FDD 1023

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Fotm 1023Rev. September 1996)

' rlmcnl d he ll'ea5UTY'' R.euenue Sl f\Cce

Application for Recognition of ExemptionUnder Section 501(c)(3) of the Internal Revenue Code

OMS No. 1545-0056

Note: If u mpt t ~ l i i Jisapprove< . this iiPp/lcationw be open for publici()$p0c:tion.

Read ttte instructions for each Part carefully.A User Fee must be attached to thiS application.

If the required information and appropria te documents are not submitted along with Form 8718 (with payment of theappropriate user fee), the application may be returned to you .

Complete the Procedural Checklist on page 8 of the Instructions .lPart I Identification of Applicant

1a Full name of organization (as ~ h o w nIn o r g a n i ~ n gdocument) 2 Employer identification number (EIN)(Ifnone, see page J of the ~ c lnatn.lctlons .)

FOUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC. 1 3 - 4 1 7 4 4 0 21 b c/o Name (if applicable) 3 Name and telephone number of person

to be contacted if additional informationC l i f f o r d D. May, P r e s i d e n t is needed

1c Address (number and street) Room/SuiteJo sep h M. Yo h l in ,S ec . / Tr e a s .

1020 19th S t r e e t , N.W. 340 2 l 5 ) 542 - 1 2 2 21d City. town, or post office , state, and ZIP 0 4. If you have a foreign address, 4 Month the annual accounting period ends

see Specific Instructions for Part I, page 3.December5 Date incorporated or formed

Washington , DC 20036 A p r i l 24 , 200 11e Web site address 6 Check here if applying under section:

www.defenddemocracy.o rg ; t \ 0 5 0 1 e ) b0501(f ) cQ(501(k) d 0 5 0 1 ( n )r Did the organization previously apply for recognition of exemption under this Code seet1on or under any

other section of the Code? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - . . . . - . . . . . . . . . . . . . - . . . . . . . . . 0 Yes dg NoIf "Yes, attach an explanation.

8 Is the organization requirecl to file Form 990 (or Form 990-EZ)? . . . . . . . . . . . . . . . . . . . . . . . [ZJ NIA 0 Yes 0 NoIf N o , attach an explanation (see page 3 of tha Specific l n ~ c t i o n s .

9 Has the organization filed Federal income tax returns or exempt organization Information return::;? . . . . , . O Ye$ [ZI NoIf -ves, state the form numbers, years filed, and Internal Revenue office where filed.

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

a ZJ Corporation - A t t a c h a copy of the Articles of Incorporation (including amendments and restatements) showingapproval by the appropriate state official : also include a copy of the bylaws.

b 0 T r u s t - Attach a copy of the Trust indenture or Agreement, Including all appropriate signatures and dates.c 0 Association - A t t a c h a copy of the Articles of Association, Constitution, or other creating document, with a

declaration {see instructions) or other evidence the organization was formed by adoption of thedocument by more than one person: also indude a copy of the bylaws .

If the organization is a corporation or an unincorporated association that has not yet adopted bylaws, check here Ill OI dec lare u n ~ e rthe p e n ~ l l i e sof perjury thai I am aull'lorl;::ed to sign ihis p p l l c a t i o non behalf of lhe above organ ization and lhst I haw exam ined this ~ p p l i c a t i o n ,including

the accompanymg s.cnedut..,. aM attachments, and () the be \ of my knowledge il l true . correct. and complete

.,lease.:iignHereFor Paperwork ReductiO_ISASl l ' FeD212SF .1

C l i f f o r d D. May, P r e s i d e n t(Twa or print name end title or aulhority o( slgoer)

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rm 1023 (Rev. 1).98) age 2

~ a r tII I Activities and Oporationallnformatlon0 rovide a detailed narrative description of all the activities of the organization - past, present, and planned. Do not merelyrefer to or repeat the language In the organizational document. List each activity separately in the order of Importancebased o the relative time and other resources devoted to the activity. lndlcatG the percentage of time for each activity. Eachdescripl.lon should include, as a minimum, the following: (a) a detailed description of the activity Including its purpose and howeach activity furthers your exempt purpose; (b) when the activity was or will be initiated; and (c) where and by whom the activityWill be conducted .

EE TT CHED SUPPLEMENT L ST TEMENT

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

E TT CHED SUPPLEMENT L ST TEMENT

Describe the organization s fundraising program both ct 1 d 1lnclude_details of fundraising activities such as s'electiv: ~ = i l i ~ ~ sP , ~ : : : ~ ~ : ~~ x p a l ~~ what extent it has been put into effect .professional fundraisers, etc . Attach representative copies of sol c:: ta t l f fi n .ra,ISing committees , use of volunteers or

1 1 ons or 111anc1a support .

A

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rm 1023 (Rev. 996)

art II I Acti"ltles and Operational Information Continued)

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Page 3

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

EE TT CHED SUPPLEMENT L ST TEMENT

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

d Are any members of the organization's governing bOdy Mdisqualified persons" with respect to the organization(other than by reason of being a member of the governing body) or do any of the members have either abusiness or family relationship with "disqualified persons"? (See Specific Instructions for Part II, Line 4d,on page 3.) . . - . . . . - . - -- . . . . - . . - . . . - . . . - . . . . . . - . . . - - . . . - - . . . - . . . . XI Yes 0 NoIf "Yes, explain .

E E TT CHED SUPPLEMENTAL ST TEMENT

5 Does the organization control or is it controlled by any other organization? - . . 0 Yes ZJ NoIs the organization the outgrowth of (or successor to) an other organization, or does It have a specialrelationship with another organization by reason of interlocking directorates or other factors?. . . . . . . 0 Yei [ZJ NoIf either of these questions is answered MYes, explain .

6 Does or willthe organization directly or Indirectly engage in any of the following transactions with any politicalorganization or other exempt organization (other than a 501 (c)(3) organization): (a) grants: {b) purchases orsales of assets; (c) rental of fadlities or equipment; {d) loans or loan guarantees: (e) reimbursementarrangements; f) performance of services, membership, or u n d r a i ~ i n gsolicitations; or (g) sharing of facilities.equipment, mailing lists or other assets, or paid employees? . . . . . . . . . . . _ _ O Yes NoIf "Yes," explain fully and identify the other organizations involved .

7 Is the organization financially accountable to any other organization? . . . _ __ _ . . . . . 0 YelS [ZI NoIf MYes. explain and identify the other organization. Include details concerning accountebility or attach c o p i ~of reports if any have been submitted .

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c L ~ ~ q C L LI U L c ~ c c ~ f ~ L ~ L

Form 1023 (Rflv. 998)

[Pa J Activltie$ and Operational Information Continued)

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

SEE ATTACHED SUPPLEMENTAL STATEMENT

9 Will the organization be the beneficiary of tax-exempt bond financing within the next 2 years? . . . . . . . . . . . . 0 Ye$ [Zl No

10a Will any of the organization's facilities or operations be managed by another organization or Individual undera contractual agreement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Yes 00 No

b Is the organization a party to any leases? , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ZJ Ye& O NoIf either of these questions is answered Yes; attach a copy of the contracts and explain the relationshipbetween the applicant and the other parties.

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

11 Is the organization a membership organi;zation? . . . . . . _ . . O Yes 00 NoIf vas, complete the following:

a Describe the organization's members hip requirements and attach a schedule of membership fees and dues.

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

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

12a If the organization provides benefits, seJVices, or products, are the recipients required, or Will they berequired, to pay for them? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 0 Yes 0 NoIf ves. explain how the charges are determined and attach a copy of the cur rent fee schedule.

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

~ f ~ ~ ~ ~ n h ~ ~t h ~; ~ i p l ~ ~ t ;~ ~b ~ ~ ~ f t ~ i ; ~ i ~~ ~ ~ ~ ~ ~ i i ib ~ s ~ i ~ t ~ . [ZJ NIA 0 Yes 0 No

3 Does or will the organization ettempt to influence legislation? . 0If Yes, explain. Also, give an estimate of the percentage of h ~~ ~ g ~ ~ i ~ t i ~ ~ ~u ~~ ~ ~ d ~ ~ d ~t h ~ t.Itd ~ ~ ~ t ~ Yes [XJ Noor plans to devote to this activity.

4 ~ o e sor Will the organization intervene n any way in political campaigns including the publication ord1str\but1on of statements? 'If MYes explain fully. . . 0 Yes [ZJ N o

F E O i Z 1 ~ 4

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=onn 1023 Rev. 9-98) Page 5

_Par [) Technical Requirements

Are you filing Form 1 023 Within 15 months frem the end of tile month in which your organization was created or formed? . _ . 0 0 - [ l Yes 0 No

. I

If you answer v e s . ~do not answer questions on lines 2 through 6 below.2 If one o the exceptions to the 15-month filing requirement shown below applies, check the appropriate box and proceed to

question 7.

E x c e p t i o n ~ J- You are not requifed to file an exemption application within 15 months If the organization:

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

O b Is not a private foundation and normally has gross receipts of not more than $5,000 in each tax year; orO c Is a subordinate organizat ion covered by a group exemption letter, but only if the parent or supervisory organization

timely submitted a notice covering the subordinate.

3 If the organization does not meet any of the exceptions on line 2 above. are you filing Form 1023 within 27month:;; from the end of the month in which the organization was created or formed? . . . . . . . . . . . . . . . . 0 Yes 0 No

If Yes, your organization qualifies under Regulation section 301 .9100-2, for an automatic 12-monthextension of the 15-month filing requirement . Do not answer questions 4 through 5.

If N o , ~answer question 4.

4 If you answer No to question 3, does the o r g a n i ~ l l o nwish to request an extension of time lo apply underthe reasonable action and good f a i t h ~and the no prejudice to the interest of the gover nment requirementsof Regulations section 301.910Q-.3? - . - . . 0 Yes O No

If Yes, give the reasons for not filing this application within the 27-month period described in question 3.See Specific Instructions Part Ill l ine 4, before completing this item. Do not answer questions 5 and 6.

If No. answer qJestions 5 and 6.

5 If you answer No to question 4. your organization's qualification as a section 501 (c)(3) organization c n be

recognized only from the date this application is filed. Tflerefore, do you want us to consider the applicationas a request for recognition of exemption as a section 501(c)(3) organization from the date the application sreceived and not retroactively to the date the organization was created or formed? . 0 O Yes 0 No

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

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orm 1023 ~ e v 9-98)

Part Ill I Technical Requirements Continued),s the organization a private foundation?lZ Yes (Answer ques tion 8.)O No (Answer questio n 9 and proceed as instructed.)

~ 1 : : : > : : : > 4 ~ ( 1 1 I U l ~ l ~ ~ l( l d l : : l l

a If you answer yes to question 7, does the organization claim to be a private operating foundation?

Yes (Complete Schedule E.)0 NoAfter answering question 8 on this line, go to line 14 on page 7

Page 6

9 If you answer No to question 7. indicate the public charity classification the organization is requesting by checking the boxbelow that most appropriately applies:

THE ORGANIZATION IS NOT A PRIVATE FOUNDATION BECAUSE IT QUALIFIES:

a 0

b 0c 0

d 0e 0

f 0g 0

h 0

As a church or a convention or association Of churches(CHURCHES MUST COMPLETE SCHEDULE A.

fvf a school MUST COMPLETE SCHEDULE B.)As a hospital or cooperative hospital service organization, or amedical research organization o p e r e ~ t ein conjunction with ahospital (These organizations, exce pt for hospital serviceorganizations, MUST COMPLETE SCHEDULE C.

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

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

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

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

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

0 As normally receiving not more than one-third of its support fromgross investment income and more than one-third of its support fromcontributions, membership fees, and gross receipts from activitiesrelated to its exemp t functions (subject to certain exceptions).

j 0 The organization is a publicly supported organization but is not surewhether it meets the public support test of h or i. The organ izationwould like the IRS to decide the prope r classification .

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

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

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

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

Section 509(a)(3}

Section 509(a)(4)

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

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

Section 509 a) 2)

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

If you checked one of the boxes a through i n question 9. go to question14. If you checked box g In question 9, go to questions 11 and 12.

I f you checked box h, I, or j in question 9, go to question 10.

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m 1023 Rav. 9.Q8)

art Ill I Technica l Requirements Continued)f you checked box h, 1 or J n question 9, has the organization completed a t ax year of at least 8 months?

0 Yes - Indicate whether you are requesting:O A definitive ruling. (Answer questions 11 through 14.)O An advance ruling. (Answer questions 11 and 14 nd attach two Forms 872-C completed end signed.)

0 No - Yo u must request an advance ruling by completing and signing two Forms 872 G and attaching them to theForm 1023.

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

If you are requesting e defini tive ruling under section 170(b)(1 )(A)(iv) or (vi), check h r ~0 and:

a Enter 2% of line 8, column (e), Total, of Part IV-A . .

b Attach a list showing the name and amount contributed by each person (other than a govemmeotal unit or publicly supportedorgangation) whose total gifts, grants, contributions, etc., were more than the amount entered on line 12a above.

If you are requesting a definit ive ruling under section S09(a)(2), check here.,.. 0 and:a For each of the years included on lines 1, 2, and 9 of Part IV-A, attach a fist showing the name of and amount received from

each ~ d i s q u l i f i e dperson. (For a definition of disqualified person, see Specific Instructions, Part II, Line 4d, on page 3 .)

b For each of the years included on line 9 of Part IVA, attach a list showing the name of and amount received from each payer(other than a disqualified person ) whose payments to the organization were more than 5,000. For this purpose, payerincludes, but is no t limited to, any organization described in sections 170(b)(1 )(A)(I) through (vi) and any governmental agencyor bureau

Indicate if your organization is one of the following. If so, complete the required schedule. (Submit lf Yes,only those schedules that apply to .your organization. Do not submit blank schedules.) YK o c:omplata

Schedule :

Is the organization a church? , . X A

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

Is the organization. or eny part of it, a hospital or medical research organization? . . . . . . . . . . . . . . . . . X cIs the organization a section 5 09(a)( 3) supporting organization?_ . _ _ _ X D

Is the organization a private operating foundation? _ . X E

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

Is the organization, or any part of it, a child care organization?_ . . _ . . _ X G'

Does the organization provide or administer any scholarship benefits , student aid, etc.?- 0 X H

Has the organization take n over, or will it take over, the facilities of a for profit institution? . X I

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onn 1023 (Rev. 9-98)

art IVI Flnanclai .Data

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

Page 8

;mplete the financial statements for the current year snd for each of he 3 years Immediately before it f n .existence kiss than 4

ars complete the statements for each ye r in existence If In exh;tenc::e less than 1 year, also provide proposed bUdgets fore 2 years follOWing the c;urrent year.

A ta emen o avenue an cpensess t t fR dExCurrent 3 prior tax years or proposed budget for 2 years

tax year1 Gifts, grants, and contributions (a) From 4/24 (b) 20Q2 (c) 2003 (d) (e} TOTALreceived (not Including unusual to 12/31/01 FYE 12/31 FYE .12/31

I

grant s - see page 6 of the 1.100 000 2.200.000 2 200.000 5 500.000.00instructions) . __ . . _ . . . . . , . . _2 Membership fees received . . . . .3 Gross investment Income (see 6211instructions for definition) . . 25.000 25.000

56211 00

4 Net income from organization'sunrelated business activities notincluded on line 3 _ _

5 Tax revenues levied for and eitherpaid to or spent on behalf o f theorganization . . . _ . . . _ . . . . _ .

6 Value of services or facilitiesfurnished by a governmental unit

Cl.l to the organization without charge:::1 (not including the value of services

or facilities generally furnishe d theD public without charge) . . . . _ 0::

7 Other income (not including gainor loss from sale of capital assets)(attach schedule) . . . . . _

8 Total (add lines 1 through 7) . . . 1 106 211.00 2,225 000.00 2 225 000.00 5 556 211.00

9 Gross receipts from admissions,sales of merchandise or services,or furnishing of fadlities in anyactivity that is not an unrelated

business within the meaning ofsection 513. Include related costof sales on line 22

10 Total (add lines 8 and 9 . __ . . . 1 106,211.00 2,225 000.00 2 225 000.00s 556 211.00

11 Gain or loss from sale of eapitalassets (attach schedule) . . . . .

12 Unusual grants _ _ . . . . . _ . . .13 Total revenue (add lines 10

through 12) . . _ . . _ . . . _ . 1,106.211.00 2.225.000.00 2 225.000.00 5,556.211.0014 Fundraising expenses . . _ _ . . 015 Contributions, gifts, grants, and

similar amounts paid (attachschedule) _. . . _ _ . . 0

16 Disbursements to or for benefit ofmembers (attach schedule) . . . . 017 Compensation of officers,

Ill directors, and trustees (attachQl 70 582ll schedule) . . . _ . . __ . . . _ . . c

18 Other salaries ond wages . . .0..3j 19 Interest I I I I f r f I f 1 r o

20 Occupancy (rent, utilities , etc.) _ . 918921 Depreciation and depletion . . . . .22 Other (attach schedule) I I r f I 548 923 2.209.082 2 179 90623 Total expenses (add lir:tes 14

through 22) . . . . . . __ . . . _ . 628,694.00 2 209 082.00 2 179 906.0024 Excess of revenue over expenses

(line 13 minus line 23 . . _ . . 477,517.00 15 918.00 45.094.00TF FEO;i 129F.e 2002 E e n s e s Se Ap e t t a c h e d Budget approved a t 12 /19 /01 D t~ 3 Expenses - see At t ach ed Proposed Budget 1 r e c o r s Meeting

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P11ge 21Form 10:

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PART IT

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 50l(c)(3) OF THE INTERNAL REVENUE CODE

FORM 1023

SUPPLEMENTAL STATEMENT

Question 1:

Foundation for the Defense of Democracies, Inc. (''FDD ) was incorporated in NewYork on April 24, 2001 as EMET: An Educational Initiative, Inc. ( . EMET''). The initial purpose ofEMET was to provide education meant to enhance Israel's image in North America and the public'sunderstanding ofissues affecting Israeli-Arab relations. The attached brochure illustrates EMET'sinitial purposes, and the methods by which EMET was to attain such goals . These goals continue as

part ofFDD s purpose.

As a result o f the terrorist attacks on Tuesday, September 11, 2001, the Board ofDirectors determined that EMET smission should be expanded. The Board has recognized the sadfact that Israel is no longer the only democracy in the world facing the scourge of terrorism. TheUnited States and other democratic countries all over the world are all at risk. In addition, freedomloving countries are currently ill-equipped to deal with this menace, as the concept of purposelydestroying innocent lives is completely foreign to the ideas and beliefs which we hold so dear .

Accordingly, the name and focus ofthe organization were changed to reflect theseunfortunate times. The Board ofDirectors has determined that the organization would bet ter servethis country and all other democratic societies by developing research in the area of global terrorismand providing such research to the public. By serving as a think tank on terrorism, theorganization will strive to strengthen American resolve and increase the general knowledge regardingterrorism, develop educational materials on the eradication o f errorism everywhere in the world, toachieve peace in the Middle East and elsewhere. On October 22, 2001, the Board of Directorstherefore authorized the organization to change its name to Foundation for the Defense ofDemocracies, Inc. and developed the following mission statement:

Foundation for the Defense of Democracies conducts research andprovides education on international terrorism - the most serious threat to theUnited States and other free, democratic nations. FDD produces independentanalyses o f global terrorism's intentions and capabilities, as well as of thehistorical, cultural, philosophical and ideological factors that drive terrorism, andwhich threaten democracies and the individual freedoms guaranteed withindemocratic societies.

Non-partisan and non-profit, FDD promotes informed debate aboutpolicies and positions that will most effectively eradicate the scourge o finternational terrorism. In addition, FDD works to improve education aboutdemocracies, and to help promote democracy in the Middle East and othertroubled regions.

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JUN lb 11:1o FR 00 2155427711 TO 12022070191..-.

FOUNDATION FOR THE DEFENSE OF DEMOCRACIES INCc/o Clifford D. May President

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 501(c)(3) OF THE INTERNAL REVENUE CODE

FORM 1023


The Board of Directors and Officers ofFDD believe that:

~ Terrorism -which can most precisely be defined as deliberate actsof violence undertaken against unarmed civilians for the purpose ofinstilling terror- is a crime against humanity. It is never justifiable,and must never be condoned or tolerated by civilized peoples.Terrorism de-legitimizes the cause of those who employ it.

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

i> Regimes that financet host or otherwise aid and abet terrorism are ina state ofhostili y with all free and democratic nations, and with allcivilized peoples, whatever their religion or nationality, andw h ~ r e v e rthey live.

i> Israel is part of the solution to fighting terrorism, not part of theproblem. For decades, Israel has been on the front line of the waragainst terrorism. Given its experience and intelligence-gatheringcapabilities, Israel is America s most reliable and valuable ally inthis conflict.

)- The way to achieve peace in the Middle East is not bycompromising Israel s existence as the only democracy in theregion, but rather by defeating terrorism. Until terrorism iseradicated, any Arab leader who dares attempt to enter into arealistic, lasting peace agreement with Israel can expect to suffer thesame fate as Egyptian President Anwar Sadat.

t - . 1 4 / ~ ~

FDD is a nonprofit organization. and is not organized for the private gain of anyindividual. The activities to be undertaken by FDD will be developed y its professional staff, withthe support and guidance of its philanthropic leadership. FDD will strive to communicate a clearconcise and focused message, which once established will be adhered to consistently. By way ofillustration only, FDD initiatives may include a speakers bureau, discussion forums, creation of oped pieces, educational outreach to Jewish and non-Jewish communities as well as college campusesand secondary schools, creation of fiction and/or nonfiction books, a play, television programs and/ora film. Topics to be explored may include, among others, a study of Jihadism, the militant andradical fonn of Islam, the fomtS of tenorism to which we may be exposed, m ~ t h o d swhich we canutilize to eradicate terrorism, the Israeli-Arab conflict in general, the spirit and image ofisrael, the

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JUN 16 2005 11=16 FR 00-.. .

2155427711 TO 2 22 7 1 ~ 1' ' .

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

APPLICATION FORRECOGNITIONOF EXEMPTION UNDERSECTION 501(c)(3) OF THE INTERNAL REVENUE CODE

FORM 1023

SUPPLEMENTALSTATEMENT

importance of a Jewish state, the unique relationship between Israel and the United States, andIsrael's status as the only democracy in the Middle East.

On April 24, 2001, FDD announced the creation of its frrst initiative, the EMETFe1Jows Program, which was conducted in cooperation with Tel Aviv University and Hillel, TheFoundation for Jewish Campus Life. The Program sponsored the education of 40 college studentsrepresenting 26 North American campuses at The Jaffe Center for Strategic Studies at Tel AvivUniversity. The goal o f the Program was to enable the Fellows to provide educational outreach ontheir own college campuses throughout the United States upon their return . The Program isanticipated to be expanded for the Swnmer of2002, to include Jewish as well as Chr istian students .

The EMET Fellows Program has initiated a secondary program, entitled Caravan ForDemocracy, which will be conducted in cooperation with The Jewish National Fund andMediawatch. The Caravan For Democracy will sponsor speakers and other programs on variouscollege campuses in North America. FDD has budgeted $100,000 during fiscal year 2002 for thisprogram.

In January, 2002 FDD undertook an educational mission to Israel by several boardmembers, including former Housing and Urban Development Secretary Jack Kemp and formerSenator Frank Lautenberg. This trip will be followed by a media tour in the United States infurtherance ofFDD's message.

The officers and directors of FDD have appeared on various radio and televisionprograms and have been interviewed by several of the nations top journalist s, in order to promoteFDD's message; a list o f such appearances through December 19, 2001 is attached hereto. Inaddition, FDD has prepared a number o f White Papers , .. Decision Memoranda' and Devil'sAdvocate Analyses for distribution to various media and opinion leaders, in order to frame thecurrent debates regarding terrorism and to maintain FDD's media visibility. Sample copies of suchdocuments are attached .

FDD has produced its first VNR (video news release), which featured an Israelihospital where, even during the intifada, doctors perfonn state-of-the-art heart surgery on infantsfrom around the world - including infants from Palestinian territories . The VNR was released tovarious local news organizations throughout the country, and, as of December 19, 2001. wasbroadcast in 14 different metropolitan areas , reaching an estimated 441,500 households; a BroadcastMonitoring Report as ofDecember 24, 2001 is attached. FDD is in the process o f producing at leastthree other VNRs, which are scheduled to be released during 2002 .

Finally, FDD is considering the development of a television series or movie, currentlytitled 'The Roots o f Terror to be broadcast on PBS, and/or in classrooms throughout the country.

Robert Chitester, creator of many other PBS specials, may direct the project.Page 3 ofl3

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 50l(c)(3) OF Tiffi INTERNAL REVENUE CODE

FORM 1023


I . J . U

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

FDD is organized and shall be operated exclusively for charitable, scientific andeducational purposes within the meaning of Section 5 1 ( c)(3) of he Internal Revenue Code of1986,as amended (or the corresponding provision of any future United States Internal Revenue Law, the

Code''). FDD shall not carry on any activities not permitted to be carried on (a) by a corporationexempt from federal income tax under Section 501(c)(3) of the Code, or (b) by a corporation,contributions to which are deductible under Section 170(c)(2) of the Code. t is intended thattransfers to FDD shall qualify for deduction under Sections 170, 2055 and 2522 of he Code and thatFDD shall be exempt from Federal income taxation under Section 50l(a) of the Code as anorganization described in Section 5 1 (c)(3) of he Code and which is a private foundation by reasonof being described in Section 509 of the Code In addition, FDD intends to qualify as a privateoperating foundation, as described in Section 4942(j)(3) of the Code.

I

No part of FDD s net earnings shall inure to the benefit of or be distributable to itsdirectors, officers, or other private persons, except that FDD shall be authorized and empowered topay reasonable compensation for services rendered by its officers and directors and to makepayments and distributions in furtherance of its charitable purposes. No substantial part ofFDD sactivities shall be the carrying on of propaganda, or otherwise attempting to influence legislation, andFDD shall not participate in, or intervene n (including the publishing or distributing of statements)any political campaign on behalf of(or in opposition to) any candidate for public office.

FDD will exercise expenditure responsibility to the extent required by Section 4945of the Code, including, in the case of any grant to an individual for travel, study. or other similarpurposes. obtaining advance approval of scholarship procedures as provided in Code Sections4945(d) and (g) and the regulations thereunder.

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 50l(c){3) OF THE INTERNAL REVENUE CODE

FORM 1023


PART II Questions 4(a) and 4(b):

Names, Addresses and Titles Compensationof Officers and Directors

Jack Kemp ~ Chairman7904 Greentree Road 100,000Bethesda, MD 20817

Frank La.utenberg- Director201 West Passaic Street NONERochelle Parl

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION SOI(c)(3) OF THE .INTERNAL REVENUE CODE

FORM 1023


Bernard Marcus- Director2455 Paces Ferry Road NONEAtlanta, GA 30339Ronald Rubin - Director200 S. Broad Street NONEPhiladelphia, P A 19102Lynn Schustennan - Director4011 South Yorktown Place NONE

Tulsa. OK 74105Peter May - Director280 Park Avenue NONENew York, NY 10017Joseph W cbe r Director1912 Montreal Road NONETucker, Georgia 30084Lewis S. Ranieri - Director5 Charles Lindbergh Boulevard NONESuite 500Uniondale, NY 11 553Dalck Feith - Director8134 High School Road NONEElkins Park, PA 19027David Cutler DirectorFive Sentry Parkway West NONESuite 100Blue Bell, PA 19422Clifford D. Ma y - President and ExecutiveDirector 250,0001020 191h Street, N.W. Ste. 340Washington, DC 20036Nir Borns Vice President Program Director102019 Street, N.W. Ste. 340 80,275W s h i n g t o ~DC 20036Joseph M. Yohlin Secretary and Treasurer1086 Penllyn Pike NONEBlue Bell, P A 19422

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PART II.

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

APPLICATION FOR RECOGNITIONOF EXEMPTION UNDERSECTION 501 c) 3) OF THE INTERNAL REVENUE CODE

FORM 1023


Question 4 d) :

The Contributing Directors are disqualified persons by reason of being substantialcontributors to FDD .

PART II. QuestionS:

FDD has purchasedsome

furniture, office supplies and office equipment, such as severalcomputers. a copier, fax machine, etc.

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PART IV.

PART IV

~ ~ ~ ~ ~ ~ ~ ~U ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 50l c) 3) OF THE INTERNAL REVENUE CODE

FORM 1023

Line 17:


Compensation o f officers, directors and trustees for period endingDecember 31, 2001:

Clifford D. May, President: 70,582.00

Line 22: Other Expenses:I

A FDD retained the seJVices o f a media consulting firm, Creative Response Concepts,at a monthly cost o f 42,500.00.

Total media strategist, counsel and liaison expendituresduring the period ending December 31, 2001: 315,508.00.

B. The Expenses associated with The EMET Fellows Program were:

123

4.5

6

TOTAL:

Airfareffravel expenses .for students:Lodging for students:Advertising/brochure development:

Syllabus, books. and materials:Fund Set-aside:Fees to consultant:

84,000.0072,000.00

8,400.00

1,500.003,600.008,000.00

177,500.00

A total of 25,000 will be set aside for purpose o f enabling students to develop an Israeladvocacy plan on campus following their return.

The costs associated with the EMET Fellows Program are expected to double for theProgram scheduled for the Summer of 2002.

C. The costs of office supplies, furniture and equipment during the period ending December31, 2001 were as follows:

123

TOTAL:

Office/Computer Equipment:Furniture:Telephone:

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26,245.0011,261.00

1,394.00

38,900.00

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


FORM 1023


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

1.2.3.3.4.5.6.

TOTAL:

Travel/Meals:Shipping/Postage:Legal:Filing Fees:

Does/Subscriptions:Health insurance:Office Operations:

5,677.00306.00

3,906.002,110.00

301.00812.00

3,425.00

16,537.00

E. FDD is currently developing its website, www.defenddemocracy.org, and has engagedKESEM Technology to provide ~ c h n o l o g i c lsupport. The costs associated with this engagementare 25,450. In d d i t i o n ~FDD will incur substantial costs in operating the website, creating andbroadcasting emails, drafting press releases and updating the site periodically.

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FoUNDATION FOR THE DEFENSE OF DEMOCRACIES, INC.

c/o Clifford D. May President

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 501(c)(3) OF THE INTERNAL REVENUE CODE

FORM 1023


SCHEDULEE

PRIVATE OPERATING FOUNDATIONS

Line 2a:organized :

Amounts paid directly for the active conduct of he activities for which FDD is

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

Total:

70,582.00315,508.00177,500.00

5,677.00306.00

3,906.002,110.00

301.00. 812.003,425.001.394 .00

581,521.00

Line 2b:purposes:

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

Office/Computer Equipment:Fumiture:Total:

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26,245.0011.261.0037,506.00

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


FORM 1023


SCHEDULEE

PRIVATE OPERATING FOUNDATIONS

Line 21. FDD has satisfied the requirements of Section 4942(j)(3) o f the InternalRevenue Code for the Income Test and for the Endowment Test for its first fiscal year endingDecember 31, 2001 by making qualifying distributions directly for the active conduct of its

charitable activities which greatly exceeded FDD s adjusted net income and minimum investmentreturn for the year. FDD intends to continue to satisfy both tests in the future by making qualifyingdistributions directly for the active conduct of its charitable activities which will approximate thetotal contributions made to FDD during each year.

FDD has already completed and fully funded its first program, the EMETFellows Program. A second Program is in development. In addition, through the course of its firstyear, several of the officers and directors ofFDD have appeared on radio and television programsand have authored newspaper op-ed pieces and articles, a list of which are attached hereto . FDD sfirst VNR has been released to numerous loca) news organizations throughout the country and hasbeen broadcast in 14 different cities. Three additional VNR s are currently in production. FDD s

ftrst television series/movie, tentatively entitled, The Roots of Terror,. is in development. Finally,FDD is currently developing a websi te which will provide valuable and educational information tothe public.

The attached brochures, press releases and media presentation illustrate FDD sdesire to actively enhance the public s understanding of errorism and how to cope with it, as well asother issues affecting Israeli-Arab relations.

The scope of FDD activities towards satisfaction of the requirements ofSection 4942{j)(3) is discussed in greater detail in the response to Part IT, Question 1, hereinabove.

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

APPLICATION FOR RECOGNITION OF EXEMPTION UNDERSECTION 501 (c)(3) OF THE INTERNAL REVENUE CODE

FORM 1023


EXHIBIT A

CERTfl 'CATION

I, Clifford D. May, the President ofFDDt do hereby certify that attached hereto is a tme andcorrect copy of he Certificate oflncorporation, the Certificate o f Amendment and Bylaws ofFDDand that the same have not been subsequently amended, modified, or supplemented.

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Documents

FDD 1023