To Friends and Supporters of the Desert Outreach Foundation, formerly Desert Rainbow Foundation:

From our beginning in 1999, to date, we have provided over $300,000 in scholarship assistance to deserving local students. And, in a program we began in 2002, we have aided distressed children by distributing over 11,000 Teddy Bears to child abuse treatment and prevention facilities, hospital emergency rooms, and local fire and police departments. Each of you can be proud of what we have accomplished together.

On behalf of the Board of Directors of the Desert Outreach Foundation, I must unfortunately announce that shortly we will no longer continue to operate as a nonprofit organization. For the last several years, it has become increasingly difficult to raise the funds necessary to continue our operation while at the same time continue to provide scholarships to our local students. As a result, we have been forced to use some of our cash reserves to fund scholarships.

In 2014, recognizing that we did not want to continue to deplete our cash reserves simply to keep operating as a nonprofit organization, we began to explore how best we could utilize our remaining cash reserves. Our goal was to ensure that our funds would not only be used to provide scholarships to local students, but also that the criteria we used to determine scholarship recipients would continue to be utilized. We strongly believe that we have found the nonprofit organization that will continue to provide scholarships in our name using the same criteria we developed. Also, this organization met our other goal, which was to find a well-respected organization with a long history of providing scholarships, and one that would continue to operate for many years to come.

The organization we have selected to receive our cash reserves and to continue to provide scholarships to local students in our name is The Community Foundation. The Community Foundation was founded in 1941. Today, the Foundation has grown to become not only one of the most significant funders of scholarships throughout Inland Southern California, but also provides millions of dollars in charitable grants for a variety of community needs through its offices in Riverside, San Bernardino, and Palm Springs. The Community Foundation is the only foundation of its kind in Riverside and San Bernardino Counties that is accredited according to the highest ethical and legal criteria of the Council on Foundationsí National Standards Board.

The Foundation's total assets, as of January 1, 2015, were about $86 million, of which about $23 million was Scholarship Funds. In 2014, the Foundation awarded $2.8 million in scholarships and education grants. The Foundation invests the funds it receives in a diversified portfolio with a long-term horizon. For the last 5 years, the Foundation's portfolio has had an average rate of return on investment of about 9.1%. Thus, this return significantly exceeds their cost of administering each fund.

More than 500 individuals, families, or organizations have established a fund with The Community Foundation. They work closely with those establishing a fund with them to ensure the funds are utilized in the manner dictated by those establishing the fund. The DOF Board of Directors held many meetings with The Community Foundation personnel throughout 2014, and then decided to test the Foundationís ability to administer our scholarship program as we wanted. We provided The Community Foundation the scholarship application we used, our contact list with the local high school and college counselors, and the criteria we used to evaluate and rank the applications. What we discovered was the application they had been using, their contact list, and the criteria for ranking applicants was very similar to what we had used. The only change we had them make was to give a little higher emphasis to the financial need of the applicant in the scoring and ranking part of the process. Once we were convinced that this would be handled in the manner we wanted, we provided the Foundation with $10,000 to be awarded as our scholarships for 2015.

Your Board of Directors was very pleased with the entire scholarship process administered by The Community Foundation. They received 55 qualified applications for our scholarships, while the most we had received in the last several years was 45. Once The Community Foundation had completed their scoring and ranking of the applicants, and the determination of who should receive our scholarships, we reviewed their process for making these determinations. We agreed 100% with the process they used and the applicants they recommended be awarded our scholarships.

For the reasons I have just explained, we will be providing The Community Foundation with about $118,000 in early 2016. Because there are still many people in the Desert that associate us with our prior name of Desert Rainbow Foundation, The Community Foundation will list our fund as Desert Outreach Foundation, formerly Desert Rainbow Foundation.

We welcome any comments you may have regarding the decisions we have reached.

Jack D. Williams
President, Board of Directors
Desert Outreach Foundation

Desert Outreach Foundation IRS 501(c)(3) Tax ID #91-1940047
1775 E. Palm Canyon Drive, Suite 110, Palm Springs, CA 92264