Accountants and
Management Consultants
The US Member Firm of
Grant Thornton International

Board of Trustees
The Cancer Research Foundation

We have audited the accompanying statement of financial position of The Cancer Research Foundation as of March 31, 2000 and 1999, and the related statements of activities and changes in net assets and cash flows for the years then ended. These financial statements are the responsibility of the Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audits.

`We conducted our audits 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Cancer Research Foundation as of March 31, 2000 and 1999, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles.

Chicago, Illinois
May 26, 2000

700 One Prudential Plaza
130 E Randolph Drive
Chicago, IL 60601-6203
Tel: 312-856-0200

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Statement of Financial Position
March 31, 2000 and 1999

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Statement of Activities and Changes in Net Assets
Year ended March 31, 2000

The Cancer Research Foundation
Statement of Activities and Changes in Net Assets - Continued
Year ended March 31, 1999

---

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Statement of Cash Flows
Years ended March 31, 1999 and 2000

	2000	1999
Cash flows from operating activities
Change in net assets	$124,860	$ (132,625)
Adjustment to reconcile change in net assets to net cash provided by operating activities
Net realized and unrealized loss on investments	(188,859)	210,110
Depreciation expense	867	450
Increase in accounts receivable	(49,616)	(102,488)
(Increase) decrease in accrued interest receivable	(2,544)	8,767
(Increase) decrease in prepaid assets	(188)	493
Increase in accrued expenses	10,906	160
Decrease in grants payable	(24,590)	(350,362)
Total cash used in operating activities	(129,164)	(365,495)
Cash flows from investing activities
Purchase of equipment	-	(2,080)
Proceeds from sale of investments	2,619,586	1,741,403
Purchases of investments	(2,555,646)	(1,306,083)
Total cash provided by investing activities	63,940	433,240
(Decrease) increase in cash and cash equivalents	(65,224)	67,745
Cash and cash equivalents, beginning of year	99,061	31,316
Cash and cash equivalents, end of year	$33,837	$ 99,061

 

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Notes to financial Statements
March 31, 2000 and 1999

NOTE A - NATURE OF PROGRAM SERVICES
The purpose of The Cancer Research Foundation (the "Foundation") is to obtain and distribute funds to recognized doctors, hospitals, laboratories, institutes, and centers engaged in cancer research.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements of the Foundation have been prepared on the accrual basis.
Classification of Net Assets - The Foundation's net assets have been grouped into the following two classes:
Unrestricted - Net assets that are not subject to donor-imposed stipulations. Unrestricted net assets may be designated for specific purposes by action of the Board of Trustees or may otherwise be limited by contractual agreements with outside parties.
Permanently Restricted - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Foundation. Generally, the donors of these assets permit the Foundation to use all or part of the income earned on these assets. Permanently restricted assets consist of the Foundation's endowment fund.
Grants - Grants are recorded as expenses when the Board approves the grants. Grants approved by the Board, but not yet paid, are recorded as liabilities in the balance sheet.
Cash Equivalents- The Foundation considers all liquid investments purchased with an original maturity of three months or less and designated to be used to support daily operations to be cash equivalents.
Investments - Investments are carried at fair market value, based on quoted market prices. Interest and dividends are included in operating revenues as investment income. Realized and unrealized gains and loses are separately stated as other gains and losses on the statement of activities.
Equipment - Equipment purchased by the Foundation is stated at cost. Depreciation of assets begins when the assets are placed in service. Depreciation is computed using the straight-line method over the estimated useful life of equipment of five years.
Use of Estimates - The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may vary from those estimates.

NOTE C - SPLIT INTEREST AGREEMENTS
The Cancer Research Foundation has been named the beneficiary of the following split interest agreements which have been recorded in accounts receivable and are considered temporarily restricted due to time restrictions:

NOTE D - INVESTMENTS
Investments are stated at fair value as of March 31, 2000 and 1999. Cost of donated securities is determined at the fair value of the securities on the date of receipt. Investments consist of the following at March 31, 2000 and 1999:

NOTE E - PERMANENTLY RESTRICTED NET ASSETS The Foundation received endowments totaling $710,265 in fiscal 1989 and fiscal 1988 from the Eugene and Dorothy S. Fletcher Trust. The terms of the endowments require permanent investment of the principal, but permit the use of investment earnings for laboratory research.

NOTE F - TAX STATUS The United States Treasury Department has advised that the Foundation is a not-for-profit corporation organized and operated exclusively for charitable and scientific purposes, is exempt from Federal income tax under Section 501(c)(3) of the Internal Revenue Code, and is not a private foundation as defined in Section 509(a) of the Internal Revenue Code.

NOTE H - LEASE AGREEMENT The Foundation is obligated for rental expense under a non-cancelable operating lease for office space. The agreement provides for annual base rents plus additional rents relating to future increases in the building's operating expenses and real estate taxes. At March 31, 2000 and 1999, future minimum rental commitments are as follows:

Fiscal year ending	Amount
2001	12,898
2002	13,220
2003	13,548
2004	2,267
Total	$41,993

During 2000, the Foundation incurred $10,775 in rent expense.