a simple vision

2. a simple vision In 1963, Saul and Dayee Haas attended a parents' open house at Garfield High where their daughter Deesa was a student. They discovered the school struggled to meet some critical needs of disadvantaged students, which jeopardized their ability to participate and remain in school. So Saul Haas wrote a check for $500 and gave it to principal Frank Hanawalt, to do that which otherwise would not be timely done. From that gesture evolved the vision of the Haas Foundation…to help promising young people at critical times in their lives. Over the years, many have shared the Haas' commitment. As part of the board for more than 35 years, I've personally witnessed the impact of this simple, but powerful vision. Evidence of success is widespread. One student who received Haas Foundation assistance became a judge. Another became a legal counsel for the U.S. Department of Health, Education and Welfare in Washington, D.C. Many have become teachers in our schools. Today, volunteers and donors, educators and students, continue to believe in the power of education. This year’s annual report reflects the legacy of the Haas' vision and celebrates the promise that education, and Haas school funds, holds for needy students across Washington—a better future. Jon Galt Bowman President, Board of Directors Saul & Dayee G. Haas Foundation 2

3. our commitment It is my pleasure to serve as your Executive Director. What a treat my experience has been this past year. I could not ask for a better staff, board or group of volunteers. In addition, the dedication that our school partners have exhibited is truly remarkable. The Saul & Dayee G. Haas Foundation is, in my opinion, a catalyst. We provide small portions of funding annually to more than 800 eligible schools. This past year alone, 588 schools distributed funds within their learning community. In addition to being a catalyst, we are an equalizer. Self-selecting out of sports, music or even attending school is far too common. We prefer preventative actions to corrective ones. Without Haas Foundation funds, many students would not be as engaged in school as they could or should be. Many others would not have been able to stay in school. We believe that each child deserves a better future and that as a community it is important to be responsive to their unmet needs. I'm proud of our Foundation's accomplishments this year and we remain grateful to our board, donors, volunteers and school partners. We're providing this 2004-05 report on our stewardship in the hope that you will continue to be part of our pursuit to improve students' educational opportunities in Washington. Bonnie Hilory Executive Director Saul & Dayee G. Haas Foundation 206.370.6714 3

4. student stories Inspiring stories of… Hope…When a student's ailing mother was moved into a health care home and he had no way to visit her, his grades and interest in school began to slip. The Haas School Fund provided two months of bus fare and he was able to visit his mother regularly. Now with her encouragement, he is back on the right track with his life and school. From Mountain View High School Strength…An 8th grade girl lives with her sister. She is low-income, disabled and doesn’t have a lot of clothing. While participating in a leadership assembly, her knee gave out and was dislocated. Emergency workers had to cut her pants to help her. We used Haas funds to buy her new pants. From Carbonado School Courage…A senior student lost his mother during the school year. He was forced to live on his own while working and going to school. We used Haas funds to pay his classroom fees so he could graduate on time and receive his diploma. From Castle Rock High School 4

5. fund distribution Below you'll find an overview of the Haas Foundation statewide grants by category for 2004-2005.* *Amounts include matching funds raised by schools and any unused funds from previous fiscal year. 5

6. key accomplishments • Personnel • Search Committee hired Bonnie Hilory in January 2005 as Executive Director. Bonnie promoted to first full-time Executive Director July 6, 2005. • Honored Frank Hanawalt, former Executive Director in a ceremony at Garfield High School celebrating his more than 19 years of dedication to education and the Haas Foundation. Frank was elected to the Board of Directors in May. • Reorganized the Foundation office to accommodate a volunteer workstation. • Recruited and trained 15 key volunteers specializing in IT/web support, grant writing, newsletter, database development and office support. • Beginning in January of 2005 through September 2005, we received support from 15 active volunteers who provided 400 hours of service. This equates to a savings of $7,020 based on $17.55 per hour volunteerd. • Established an internship position to support the Foundation. This is a 6-month internship focused on Development. • Infrastructure • Developed a strategic 3-year plan by collaborating with the Disappearing Task Force Committee and Board. Board adopted this plan in May. • Refined and clarified the process for distributing funds to schools, awarding matching grants, and year-end reporting. Board adopted a new scorecard method in July. • Initiated the process of creating tools for developing grants and cultivating donors, including purchasing software to manage this new initiative. Purchased new software package that aligns with QuickBooks and can accommodate development, donor, and volunteer tracking 24/7. • Built computer network infrastructure incorporating latest technology and best practices. Foundation software is now backed up weekly. • Changed the name of Haas Heritage Board to Haas Heritage Advisory Council, and clarified roles and expectations 6

7. key accomplishments • Marketing/Branding • Developed a new brand for the foundation, which depicts the core values identified in the strategic plan. • Initiated presentations to community organizations to introduce Haas Foundation, increase our visibility and to begin the donor cultivation process. • Launched enhanced website - www.haasfoundation.org - featuring information about the Foundation (history, mission, goals), Adopt-a-School program, online donation, volunteer opportunities, and e-newsletter registration. • Created PowerPoint presentations to help promote the Foundation. • Communication with Schools • Implemented orientation meetings with more than 300 school coordinators in 9 Educational Service Districts (ESD), increasing awareness of the Foundation's Adopt-a-School and matching grants program. • Recruited 20+ Haas School Fund Coordinators for the newly formed Haas Educators Ambassador Program (HEAP). • Launched an Educator e-newsletter targeting 812+ schools to create and encourage better communication. • Launched an e-newsletter for Friends of the Saul & Dayee G. Haas Foundation. • Development • Pursued in-kind sponsorship grants securing commitments from several donors. • Sponsored and attended the Edward R. Murrow Symposium for the 25th year anniversary. This event honors Saul Haas and his career in Journalism. The day is filled with workshops for college students from WSU and Idaho campuses. • Achieved 100% contribution support from Board and Staff, increasing annual fund giving 64%. • In 2004-2005, we supported students across the state in 588 schools with $279,208 in grants and $46,896 in matching grants. 7

8. regional events Edward R. Murrow Symposium The Haas Foundation sponsored and attended this symposium for the 25th year. This event honors Saul Haas and his career in Journalism. The day is filled with workshops for college students from WSU and Idaho campuses. Spring 2005 Orientation Meetings We conducted orientation meetings with more than 300 school coordinators in 9 ESDs, increasing awareness of the Foundation's Adopt-a-School and matching grants program. Dave Ross Edward R. Murrow Symposium 2005 at Washington State University. Emory Bundy (right), Haas Board member, congratulates Yakima School Fund Coordinator Shawn John (left), recipient of one of the extra $110 fund awards. During May and June, Foundation staff and Board members traveled around the state meeting 313 school fund coordinators. 8

9. special memories Garfield/Franklin High School Tribute to Frank Hanawalt Frank Hanawalt, retired executive director of the Haas Foundation and principal of Garfield and Franklin High Schools in Seattle, was honored in a special ceremony on April 7, 2005, at Garfield High School. Mr. Hanawalt received a standing ovation from over 1,200 students, colleagues and dignitaries. “Mr. Hanawalt is proof that one individual can make a difference,”Raj Manhas, Seattle Public School’s Superintendent Karel Cipra, Garfield Associated Student Body President, presented Frank with Garfield High memorabilia as a tribute from the students. Executive Director Recognition Dinner The board honored Frank Hanawalt for his dedication, leadership and contributions serving nearly 20 years as the Haas Foundation's Executive Director. They also welcomed the Foundation’s new Executive Director, Bonnie Hilory. Sue Russell reminiscences with Frank about special memories of their service together at the Foundation. Jon Galt Bowman, Haas Foundation Board President, presented Mr. Hanawalt with a plaque honoring his many years of service. 9

10. foundation support 2004-2005 Board of Directors Jon Galt Bowman…………… President Dr. Carver Gayton………..… Vice-President Deesa M. Haas……………... Secretary Lee A. Miller………………… Treasurer Emory Bundy Hon. Betty B. Fletcher Ruth Gerberding R. Danner Graves Frank S. Hanawalt Hon. Charles V. Johnson Tom Lord John Mackenzie Richard (Dick) McCormick George P. Moynihan Roger D. Percy Foundation Staff Bonnie B. Hilory……………… Executive Director Susan C. Russell……………. School Fund Manager Volunteers Macy Cross…………………… Detective-Absent Schools Kazu (Yoshikazu) Funato…… Development Director Clary Goedert-Gasper………. Database Support Caren Gussoff……………….. Grant Writer Melody Hazen………………... Presentation/Annual Report Sharrie Hyder………………… Grant Writer Pam Jones…………………… Office Support Inga Jugurt…………………… Database Guru Chuck (Arthur) Kirchmeier…… Graphic Designer Holly Knowles…………………. Research/Office Support Francis LeSourd………………. Grant Writer Heather Mehaffie……………… Copy Editor Chloe Moss……………………. Presentation Support Anthony Nirschl……………….. Volunteer Coordinator Saravan Paramashivan……… IT Support Cindy Roberts…………………. Newsletter Editor Carolyn Storie…………………. Grant Research/Event Support Velle Wright……………………. Grant Writer Geoff Yamasaki……………….. Grant Writer Pro Bono Support Preston-Gates-Ellis, Alan Wicks Branch, Richards & Co. In-Kind Sponsors Google, Ad Word Accretive, Network Host Mike Koss, Server Space Melody Hazen, Photo Artwork Saravan Paramashivan, Technology Supplies Kevin Talbot, Volunteer Gifts Donors iSOLD It Jon Galt Bowman Emory Bundy Hon. Betty B. Fletcher Dr. Carver Gayton Ruth Gerberding R. Danner Graves Frank S. Hanawalt Bonnie B. Hilory Hon. Charles V. Johnson Tom Lord John Mackenzie Richard (Dick) McCormick Lee A. Miller George P. Moynihan Roger D. Percy Susan C. Russell Heritage Advisory Council Maurice (Maury) Clark Ellen Dial Duff Kennedy Shirley Salomon Alan Wicks Colleen S. Willoughby About Saul Haas(1896-1972) Saul Haas left the New York ghetto for the Pacific Northwest with ambitious dreams that he realized in a full, occasionally controversial, life as a journalist, political activist, and pioneering broadcaster. The founder of KIRO radio and a power in Washington Democratic politics, Haas was complex and contradictory, self-educated and variously described as brilliant, irascible, compassionate, and a benevolent despot — or sometimes not so benevolent. While building KIRO into a powerful station, he remained immersed in politics, serving as state director of the Democratic National Campaign Committee. Haas saw great promise in public television as an educational tool and in 1968 was appointed to the Corporation for Public Broadcasting's first board of directors. He had a lifelong empathy for the underprivileged and formed the Saul and Dayee G. Haas Foundation to aid needy students. The Saul and Dayee G. Haas Foundation was founded in 1963, and is celebrating it’s 42nd year of service supporting over 15,000 of Washington’s young people annually. 10

11. CPA report ACCOUNTANT’S REPORT Board of Directors The Saul and Dayee G. Haas Foundation (a corporation) We have reviewed the accompanying statement of net assets arising directly from cash transactions of The Saul and Dayee G. Haas Foundation (a corporation) (the “Foundation”) as of June 30, 2005, and the related statements of revenue collected, contributions and expenses disbursed, and changes in net assets for the year then ended in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the Foundation’s management. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. As described in Note 2, these statements were prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 2. The financial statements for the year ended June 30, 2004, were audited by us, and we expressed an unqualified opinion on them in our report dated October 28, 2004 but we have not performed any audit procedures since that date. Branch, Richards & Co. Seattle, Washington August 5, 2005 11

12. CPA report 12

13. CPA report NOTES TO CASH-BASIS FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2005 AND 2004 NOTE 1 - DESCRIPTION OF ORGANIZATION PURPOSE DESCRIPTION OF ORGANIZATION The Saul and Dayee G. Haas Foundation (a corporation) (the "Foundation") was originally organized as a trust on June 25, 1963, and received its initial contribution of assets from Mr. Saul Haas. On November 10, 1971, the Foundation was incorporated under the laws of the state of Washington, and all of the assets of the trust were assigned to the corporation on December 1, 1972. Mr. Haas passed away on October 17, 1972, and the Foundation subsequently received contributions from his estate totaling $2,772,641. On October 22, 1974, the Foundation changed it name to The Saul and Dayee G. Haas Foundation. Mrs. Haas passed away on December 16, 1983, and the Foundation subsequently received contributions from her estate totaling $1,829,500. During the fiscal year ended June 30, 1989, the Foundation received the final distribution of cash of $17,374 from Mrs. Haas' estate. The purpose of the Foundation is to contribute moneys, generated through investments of the Foundation's corpus, primarily to junior and senior high schools throughout the state of Washington to assist students to stay in school and to realize their full potential. The Foundation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. NOTE 2 - BASIS OF REPORTING The financial statements of the Foundation are prepared on the cash basis of accounting. Consequently, revenue and related assets are recognized when received rather than when earned; contributions and expenses are recognized when paid rather than when the obligation is incurred; and increases or decreases in the market value of investment securities and amortization of bond discounts and premiums are not reflected in the financial statements. The financial statements do not include accrued interest income of approximately $63,031 and $72,619 at June 30, 2005 and 2004, respectively. Further, no separate statement of cash flows is provided because the information is included in the cash-basis statements of revenue collected, contributions and expenses disbursed, and changes in net assets. Investment securities, except for equity securities, are carried at cost. Equity securities are carried at cost or, if donated, at market value on the donation date. NOTE 3 – NOTE RECEIVABLE The Foundation has a note receivable that is collateralized by a real estate deed of trust. The note requires monthly payments in the amount of $6,300, including interest at 7.5% and principal, through June 1, 2009, at which time the remaining balance is to be paid in full. 13

14. CPA report NOTE 4 – MANDATORY INCOME DISTRIBUTIONS The 1969 Tax Reform Act, as amended by the Economic Recovery Tax Act of 1981, provides that for taxable years beginning after 1981, a private foundation is required to distribute its minimum investment return (5% of the Foundation's net investment assets less federal excise tax) within the year received or the following year or be subject to a 15% first-level tax on its undistributed income. Amounts distributed in excess of the required minimum in prior years reduce the current year's required minimum distribution. The Foundation has met or exceeded the required minimum distribution in prior years and at June 30, 2005, has an excess distribution carryover of $130,656. NOTE 5 – INVESTMENT SECURITIES At June 30, 2005, the fair value of the Foundation's investment in equity securities exceeded cost by $991,719. Gross unrealized gains at that date were $1,097,887. The Foundation purchased investment securities aggregating $683,485 and $1,272,280 in 2005 and 2004, respectively. The Foundation sold or redeemed investment securities aggregating $326,495 and $761,360 in 2005 and 2004, respectively. Gain or loss on the sale of investments is calculated using the specific identified cost method. A summary of the Foundation's investment in bonds (principally corporate) at June 30, 2005, is as follows: A summary of the Foundation's investment in treasury notes at June 30, 2005, is as follows: The FNMA mortgage-backed security with a cost of $8,374 bears interest at 7% and has a stated maturity date of 2010. NOTE 6 – EMPLOYEE RETIREMENT PLAN On October 31, 2001, the Board of Directors adopted and implemented a Simple Employee Pension Plan ("SEP IRA") under Section 408(k) of the Internal Revenue Code beginning with the 2001 - 2002 fiscal year. The amount of the Foundation's annual contribution to each employee's SEP IRA shall be 10% of the employee's annual compensation. Contributions totaled $7,468 in 2005. 14

15. The Saul & Dayee G. Haas Foundation is a tax-exempt 501(c)(3) privately funded foundation.