Form

"

990
Please use IRS
label or printo

Return of Organization Exempt From Income Tax

Under section 501 (c ), 527, or 4947(a)(1) of the Internal Revenue Code (except black lung benefit trust or private foundation)
^ The organization may have to use a copy of this return to satisfy state reporting requirements

OMB No

1545-00e

2007
n Dph1slyecttio

Department the Treasury Internall Revenue Service ce

A For the 2007 calendar year , or tax year beginning

B Check If
applicable aChanges Addres

and ending D Employer identification number

C Name of organization

change a change Lj;etum =Termini tlon

Amended

HE HEARTLAND INSTITUTE
Number and street (or P 0 box if mail is not delivered to street address)

36-3309812
Room/suite E Telephone number

Stype ee Specific
tnstruc-

l9 SOUTH LA SALLE STREET

city or town, state or country, and ZIP + 4

1 903

( 312 )
F Pccounonq memos
LI Other

377-4000
El Cash a Accrual

bons

return

HICAGO

IL

60603

5 ec,

H and I are not applicable to section 527 organizations. H ( a ) Is this a group return for affllfates9 =Yes 0 No N/A -HEARTLAND. ORG G Website H(b) If "Yes, enter number of affiliates ^ )A (insert no)El4947(a)(1)or[527 H(c) Are all affiliates included? J Organization type 501(c)( 3 N/A Yes F--]No (If "No, attach a list ) K Check here 10, 0 if the organization is not a 509(a)(3) supporting organization and its gross H(d) Is this a separate return filed by an org anization covered by a g rou p rulin g ? El Yes OX No receipts are normally not more than $25,000 A return is not required, but it the organization chooses to file a return, be sure to file a complete return N/A I Grou p Exem ption Number ^ must attach a completed Schedule A (Form 990 or 990 EZ). M L Gross receipts Add lines 6b, 8b, 9b, and 10b to line 12 ^ 5 , 216 , 884. Check ^ [] If the organization is not required to attach Sch B (Form 990, 990-EZ, or 990-PF)

Application pending

Section 501 c 3 or g anizations and 4947 ( a )( 1 ) nonexem p t charitable trusts ()()

Part I
1 a b c d e 2 3 4 5 6 a b c 7 d 8 a b c d 9
a

Revenue . Expenses . and Chances in Net Assets or Fund Balances

Contributions , gifts, grants , and similar amounts received Contributions to donor advised funds Direct public support ( not included on line 1a ) Indirect public support ( not included on line 1a) Government contributions ( grants ) ( not included on line 1a) 1a 1b 1c 1d

4,967,005.

Total ( add lines la through 1d ) ( cash $

4 ,967,005.

noncash $

le
2 3

4,967,005.
189,135.
26,157.

m cr:
110 CE5
PV

Program service revenue including government fees and contracts (from Part VII, line 93 ) Membership dues and assessments Interest on savings and temporary cash investments Dividends and interest from securities 6a Gross rents 6b Less rental expenses Net rental income or (loss ) Subtract line 6b from line 6a Other investment income ( describe ^ ( B ) Other ( A ) Securities Gross amount from sales of assets other 8a than inventory 8b Less cost or other basis and sales expenses 8c Gain or ( loss) (attach schedule) Net gain or (loss) Combine line 8c , columns ( A) and (B) Special events and activities ( attach schedule ) If any amount is from gaming , check here ^ El
Gross revenue (not Inducing $ of contnbutons reported on line 1b) 9a

4
5

34,587.

M -v

6c 7

0 00

8d

b c 10 a b c 11 12 13 14 a w 15 16 17 18 19 20 21

dd Z

9b Less direct expenses other than fundraising expenses Net income or (loss ) from special events Subtract line 9b from line 9a 10a Gross sales of inventory , less returns and allowances 10b Less cost of goods sold Gross profit or (loss ) from sales of inventory (attach schedule ) Subtract line 10b from line 104 Other revenue ( from Part VII , line 103) Total revenue . Add lines le 2 3 4 5 6c 7 8d 9c 10c and 11 (' Program services (from line 44 , column ( B)) Management and general ( from line 44 , column (C)) Fundraising ( from line 44 , column (D)) AUG 2 9 2908 Payments to affiliates ( attach schedule) Total ex p enses . Add lines 16 and 44 , column ( A ) >> Y^ - !FkJ Excess or (deficit ) for the year Subtract line 17 from line 12 Net assets or fund balances at beginning of year ( from line 73 , column (A)) Other changes in net assets or fund balances ( attach explanation) Net assets or fund balances at end of year Combine lines 18, 19, and 20 ' LHA For Privacy Act and Paperwork Reduction Act Notice , see the separate instructions.

9c

10c 11 12 13 14 15 16 17 18 19 20 21

5 , 2 16 , 8 8 4 5 ,172,467.

448, 138 . 244, 737 . 5, 865, 342 . <648, 458 . : 535, 113
0 < 113 345 Form 990(2007

12-z-o7

(; [-I

990 (2007)
ERTt 11

THE

HEARTLAND

INSTITUTE

36-3309812

Statement of Functional Expenses

All organizations must complete column (A) Columns (B), (C), and ( D) are required for section 501(c)(3) and (4) organizations and section 4947 (a)(1) nonexempt charitable trusts but optional for others (A ) Total (B ) Program services ( C) Management and general ( D) Fundraising

Do not include amounts reported on line 6b, 8b, 9b, 10b , or 16 of Part 1 22a Grants paid from donor advised funds (attach schedule)
(cash $ 0 noncash $ 0
^ O 2a If this amount includes foreign grants , check here

22b Other grants and allocations (attach schedule

STATEMENT
22b

lash $ 135000 noncash$

If this amount includes foreign grants, check here

0. 1
^ a

135,000.

135,000.

23 Specific assistance to individuals (attach schedule) 24 Benefits paid to or for members (attach schedule) 25a Compensation of current officers , directors, key employees , etc listed in Part V-A

23 24

25a 25b

172,629. 31,000.

114,344. 31,000.

47,288. 0.

10,997. 0.

b Compensation of former officers , directors, key employees , etc listed in Part V- B

c Compensation and other distributions , not included above , to disqualified persons (as defined under section 4958 (f)(1)) and persons described in section 4958 ( c)(3)(B) 26 Salaries and wages of employees not included on lines25a ,b,andc 27 Pension plan contributions not included on lines 25a , b, and c 28 Employee benefits not included on lines 25a-27 29 Payroll taxes 30 Professional fundraising fees 31 Accounting fees 32 Legal fees 33 Supplies

5c

26
27 28 29 30 31 32 33

1, 059, 125.

603, 339.

322, 578.

133, 208.

68 ,592'.
15,940. 839 ,497. 14 7,199.

43,827.
14,058. 817,702. 129,814.

9,907.
1,217. 6,096. 11,243.

14,858.
665. 15,699. 6,142.

34 Telephone
35 Postage and shipping 36 Occupancy 37 Equipment rental and maintenance 38 Printing and publications 39 Travel 40 Conferences , conventions , and meetings

34
35
36 37 38 39 40

1,217,535.
484 , 781. 1, 601 . 10, 299 . 28 ,616. 743,906. 909 ,622.

1,213,709.
465, 158.

1,261.
1,846. 1 6 01 . 10,299 .

2,565.
17,777.

41 Interest
42 Depreciation , depletion, etc. (attach schedule )

41
42

43 Other expenses not covered above (itemize): a OTHER EXPENSES 43a

26,963. 671,615. 905,938.

77. 31,041. 3,684

1,576. 41 , 250.

b SUBCONTRACTOR, c WRITERS, EDITORS d ADVERTISING

e f g 44 Total functional expenses . Add lines 22a through 43g (Organizations completing columns ( B)-(D), carry these totals to lines 13 -15)

43b 43c 43d

43e 43f 43

44

5, 865, 342.

5,172 , 467.

448, 138.
^

244, 737.
Yes 0 No N/A
N/A

Joint Costs . Check ^ Q if you are following SOP 98-2. Are any joint costs from a combined educational campaign and fundraising solicitation reported in (B) Program services' N/A , (ii) the amount allocated to Program services $ If 'Yes,' enter ( I) the aggregate amount of these joint costs $
(III) the amount allocated to Management and general $ 72301 1 12-27-o7 N/A , and (iv) the amount allocated to Fundraising $

z^

Form 990 (2007)

THE HEARTLAND INSTITUTE Form 990 2007 Part UI Statement of Program Service Accomplishments (See the instructions.)

36-3309812

Page 3

Form 990 is available for public inspection and, for some people, serves as the primary or sole source of information about a particular organization. How the public perceives an organization in such cases may be determined by the information presented on its return. Therefore, please make sure the return is complete and accurate and fully describes, in Part III, the organization's programs and accomplishments.

What is the organization ' s primary exempt purpose? ^ RESEARCH & WRITING ON PUBLIC

POLICY

ISSUES

Program Service Expenses

(Required for 501(c)(3) and ( 4) orgs , and 4947( a)(1) trusts, but optional for others )

All organizations must describe their exempt purpose achievements in a clear and concise manner . State the number of clients served , publications issued , etc. Discuss achievements that are not measurable . (Section 501 (c)(3) and (4) organizations and 4947 (a)(1) nonexempt charitable trusts must also enter the amount of grants and allocations to others.)

a PUBLICATIONS - RESEARCH,
PUBLICATIONS ON PUBLIC

WRITING AND DISTRIBUTION OF

ISSUES. HEARTLAND PRODUCED TWO

POLICY

NEWSLETTERS,
BOOKLET

FIVE MONTHLY NEWSPAPERS ,

THREE BOOKS AND ONE

IN 2007.

( Grants and allocations

If this amount includes foreig n g rants , check here

2,389,180.

b PUBLIC RELATIONS - SEMINARS,

BUREAU AND OTHER ACTIVITIES

EVENTS,

A WEB SITE,

SPEAKERS

AIMED AT EDUCATING HEARTLAND

MEMBERS AND THE GENERAL PUBLIC POLICY ISSUES.

(Grants and allocations

If this amount includes forei g n g rants , check here

Ej

1 , 791,365.

c GOVERNMENT RELATIONS - PUBLICATIONS AND EVENTS GEARED TOWARD EDUCATING AND INFORMING LOCAL, STATE AND NATIONAL ELECTED OFFICIALS ABOUT PUBLIC POLICY ISSUES.

(Grants and allocations

If this amount includes forei g n g rants , check here

904,293.

d NEW COALITION - PUBLICATIONS AND EVENTS GEARED TOWARD

EDUCATING AND INFORMING LEADERS OF AFRICAN-AMERICAN, HISPANIC AND OTHER MINORITY GROUPS.

If this amount includes forei g n g rants , check here $ (Grants and allocations e Other program services (attach schedule ) SEE STATEMENT 2 13 5 , 0 0 0 . ) If this amount includes forei g n g rants , check here $ (Grants and allocations

^ ^

EJ 0

87,629 .

f Total of Program Service Expenses (should equal line 44, column (B), Program services)

5,172,467. Form 990 (2007)

723021 12-27-07

THE HEARTLAND Form 990 2007 Part IV Balance Sheets (See the instructions)

INSTITUTE
(A) Beginning of year

36-3309812
(B) End of year

Pag e 4

Note: Where required, attached schedules and amounts within the description column should be for end-of-year amounts only

45 46

Cash - non-interest-bearing Savings and temporary cash investments

500,352. 45
45

1,214.

47 a Accounts receivable
b Less: allowance for doubtful accounts

47a
47b

10,626.
8,468. 47c 10,

626.

<

48a 48 a Pledges receivable 48b b Less: allowance for doubtful accounts 49 Grants receivable 50 a Receivables from current and former officers, directors, trustees, and key employees b Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3 (B) 51 a 51 a Other notes and loans receivable 51b b Less allowance for doubtful accounts 52 53 54 a b 55 a Inventories for sale or use Prepaid expenses and deferred charges Investments - publicly-traded securities Investments - other securities Investments - land, buildings, and equipment: basis b Less- accumulated depreciation Investments - other 56 57 a Land, buildings, and equipment* basis b Less: accumulated depreciation Other assets, including program-related investments 58 55a 55b 57a 216,821 . 18,222. Cost ^ ^ 0 Cost FMV FMV

48c 49 50a 50b 51c 52 53 54a 54b

45,923.

55c 55

57b

135,370. )

34,659. 57c 6,000. 58

567 701 . 59

81,451. 6 , 000. 145 , 214.

258,559.

(describe ^ SECURITY DEPOSIT

59 Total assets must eq ual line 74 ) . Add lines 45 throu g h 58

60
61 62 63 64 a b 65

Accounts payable and accrued expenses

Grants payable Deferred revenue Loans from officers, directors, trustees, and key employees Tax-exempt bond liabilities Mortgages and other notes payable Other liabilities (describe ^

32,588.

50
61 62 53 64a 64b

65

Total liabilities . Add lines 60 throu g h 65 66 Organizations that follow SFAS 117, check here ^ 0 and complete lines 67 through 69 and lines 73 and 74.

32,588.

65

258 f 559.

67
cc m c
3 LL

Unrestricted

535,113.

57
68 69

<113,345.

68 Temporarily restricted 69 Permanently restricted and Organizations that do not follow SFAS 117, check here ^ complete lines 70 through 74. 70 Capital stock, trust principal, or current funds 71 Paid-in or capital surplus, or land, building, and equipment fund 72 Retained earnings, endowment, accumulated income, or other funds 73 Total net assets or fund balances . Add lines 67 through 69 or lines 70 through 72 (Column (A) must equal line 19 and column ( B) must equal line 21) 74 Total liabilities and net assets/fund balances . Add lines 66 and 73

70 71 72

535 , 113. 5 67 7 01 .

73 74

<113 , 345. 14-5 , 21-4.

Form 990 (2007)

723031 12-27-07

4
36-3309812 THE HEARTLAND INSTITUTE Form 990 2007 Part IV-A Reconciliation of Revenue per Audited Financial Statements With Revenue per Return (See the instructions)
a b Total revenue, gains, and other support per audited financial statements Amounts included on line a but not on Part I, line 12: 1 Net unrealized gains on investments 2 Donated services and use of facilities 3 Recoveries of prior year grants 4 Other (specify) Add lines b1 through b4 Subtract line b from line a Amounts included on Part I, line 12, but not on line a: 1 Investment expenses not included on Part I, line 6b 2 Other (specify): Add lines dl and d2

Page5

5,216,884.
b1

c d

b c

0. 5,216,884.

e Port IV- U
a b 1 2 3 4 c d

e
a

0. 884.

Reconciliation of expenses per Audited rtnanciat statements with expenses per Return
5,865,342.

1 2 Other (specify): Add lines dl and d2 e Total ex p enses Part I line 17 ) . Add lines c and d

Total expenses and losses per audited financial statements Amounts included on line a but not on Part I, line 17: Donated services and use of facilities Prior year adjustments reported on Part I, line 20 Losses reported on Part I, line 20 Other (specify): Add lines b1 through b4 Subtract line b from line a Amounts included on Part I, line 17, but not on line a: Investment expenses not included on Part I, line 6b

b1 b2 b3 b4 b c d1 d2 ^ d e 0 . 342. 0 5,865,342.

, 865 ,

Part V-A

Current Officers, Directors , Trustees, and Key Employees (List each person who was an officer, director, trustee,
nr key emnlnvee nt any time donna the year even if they were not compensated.) (See the instructions )

(A) Name and address

(B) Title and average hours per week devoted to

position

(C) Compensation (If not paid , enter

- 0-.

(D)Contnbutions to employee benefit plans & deferred compensation plans

(E) Expense account and other allowances

---------------------------------

SEE STATEMENT 3
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

172

629.

0.

0.

Form 990 (2007)

723041 12-27-07

THE HEARTLAND INSTITUTE Form 990 (2007) Part V-A Current Officers, Directors, Trustees, and Key Employees (continued)
75 a ' Enter the total number of officers, directors, and trustees permitted to vote on organization business at board

36-3309812

Page6 Yes No

meetings

16

b Are any officers, directors, trustees, or key employees listed in Form 990, Part V-A, or highest compensated employees listed in Schedule A, Part I, or highest compensated professional and other independent contractors listed in Schedule A, Part II-A or II-B, related to each other through family or business relationships? If "Yes,' attach a statement that identifies SEE STATEMENT 4 the individuals and explains the relationship(s) c Do any officers, directors, trustees, or key employees listed in Form 990, Part V-A, or highest compensated employees listed in Schedule A, Part I, or highest compensated professional and other independent contractors listed in Schedule A, Part II-A or II-B, receive compensation from any other organizations, whether tax exempt or taxable, that are related to the organization? See the instructions for the definition of "related organization."

75b

75c

If 'Yes,' attach a statement that includes the information described in the instructions. X 75d d Does the org anization have a written conflict of interest polic y ? Part V- 8 Former Officers , Directors , Trustees , and Key Employees That Received Compensation or Other Benefits (If any former officer, director, trustee , or key employee received compensation or other benefits (described below) during the year, list that person below and enter the amount of compensation or other benefits in the appropriate column. See the Instructions.) (C) Compensation ( D) Contributions to (E) Expense employee benefit ( if not paid , (A) Name and address ( B) Loans and Advances account and plans & deferred enter -0-) com p ensation p lans other allowances

LEE WALKER _ AVENUE 8086 _S_O_U_T_H SOUTH _ GARFIELD 60527 IL BURR RIDGE ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------I------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Part YC
76 77 78 a b 79 80 a b

0.

31 , 000.

0.

0.

Other Information (See the instructions)

75 77 78a 78b 79 80a

Yes No
X X X X X X

Did the organization make a change in its activities or methods of conducting activities? If ' Yes,' attach a detailed statement of each change Were any changes made in the organizing or governing documents but not reported to the IRS? If 'Yes,' attach a conformed copy of the changes. Did the organization have unrelated business gross income of $1 ,000 or more during the year covered by this return'? If 'Yes ,' has it filed a tax return on Form 990 - T for this year'? Was there a liquidation , dissolution, termination , or substantial contraction during the year? If 'Yes,' attach a statement Is the organization related (other than by association with a statewide or nationwide organization ) through common membership , governing bodies , trustees , officers, etc., to any other exempt or nonexempt organization? N/A If 'Yes ,' enter the name of the

and check whether it is Q exempt or 0 nonexempt 81a 0 81 a Enter direct and indirect political expenditures (See line 81 instructions.) b D id the o rganization file Form 11 20 - POL for this year?

ib X Form 990 (2007)

723161/12-27-07

.'

Form 990 2007 THE HEARTLAND INSTITUTE Pan VI Other Information (continued)

36-3309812

Page 7 Yes No
X

82 a' Did the organization receive donated services or the use of materials, equipment, or facilities at no charge or at substantially less than fair rental value? b If 'Yes,' you may indicate the value of these items here. Do not include this amount as revenue in Part I or as an expense in Part II. N/A (See instructions in Part III.) 82b 83 a Did the organization comply with the public inspection requirements for returns and exemption applications? b Did the organization comply with the disclosure requirements relating to quid pro quo contributions? 84 a Did the organization solicit any contributions or gifts that were not tax deductible? b If 'Yes,' did the organization include with every solicitation an express statement that such contributions or gifts were not N/A tax deductible? N/A 85 a 501(c)(4), (5), or(6). Were substantially all dues nondeductible by members? N/A b Did the organization make only in-house lobbying expenditures of $2,000 or less? If Yes' was answered to either 85a or 85b, do not complete 85c through 85h below unless the organization received a waiver for proxy tax owed for the prior year. N/A 85c Dues, assessments, and similar amounts from members N/A 85d Section 162(e) lobbying and political expenditures N/A 85e Aggregate nondeductible amount of section 6033(e)(1)(A) dues notices N/A 851 Taxable amount of lobbying and political expenditures (line 85d less 85e) N/A Does the organization elect to pay the section 6033(e) tax on the amount on line 85f'7 If section 6033(e)(1)(A) dues notices were sent, does the organization agree to add the amount on line 85f to its reasonable estimate of dues allocable to nondeductible lobbying and political expenditures for the N/A following tax year?

82a

83a 83b 84a 84b 85a 85b

X X X

c d e t g h

85

85h

86

501(c)(7) organizations Enter: a Initiation fees and capital contributions included on N/A 85a line 12 N/A 86b b Gross receipts, included on line 12, for public use of club facilities N/A 87a 87 501(c)(12) organizations Enter: a Gross income from members or shareholders b Gross income from other sources (Do not net amounts due or paid to other sources N/A 87b against amounts due or received from them.) 88 a At any time during the year, did the organization own a 50% or greater interest in a taxable corporation or partnership, or an entity disregarded as separate from the organization under Regulations sections 301.7701.2 and 301.7701.3" If 'Yes,' complete Part IX b At any time during the year, did the organization, directly or indirectly, own a controlled entity within the meaning of section 512(b)(13)? If 'Yes,' complete Part XI 89 a 501(c)(3) organizations Enter: Amount of tax imposed on the organization during the year under: 0 , section 4912 ^ 0 , section 4955 ^ section 491110, b 501(c)(3) and 501(c)(4) organizations. Did the organization engage in any section 4958 excess benefit transaction during the year or did it become aware of an excess benefit transaction from a prior year? c 88a ^ 0 88b X X

If Yes,' attach a statement explaining each transaction Enter: Amount of tax imposed on the organization managers or disqualified persons during the year under 0 . sections 4912, 4955, and 4958 ^ ^ 0 d Enter: Amount of tax on line 89c, above, reimbursed by the organization e All organizations At any time during the tax year, was the organization a party to a prohibited tax shelter transaction? I All organizations. Did the organization acquire a direct or indirect interest in any applicable insurance contract,7 9 For supporting organizations and sponsonng organizations maintaining donor advised funds Did the supporting organization, or a fund maintained by a sponsoring organization, have excess business holdings at any time during the year? 90 a List the states with which a copy of this return is filed ^ IL b Number of employees employed in the pay period that includes March 12, 2007 91 a The books are m care of ^ THE HEARTLAND INSTITUTE 90b

89b

89e 8911 89

X X X 19

Telephone no ^

( 312)

377-4000
Yes 91 b No X

Locatedat ^ 19 SOUTH LA SALLE STREET,

#903,

CHICAGO,

IL

ZIP+4 ^ 6 0603

b At any time during the calendar year, did the organization have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? N/A If Yes,' enter the name of the foreign country ^ See the instructions for exceptions and filing requirements for Form TD F 90-22 .1, Report of Foreign Bank

Form 990 (2007)

723162 / 12-27-07

Form 990 2007 THE HEARTLAND Other Information (continued) Pert VI

INSTITUTE

36-3309812
91 c

Page 8 Yes No
X

C 'At any time during the calendar year , did the organization maintain an office outside of the United States? N/A If 'Yes,' enter the name of the foreign country ^ 92 Section 4947(a)(1) nonexempt chartable trusts filing Form 990 in lieu of Form 1041 - Check here and enter the amount of tax -exem pt interest received or accrued durin g the tax year ^ Analysis of Income - Producing Activities (see the instructions) Part VU Excluded by section 512 , Unrelat ed business income Note : Enter g ross amounts unless otherwise indicated 93 Program service revenue: (A) Business code (B) Amount

92
513, or

^ N/A

(C_ )
son

(D)
Amount

(E) Related or exempt function income

a b c d
e

PUBLICATIONS/RESEARCH POLICY BOT/INTERNET PUBLICATIONS/RESEARCH SPEAKERS BUREAU

511110

48,175.

140,960.

f Medicare/Medicaid payments g Fees and contracts from government agencies 94 Membership dues and assessments 95 Interest on savings and temporary cash investments 96 Dividends and interest from securities 97 Net rental income or (loss) from real estate" a b 98 99 100 debt-financed property not debt -financed property Net rental income or (loss) from personal property Other investment income Gain or (loss) from sales of assets other than inventory 101 Net income or (loss) from special events 102 Gross profit or (loss) from sales of inventory 103 Other revenue. a
b C d e 104 Subtotal (add columns ( B), (D), and (E)) 48 , 175 .

26,157. 34,587.

105 Total (add line 104, columns (B), (D), and (E)) Note : Line 105 plus line le, Part 1, should equal the amount on line 12, Part 1

0.1 ^

201,704. 249,879.

Part Vi ll
Line No .

Relationship of Activities to the Accomplishment of Exempt Purposes (Seethe instructions)

Explain how each activity for which income is reported in column ( E) of Part VII contributed importantly to the accomplishment of the organization's exempt purposes ( other than by providing funds for such purposes)

93A ANNUAL FUNDRAISER & OTHER PUBLIC EVENTS EDUCATES ATTENDEES AS WELL AS 93B H EARTLAND DISSEMINATES ITS RESEARCH THRU PUBLICATIONS & PUBLIC EVENTS. 94 EMBER DUES QUALIFY MEMBERS FOR FREE PUBLICATIONS & EVENT DISCOUNTS. 95 INTEREST IS EARNED INCIDENTAL TO FUNDRAISING & PROGRAM ACTIVITIES. Part 1X Information Regard ing Taxable Subsidiaries and Disregarded Entities (See the instructions)
Name, address , and EIN of corporation , partnershi p , or disre g arded entity Percentage of ownership interest Nature of activities Total Income End-of-year assets

N/A

Part X

Information Reaardi na Transfers Associated with Personal Benefit Contracts (See the instructions )
0 Yes LI Yes No No

(a) Did the organization , during the year , receive any funds , directly or indirectly, to pay premiums on a personal benefit contract? (b) Did the organization , during the year , pay premiums, directly or indirectly, on a personal benefit contract? Note : If "Yes" to (b), file Form 8870 and Form 4720 (see instructions).

Form 990 (2007)

723163 12-27-07

36-3309812 THE HEARTLAND INSTITUTE Form 990 2007 Information Regarding Transfers To and From Controlled Entities . Complete only if the organization is a part
controlling organization as defined in section 512 (b)(13). 106 N/A

Page 9

Yes No
Did the reporting organization make any transfers to a controlled entity as defined in section 512(b)(13) of the Code? If 'Yes,' com p lete the schedule below for each controlled entit y . (B) (C) (A) Employer Description of Name, address, of each Identification transfer controlled entity Number ------------------------------------------------------------------------------------------------- ---------------------------------------------------------------- --------------------------------

(D) Amount of transfer

Totals

Yes No
107 Did the reporting organization receive any transfers from a controlled entity as defined in section 512(b)(13) of the Code? If 'Yes,' com plete the schedule below for each controlled entity . (D) (B) (C) (A) Employer Amount of Description of Name , address, of each Identification transfer transfer controlled entity Number ------------------------------------------------------------------------------------------------- ---------------------------------------------------------------- --------------------------------

Totals

Yes No
108 Did the organization have a binding written contract in effect on August 17, 2006, covering the interest, rents, royalties, and annuities described in q uestion 107 above?
Under penalties of perryry , I declare tha ve examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct,

and complete Declaration of prep

!h

offic

ca

n all informatt

of which preparer has any knowledge S--

Please

,7' 0

Sign Here

Signature of officer a Type or m e a nd title

ate I kit

Date ,^ a S
Prearer'sSSNorPTWN (See Gen Inst )Q

Paid

Preparers

signature

SCHEDULE A (Form 990 or 990-EZ)

Department of the Treasury Internal Revenue Service Name of the organization

Organization Exempt Under Section 501(c)(3)

(Except Private Foundation ) and Section 501(e), 501(f), 501(k), 501(n ), or 4947( a)(1) Nonexempt Charitable Trust Supplementary Information-(See separate instructions.) ^ MUST be completed by the above organizations and attached to their Form 990 or 990-EZ

OMB No 1545-0047

2007
(d) Contributions to employee benefit
plans & deferred compensation

Part I

Employer identification number 36 3309812 Compensation of the Five Highest Paid Employees Other Than Officers, Directors, and Trustees (See oaae 1 of the instructions List each one If there are none. enter 'None ')

THE HEARTLAND INSTITUTE

(a) Name and address of each employee paid more than $50,000

( b) Title and average hours per week devoted to

p osition

(c) Compensation

(e) Expense account and other allowances

NICO _ LE T _TE__ M_ COMERFORD ___________ MANAGER

597 _E GREN O AKS DRIVE,CRYSTAL LAKE, I 40.00 64,035.

MANAGER 40.00 /P HUMAN RES --------------------------40.00 HICAGO IL 5127 W GLADYS FLOOR 2 KEVIN M. FITZGERALD ___________ P PROGRAMS ------------40.00 1934 N. LEAVITT #2 CHIAGO, IL 60647
_ R. _ MARTIN __________________ TREVOR 3270 N LAKE SHORE DR #13E_ CHICAGO IL_
Total number of other employees paid over $50,000 ^

RALPH W CONNER ____________________ 60153 313 N 5TH, MAYWOOD, IL LATREECE VANKINSCOTT

68,293. 69,747. 80,065. 72,040.

P GOVT REL.

40.00
7

Part Il-A

Compensation of the Five Highest Paid Independent Contractors for Professional Services
(See nane 9 of the instructions List each one (whether individuals or firms) If there are none . enter "None')

(a) Name and address of each independent contractor paid more than $50,000

(b) Type of service

( c) Compensation

MS. ALEXANDRA LIDDY BOURNE -----------------------------------------22309 9321 OLD MANSION ROAD, ALEXANDRIA, VA MR.S.T. KARNICK ---------------------DRIVE----IND---IANAPOL----4-62-, I S---IN , 4-62-3-4 402 NORTH GREENLEE MR. JAMES M. TAYLOR -----------------------------------34219 3718 162ND AVENUE EAST, PARRISH, FL MS. KARLA SCHNEEBERGER ----------------------------------80917 5056 HARVEST ROAD, COLORADO SPRINGS, CO -------------------------------------------Total number of others receiving over $50,000 for professional services

WRITIN G & SPEAKER ON ENV SENIOR EDITOR FO R

R ESEARCH,

90,500.

FIVE PUBLICATION 4ANAGING EDITOR

OR MONTHLY PUBLI

80,400.
71,750. 54,000.

4AN AGING EDITOR

OR TWO PUBLICATI

Part I]-B

Compensation of the Five Highest Paid Independent Contractors for Other Services (List each contractor who performed services other than professional services, whether individuals or
firms If there are none, enter "None" See page 2 of the instructions ) (a) Name and address of each independent contractor paid more than $50,000 (b) Type of service I (c) Compensation

-------------------------------------------NONE

Total number of other contractors receiving over $50.000 for other services

723101/12-27-07

LHA For Paperwork Reduction Act Notice , see the Instructions for Form 990 and Form 990-EZ

Schedule A (Form 990 or 990-EZ) 2007

Schedule A ( Form 990 or 990 - EZ) 2007 THE Part fi 1

HEARTLAND

INSTITUTE

36-3309812

Paget

Statements About Activities (See page 2 of the instructions)

Yes I No

a b

c d e Transfer of any part of its income or assets? 3 a Did the organization make grants for scholarships, fellowships, student loans, etc 7 (If 'Yes' attach an explanation of how the organization determines that recipients qualify to receive payments ) b Did the organization have a section 403(b) annuity plan for its employees? c Did the organization receive or hold an easement for conservation purposes, including easements to preserve open space, the environment, historic land areas or historic structures? It'Yes," attach a detailed statement d Did the organization provide credit counseling, debt management, credit repair, or debt negotiation services 4 a Did the organization maintain any donor advised funds? If "Yes," complete lines 4b through 4g If 'No "complete lines 4f b c d e f

During the year, has the organization attempted to influence national, state, or local legislation, including any attempt to influence public opinion on a legislative matter or referendum? If 'Yes, enter the total expenses paid or incurred in connection with the $ (Must equal amounts on line 38, Part VI-A , or lobbying activities ^ $ line i of Part VI-B Organizations that made an election under section 501(h) by filing Form 5768 must complete Part VI-A Other organizations checking 'Yes' must complete Part VI-B AND attach a statement giving a detailed description of the lobbying activities During the year, has the organization, either directly or indirectly, engaged in any of the following acts with any substantial contributors, trustees, directors, officers, creators, key employees, or members of their families, or with any taxable organization with which any such person is affiliated as an officer, director, trustee, majority owner, or principal beneficiary? (If the answer to any question is "Yes," attach a detailed statement explaining the transactions.) Sale, exchange, or leasing of property? Lending of money or other extension of credit9 Furnishing of goods, services, or facilities? Payment of compensation (or payment or reimbursement of expenses if more than $1,000)7

2a 2b 2c 2d 2e 3a 3b 3c 3d 4a 4b 4-

X X X X X X X X X X

and 4g Did the organization make any taxable distributions under section 4966? Did the organization make a distribution to a donor, donor advisor, or related persons Enter the total number of donor advised funds owned at the end of the tax year Enter the aggregate value of assets held in all donor advised funds owned at the end of the tax year Enter the total number of separate funds or accounts owned at the end of the year (excluding donor advised funds included on line 4d) where donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts g Enter the aggregate value of assets in all funds or accounts included on line 4f at the end of the tax year

N/A N/A ^ ^ ^ ^

C0 0. 0. 0-

Schedule A (Form 990 or 990-EZ) 2007

723111 12-27-07

Schedule A (Form 990 or 990-EZ) 2007 THE Part IV

HEARTLAND

INSTITUTE

36-3309812

Page3

Reason for Non-Private Foundation Status (See pages 4 through 8 of the instructions )

I certify that the organization is not a private foundation because it is (Please check only ONE applicable box ) 5 A church, convention of churches, or association of churches Section 170(b)(1)(A)(i) 5 A school section 170(b)(1)(A)(ii) (Also complete Part V ) 7 A hospital or a cooperative hospital service organization Section 170(b)(1)(A)(ni) A federal, state, or local government or governmental unit Section 170(b)(1 )(A)(v) 8 A medical research organization operated in conjunction with a hospital Section 170(b)(1)(A)(m) Enter the hospital's name, city, 9 10 11a 11b 12 0 0 and state ^ An organization operated for the benefit of a college or university owned or operated by a governmental unit Section 170(b)(1)(A)(iv) (Also complete the Support Schedule in Part IV-A ) An organization that normally receives a substantial part of its support from a governmental unit or from the general public Section 170(b)(1)(A)(vi) (Also complete the Support Schedule in Part IV-A ) A community trust Section 170(b)(1)(A)(vi) (Also complete the Support Schedule in Part IV-A ) An organization that normally receives ( 1) more than 33 1 /3% of its support from contributions, membership fees, and gross receipts from activities related to its charitable, etc , functions - subject to certain exceptions, and (2) no more than 33 1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975 See section 509(a)(2) (Also complete the Support Schedule in Part IV-A ) An organization that is not controlled by any disqualified persons ( other than foundation managers ) and otherwise meets the requirements of section 509(a)(3) Check the box that describes the type of supporting organization 0 Type III-Other = Type III- Functionally Integrated = Type I = Type II Provide the following information about the supported organizations . (See page 8 of the instructions ) (a) Name(s) of supported organization (s) (b) Employer identification number (EIN) (c) Type of organization (described in lines 5 through 12 above or IRC section) (d) Is the supported organization listed in the supporting organization's governing documents? Yes No (e) Amount of support

13

Total 14 L An organization organized and operated to test for public safety Section 509(a )( 4) (See page 8 of the instructions )

Schedule A (Form 990 or 990 -EZ) 2007

723121 12-27-07

36-3309812 Schedule A (Form 990 or 990-EZ) 2007 THE HEARTLAND INSTITUTE Pad IWA Support Schedule (Complete only if you checked a box on line 10, 11, or 12 .) Use cash method of accounting.

Page 4

Note : You may use the worksheet in the instnictions for converting from the accnia/ to the cash method of accounting Calendar year ( or fiscal year (d) 2003 ( e) Total ( c) 2004 ( b) 2005 (a) 2006 beginning in) ^ Gifts , grants , and contributions 15 cludeunusual re c eived 8, 034, 703. 2, 492, 169. 2, 242, 948. 1, 753, 416. 1, 546, 170. g rants o28 117, 363. 33,196. 28,945. 29,943. 25,279. Membership fees received 16 17 Gross receipts from admissions, merchandise sold or services performed , or furnishing of facilities in any activity that is related to the organization's charitable , etc, purpose Gross income from interest , dividends , amounts received from payments on securities loans ( section 51 2(a)(5 ) rents, royalties, income from simi lar sources , and unrelated business taxable income (less section 511 taxes ) from businesses

187, 267.

246, 591.

211, 980.

316, 026.

961,864.

18

acquired b the organization after June 30 , 75

19 20 Net income from unrelated business activities not included in line 18 Tax revenues levied for the organization ' s benefit and either paid to it or expended on its behalf The value of services or facilities furnished to the organization by a governmental unit without charge Do not include the value of services or facilities generally furnished to the public without charge

42, 973.

1,401.

2,819. <93,628.

1,700. <92,239.

48,893. <323,082.:

<23,535. > <113,680.

21

22
23 24

Other Income Attach a schedule

Do not include gain or ( loss) from sale of capital assets Total of lines 15 through 22 Line 23 minus line 17

SEE

STATEME

T 5

25
26

Enter s %ofline 23

2, 724, 153. 2, 536, 886. 27,242.

2, 407, 203. 2,160,612. 24, 072.

15,000. 1, 922, 783. 1, 710, 803. 19,228.

1, 800, 602. 1, 484, 576. 18,006.

^ 26a

15,000. 8,854,741. 7, 892, 877.

N/A

Organizations described on lines 10 or 11: a Enter 2 % of amount in column ( e), line 24 b Prepare a list for your records to show the name of and amount contributed by each person ( other than a governmental unit or publicly supported organization ) whose total gifts for 2003 through 2006 exceeded the amount shown in line 26a Do not file this list with your return . Enter the total of all these excess amounts c Total support for section 509 ( a)(1) test Enter line 24 , column (e) 19 18 d Add Amounts from column ( e) for lines

^ 26b ^ 25c

N/A N/A

e f 27

N/A 25d N/A ^ 26e Public support ( line 26c minus line 26d total ) N/A ^ 26f Public s uooort oercentaae ( line He ( numerator) divided by line 26c ( denominator)) Organizations described on line 12 . a For amounts included in lines 15, 16, and 17 that were received from a 'disqualified person; prepare a list for your records to show the name of, and total amounts received in each year from, each 'disqualified person ' Do not file this list with your return Enter the sum of 22 26b ^
such amounts for each year

309,392. 349, 633. (2003) 2, 869, 522. (2004) 953, 200. (2005) (2006) b For any amount included in line 17 that was received from each person (other than 'disqualified persons'), prepare a list for your records to show the name of,
and amount received for each year, that was more than the larger of (1) the amount on line 25 for the year or (2) $5,000 (Include in the list organizations described in lines 5 through 11b, as well as individuals ) Do not file this list with your return After computing the difference between the amount received and the larger amount described in (1) or (2), enter the sum of these differences (the excess amounts) for each year 0 . (2003) 0 . (2004) 0. (2005) (2006 ) c d e f g h Add Amounts from column ( e) for lines 15

0.

8 ,034,703.

16

117, 363. 0.

17

961, 864.

20

21

and line 27b total 4,4 81,747. Add Line 27a total Public support (line 27c total minus line 27d total) 8,854 741. 271 ^ Total support for section 509(a)(2) test Enter amount on line 23, column (e) 52.3130% Public support percentage (line 27e ( numerator ) divided by line 27f (denominator)) .5522% Investment i n co me oercentaae ( line 18 . column ( e) (numerator ) divided by line 27f ( denomin records to 28 Unusual Grants : For an organization described in line 10, 11, or 12 that received any unusual grants during 2003 through 2006, prepare a list for your show, for each year, the name of the contributor, the date and amount of the grant, and a brief description of the nature of the grant Do not file this list with your return Do not include these grants in line 15
723131 12-27-07 NONE Schedule A (Form 990 or 990-EZ) 2007

No. No. 00,

9,113,930. 4,481,747. 4,632,183.

Schedule A ( Form 990 or 990 -EZ) 2007 THE HEARTLAND INSTITUTE Private School Questionnaire ( See page 9 of the instructions) Pad V

36-3309812 N/A
I^

Page 5

(To be completed ONLY by schools that checked the box on line 6 in Part
29 30 31

Does the organization have a racially nondiscriminatory policy toward students by statement in its charter , bylaws, other governing instrument , or in a resolution of its governing body2 Does the organization include a statement of its racially nondiscriminatory policy toward students in all its brochures , catalogues, and other written communications with the public dealing with student admissions, programs , and scholarships Has the organization publicized its racially nondiscriminatory policy through newspaper or broadcast media during the period of solicitation for students , or during the registration period if it has no solicitation program, in a way that makes the policy known to all parts of the general community it serves2 If "Yes," please describe , if "No," please explain ( It you need more space , attach a separate statement

Yes No 29 30

31

32

Does the organization maintain the following a Records indicating the racial composition of the student body, faculty, and administrative staff? b Records documenting that scholarships and other financial assistance are awarded on a racially nondiscriminatory basis? c Copies of all catalogues, brochures, announcements, and other written communications to the public dealing with student admissions, programs, and scholarships? d Copies of all material used by the organization or on its behalf to solicit contributions? If you answered "No' to any of the above, please explain (If you need more space, attach a separate statement )

33

a b c d e f

Does the organization discriminate by race in any way with respect to Students' rights or privileges? Admissions policies? Employment of faculty or administrative staff? Scholarships or other financial assistance? Educational policies? Use of facilities? g Athletic programs? h Other extracurricular activities? If you answered 'Yes' to any of the above, please explain (If you need more space, attach a separate statement

34 a

Does the organization receive any financial aid or assistance from a governmental agency? b Has the organization's right to such aid ever been revoked or suspended? If you answered 'Yes' to either 34a or b, please explain using an attached statement 35 Does the organization certify that it has complied with the applicable requirements of sections 4 01 through 4 05 of Rev Proc 75-50, 1975-2 C 8 587, covering racial nondiscrimination? If "No; attach an explanation Schedule A (Form 990 or 990 -EZ) 2007

723141 12-27-07

Schedule A ( Form 990 or 990-EZ) 2007 THE HEARTLAND INSTITUTE Part VI-A Lobbying Expenditures by Electing Public Charities ( See page 11 of the instructions)
(To be completed ONLY by an eligible organization that filed Form 5768) Check ^ a n if the oraanlzatlon belonos to an affiliated group

36-3309812 Pa g e 5 N/A

Check ^ b = If you checked "a" and "limited control' provisions apply

Limits on Lobbying Expenditures

(The term "expenditures" means amounts paid or incurred 36 Total lobbying expenditures to influence public opinion ( grassroots lobbying) 37 Total lobbying expenditures to influence a legislative body ( direct lobbying) 38 Total lobbying expenditures ( add lines 36 and 37) 39 Other exempt purpose expenditures 40 Total exempt purpose expenditures (add lines 38 and 39) 41 Lobbying nontaxable amount Enter the amount from the following table The lobbying nontaxable amount is If the amount on line 40 is Not over $ 500,000 Over $ 500,000 but not over $ 1,000,000 Over $ 1,000,000 but not over $ 1,500 , 000 Over $ 1,500 , 000 but not over $ 17,000 , 000 Over $ 17,000 , 000 20 % of the amount on line 40 $ 100,000 plus 15% of the excess over $ 500,000 $175,000 plus 10% of the excess over $1,000,000 $225,000 plus 5% of the excess over $ 1,500,000 $1,000,000 41

(a) Affiliated group

totals

(b) To be completed for all

electing organizations

N/A
36 37 38 39 40

42 Grassroots nontaxable amount ( enter 25 % of line 41) 43 Subtract line 42 from line 36 Enter -0- if line 42 is more than line 36 44 Subtract line 41 from line 38 Enter -0- if line 41 is more than line 38 Caution : If there Is an amount on either line 43 or line 44, you must file Form 4720.

42 43 44

4-Year Averaging Period Under Section 501(h)

(Some organizations that made a section 501(h) election do not have to complete all of the five columns below See the instructions for lines 45 through 50 on page 13 of the instructions ) Lobbying Expenditures During 4-Year Averaging Period Calendar year ( or fiscal year beginning in ) 45 Lobbying nontaxable (a) 2007 (b ) 2006 ( c) 2005 (d) 2004

N/A
(e) Total

amount
46 Lobbying ceiling amount ( 150% of line 45 ( e )) 47 Total lobbying

0
0

expenditures
48 Grassroots nontaxable

0 0
0

amount
49 Grassroots ceiling amount ( 150% of line 48 ( e )) 50 Grassroots lobbying

expenditures
Part V1-B Lobbvina Activity by Nonelectina Public Chariti es
(For reporting only by organizations that did not complete Part VI-A) (See page 14 of the instructions ) During the year, did the organization attempt to influence national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of a Volunteers b Paid staff or management (Include compensation in expenses reported on lines c through h.) c Media advertisements d Mailings to members, legislators, or the public e Publications, or published or broadcast statements f Grants to other organizations for lobbying purposes g Direct contact with legislators, their staffs, government officials, or a legislative body h Rallies, demonstrations, seminars, conventions, speeches, lectures, or any other means i Total lobbying expenditures (Add lines c through h ) If'Yes'to any of the above, also attach a statement giving a detailed description of the lobbying activities i32^07

0
N/A Amount

-- - ---- -- ----

Schedule A (Form 990 or 990 - EZ) 2007

36-3309812 Schedule A ( Form 990 or 990-EZ) 2007 THE HEARTLAND INSTITUTE Part YH Information Regarding Transfers To and Transactions and Relationships With Noncharitable
51 Exempt Organizations ( See page 14 of the instructions) Did the reporting organization directly or indirectly engage in any of the following with any other organization described in section 501(c) of the Code ( other than section 501 (c)(3) organizations ) or in section 527, relating to political organizations? a Transfers from the reporting organization to a nonchantable exempt organization of (i) Cash (ii) Other assets b Other transactions (i) Sales or exchanges of assets with a noncharitable exempt organization (II) Purchases of assets from a noncharitable exempt organization (iii) Rental of facilities, equipment, or other assets (iv) Reimbursement arrangements (v) Loans or loan guarantees (vi) Performance of services or membership or fundraising solicitations Sharing of facilities, equipment, mailing lists, other assets, or paid employees If the answer to any of the above is 'Yes, complete the following schedule Column (b) should always show the fair market value of the goods, other assets, or services given by the reporting organization If the organization received less than fair market value in any transaction or sharing arrangement, show in column (d) the value of the goods, other assets, or services received

Page 7

Yes

No

51a(i) a(ii) b(i) b(ii) b(iii) b(iv) b(v) b(vi)

X X X X X X X X X

N/A

(a)
Line no

(b)
Amount involved

(c)
Name of noncharitable exempt organization

(d)
Description of transfers, transactions, and sharing arrangements

52 a

Is the organization directly or indirectly affiliated with, or related to, one or more tax-exempt organizations described in section 501(c) of the ^ Code (other than section 501(c)(3)) or in section 527'

Yes

No

THE''HEARTLAND INSTITUTE

36-3309812

FORM 9'90

CASH GRANTS AND ALLOCATIONS TO OTHERS

STATEMENT

CLASS OF ACTIVITY /DONEE'S NAME AND ADDRESS ENVIRONMENT & CLIMATE NATURAL RESOURCES STEWARDSHIP PROJECT P.O. BOX 23013 OTTAWA, ONTARIO K2A 4E2 CANADA ENVIRONMENT & CLIMATE FRONTIER CENTRE FOR PUBLIC POLICY
ONE LOMBARD PLACE, SUITE 25 WINNIPEG, MANITOBA, R3B 0X3 LOMBARD CONCOURSE CANADA

AMOUNT

25,000.

25,000.

ENVIRONMENT & CLIMATE

NEW ZEALAND CLIMATE SCIENCE COALITION 1104 ONERIRI RD, R.D. 2 KAIWAKA, NORTHLAND, NEW ZEALAND 0573 ENVIRONMENT & CLIMATE SCIENCE & ENVIRONMENTAL POLICY PROJECT 1600 SOUTH EADS STREET #712-S ARLINGTON, VA 22202-2907

25,000.

15,000.

ENVIRONMENT & CLIMATE INTERNATIONAL CLIMATE SCIENCE COALITION P 0 BOX 304001

HAURAKI, NORTH SHORE CITY 0622, NEW ZEALAND

45,000.

TOTAL

INCLUDED ON FORM 990,

PART

II,

LINE

22B

135,000.

FORM 990

OTHER PROGRAM SERVICES

STATEMENT

DESCRIPTION OF OTHER PROGRAM SERVICES WITH UNRESTRICTED GRANTS TO 501C(3)AND OTHERS MISSIONS IN LINE WITH HEARTLAND INSTITUTE. TOTAL TO FORM 990, PART III, LINE E

GRANTS AND ALLOCATIONS

EXPENSES

135,000. 135,000.

0.

STATEMENT(S)

1,

THE-HEARTLAND

INSTITUTE

36-3309812

FORM 990

PART V-A - LIST OF CURRENT OFFICERS, DIRECTORS, TRUSTEES AND KEY EMPLOYEES

STATEMENT

EMPLOYEE
TITLE AND COMPENBEN PLAN EXPENSE

NAME AND ADDRESS JOSEPH BAST 600 EAST WILMETTE ROAD #124 PALATINE, IL 60074
ROBERT BUFORD

AVRG HRS/WK PRESIDENT 40.00

SATION

CONTRIB ACCOUNT

96,292.

0.

0.

DIRECTOR

1333 N. KINGSBURY AVENUE #301 CHICAGO, IL 60622 PAUL FISHER

77 WEST WACKER DRIVE, SUITE 4400

0.00

0.

0.

0.

DIRECTOR
0.00 0. 0. 0.

CHICAGO,

IL 60601
DIRECTOR 0.00

JAMES FITZGERALD 1629 COLONIAL PARKWAY

0.

0.

0.

INVERNESS,
DAN HALES

IL 60067
DIRECTOR

711 OAK STREET,

WINNETKA, IL

SUITE 102

0.00

0.

0.

0.

60093

WILLIAM HIGGINSON
990 NORTH LAKE SHORE DRIVE #11B

DIRECTOR
0.00 0. 0. 0.

CHICAGO,

IL 60611 DIRECTOR 0.00

JAMES JOHNSTON 2143 CHESTNUT AVENUE WILMETTE, IL 60091

ROY MARDEN

0.

0.

0.

DIRECTOR

330 EAST 46TH STREET,

NEW YORK, DAVID NY 10017

SUITE 4J

0.00

0.

0.

0.

PADDEN

DIRECTOR

100 WEST MONROE, SUITE 706 CHICAGO, IL 60603

FRANK RESNIK 175 EAST DELAWARE CHICAGO, IL 60611

0.00

0.

0.

0.

PLACE

DIRECTOR 0.00

0.

0.

0.

ELIZABETH ROSE 2110 GUY STREET SAN DIEGO, CA 92103-1539

DIRECTOR 0.00

0.

0.

0.

STATEMENT(S)

THE HEARTLAND INSTITUTE

HERBERT WALBERG CHAIRMAN

36-3309812

180 EAST PEARSON STREET, 3607 CHICAGO, IL 60611 RAJEEV BAL 501 WEST MICHIGAN MILWAUKEE, WI 53201-3050 THOMAS WALTON 300 RENAISSANCE CENTER, 482-C27-C81 DETROIT, MI 48265-3000 BIJU GEORGE KULATHAKAL 211 EAST OHIO, # 603 CHICAGO, IL 60611

SUITE 0.00 0. 0. 0.

DIRECTOR 0.00

0.

0.

0.

DIRECTOR MC 0.00 0. 0. 0.

DIRECTOR 0.00

0.

0.

0.

DIANE C. BAST 900 EAST WILMETTE RD.,#124

PALATINE, IL 60074

VICE PRESIDENT 40.00

76,337.

0.

0.

TOTALS

INCLUDED ON FORM 990,

PART V-A

172,629.

0.

0.

STATEMENT(S)

' TA& HEARTLAND

INSTITUTE

36-3309812

FORM 990

EXPLANATION OF RELATIONSHIP PART V-A, LINE 75B

STATEMENT

INDIVIDUAL'S NAME JOSEPH L. BAST

TITLE OR ROLE PRESIDENT

INDIVIDUAL'S NAME DIANE C. BAST

TITLE OR ROLE VICE PRESIDENT

EXPLANATION OF RELATIONSHIP
HUSBAND & WIFE AND FULL TIME KEY EMPLOYEES SINCE INCEPTION OF ORGANIZATION.

SCHEDULE A

OTHER

INCOME

STATEMENT

DESCRIPTION

2006 AMOUNT 0. 0.

2005 AMOUNT 0. 0.

2004 AMOUNT

2003 AMOUNT

LAPSED TIME RESTRICTIONS TOTAL TO SCHEDULE A, LINE 22

15,000. 15,000.

0. 0.

STATEMENT(S)

4,

THE HEARTLAND INSTITUTE FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2007 AND

REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

THE HEARTLAND INSTITUTE

TABLE OF CONTENTS

REPORT NAME
Auditor's Report Financial Statements: Statement of Financial Position Statement of Activities Statement of Functional Expenses

PAGE 3

4 5 6 7

Statement of Cash Flows

Notes to Financial Statements

8-10

JAMES F. SEXTON AND ASSOCIATES, LTD.

CERTIFIED PUBLIC ACCOUNTANTS
Woodfield Lake Office Court 941 Plum Grove Road, Suite A Schaumburg, Illinois 60173

www.mycpacfo.com

(847) 605-0700 Fox (847) 605-0705

July 3. 2008

To The Board of Directors

The Heartland Institute

We have audited the accompanying statement of financial position of The Heartland Institute (a nonprofit organization) as of Deeemhcr 31, 2007 and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the organizi:.onfs management. Our responsibility is to e,:press ;-tn opinion on these financial statements based an our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining on a test basis cevidene. supporting the anlountc and disclosure-- ir the fi.jancia! statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financi :! ^tatemcnt presentation. We believe that our audit provides a reasonable basis for our opiniGn In our opinion , the financial st::::ments referred to above present fairly, in a,] material respects, the financial position of The Heartland Institute as of December 31, 2007 , and the changes in its net assets and its cash flows for the year then ended in conform ity with U.S. generally accepted accounting principles.

JAMES F . SEXTON & ASSOC., LTD. CERTIFIED PUBL IC ACCOUNTANTS

MEMBER OF AMERICAN INSTITUTE OF CPAs AND ILLINOIS CPA SOCIETY

Statement of Financial Position December 31, 2007 ASSETS

CURRENT ASSETS
Cash and Cash Equivalents Accounts & Pledges Receivable Prepaid Expense Total Current Assets FIXED ASSETS Office Furniture Office Equipment Leasehold Improvements Less: Accumulated Depreciation Net Equipment OTHER ASSETS Deposits Total Other Assets TOTAL A SSETS LIABILITIES AND NET AS SET S CURRENT LIABILITIES Accounts Payable Total Current Liabilities NET ASSETS Unrestricted Temporarily Restricted 1,214 10,626 45,923 57,763

16,764 146,150 53,907 (135,370) 81,451

6,000 6,000 145,214

258,559 258,559

(113,345) 0 (113,345) 145,214

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS See Notes to Financial Statements 4

The Heartland Institute Statement of Activities Year Ended December 31, 2007 CHANGES IN UNRESTRICTED NET ASSETS: Contributions

Publications /Research Advertising Memberships Fund Raising Interest Income TOTAL

NET ASSETS RELEASED FROM RESTRICTIONS: Satisfaction of Purpose Restrictions

4,967,006 27,071 21,104 26,157 140,960 34,587

5,216,884

TOTAL UNRESTRICTED REVENUE, GAINS AND OTHER SUPPORT EXPENSES

Program Management and General Fund Raising 5 ,175,394 448,138 244,737

5,216,884

TOTAL EXPENSES INCREASE ( DECREASE ) IN UNRESTRICTED NET ASSETS CHANGES IN TEMPORARILY RESRICTED ASSETS: Satisfaction of Purpose Restrictions
Decrease of Temporarily Restricted Assets CHANGE IN NET ASSETS (RESTRICTED)

5,868,269

(651,385)

0 0 538,040 (1 13,345)

NET ASSETS, BEGINNING OF YEAR (UNRESTRICTED) NET ASSETS, END OF YEAR (UNRESTRICTED) See Notes to Financial Statements
5

The Heartland Institute Statement of Functional Expenses

Year Ended December 31, 2007

Desaiption

Grarts -

Program PL"icatiors $181,915 1,085,130 634,119 59,938 1Q471 14,897 396,051 169

Salaries, and omits Rirfir-g and Publications Wing Office and Ooa.peny ies and Eqdpnert Lease Trauel, E ibi6 Baits Services ax! A ssiorel Fees C r 6qeues Pdvertisi Depreciation Irterest Tdq:txm Gals
TOTAL FReice IIageof Total

Govt Relations $38D,830 27,637 119,518 22,686 7,744 225,394 92,242 25,785

Pubic New Relations Coalition $157,990 X1,948 8,216 92726 5,642 58,423 44,992 2,198 1,201 24,411 2,964 224,830 39,221 144,101 1,009 905,938

WigA & Gerf l $369,866 1,261 6,096 11,243 9,907 1,846 31,041 77 a684 1,299 1,601 1,217

Rex raising $144,205 2,565 15,699 6,142 14,858 17,777 41,250 1,576

TOTAL

6,490

2456

4,874 135,000
$1 , 794,294 30.58/

238

665

$1,262,754 1,217,535 839,497 147,199 68,592 487,708 743,906 28,616 909,622 10,299 1,601 15,940 135,000
$5,866,269 100,00/

$Z 389, 180 , $904, 292 40.71/ 15.41 /

$87 Gd8 $448, 138 $244,737 7. 64% 417/ 1.49-/

Cash Flows From (Used By) Operating Activities: Change In Net Assets Adjustments to reconcile change in net assets to net cash used for operating activities Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid publications Increase (decrease) in accounts payable (Increase) decrease in investments Release of temporary restricted assets Net cash provided ( used) by Operating Activities Cash Flows From (used by) Investing Activities Purchase of property and equipment Net cash provided ( used) by investing activities Net increase (decrease) in cash Cash - Beginning Balance

(651,385)

10,299 (2,157) (27, 701) 228,899 0 0 (442,045)

(57, 091) (57,091) (499,137) 500,351

Cash - Ending Balance

Amounts included in operating activities above: Amounts of interest paid

1,214

1,601

See Notes to Financial Statements 7

The Heartland Institute Statement of Functional Expenses Year Ended December 31, 2007

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Heartland Institute is a nonprofit corporation organized exclusively for charitable and educational purposes. Its main purpose is to inform and educate the public on research of past and existing public policies and the effects and results of those policies and free market or private sector alternatives. METHOD OF ACCOUNTING
The Organization maintains its records on the accrual basis in accordance with U. S. generally accepted accounting principles.

BASIS OF PRESENTATION
Financial statement presentation follows the recommendations of the Financial Accounting Standards in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Non-forProfit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the use of management's estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

CASH AND EQUIVALENTS

The Organization considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents for purposes of the statement of cash flows exclude permanently restricted cash and cash equivalents.

FUNCTIONAL EXPENSE REPORTING

The cost of providing program and supporting services has been summarized by function, based on estimates developed by management.

ACCOUNTS & PLEDGES RECEIVABLE

Accounts receivable are stated at the amount management expects to collect from outstanding balances and pledges. Management provides for probable uncollectible amounts through a provision for bad debt expense based on its assessment of the current status of individual receivables. Balances that are still outstanding after management has used reasonable collection efforts are written off to bad debt expense. There were no bad debt write-offs or accounts deemed uncollectible for 2007.

DONATIONS Donations received in property other than cash are recorded at their fair market value on the date of the gift. Donations in property whose fair market values are not objectively determinable are omitted from the financial statement in accordance with generally accepted accounting standards. 8

The Heartland Institute Statement of Functional Expenses Year Ended December 31, 2007

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DEPRECIATION

Fixed assets are recorded at cost (or fair market value on the date of donation). Management follows the practice of capitalizing all expenditures for property, furniture, fixtures and office equipment in excess of $500. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Depreciation amounted to $10,299 in 2007.

NOTE 2 - TAX STATUS

Heartland Institute is a non-profit organization. It qualifies under the Internal Revenue Code Section 501(c)(3) as an organization exempt from federal income taxation.

NOTE 3 - FUND BALANCE - TEMPORARILY RESTRICTED

Prior to 1997, the estate of Franklin Butcha executed a note under the charitable remainder trust provisions of the Internal Revenue Code. Interest of 5.5% per annum is paid quarterly to the beneficiary of Franklin Butcha estate (his spouse) until her death. The principal loan of $25,000 plus previously accrued interest of $5,576 prior to Franklin's death for a grand total of $30,576 was recognized as other income in 1996. Since then income and interest expense has been recorded through the unrestricted fund balance. Any present value adjustment to the bequest as with discounted cash flow adjustments were deemed insignificant.

NOTE 4 - LEASE COMMITMENTS

Management entered into a lease extension for its headquarters effective June 1, 2008 through January 31, 2012. Monthly base rent payments are currently $7,497 per month. Management entered into a new lease to rent additional space at the same location effective March 1, 2007 through January 31, 2012. Monthly base rent payments are currently $5,058 per month. Rent expense amounted to $147,197 in 2007. The Organization also entered into two equipment -operating leases: 1. A photocopier lease was entered commencing September 2003 for $1,397 per month through March 2011.

2. A postage machine lease was entered commencing December 2004 for $850 per quarter through February 2008.

The Heartland Institute Statement of Functional Expenses Year Ended December 31, 2007

NOTE 4 - LEASE COMMITMENTS (CONTINUED) Following are the minimum future rental commitments: Period Ended December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 December 31, 2012 and thereafter
Total

Amount
$170,928 $174,667 $179,383 $171,689 $ 14,130 $710,797

NOTE 5 - RETIREMENT PLAN

The Organization sponsors a 401(k) retirement plan covering substantially all employees. No contributions were paid during 2007.

NOTE 6 - CONCENTRATION OF CREDIT RISK

The Organization maintains several bank accounts at two banks. Accounts at an institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. Cash at one of these institutions occasionally exceeds federally insured limits. The amount in excess of the FDIC limit totaled $0 as of December 31, 2007. During 2007, the Organization received 38% of its contribution revenue from a single donor.

NOTE 8 - FUNCTIONAL ALLOCATION OF EXPENSES

The costs of providing the various programs and activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

10

yti

. [

Form

8868

(Rev. April 2007)

Departrr^nt of the Treasury
internal Revenue Service

1 I

Application for Extension of Time To File an Exempt Organization Return

^ File a separate application for each return.

OMB No. 1545.1709

If you are filing for an Automatic 3-Month Extension, complete only Part I and check this box If you are filing for an Additional (not automatic ) 3-Month Extension, complete only Part II (on page 2 of this form).
Do not complete Part II unless you have already been granted an automatic 3-month extension on a previously filed Form 8868. Part I Automatic 3-Month Extension of Time. Only submit original (no copies needed).

Section 501(c) corporations required to file Form 990-T and requesting an automatic 6-month extension - check this box and complete Part I only

^ Q

All other corporations (including 1120-C filers), partnerships, REM/Cs, and trusts must use Form 7004 to request an extension of time to file income tax returns Electronic Filing (e-file). Generally, you can electronically file Form 8868 if you want a 3-month automatic extension of time to file one of the returns noted below (6 months for section 501(c) corporations required to file Form 990-T). However, you cannot file Form 8868 electronically if (1) you want the additional (not automatic) 3-month extension or (2) you file Forms 990-BL, 6069, or 8870, group returns, or a composite or consolidated Form 990-T. Instead, you must submit the fully completed and signed page 2 (Part II) of Form 8868. For more details on the electronic filing of this form, visit www irs ov/efile and click on e-file for Chanties & Nonprofits
Type or print Name of Exempt Organization Employer identification number

THE HEARTLAND INSTITUTE

File by the

36-3309812

due date for filing your return See

Number, street, and room or suite no. If a P.O. box, see instructions. 19 SOUTH LA SALLE STREET, NO. 903

instructions

City, town or post office, state, and ZIP code For a foreign address, see instructions. CHICAGO, IL 60603

Check type of return to be filed (file a separate application for each return)Form 990 Form 990-BL Form 990-EZ 0 Form 990-PF 0 Form 0 Form LI Form Form 990-T (corporation) 990-T (sec. 401(a) or 408(a) trust) 990-T (trust other than above) 1041-A INSTITUTE 0 Form 4720 0 Form 5227 Form 6069 For-,i 8870

The books are in the care of ^ THE

HEARTLAND

Telephone No. ^ (312)

3-77-4000

FAX No ^

If the organization does not have an office or place of business in the United States, check this box If this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) box ^ = 1

^ 0 If this is for the whole group, check this If it is for part of the group, check this box ^ Q and attach a list with the names and EINs of all members the extension will cover.

I request an automatic 3-month (6-months for a section 501(c) corporation required to file Form 990-T) extension of time until AUGUST 15, 2008 , to file the exempt organization return for the organization named above . The extension is for the organization ' s return for

^
^ 2 3a b c

calendar year 2 0 0 7 or
tax year beginning , and ending 0 Initial return LI Final return LI Change in accounting period

If this tax year is for less than 12 months , check reason

If this application is for Form 990-BL, 990-PF, 990-T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits. See instructions If this application is for Form 990-PF or 990-T, enter any refundable credits and estimated tax pay ments made. Include an y prior year overpay ment allowed as a credit. Balance Due. Subtract line 3b from line 3a Include your payment with this form, or, if required, deposit with FTD coupon or, if required, by using EFTPS (Electronic Federal Tax Payment System). See instructions

3a 3b

$ $

3c

N/A

Caution . If you are going to make an electronic fund withdrawal with this Form 8868, see Form 8453-EO and Form 8879-EO for payment instructions. LHA For Privacy Act and Paperwork Reduction Act Notice , see instructions . Form 8868 (Rev 4-2007)

723831 05-07-07