility Minnesota to support their 40 VITA (Volunteer Income Tax Assistance) sites where 9,400 low-income taxpayers claimed $10.7 million in refunds. At eight of these VITA sites, volunteers also screened families for health care eligibility. Twenty-three trainings were held throughout the state where 720 social service outreach workers and citizens learned to screen families for eligibility in seven work support programs, including health insurance, child care assistance, and tax credits. The Hennepin and Ramsey County Boards of Commissioners (Minneapolis and St. Paul) adopted pro­ Earned Income Tax Credit (EITC) and anti-Refund Anticipation Loan (RAL) resolutions and directed their staffs to increase EITC outreach with clients. CDF's primary health care outreach efforts at four pilot sites screened 7,000 households and generated 2,700 public health care applications for 4,600 adults and children. CDF produced the Annie E. Casey Foundation Minnesota KIDS COUNTreport, documenting the trends in child well-being county-by-county. Fifteen community forums educated citizens, advocates, and the media on the status ofchildren in their geographic area and trained them to become effective child advocates. Minnesota also held Freedom Schools in Minneapolis and St. Paul, held Beat the Odds events in the Twin Cities, St. Cloud and Rochester, and coordinated more than 500 Children's Sabbath services throughout the state.

CDF-California (Los Angeles and Oakland)

CDF-California released its first annual Better Choices for Children report in 2004 highlighting family

~ 6 I Children's Defense Fund stories, analyzing the cumulative impact of the Governor's proposed budget and revenue policies on children in California, and proposing better state choices and investments in children and families. As part of its 100% Campaign collaboration with Children Now and the Children's Partnership, COF-California fought for health insurance for all California children. The 100% Campaign and PICO California, a statewide faith-based organizing coalition, partnered with state legislative leaders who intro­ duced a bill to provide health coverage for all 800,000 uninsured California children. Working with a wide range ofallies, COF also helped ensure that Healthy Families (CHIP) coverage for children remained available and uncapped with immigrant children continuing to qualifY; that Medicaid coverage remained available to pregnant women and immigrants; and that critical services for disabled children, child care services for lew­ income families, and CalWorks (TANF) grants for families were protected. Fifteen years ago, COF began awarding Beat the Odds® scholarships to five Los Angeles youths and recently hosted its first California Beat the Odds alumni luncheon. Or. Phil McGraw keynoted the 2004 scholarship awards dinner. With over 300 in attendance, the event co-chairs raised more than $300,000 for scholarships and COF-California advocacy efforts. COF-California oversees two active COF Student Health SM Outreach (COF SHOUT ) programs at the University of Southern California (USC) and the University of California, Los Angeles (UCLA) and works with two Freedom Schools. With partners across the state, COF-California provided assistance to help eligible families get the EITC and the Child Tax Credit and established a pilot project in Los Angeles with CDF SHOUTand CDF SPROUT projects to link child care coverage, health insurance enrollment and EITC informationlreferral. COF also released a report with Congressman Xavier Becerra to help families avoid predatory tax preparation sites. With grassroots advocacy and coalition building, COF is engaging individuals from all walks of life through the Child Defender: A Newsletter and Call to Action from CDF-California. Endorsements for our Leave No Child Behind® movement exist from over 350 organizations. State and local legislators and leaders are engaged through Wednesdays at Home® activities, media events, and other opportunities including the annual Better Choices for Children day, the National Observance ofChildren's Sabbaths celebration, and the GrandRally for Grandparents and Other Relatives Raising Children.

CDF-Ohio (Columbus and Cleveland)

CDF-Ohio trained over 200 social workers, nurses, hospital account specialists, community leaders and families in Healthy Start Healthy Families (HSHF) to conduct health outreach and enrollment throughout Ohio. It co-chaired the Central Ohio Cover the Uninsured Week Community Forum where over 30 organizations explored challenges in Ohio's health care system and the importance ofpublic health programs like Medicaid and CHIP in preventing the problem of the uninsured from growing. New models and strategies for covering the uninsured also were explored. COF sponsored the Back to School mini-grant campaign which funded 10 Healthy Start Healthy Families outreach and enrollment projects throughout Ohio and created a data collaboration with the Ohio Oepartment of Jobs and Family Services and advocacy organizations to identify ways to share information and track Medicaid enrollment trends for children and families to better target Medicaid outreach efforts. It also began a business outreach campaign to educate human resources personnel about public health insurance programs available to employees. COF-Ohio registered 5,119 new Ohio voters; helped residents claim $925,543 in EITC and Child Tax Credit (CTC) dollars; and expanded Children's Sabbath activities in Oayton, Cleveland, Columbus and Cincinnati. The Ohio Children's Agenda, a comprehensive legislative and budget agenda covering Early _Childhood, Public Education, Child Welfare, Juvenile Justice, Child Health and Family Economic Security, was released at a Statehouse press conference on the morning ofAugust 24, 2004.

2004 Annual Report I 7 :ifJ 2004 Donors

Foundation Donors Surdna Foundation, Inc. Barr Charitable Trust Wasserman Foundation The Braeside Foundation $1,000,000 and above The Norman and Rosita Winston The Broad Foundation Anonymous Foundation, Inc. Catto Charitable Foundation W. K. Kellogg Foundation Connemara Fund $10,000 - $24,999 Margaret O. Cromwell Family Fund $500,000 - $999,999 Alexander Abraham Foundation The Daedalus Foundation Michael and Susan Dell Foundation' Altman Foundation' Horace Dawson Foundation The Ford Foundation' Amerigroup Foundation Jackson and Irene Golden Charitable • Robin Hood Foundation Ceres Foundation, Inc. Foundation The Robert Wood Johnson Foundation' Harry Chapin Foundation Heinz Family Foundation Ewing Marion Kauffman Foundation' The David H. Cogan Foundation, Inc. The Joseph Charitable Trust The Columbus Foundation Harris and Eliza Kempner Fund $100,000 - $499,999 Commonwealth Fund' The Ruth M. Knight Foundation, Inc. Aetna Foundation, Inc· William Caspar Graustein The Kurz Family Foundation AT&T Foundation Memorial Fund Maak Foundation, Inc. (Madeleine The California Endowment Hess Foundation, Inc. Albright) Annie E. Casey Foundation Henry J. Kaiser Family Foundation Milken Family Foundation The Marguerite Casey Foundation Kansas Health Foundation Elizabeth Anne Moller Revocable Trust Cleveland Foundation Mardag Foundation' Norton Family Office Fannie Mae Foundation Jean B. May Trust Peter Norton Foundation Freddie Mac Foundation Medtronic Foundation' Piersol Foundation, Inc. Hogg Foundation' The Barry and Wendy Meyer Sidney and Joanna S. Poitier Foundation Joyce Foundation Charitable Foundation The Ira M. Resnick Foundation McKnight Foundation New York Times Company Foundation' Philip W. Riskin Charitable Foundation The Prudential Foundation' The Perelman Family Foundation, Inc. Sylvia Ritzenberg Charitable Trust Charles H. Revson Foundation, Inc. Grace Jones Richardson Trust The Bella Spewack Article Fifth Trust Rockefeller Foundation' Else Sackler Foundation Streisand Foundation Sheltering Arms Foundation Vivendi Universal Foundation $50,000 - $99,999 Samuel M. and Helene K. Soref Theodore and Renee Weiler Foundation Otto Bremer Foundation' Foundation (Mr. and Mrs. Alan Safir) The Bush Foundation' Harry A. Wasserman Living Trust Myra Younker Revocable Trust The Davis Family Fund Helga B. Wolffs Revocable Living Trust Charlotte and Arthur Zitrin Foundation Knowledge Works Foundation Ziffren Brittenham Branca & Fischer Public Welfare Foundation, Inc. Foundation $500 - $999 The Riggio Foundation' The Clements Foundation, Inc. $5,000 - $9,999 Community Foundation of Middle $25,000 - $49,999 Hugh J. Anderson Foundation Tennessee, Inc. American Express Foundation The Bench Trail Fund Jack and Pauline Freeman Blue Cross Blue Shield of Minnesota Cummins Foundation Foundation, Inc. Foundation Harris Foundation S. Kann Sons Company Foundation, Inc. Filomen M. D'Agostino Foundation Kings Care Foundation Gladys Madoff Trust The George Gund Foundation' The Abe and Frances Lastfogel Nour Foundation, Inc. The Health Foundation of Greater Foundation The Omenn-Darling Family Advised Fund Cincinnati Lear Family Foundation The Deborah Oppenheimer Trust The Emma B. Howe Memorial Fund of The Pittman Family Foundation Goldie Otters Trust The Minneapolis Foundation' Inez L. Pulver Living Trust Painted Flower Fund The Leibowitz and Greenway Family The Shifting Foundation The San Francisco Foundation Charitable Foundation The Trull Foundation' Schulman/Murphy Philanthropic Fund Dorothy B. Leithman Trust United Hospital Fund' Southern Minnesota Initiative Ronald McDonald House Foundation Charitable Foundation $1,000 - $4,999 Stainman Family Foundation, Inc. Cornelia B. Mendenhall Revocable Trust The Susan A. and Donald P. Babson Roy Thompson Family Fund New York Community Trust Charitable Foundation The Diane Trombetta Foundation Ohio Children's Foundation Baltins Family Fund of The Minneapolis Wal-Mart Foundation Osteopathic Heritage Foundation Foundation Nathan H. Weiss Memorial Fund The Proctor & Gamble Fund' Claire Phillips Barnet Foundation, Inc. The Winnick Family Foundation, Inc.

• indicates 2004 payment on multi-year grants

~ 8 I Children's Defense Fund Corporate Donors Warner Bros. Entertainment, Inc. Charles Fleming Wilmer, Cutler & Pickering Jennifer Garner $50,000 and Above World Reach, Inc. Gail Garrow Anonymous Edward & Verna Gerbic The Coca-Cola Company' $500 - $999 Kevin Huvane Along Came Mary Productions, Inc. Ruth Ann Huvane $25,000 - $49,999 BD Matching Gift Program Phyllis Johnson Amgen, Inc. Clear Solutions, Inc. Ric & Suzanne Kayne Anheuser Busch Companies, Inc. Kinder Transport Association, Inc. Christoper Keyser & Susan Sprung Discovery Communications' Kingsley Bate, Ltd. Robert & Nina Kotick Enterprise Corporation of the Delta Kleinberg Lopez Lange Cuddy Thomas H. Lee & Ann Tenenbaum Hinds County Health Alliance' and Edel, LLP Mr. and Mrs. Randy Lipton • Nordstrom Lexington Financial Management David & Joan Maxwell North Country Regional Hospital Marketing & Research Resources, Inc. David & Cynthia McGrath William Morris Agency Charles E. Merrill, Jr. $10,000 - $24,999 The New York Times Company Abe & Irene Pollin Citigroup Global Markets, Inc. The Paper Trail John & Lisa Pritzker Design Cuisine Patricia Richardson General Mills, Inc. Individual Donors Richard & Nancy Daly Riordan Major League Baseball, Inc. Regina Rogers Marke Rosenthal & Lisa Roumell Scholastic, Inc. $100,000 and above Cheryl Saban The St. Paul Companies, Inc. Paul Tudor Jones Universal Music Group, Inc. Harriet Schlesinger The Walt Disney world Company $50,000 - $99,999 Lorraine Schwartz Elwyn & Jennifer Berlekamp Peter Tarnoff & Mathea Falco $5,000 - $9,999 Ryan Phillippe & Reese Witherspoon Sidney Werkman & Nancy Folger Cardinal Health, Inc. Drs. Burton & Myra Wise Carver Federal Savings Bank $25,000 - $49,999 Selim Zilkha & Mary Haley Citgo Petroleum Corporation Jeffrey Abrams & Kathleen McGrath Creative Artists Agency, Inc. Frank & Carol Biondi $1,000 - $4,999 Finkl Charities, Inc. Richard & Laura Chasin Anonymous Fox Group Leslie Cornfeld Dr. Henry J. & Ruth Aaron IBM Employee Services Center Michael & Beth Klein Henry Abrons & Li-hsia Wang Interior Music Corporation Michael Urfirer Christopher Anderson Metlife Rosalyn Anderson Toyota Motor Sales, U.s.A., Inc. $10,000 - $24,999 Valerie Ashe Anonymous Nancy Atherton $1,000 - $4,999 Martin & Dr. Kathleen Berger Mathew Atkins & Erin Corcoran 2201 Broadway Investments, LLC David & Katherine Bradley Richard Ault AT&T (Workplace Campaign) Stephen Carter & Enola Aird Ruth Ayers California Family Health Council, Inc. Beit Chaverim Jack Bender & Laura Owens Ciber, Inc. Glenn & Eva Dubin Jules Bernstein & Linda Lipsett G+J USA Publishing David & Becky Hornbeck Terry Black The Glenmeade Trust Company Peter & Judy Kovler Dr. Jeffrey W. & Julie Blake Halom House, Inc. Donald Lateiner & E. Marianne Gabel Patricia Blessing Hasbro, Inc. Maya Lin Gertrude Bock Health Plus Prepaid Health Services Katharine Merck Walter & Marilyn Booker Plan, Inc. Daniel & Brooke Neidich Paul & Erika Bourguignon Hensen, Jacobson, Teller, Hoberman, J. Michael & Patricia Solar Judith Buechner Newman, Warren, Sloane, LLP Robert F. & Ruth Ann Vagt Margaret Burchinal Hewlett-Packard Employee Charitable Bradley Whitford & Jane Kaczmarek Dr. JoAnne Burger Giving Program Kimberly Williams-Paisley John & Kim Burmeister Invedmed Associates LLC Marion Burrell Levine Museum of the New South $5,000 - $9,999 Linda Stafford Burrows Lipsitz & Ponterio, LLC Anonymous Lisle Carter & Jane Livingston Microsoft Giving Campaign Tom & Jill Barad Frank & Ruth Caruso MTV Networks Bill & Marjorie Coleman Andrew Clarkson Northrop Grumman Corporation John & Wendy Cozzi John Cohn & Dr. Jeanne Raisler Prudential Financial AP Egil & Sidney Croff Dr. Johnetta Cole Skadden, Arps, Slate, Meagher & Flom Jon & Stephanie DeVaan Dr. Henry Alfred Coleman Swindler Berlin Shereff Friedman, LLP Peter & Marian Wright Edelman Dr. James Comer

• indicates 2004 payment on multi-year grants

2004 Annual Report I 9 :/;tJ Robert Cook Robert & Miriam Knox Mary Ratcliff Emily Corry Rob Konigsberg Ed Redlich & Sarah Timberman Melissa Costello Nathan & Mary Lynn Kotz Lillian Redlich Anne Covert Ronya Kozmetsky Burton & Judy Resnick Olive Covington Alex Kurtzman & Samantha Counter Stewart Resnick Michael & Kathleen Curtin Mr. and Mrs. Herbert Kurz Violet Robinson Thomas Cuth bertson Richard & Barbara Lane Carla Rodgers Michael & Leslee Dart Robert Laughlin Dwight Rogers & M.G. Gillespie Larry David Marta Jo Lawrence Gary Ross & Allison Thomas Denise DiPasquale Melanie Lawson Michael Rothschild & Gayle Donsky Gerard & L. J. Leeds Lynn Greenberg Betsy Drake Thomas & Barbara Leggat Rhea Rubin • Patricia Eagan Tom Lehrer Arnold & Louise Sagalyn Bert & Jo Ann Eder Judith Levinson Jane Saltonstall David & Margaret Engel Judith Levitan Ellin Saltzman Stephanie Evans (Marin Community Ed & Evelyn Lieberman Elizabeth Schaaf Foundation) Dr. Jonathan M. Liff & Betty Cohen William Scheide Quinn Ezralow Damon Lindelof Rich & Liz Schiferl Karin Falencki Mr. and Mrs. Samuel Lindenbaum Stanley & Kay Schlozman Dr. Heidi Feldman Joseph Liu Daniel & Lee Schorr Stanley & Rhoda Fischer Ruth Lord John & Toni Schulman David & Marianna Fisher Robert & Elizabeth Lowe Doris Semler Meyer & Florence Frucher Catherine Lutz Margaret E. Senturia Elizabeth Fuller Carla Lynton Elizabeth Sherer Margaret Fuller Dr. John & Billie Maguire Sophia H. Shore Roy & Frieda Furman Burton & Nancy Malkiel Mace & Jan Siegel David Fury & Elin Hampton Elizabeth Malone Diane Meyer Simon Thomas Gallagher & Alice Jarcho Jonathan & Nandita Marks Matthew Slater & Faith Roessel David & Danielle Ganek Karl & Betsy Mathiasen Cris Smith & Gail Gorlitz Carol Gaumond Linda May Lloyd Snyder Leslie & Jane Gelb Reverend Patricia McClurg Reed Snyder Marian Gerecke Dr. Cassandra McLaurin Ruth Stanton Jim Gilchrist & Lynn Nichols Charles & Beth Miller Jean Stein Dr. Linda Gochfeld Chris Moore & Jeno Topping Michael & Judith Steinhardt Nancy Goroff-Whitney Jane Morningstar William Stempel & Dorothea Winifred Green William & Mary Sue Morrill Lindbeck Joseph F. & Marjorie Grinnell Katharine Myers Michael Stern & Lisa Kudrow Barbara Grodd Reg & Becky Myers Meryl Streep Dr. Michael & Mary Gross Stephen & Louisa Mygatt Nicholas & Kelly Styne Gregory & Elizabeth Grunberg Jack Nash Constance B. Swain Zachary & Sarajane Guevara Sofi & Deborah Newmyer Stephen & Nan Swid Stephen Gunther Henry Norr John & Laurie Sykes Dr. Donna Hamilton Seth Novatt & Priscilla Natkins James & Eileen Tait Valerie Harrington Peter Novick John & Marji Tate Ron Hartmann Jim O'Hara & Marla Romash Oliver Thomas Howard & Patricia Haworth Kenneth Olin Rich & Pauline Tompkins Seymour & Elizabeth Hersh Peter O'Malley Thomas & Sally Troyer Lawrence & Suzanne Hess Alberto & Ivanna Omeechevarria Daniel Tysver & Jennifer Stoos Marlene Hess Annabell Page Dr. Richard & Gail Ullman Robert & Constance Hickey Gloria Page Valerie Vanaman Coleman & Jutta Hicks Sanford & Kristen Panitch Lee Vance & Cynthia King Joseph Higdon & Ellen Sudow Walter Parkes & Laurie MacDonald Patricia Voydanoff Sara Hinckley Charles & Danica Perez Matt & Jessica Wagner Elizabeth Hirsch Dr. Richard Peters Mary Ann Barrows Wark Terry Huffington Michael & Heather Pineault Douglas & Judith Weinstock Hassan & Mouna Iken Suzanne Polen Alan Wertheimer John Johnson Ellen Polivy Louis Wiener Gadi Kaufmann William & Carol Price Irwin & Margo Winkler Robert & Nan Keohane Frederick & Jean Pugh Deborah Wright Douglas Kerr Frank & Wendy Raines Helen Wright & John Pinkering Barry Kliff Michael & Joyce Rappeport Jean Wyman

• indicates 2004 payment on multi-year grants

~ 10 I Children's Defense Fund Reverends Philip & Betty Jean Young John & Seena Clark Mr. and Mrs. Scott Gilbert Mr. and Mrs. Alfred Youngwood Jacqueline Clay Mr. and Mrs. David Goldknopf Jeffrey & Mary Zients Robert Clements Akiva & Rebecca Goldsman Joseph & Mary Clifford James & Katherine Goodman $500 - $999 Wole Coaxum Mary Goodman Anonymous Edmund & Violet Coffin Carolyn Gordon Gerald & Carol Abrams Francis & Tia Colangelo Thomas Gordon Dr. William Abrams Len & Laurinda Coleman Doyle Graham & Dr. Aglaia O'Quinn S. & Mary Adelstein Robert & Ann Rhodes Conley Mr. and Mrs. Steven Greer Joseph Albright & Marcia Kunstel Warren & Clara Copeland Stanley Griffith & Ann E. Schauffler Stuart Anderson Mr. and Mrs. Ken Copen Kim and Beth Griffith Joseph Angier Eugenie Copp Janet Grillo • Albert Arent Shirley Cornwell Helen Grove Robert & Wanda Auerbach Fred Cox Mildred Guberman Lotte Bailyn David Cramer & Susan Stodolsky Gregg H. Haifley Steven & Connie Ballmer Kim Crowley Alice Hall Arthur and Dr. Betty Bardige Michael & Patricia Curry James & Sarah Hall Mr. and Mrs. Kenneth Barna Shelley Curtis Daniel & Marcia Halperin Helen Bartee Linda Curtiss Anne Harnett Paul & LaVonne Batalden Arlene Daniels Elizabeth Harris Iona Benson Allen S. Hammond & Dr. Linda Jennifer Creighton Harris Doris Bergen Darling-Hammond Ruth Harris Julie Bergman Arliss Davis S. M. Harris Joan Berkley Mr. and Mrs. Warren Davis Roger Hatch & Joyce Baugh Weiner Berkowitz Tom & Gun Denhart Tony Hatoun & Andrea Levitt William & Dr. Paula Bernstein Mr. and Mrs. Jonathan Dolgen Robert Hauptman Doris Binda A. A. & Sue Dorskind Paul Hayes Dr. John Blanton & Kathryn Dyer Vesta Downer Jeanne Heberle Louis Blau Thomas Draper Anne Heck Dorothy Bleck Peggy Du lany Karen Herckis Gloria Bleil Carol Dulmage Dr. Howard & Doris Hiatt Karlene Bley Melinda Dutton Donald Hillard Rose Blum Ezra Edelman John Hirschi Karen Blumenthal Cynthia Edwards Carol Hittle Cynthia Boardman Kerry Edwards Nancy Hoffman Tersh & Sally Boasberg Mary Edwards Joseph & Natalie Hofheimer Dr. Halcyone Bohen John & Jennifer Eisendrath Joshua & Margo Holland Mark Borowsky Jeanne Eisenstadt Tom Holzbog & Janet Dreisen Avis Boutell Mark Eisener Susan Davis Hopkins Mr. and Mrs. Robert Bowie Robert & Debra Ekman Tim & Vivian Horan William Bradley Arthur & Lois Elias Ann Howkins Sharon Brandford Michael Elkin Ken & Jill Iscol Dorothy Brickhouse Mr. and Mrs. S. Ellsworth Mary Jackson Harry Brittenham Toby Emmerich David & Helen Jaffe Drs. Donald & Judith Broder William England Roderick Jameson David & Ann Broder Reverend Dana English Andrew Jarecki Kevin & Catherine Broderick Robert & Mary Estrin Stephen & Deborah Jencks Gretchen Buchenholz Karyn Feiner Bill Johnson Roland Buck Alyson Findling David Jones William Buffett Rich & Beverly Fink Judy Judd Bryan Burk Daniel & Tessa Fisher Matt & Colleen Kapklein Helen Burke Edward Fitz Jo Kaplan David Burt Mr. and Mrs. Joseph Freeman Rhonda Kaplan Phyllis Byers-Hetland Sophia French Carolyn Katz Katharine Cahn Mr. and Mrs. Daniel Furman Martin Katz Sarah Caplan Harvey & Alice Galper Mr. and Mrs. Edwin Kemp Elisabeth Case Victor Garber Dr. and Mrs. Thomas Kilip Patia Case Irwin Garfinkel Donald & Marie Klawiter Stockard Channing Geoffrey Garin Steven Konsker Dennis Christiansen & Kathleen Burchby Marjorie Garrard Lori Korinek -Sylvia Civin Anne Gibson Patricia Kovel-Jarboe

• indicates 2004 payment on multi-year grants

2004 Annual Report I 11 Brian & Janet Kramer Melva Peterson Dr. and Mrs. Jud Staller Robert Kruger Mr. and Mrs. Jeff Pinkner Guss & Gwendolyn Stepp Todd & Dara La Porte Constance Gayl Pious Sandra Stern Mr. and Mrs. Bruce Lanphear Ginny Piuardi Elliot Stern Elliot & Frances Lehman Susan Plotkin Peter Sternlight Terry & Margaret Lenzer Martin Poole Phyllis Stevens Patricia Leopold Doreen Quinn Alan Stopper & Janis Zloto Joan Schnitzer Levy Tony & Judy Raphael Myles & Lise Striar Robin Lightstone Amelie Ratliff Fallon Sutton Holly Link David & Jennifer Rea Cheryl Symmes George & Bethany Little Shirley Reece Charles Talcott Kari Lizer Mr. and Mrs. Dale Reppert William & Villabeth Taylor • Robert Loftfield Amy Franklin Richter Peter and Laura Terpenning Roger Lowenstein & Barbara Gordon Don & Barbara Rickles Albertha Toppins Grace Lyu-Volckhausen Ron & Iva Rifkin Janis Torrey Linda Macklowe Tim Robbins & Susan Saran don Bruce & Emily Toth Mia Maestro Kimberly Robinson Elsie Van Buren Gerald & Madeline Malovany Dr. Sally S. Robinson Vasundara Varadan Mr. and Mrs. Paul Mangelsdorf Sarah Anne Robinson Polly Victor Robert & Theresa Manning Dr. Pamela Roby Alvin von Auw Anne Manuel Dr. Linda Rock Andrew & Elizabeth Waisler William & Kaye Marks Martin Rodgers Mr. and Mrs. Roy Walker Dr. Hermine Marshall John Rodgers Rufus Wanning Margaret Martin Frank & Jinx Roosevelt Mr. and Mrs. Richard Watkins John & Connie Marty Barbara Rosen Janet Weinstein Ethel Massey Carla Zingarelli Rosenlicht Kevin Weisman Roz Mazer & David Holzworth Ann Rosewater Howard & Margaret Weitzman Deborah McDonald Charles & Joan Ross Adam Wellman Nellie McKay Susan Russell Janice Welsch Gary Meisel Bruce Saito Thomas & Ellie Wertheimer Mary Metz Alvin & Harriet Saperstein Zoe Caldwell Whitehead Dr. Ruben Meyer Mr. and Mrs. Homer Schaaf Donna Whitt Gertrude Michaelson Maria Saenz Edith Wiener Alice Miller Bob & Alice Schacht Emily Williams Reverend Robert Miller Aaron Schecter Dr. Dorothy Windhorst Sondra Miller-Shegog Dr. and Mrs. Barton Schmitt Garen Wintemute Andrew Milstein & Melissa Hyman Leonard Schneider W. A. & Cory Wood Robin Moody Maxine Sclar Miriam Wosk Rick Morgan & Arlene Rodenbeck Susan Hanway Scott Rosalyn Zakheim & Gayle Dukelow Kenneth & Katherine Mountcastle Eleanor Searle John & Lucia Mudd Nina Segre Organizations and Religious Roy & Alyce Mullen Eleanor Sellstron Network Donors Richard & Mary Murname Robert Serafin Barbara Murphy Esther Shay $100,000 and above Benjamin Neilson Dr. Barbara Shelton America's Families United Sheila Nicklas Thomas & Denise Sherman Carol Nyholm Virginia Shiller Richard & Gail Odgers David & Marybeth Shinn $50,000 - $99,999 Hortense Oldfather Bernard & Edith shoor Children's Charities of America Deborah Oppenheimer Jerry & Cecile Shore New York Academy of Medicine Ernest & Mary Oppman Thomas Sibley Rutgers University Mr. and Mrs. Eric Orlin Marcia Sigler Jane Oski Sandra Simon $25,000 - $49,999 Elizabeth Osthimer Janet Singer Center for Community Partnerships in Mary Palmer Paul Slager Child Welfare of the Center for the Sarah Parlow Mr. and Mrs. Brewster Smith Study of Social Policy Dr. Alice Passer Dr. Marilyn Smith Mark Pedowitz Marion Smith $10,000 - $24,999 Barry Pelzner Michael Smith & Diane Renfroe AARP Robert & Victoria Pennoyer Susan Snyder United Way of New York City James Perrin Eugene & Peggy Somoza Windsor Village United Methodist Joel Perwin Nancy Spears Church

• indicates 2004 payment on multi-year grants

~ 12 I Children's Defense Fund Children's Defense Fund and Children's Defense Fund Action Council Consolidated Financial Statements For the year ended December 31, 2004 • (with Summarized Financial Information for the year ended December 31, 2003)

Table of Contents

Page(s)

Report of Independent Auditors 1

Consolidated Statement of Financial Position 2

Consolidated Statement of Activities 3

Consolidated Statement of Cash Flows 4

Notes to Consolidated Financial Statements 5-14

Supplemental Information:

Consolidating Statement ofFinancial Position - Operating 14

Consolidating Statement ofUnrestricted Activities ;. 15 PricewaterhouseCoopers LLP 1751 Pinnacle Drive McLean VA 22102-3811 Telephone (703) 918 3000 Facsimile (703) 918 3100

Report of Independent Auditors

To the Board ofDirectors of The Children's Defense Fund And Children's Defense Fund Action Council:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of activities and of cash flows present fairly, in all material respects, the financial position of the Children's Defense Fund and Children's Defense Fund Action Council (consolidated 'CDF') at December 31, 2004, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These fmancial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The prior year summarized comparative information has been devised from Children's Defense Fund's 2003 financial statements, and in our report dated April 30, 2004, we expressed an unqualified opinion on those financial statements. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall fmancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 14 through 15 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

March 24, 2005 Children's Defense Fund and Children's Defense Fund Adion Council Consolidated Statement of Financial Position As of December 31, 2004 (with Summarized Financial Information as of December 31, 2003)

OPERATING ENDOWMENT Total 2004 Total 2001

ASSETS

Cash and Cash Equivalents $ 1,583,254 $ $ 1,583,254 $ 1,729,711 Investments 76,386 29,420,460 29,496,846 30,574,515 Restricted Cash 563,000 563,000 563,000 Grants and Pledges Receivable (Net) 10,560,967 10,560,967 9,800,204 Property, Plant & Equipment (Net) 14,711,081 14,711,081 14,488,701 Other Assets 642,773 15,000 657,773 793,507

TOTAL ASSETS 27,574,461 29,998,460 57,572,921 57,949,638

LIABILITIES

Accounts Payable and Accrued Expenses 1,000,609 1,000,609 1,248,480 Bonds Payable 7,515,000 7,515,000 7,760,000

TOTAL LIABILITIES 8,515,609 8,515,609 9,008,480

NET ASSETS Unrestricted Children's Defense Fund 4,882,678 20,440,766 25,323,444 26,016,949 Children's Defense Fund Action Council 357,678 357,678 616,260 Total Unrestricted 5,240,356 20,440,766 25,681,122 26,633,209

Temporarily Restricted 13,818,496 2,451,094 16,269,590 15,201,349 Permanently Restricted 7,106,600 7,106,600 7,106,600

TOTAL NET ASSETS 19,058,852 29,998,460 49,057,312 48,941,158

TOTAL LIABILITIES AND NET ASSETS $ 27,574,461 $ 29,998,460 $ 57,572,921 $ 57,949,638

The accompanyingnotes are an integralpartifthese consolidatedfinancialstatements.

2 Children's Defense Fund and Children's Defense Fund Adion Council Consolidated Statement of Adivities For the year ended December 31, 2004 (with Summarized Financial Information as of December 31, 2003)

Temporarily Pennanently Total Total Unrestricted Restricted Restricted 2004 2003 REVENUE, GAINS AND OTHER SUPPORT Contributions and donations Foundations and corporations $ 736,572 $ 11,781,746 $ $ 12,518,318 $ 18,201,929 • Individuals 2,517,605 2,517,605 3,175,033 Organizations and groups 180,725 180,725 292,666

Other Sales of publications and merchandise 120,497 120,497 179,471 National conference 88,995 Special events 1,059,783 1,059,783 1,630,445 Training fees 502,046 502,046 512,879 Miscellaneous 224,400 224,400 309,048

Investment income Endowment Interest and dividends 506,975 138,500 645,475 706,770 Realized and unreaiized gains, net of 1,849,759 505,335 2,355,094 3,314,396 manager fees Operating 14,019 14,019 16,194

Net assets released from restrictions 11,357,340 (11,357,340)

Total Revenue 19,069,721 1,068,241 20,137,962 28,427,826

EXPENSES Program Services Leadership development and state and 3,787,688 3,787,688 3,404,467 community capacity building

Policy and program development and 8,763,561 8,763,561 9,584,505 implementation Public education, media campaigns, Intemet 1,389,745 1,389,745 1,370,767 outreach and publications Black Community Crusade for Children 3,219,958 3,219,958 3,038,458

Total Program Services 17,160,952 17,160,952 17,398,197

Supporting Services General and administrative 1,884,615 1,884,615 1,899,950 Fundraising 976,241 976,241 1,494,149

Total Supporting Services 2,860,856 2,860,856 3,394,099

Total Expenses 20,021,808 20,021,808 20,792,296

Change in Net Assets (952,087) 1,068,241 116,154 7,635,530

Beginning Net Assets 26,633,209 15,201,349 7,106,600 48,941,158 41,305,628

Ending Net Assets $ 25,681,122 $ 16,269,590 $ 7,106,600 $ 49,057,312 $ 48,941,158

The accompanyingnotes are an integralpartifthese consolidatedfinancialstatements.

J Children's Defense Fund and Children's Defense Fund Adion Council Consolidated Statement of Cash Flows For the year ended December 31, 1004 (with Summarized Financial Information as of December 31, 1003)

2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 116,154 $ 7,635,530 Adjustment to reconcile change in net assets to net cash used in operating activities Depreciation and amortization 700,616 643,854' Realized and unrealized gain on investments (2,681,837) (3,644,114) Change in assets and liabilities: Grants and pledges receivables (net) (760,763) (4,932,482) Other assets 135,734 59,534 Accounts payable and accrued expenses (247,871 ) 2,542

NET CASH USED IN OPERATING ACTIVITIES (2,737,967) (235,136)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of investments, net 16,847,485 5,641,142 Purchases of investments (13,087,979) (3,663,947) Purchases of property and equipment (922,996) (2,174,234)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 2,836,510 (197,039)

CASH FLOWS FROM FINANCING ACTIVITIES Repayments of bonds payable (245,000) (235,000)

NET CASH USED IN FINANCING ACTIVITIES (245,000) (235,000)

NET DECREASE IN CASH AND CASH EQUIVALENTS (146,457) (667,175)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,729,711 2,396,886

CASH AND CASH EQUIVALENTS, END OF YEAR $ 1,583,254 $ 1,729,711

SUPPLEMENT CASH FLOW INFORMATION Actual cash payments of interest $ 213,171 $ 194,341

NON CASH INVESTING ACTIVITIES Gifts of Securities $ 73,154 $ 72,890

The accompanyingnotes are an integralpartifthese consolidatedfinancialstatements.

4 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

1. Organization

The Children's Defense Fund is a private, nonprofit corporation that began in 1973. The mission of the Children's Defense Fund is to Leave No Child Behind and to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start, and a Moral Start in life and • successful passage to adulthood with the help of caring families and communities. The Children's Defense Fund exists to provide a strong, effective voice for all the children of America who cannot vote, lobby, or speak for themselves. The Children's Defense Fund pays particular attention to the needs of poor and minority children and those with disabilities. The Children's Defense Fund educates the nation about the needs of children and encourages preventive investment before they get sick or into trouble, drop out of school, or suffer family breakdown. The Children's Defense Fund is supported primarily by foundation and corporate grants and individual donations. The Children's Defense Fund has never taken government funds.

The Children's Defense Fund Action Council shares the Children's Defense Fund's mission. It was organized to conduct lobbying activities and grassroots mobilization in advocating for legislation that meets the needs of children. The organizations are under common management, with the Children's Defense Fund staff performing duties of the Children's Defense Fund Action Council.

2. Summary of Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements include the accounts of the Children's Defense Fund and the Children's Defense Fund Action Council (collectively referred to as CDF). Because the organizations are under common management, they have been consolidated as required under accounting principles generally accepted in the United States of America. All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Accounting

The consolidated financial statements have been prepared on the accrual basis ofaccounting, which is in accordance with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

CDF considers demand deposits, money market funds and commercial paper with original maturities of three months or less as cash and cash equivalents. Uninvested cash held in certain endowment investment accounts are considered investments as such amounts are not to be used for general operating purposes. CDF maintains a legal right of offset with certain financial institutions, allowing any potential overdrafts to be offset with funds from other accounts held at the same institution

5 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

Investments

Investments are comprised of common and preferred stock, money market funds, fixed income funds, real estate, and equity shares of limited partnerships. Common and preferred stocks, money market funds, real estate, and fixed income funds are carried at fair value based on quoted market prices. Investments in limited partnerships are carried at the value• determined by applying the value of a partnership unit to the number of partnership units held. The value of a partnership unit is determined by the general partner based upon the fair market value ofthe partnership's capital.

Investment earnings, including net gains or losses, are accounted for in the applicable net assets classification based upon any donor- imposed restrictions.

Property. Plant. and Equipment

Property, equipment, and intangible assets are stated at cost and are depreciated using the straight-line method over the estimated useful lives ofthe assets as follows:

Buildings 30 years Building improvements 5 to 30 years Furniture, equipment and software 2 to 10 years

Expenditures for major repairs and improvements are capitalized. Upon the retirement or disposal of an asset, the cost and accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in revenue or expenses.

Intana:ible Assets

The Children's Defense Fund capitalizes expenses related to trademarks. These expenses are amortized over a period of ten years. Intangible assets are included with "Other Assets" on the Statement ofFinancial Position.

Net Assets

Unrestricted net assets represent resources that are not restricted, either temporarily or permanently, by donor- imposed stipulations. They are available for support of all organizational operations and services.

Temporarily restricted net assets represent gifts and other assets whose use is limited by donor- imposed stipulations. These restrictions are temporary in that they either expire by the passage of time or by the fulfillment of certain actions of CDF pursuant to those stipulations.

6 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

Permanently restricted net assets represent gifts of cash and other assets that are received with donor stipulations requiring that the original gift amount be held in perpetuity and only the earnings be used for the purposes designated by the donor, ifany.

Endowment Fund • CDF has established an endowment fund to account for gifts which are required by donors to be held in perpetuity and to account for internally designated endowment funds. The gifts, grants, contributions, and investment income of the endowment fund are recorded as either unrestricted, temporarily restricted, or permanently restricted revenue and support, depending on the restrictions imposed by the donors, if any. All internally designated endowment funds and related income are classified as unrestricted. The endowment fund is managed according to the guidelines and policies established by CDF's investment committee and approved by the Board ofDirectors.

Revenue Reco.:nition

Contributions, including unconditional promises to give, are recognized when received. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Contributions that are restricted by the donor for a specific time or purpose are reported as temporarily or permanently restricted contributions based on the nature of the restriction. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose of the restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the consolidated statement of activities as net assets released from restrictions. Conditional promises to give are not included as support until the conditions are substantially met.

Allocation of Functional Expenses

The costs of providing the various programs and other activities have been summarized in the accompanying consolidated statement of activities. Costs which cannot be specifically identified with a particular function and which benefit more than one functional category are allocated based on either the portion of time expended by the staff on the various functions, the square footage of space assigned to each division or the average number of people in the division.

Concentration of Credit Risk

Financial instruments that potentially subject CDF to concentrations of credit risk consist of deposits in banks and investments in excess of the Federal Deposit Insurance Corporation limits, investments in limited partnerships, and grants and pledges receivable. As of December 31,2004 and 2003, approximately $1,549,575 and $1,111,409, respectively, were deposited in banks in excess of the federal deposit insurance limit. CDF has not experienced any credit losses on these fmancial instruments in past years.

7 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

Concentration of PledKes Receivable and Foundation Revenue Risk

Four of receivables in CDF's Pledges Receivable balance comprise 70% of this balance. Total Foundation Revenue includes three grants constituting 53% of this balance. • ProKram Services Definitions

Leadership Development and State and Community Capacity Building expenses relate to child advocacy services to children and public education, technical assistance and information on children's needs and solutions to religious congregations, local leaders, service providers, child advocates, and others.

Policy and Program Development and Implementation expenses represent costs associated with the collection and analysis of data and analysis of problems of children, private and governmental health, family income, teen pregnancy prevention, childcare, child protection, and violence prevention.

Public Education, Media Campaigns, Internet Outreach and Publications expenses are related to external communications and publications.

Black Community Crusade for ChildretiID (BCCe) expenses represent those that seek to weave and reweave the rich fabric of community that historically has been the cornerstone of the healthy development of Black children; tap into and strengthen the strong Black community tradition of self- help; rebuild the bridges between generations and between the Black middle class and poor; assist and galvanize current Black leadership around specific goals for ALL children; and identify, train, nurture, link, and empower a new generation of effective Black servant-leaders younger than 30.

Commitments and ContinKencies

CDF entered into an investment agreement on December 14, 2001 with a real estate partnership limited liability company committing up to $3 million over the life of the company through December 31, 2016. As of December 31, 2004 and 2003, CDF has invested $1,578,385 and $628,431, respectively. If CDF were to fail to make a payment in accordance with the terms of the agreement, CDF would forfeit, at a minimum, 25% of its investment. As of December 31, 2004, CDF has made all payments in accordance with the terms ofthe agreement. CDF anticipates having the ability to continue capital contributions as required by the real estate commitment.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

8 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 1004 and 1003

3. Restrided Cash

Effective October 1, 2002, CDF is required to maintain a reserve demand deposit account with a minimum balance of $563,000 in accordance with certain debt covenants. Earnings on the account are not restricted for purposes ofthe debt covenant. See note 7. •

4. Grants and Pledges Receivable, Net

As of December 31, 2004 and 2003, CDF has received the following multi-year grant commitments: 2004 2003 Due in less than one year $ 4,626,163 $ 5,032,536 Due in one to five ycars 4,792,629 5,013,346 Due in six to ten years 1,627,956 Total grants and pledges receivable, gross 11,046,748 10,045,882 Less discounts on pledges receivable (485,781) (245,678) Total grants and pledges receivable, net $ 10.560,967 $ ===9;,;;,8=0...0,=20=4

In 2004, amounts due in more than one year are discounted at rates ranging from 2.33% ­ 2.83%, and amounts due in six to ten years are discounted at 2.32%. In 2003 amounts due in one to five years were discounted at 2.97%. CDF has determined that an allowance for uncollectible pledges is unnecessary.

5. Investments

Investments as ofDecember 31, 2004 and 2003 consist ofthe following: 2004 2003 Market Market Cost Value Value

Endowment

Money market funds $ 105,424 $ 105,424 $ 843,719 Reserve demand deposit 571,688 571,688 568,461 Common and preferred stocks, net 9,667,253 13,007,953 13,235,831 Fixed income funds 5,246,292 5,370,522 7,963,157 Real estate 2,703,404 2,773,368 628,431 Limited partnerships - equity and fixed income 5,900,616 8,154,505 7,708,293 Total Endowment 24,194,677 29,983,460 30,947,892

2004 2003 Market Market Cost Value Value Operating

Money market funds 127,428 Common stocks 72,791 76,386 62,195 Total Operating 72,791 76,386 189,623

Total investments $ 24,267,468 $ 30059 846 =$!f:==3~1",1=f,37==,5~1=f,5

9 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 11, 2004 and 2001

The $563,000 restricted cash is included in tre above investment balance in the Reserve demand deposit line. The limited partnerships in which CDF invests consist ofa portfolio of domestic and foreign securities, including stocks, bonds, currencies, futures contracts, forward contracts, options, swaps, real estate and other commodity interests, as well as • securities and options contracts sold short, but not yet purchased. CDF invests in these partnerships with the principal objective of achieving maximum capital appreciation of the endowment fund.

Net endowment investment earnings consist of the following for the year ended December 31, 2004 and 2003 :

2004 2003 Temporarily Umestricted Restricted Total

Interest and dividends $ 506,975 $ 138,500 $ 645,475 $ 706,770 Net realized and unrealized gains 2,105,714 575,259 2,680,973 3,641,182 Management fees (255,955) (69,924) (325,879) (326,786)

Total endowment investment earnings $ 2,356,734 $ 643,835 $ 3,000,569 ,;;;,$=~4,;,;:,0;;;,2.;=I';;,;I66;;;;

6. Property, Plant, and Equipment

Property and equipment as ofDecember 31, 2004 and 2003 consist of the following:

2004 2003 Headquarters and State and Local Offices Haley Farm Total Total

Land $ 1,984,718 $ 592,874 $ 2,577,592 $ 2,577,592 Buildings and improvements 12,841,388 5,057,892 17,899,280 17,450,98C Furniture, equipment and software 3,032,166 589,154 3,621,320 3,147,408 Total property and equipment 17,858,272 6,239,920 24,098,192 23,175,98C

Less: accumulated depreciation (8,136,883) (1,250,228) (9,387,111 ) (8,687,279) Net property and equipment $ 9,721,389 $ 4,989,692 $ 14,711,081 $ 14,488,701

Depreciation expense for the year ended December 31, 2004 and 2003 was $699,832 and $643,070, respectively.

7. Bonds Payable

In April 1997, CDF issued variable rate demand bonds (the Bonds) ill the amount of $9,000,000, as follows:

$7,500,000 of Tax-exempt Variable RatelFixed Rate Demand Bonds issued through the District ofColumbia which provide for scheduled principal payments every April

/0 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 11, 2004 and 2001

1 commencing in 1998 in the amount of $150,000, increasing to a final scheduled payment of$51 0,000 in 2022.

$1,500,000 Taxable Variable Rate/Fixed Rate Demand Bonds which provide for schedule principal payments on April 1, conunencing in 1998 in the scheduled • amount of $30,000, increasing to a final scheduled payment of $120,000 in 2022.

The interest rates vary weekly and the Bonds are convertible to fixed interest rates for both the taxable and tax-exempt bonds. The interest rates at December 31, 2004 for the tax­ exempt and taxable bonds were 2.03% and 2.56% respectively. The interest rates for December 31, 2003 for the tax-exempt and taxable bonds were 1.33% am 1.29% respectively. Bond interest expense for 2004 and 2003 were $101,869 and $103,985 respectively.

Land, building, furniture, equipment and improvements at CDF's Washington, DC headquarters are pledged as collateral. In order to provide enhanced security and liquidity for the weekly remarketing of the bonds, CDF entered into letters of credit with a bank, which expire in 2005. Under the terms of the letters of credit, the bank is obligated to lend funds to CDF in amounts sufficient to pay the purchase price ofany bonds tendered.

CDF is subject to various debt covenants including maintaining a quarterly cash flow to debt service ratio of not less than 1.25 to 1.00 as defined in the debt agreements. CDF did not meet the cash flow to debt service ratio for the quarter ending March 31, 2003, but did meet the covenant requirements for subsequent quarters ending December 31, 2004. CDF obtained a bank waiver for the above debt covenant violation Additional covenants which were met by CDF include maintaining an unrestricted net asset balance of $6,000,000; maintaining a reserve demand deposit account with a minimum balance $563,000 (effective October 1, 2002); and maintaining unencumbered restricted cash and/or marketable securities in the aggregate amount ofat least $1 ,000,000 (effective December 31, 2002).

As ofDecember 31, 2004, the aggregate schedule principal maturities on the Bonds over the next five years and thereafter are as follows:

2005 $ 255,000 2006 265,000 2007 275,000 2008 300,000 2009 315,000 Thereafter 6,105,000 Total bonds payable $ 7,515,000

CDF believes that the book values of the tax-exempt and taxable bonds approximate fair value.

Jl Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

8. Temporarily Restrided Net Assets

The consolidated temporarily restricted net assets as of December 31, 2004 and 2003, respectively, are available for the following programs or purposes: • 2004 2003 Operating: Policy and program development and implementation $ 5,138,854 $ 5,834,276 Black Community Crusade for Children 3,956,965 5,394,971 Leadership development and state and community capacity building 4,567,546 1,533,656 Public education, media campaigns, Internet outreach and publications 95,131 Time restricted for use ill future periods 60,000 92,569 Total operating 13,818,496 12,855,472

Endowment: Policy and program development and implementation 470,308 443,809 Black Community Crusade for Children 125,000 143,988 Leadership development and state and community capacity building 377,067 400,898 Public education, media campaigns, Internet outreach and publications 1,478,719 1,357,182 Total endowment 2,451,094 2,345,877 Total temporarily restricted net assets $ 16,269,590 $ 15,201,349

9. Permanently Restrided Net Assets

In accordance with donor stipulations, permanently restricted net assets are held (and invested) in perpetuity. Income earned on permanently restricted net assets as of December 31,2004 and 2003, respectively, is to be used as follows:

2004 2003 Endowment: Black Community Crusade for Children $ 4,606,600 $ 4,606,600 Public education, mcdia campaigns, Internet outreach and publications 2,500,000 2,500,000 Total permanently restricted net assets $ 7, 106,600 ;;.$=..;7,,;;'I;,;O;;f6,;;,;60;,;0

10. Release from Restridions

Donor restrictions met were as follows for the years ended December 31 :

2004 2003

Policy and program development and implementation $ 5,759,279 $ 7,283,087 Black Community Crusade for Children 2,509,845 2,347,438 Leadership development and state and community capacity building 2,658,471 3,985,216 Public education, media campaigns, Internet outreach and publications 394,745 408,096 Time and other 35,000 334,869 Total release from restrictions ~$=~=:=;,:,o,;;.;,;;;11,357,340 $ 14,358,706

12 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

11. Retirement Plan

Employees of CDF partIcIpate in a defined contribution plan under Section 403(b) of the Internal Revenue Code, which covers all employees who have completed six months of service and have attained the age of 21. Contributions to the plan are based on percentages of the. annual salary of each participating employee ranging from 5% to 7% based upon the employee's length of service. Employees are fully vested after two years of employment. Pension expense totaled $353,415 and $398,561 for the years ended December 31,2004 and 2003 respectively.

12. Leases

CDF is obligated under various noncancelable operating lease agreements for office facilities expiring at various dates through 2011. Rent expense for office space for the year ended December 31, 2004 and 2003 was $:1.71,639 and $432,519, respectively. As of December 31, 2004, the future minimum lease payments under operating leases with initial or remaining noncancelable lease terms in excess of one year are:

Years ending December 31, 2005 $ 299,708 2006 222,920 2007 151,349 2008 42,271 Thereafter 126,684 Total minimum lease payments $ 842,932

13. Related Parties

The Children's Defense Fund has a contractual agreement with an organization that is run by a member of CDF's Board of Directors. This organization provides services to support CDF's work in Alabama, Georgia and Mississippi.

The CDF Marlboro County Office in South Carolina leases office space, for the nominal rate of $1 per year, in a home that is owned by CDF's Founder.

14. Income Taxes

Children's Defense Fund is a public charity exempt from federal income tax under section 50l(c)(3) of the Internal Revenue Code. Children's Defense Fund Action Council is a social welfare organization exempt from federal income tax under section 501(c)(4) of the Internal Revenue Code. However, Children's Defense Fund and Children's Defense Fund Action Council are subject to federal income tax on unrelated business taxable income. No provision for income taxes has been made in the accompanying consolidated financial statements for the year ended December 31, 2004 and 2003, as there was no significant unrelated business taxable mcome.

13 Children's Defense Fund and Children's Defense Fund Adion Council Notes to Consolidated Financial Statements For the years ended December 31, 2004 and 2003

15. Reclassifications

Certain amounts in the financial statements for the year ended December 31, 2003 have been reclassified to conform to the 2004 presentation. •

SUPPLEMENTAL INFORMATION

Children's Defense Fund and Children's Defense Fund Adion Council Consolidating Statement of Financial Position - Operating As of December 31, 2004 (with Summarized Financial Information as of December 31, 2003)

Children's Defense Children's Defense Total 2004 Total 2003 Fund Operating Fund Action Council

ASSETS

Cash and Cash Equivalents $ 1,564,087 $ 19,167 $ 1,583,254 $ 1,729,711 Intercompany Loan (334,618) 334,618 Investments 76,386 76,386 189,623 Grants and Pledges Receivable 10,560,967 10,560,967 9,800,204 Property, Plant, and Equipment (Net) 14,711,081 14,711,081 14,491,836 Other Assets 625,556 17,217 642,773 790,372

TOTAL ASSETS 27,203,459 371,002 27,574,461 27,001,746

LIABILITIES

Accounts Payable and Accrued Expenses 987,285 13,324 1,000,609 1,248,480 Bonds Payable 7,515,000 7,515,000 7,760,000

TOTAL LIABILITIES 8,502,285 13,324 8,515,609 9,008,480

NET ASSETS Unrestricted Children's Defense Fund 4,882,678 4,882,678 4,521,534 Children's Defense Fund Action Council 357,678 357,678 616,260

Total Unrestricted 4,882,678 357,678 5,240,356 5,137,794

Temporarily Restricted 13,818,496 13,818,496 12,855,472

Permanently Restricted

TOTAL NET ASSETS 18,701,174 357,678 19,058,852 17,993,266

TOTAL LIABILITIES AND NET ASSETS $ 27,203,459 $ 371,002 $ 27,574,461 $ 27,001,746

14 Children's Defense Fund and Children's Defense Fund Adion Council Consolidating Statement of Unrestrided Adivities For the year ended December 31, 2004 _(with Summarized Financial Information as of December 31, 2003)

Children's Defense Children's Defense 2004 Total 2003 Total Fund Fund Action Council

REVENUE, GAINS AND OTHER SUPPORT Contributions and donations • Foundations and corporations $ 736,572 $ $ 736,572 $ 1,342,139 Individuals 2,054,349 463,256 2,517,605 3,175,033 Organizations and groups 179,975 750 180,725 292,666

Other Sales of publications and merchandise 120,497 120,497 179,471 National conference 88,995 Special events 1,059,783 1,059,783 1,630,445 Training fees 502,046 502,046 512,879 Miscellaneous 224,400 224,400 309,048

Investment income Endowment Interest and dividends 506,975 506,975 607,068 Realized and unrealized gains 1,849,759 1,849,759 2,846,864 Operating 13,816 203 14,019 16,194

Net assets released from restrictions 11,357,340 11,357,340 14,358,706

Total Revenue 18,605,512 464,209 19,069,721 25,359,508

EXPENSES Program Services Leadership development and state and 3,787,104 584 3,787,688 3,404,467 community capacity bUilding Policy and program development and 8,736,279 27,282 8,763,561 9,584,505 implementation Public education, media campaigns, 1,026,210 363,535 1,389,745 1,370,767 Intemet outreach and publications Black Community Crusade for Children 3,219,450 508 3,219,958 3,038,458

Total Program Services 16,769,043 391,909 17,160,952 17,398,197

Supporting Services General and administrative 1,725,853 158,762 1,884,615 1,899,950 Fundraising 804,121 172,120 976,241 1,494,149

Total Supporting Services 2,529,974 330,882 2,860,856 3,394,099

Total Expenses 19,299,017 722,791 20,021,808 20,792,296

Change in Net Assets (693,505) (258,582) (952,087) 4,567,212

Beginning Net Assets 26,016,949 616,260 26,633,209 22,065,997

Ending Net Assets $ 25,323,444 $ 357,678 $ 25,681,122 $ 26,633,209

15 Children's Defense Fund and Children's Defense Fund Adion Council Consolidating Statement of Unrestrided Adivities For the year ended December 31, 2004 _(with Summarized Financial Information as of December 31, 2003)

Children's Defense Children's Defense 2004 Total 2003 Total Fund Fund Action Council

REVENUE, GAINS AND OTHER SUPPORT Contributions and donations • Foundations and corporations $ 736,572 $ $ 736,572 $ 1,342,139 Individuals 2,054,349 463,256 2,517,605 3,175,033 Organizations and groups 179,975 750 180,725 292,666

Other Sales of publications and merchandise 120,497 120,497 179,471 National conference 88,995 Special events 1,059,783 1,059,783 1,630,445 Training fees 502,046 502,046 512,879 Miscellaneous 224,400 224,400 309,048

investment income Endowment Interest and dividends 506,975 506,975 607,068 Realized and unrealized gains 1,849,759 1,849,759 2,846,864 Operating 13,816 203 14,019 16,194

Net assets released from restrictions 11,357,340 11,357,340 14,358,706

Total Revenue 18,605,512 464,209 19,069,721 25,359,508

EXPENSES Program Services Leadership development and state and 3,787,104 584 3,787,688 3,404,467 community capacity bUilding Policy and program development and 8,736,279 27,282 8,763,561 9,584,505 implementation Public education, media campaigns, 1,026,210 363,535 1,389,745 1,370,767 Intemet outreach and publications Black Community Crusade for Children 3,219,450 508 3,219,958 3,038,458

Total Program Services 16,769,043 391,909 17,160,952 17,398,197

Supporting Services General and administrative 1,725,853 158,762 1,884,615 1,899,950 Fundraising 804,121 172,120 976,241 1,494,149

Total Supporting Services 2,529,974 330,882 2,860,856 3,394,099

Total Expenses 19,299,017 722,791 20,021,808 20,792,296

Change in Net Assets (693,505) (258,582) (952,087) 4,567,212

Beginning Net Assets 26,016,949 616,260 26,633,209 22,065,997

Ending Net Assets $ 25,323,444 $ 357,678 $ 25,681,122 $ 26,633,209

15 CDF Regional, State and Local Offices

Califomia (Los Angeles) Ohio (Cleveland) 3655 South Grand Avenue Tel: (216) 952-7846 Suite 270 Los Angeles, CA 90007 South Carolina Tel: (21 3) 749-8787 117 Cheraw Street Fax: (213) 749-4119 Bennettsville, SC 29512 • www.cdfca.org Tel: (843) 479-5310 Fax: (843) 479-0605 Califomia (Oakland) 2201 Broadway Southem Regional Office Suite 705 (Mississippi, Alabama, Arkansas, Oakland, CA 94610 Florida, Georgia, Louisiana) Tel: (510) 663-3224 P. O. Box 11437 Fax: (510) 663-1783 Jackson, MS 39283 www.cdfca.org Tel: (601) 321-1966 Fax: (601) 321-8736 Minnesota www.cdf-sro.org 200 University Avenue West Suite 210 Tennessee St. Paul, MN 55103 CDF Haley Farm Spiritual Renewal and Tel: (651) 227-6121 Leadership Development Center Fax: (651) 227-2553 P.O. Box 840 www.cdf-mn.org Clinton, TN 37717 Tel: (865) 457-6466 New York (New York City) Fax: (865) 457-6464 420 Lexington Avenue Texas (Austin) Suite 655 316 West 12 th Street New York, NY 10170 Suite 105 Tel: (212) 697-2323 Austin, TX 78701 Fax: (212) 697-0566 Tel: (512) 480-0990 www.cdfny.org Fax: (512) 480-0995 www.cdftexas.org New York (Albany) 119 Washington Avenue Texas (Houston) 3rd Floor 4500 Bissonnet Albany, NY 12210 Suite 260 Tel: (518) 449-2830 Bellaire, TX 77401 Fax: (518) 449-2846 Tel: (713) 664-4080 www.cdfny.org Fax: (713) 664-1975 www.cdftexas.org Ohio (Columbus) 52 East Lynn Street Texas (Rio Grande Valley) Suite 400 944 A West Nolana Loop Columbus, OH 43215 Pharr, TX 78577 Tel: (614) 221-2244 Tel: (956) 782-4000 Fax: (614) 221-2247 Fax: (956) 283-7975 www.cdfohio.org www.cdftexas.org

~ 30 I Children's Defense Fund I Want to Make a Difference and Join the Leave No Child Behind® Movement! CDF Action Council •

To receive alerts from the Children's Defense Fund Action Council when action is needed on behalf of children, sign up at http://capwiz.com/cdf/mlm/signup/. For email updates, you may also check the boxes below and mail or fax this form to: CDF Action Council, 25 E Street, NW, Washington DC 20001. o Child Health Medicaid and the State Children's Health Insurance Program (CHIP), proposals to expand coverage of uninsured children and parents, and immunizations o Early Childhood Development Child care and early childhood education policies, including updates on Head Start, prekinder­ garten, school-age care and the Child Care Development Block Grant (CCDBG) o Family Income and Jobs Policy issues that address child and family poverty, such as welfare, minimum wage, unemployment insurance, tax policy, housing and child support o Child Welfare and Mental Health Information related to child abuse and neglect, foster care, adoption, children's mental health, parental substance abuse, domestic violence and their impact on children o Grandparents and Other Relatives Raising Children Information about children being raised by relative caregivers because their parents are unable to care for them o Youth Development Juvenile justice, violence prevention and other issues pertaining to positive youth development o Education Major legislative and other developments in education including the implementation of the No Child Left Behind Act, education funding, and the Individuals with Disabilities Education Act o Religious Action Urgent religious action issues, new publications and opportunities for people of faith to make a difference for children

Remember to sign up with the Children's Defense Fund Action Council's E-Advocacy Center for Children at www.cdfactioncouncil.org

For more information call (202) 662-3576 or fax (202) 662-3560.

2004 Annual Report I 31 JlJ ------~

I Want to Make a Contribution to Children's Defense Fund.

• o Enclosed is my gift of $ to support the Children's Defense Fund. o My check is enclosed. (Please make checks payable to the Children's Defense Fund.) o I will arrange a transfer of negotiable securities to cover this amount. o Please charge my credit card. o Discover 0 MasterCard o American Express 0 Visa Card # _ Expiration Date _ Signature _

o My company has a matching gift program. I have enclosed the matching gift form. o I pledge to become an annual Child Defender in the amount of $, , o I have included CDF in my will. o I would be interested in a briefing on CDF's work in 2005-2006. CDFis a 501 (c)(3) nonprofit organization, anddonations are tax-dedudible to the extentpem7ittedby law.

I would like to receive more information about: o CDF Freedom SchoolsSM and after-school training and programs o CDF® Publications o Black Community Crusade for Children® (BCCC®) program o Beat the Odds® Celebrations o National Observance of Children's Sabbaths® celebrations o Samuel DeWitt Proctor Institute for Child Advocacy Ministry o CDF Haley Farm Leadership Development Programs o Youth in the Movement to Leave No Child Behind and Internships

Name Daytime Phone

Street Address Email

City, State, Zip Fax

Please detach this form and mail it to: Children's Defense Fund· 25 E Street, NW Washington, DC 20001 For additional information, please call (202) 628-8787 or email us at [email protected]

~ 32 I Children's Defense Fund

•

25 E Street, NW Washington, DC 20001 (202) 628-8787 www.childrensdefense.org ~~14