January 1, 2008 This past year was another very rewarding year of grant making. We continue to be inspired by the impact that our funding has made on our community. We are proud to have participated in many of the significant projects and programs that have benefited the people of Santa Clara County. In the past year, we have seen the nonprofit community continue to struggle as the economy is slowly rebounding. We continue to support collaborative efforts in this community. This is a trend that The Valley Foundation strongly encourages because it allows organizations with complimentary missions to serve a larger portion of the community while sharing expenses. We look forward to our continuing work with other foundations and nonprofits to promote healthy lifestyles that may eventually eliminate obesity in our valley and foster developmental assets in our youth. While we realize that there are worthy needs of all types in our local area and around the globe, we have chosen grant guidelines in order to make a consistent and greater impact on our immediate community. We maintain the following guidelines in granting funding: The Valley Foundation was created with funds raised through a community venture. It is a charter goal of The Foundation that the money raised within Santa Clara County should be used to meet the needs arising within the county. The Foundation grants focus on the health needs of low income families, with more than half of the total grant monies dedicated to this purpose. The Foundation grants start-up funding for specific projects. Foundation support may thus pave the way for future financial contributions from other public and private sources. We consider health care, medical research and social services to be the focus of our support. In providing funding for non-profit organizations, we act as a catalyst to encourage the support of other public and private sources. We seek to enrich the financial security of non-profit organizations, while encouraging a healthy independence from any one source of funding. In fiscal year 2007-2008, we granted to over 40 worthy organizations. In addition to the grants we award directly each year, we also donate funding for smaller projects to worthy organizations through our account with the Community Foundation Silicon Valley. On behalf of the Board of Trustees, I am pleased to share with you the following report which reflects the scope of our contributions and the diversity of the organizations we serve. We are always delighted to see the innovative ways in which local organizations seek to make a difference in our community and the resourcefulness with which they succeed in their efforts. We look forward to 2008 and another exciting year of grant making in our community. Sincerely, Phillip R. Boyce Chairman