﻿<?xml version="1.0" encoding="utf-8"?>
<Return xmlns="http://www.irs.gov/efile" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" returnVersion="2011v1.2" xsi:schemaLocation="http://www.irs.gov/efile">
  <ReturnHeader binaryAttachmentCount="0">
    <Timestamp>2012-08-22T15:11:54-07:00</Timestamp>
    <TaxPeriodEndDate>2012-06-30</TaxPeriodEndDate>
    <PreparerFirm>
      <PreparerFirmBusinessName>
        <BusinessNameLine1>Watts Campbell Chi &amp; Baker</BusinessNameLine1>
      </PreparerFirmBusinessName>
      <PreparerFirmUSAddress>
        <AddressLine1>7419 N Cedar Avenue Suite 103</AddressLine1>
        <City>Fresno</City>
        <State>CA</State>
        <ZIPCode>937203640</ZIPCode>
      </PreparerFirmUSAddress>
    </PreparerFirm>
    <ReturnType>990PF</ReturnType>
    <TaxPeriodBeginDate>2011-07-01</TaxPeriodBeginDate>
    <Filer>
      <EIN>205376025</EIN>
      <Name>
        <BusinessNameLine1>Red &amp; Nancy Arnold Foundation</BusinessNameLine1>
      </Name>
      <NameControl>RED&amp;</NameControl>
      <Phone>5594393057</Phone>
      <USAddress>
        <AddressLine1>7215 North Dewey Ave</AddressLine1>
        <City>Fresno</City>
        <State>CA</State>
        <ZIPCode>93711</ZIPCode>
      </USAddress>
    </Filer>
    <Officer>
      <Name>Sheila Holmes</Name>
      <Title>Secretary</Title>
      <DateSigned>2012-08-22</DateSigned>
      <AuthorizeThirdParty>true</AuthorizeThirdParty>
    </Officer>
    <Preparer>
      <Name>Carl M Campbell Jr CPA</Name>
      <Phone>5594489222</Phone>
    </Preparer>
    <TaxYear>2011</TaxYear>
    <BuildTS>2016-02-24 21:20:13Z</BuildTS>
  </ReturnHeader>
  <ReturnData documentCount="6">
    <IRS990PF documentId="IRS990PF" referenceDocumentId="GeneralExplanation" softwareId="11000144" softwareVersion="2011v1.2">
      <ExemptPF>X</ExemptPF>
      <FMVAssetsEOY>1652175</FMVAssetsEOY>
      <MethodOfAccountingCash>X</MethodOfAccountingCash>
      <AnalysisOfRevenueAndExpenses>
        <ContriReceivedRevAndExpnss>997500</ContriReceivedRevAndExpnss>
        <InterestOnSavingsRevAndExpnss>279</InterestOnSavingsRevAndExpnss>
        <InterestOnSavingsNetInvstIncm>279</InterestOnSavingsNetInvstIncm>
        <InterestOnSavingsAdjNetIncm>279</InterestOnSavingsAdjNetIncm>
        <OtherIncomeRevAndExpnss referenceDocumentId="OtherIncomeSchedule2">38996</OtherIncomeRevAndExpnss>
        <OtherIncomeAdjNetIncm>38996</OtherIncomeAdjNetIncm>
        <TotalRevenueAndExpenses>1036775</TotalRevenueAndExpenses>
        <TotalNetInvestmentIncome>279</TotalNetInvestmentIncome>
        <TotalAdjustedNetIncome>39275</TotalAdjustedNetIncome>
        <AccountingFeesRevAndExpnss referenceDocumentId="AccountingFeesSchedule">450</AccountingFeesRevAndExpnss>
        <AccountingFeesAdjNetIncm>450</AccountingFeesAdjNetIncm>
        <TaxesRevAndExpnss referenceDocumentId="TaxesSchedule">35</TaxesRevAndExpnss>
        <TaxesAdjNetIncm>35</TaxesAdjNetIncm>
        <OtherExpensesRevAndExpnss referenceDocumentId="OtherExpensesSchedule AmortizationSchedule">791</OtherExpensesRevAndExpnss>
        <OtherExpensesAdjNetIncm>791</OtherExpensesAdjNetIncm>
        <TotOprExpensesRevAndExpnss>1276</TotOprExpensesRevAndExpnss>
        <TotOprExpensesNetInvstIncm>0</TotOprExpensesNetInvstIncm>
        <TotOprExpensesAdjNetIncm>1276</TotOprExpensesAdjNetIncm>
        <TotOprExpensesDsbrsChrtblPrps>0</TotOprExpensesDsbrsChrtblPrps>
        <ContriGiftsPaidRevAndExpnss>100000</ContriGiftsPaidRevAndExpnss>
        <ContriGiftsPaidDsbrsChrtblPrps>100000</ContriGiftsPaidDsbrsChrtblPrps>
        <TotalExpensesRevAndExpnss>101276</TotalExpensesRevAndExpnss>
        <TotalExpensesNetInvstIncm>0</TotalExpensesNetInvstIncm>
        <TotalExpensesAdjNetIncm>1276</TotalExpensesAdjNetIncm>
        <TotalExpensesDsbrsChrtblPrps>100000</TotalExpensesDsbrsChrtblPrps>
        <ExcessOfRevenueOverExpenses>935499</ExcessOfRevenueOverExpenses>
        <NetInvestmentIncome>279</NetInvestmentIncome>
        <AdjustedNetIncome>37999</AdjustedNetIncome>
      </AnalysisOfRevenueAndExpenses>
      <BalanceSheets>
        <SavingsAndTempCashInvstBOY>61375</SavingsAndTempCashInvstBOY>
        <SavingsAndTempCashInvstEOY>108880</SavingsAndTempCashInvstEOY>
        <SavingsAndTempCashInvstEOYFMV>108880</SavingsAndTempCashInvstEOYFMV>
        <OtherNotesAndLoansReceivable>643727</OtherNotesAndLoansReceivable>
        <OtherNotesAndLoansRcvblBOY>655093</OtherNotesAndLoansRcvblBOY>
        <OtherNotesAndLoansRcvblEOY>643727</OtherNotesAndLoansRcvblEOY>
        <OtherNotesAndLoansRcvblEOYFMV>643727</OtherNotesAndLoansRcvblEOYFMV>
        <InvestmentsGovtObligEOY>899359</InvestmentsGovtObligEOY>
        <InvestmentsGovtObligEOYFMV>899568</InvestmentsGovtObligEOYFMV>
        <OtherAssetsEOY referenceDocumentId="OtherAssetsSchedule">1</OtherAssetsEOY>
        <TotalAssetsBOY>716468</TotalAssetsBOY>
        <TotalAssetsEOY>1651967</TotalAssetsEOY>
        <TotalAssetsEOYFMV>1652175</TotalAssetsEOYFMV>
        <TotalLiabilitiesEOY>0</TotalLiabilitiesEOY>
        <OrgThatFollowSFAS117>X</OrgThatFollowSFAS117>
        <UnrestrictedBOY>716468</UnrestrictedBOY>
        <UnrestrictedEOY>1651967</UnrestrictedEOY>
        <TotalNetAssetsBOY>716468</TotalNetAssetsBOY>
        <TotalNetAssetsEOY>1651967</TotalNetAssetsEOY>
        <TotalLiabilitiesNetAssetsBOY>716468</TotalLiabilitiesNetAssetsBOY>
        <TotalLiabilitiesNetAssetsEOY>1651967</TotalLiabilitiesNetAssetsEOY>
      </BalanceSheets>
      <ChangesInNetAssetsFundBalances>
        <TotalNetAssetsFundBalancesBOY>716468</TotalNetAssetsFundBalancesBOY>
        <ExcessOfRevenueOverExpenses>935499</ExcessOfRevenueOverExpenses>
        <Subtotal>1651967</Subtotal>
        <TotalNetAssetsFundBalancesEOY>1651967</TotalNetAssetsFundBalancesEOY>
      </ChangesInNetAssetsFundBalances>
      <ExciseTaxBasedOnInvestmentIncm>
        <InvestmentIncomeExciseTax>6</InvestmentIncomeExciseTax>
        <Subtotal>6</Subtotal>
        <TaxBasedOnInvestmentIncome>6</TaxBasedOnInvestmentIncome>
        <TaxDue>6</TaxDue>
      </ExciseTaxBasedOnInvestmentIncm>
      <StatementsRegardingActivities>
        <LegislativePoliticalActivities>false</LegislativePoliticalActivities>
        <MoreThan100Spent>false</MoreThan100Spent>
        <Form1120POLFiled>false</Form1120POLFiled>
        <ActivitiesNotPrevReported>false</ActivitiesNotPrevReported>
        <ChangesToArticlesOrBylaws>false</ChangesToArticlesOrBylaws>
        <UnrelatedBusIncomeOver1000>false</UnrelatedBusIncomeOver1000>
        <Form990TFiled>false</Form990TFiled>
        <TerminationEtc>false</TerminationEtc>
        <RequirementsOfSect508e>false</RequirementsOfSect508e>
        <AtLeast5000InAssets>true</AtLeast5000InAssets>
        <StatesFiledWith>CA</StatesFiledWith>
        <Form990PFFiledWithAG>true</Form990PFFiledWithAG>
        <PrivateOperatingFoundation>false</PrivateOperatingFoundation>
        <NewSubstantialContributors>false</NewSubstantialContributors>
        <InterestInControlledEntity>false</InterestInControlledEntity>
        <ApplicableInsuranceContract>false</ApplicableInsuranceContract>
        <ComplyWithPublicInspectionRqr>true</ComplyWithPublicInspectionRqr>
        <WebsiteAddress>N/A</WebsiteAddress>
        <BooksInCareOfBusinessName>
          <BusinessNameLine1>David W Holmes</BusinessNameLine1>
        </BooksInCareOfBusinessName>
        <BooksInCareOfPhoneNumber>5592594964</BooksInCareOfPhoneNumber>
        <BooksInCareOfUSAddress>
          <AddressLine1>7215 N Dewey</AddressLine1>
          <City>Fresno</City>
          <State>CA</State>
          <ZIPCode>93711</ZIPCode>
        </BooksInCareOfUSAddress>
        <ForeignBank>false</ForeignBank>
      </StatementsRegardingActivities>
      <StatementsRegardingActy4720>
        <SaleOrExchangeWithDsqflyPerson>false</SaleOrExchangeWithDsqflyPerson>
        <BorrowOrLendWithDsqflyPerson>false</BorrowOrLendWithDsqflyPerson>
        <FurnishedGoodsWithDsqflyPerson>false</FurnishedGoodsWithDsqflyPerson>
        <PayCompensationToDsqflyPerson>false</PayCompensationToDsqflyPerson>
        <TransferAssetsToDsqflyPerson>false</TransferAssetsToDsqflyPerson>
        <PaymentToGovernmentOffical>false</PaymentToGovernmentOffical>
        <ActsFailToQualifyAsExceptions>false</ActsFailToQualifyAsExceptions>
        <UncorrectedPriorActs>false</UncorrectedPriorActs>
        <UndistributedIncomePriorYears>false</UndistributedIncomePriorYears>
        <UndistrIncome4942a2NotApplied>false</UndistrIncome4942a2NotApplied>
        <BusinessHoldings>false</BusinessHoldings>
        <ExcessBusinessHoldings>false</ExcessBusinessHoldings>
        <JeopardyInvestments>false</JeopardyInvestments>
        <UncorrectedJeopardyInvestments>false</UncorrectedJeopardyInvestments>
        <InfluenceLegislation>false</InfluenceLegislation>
        <InfluenceElection>false</InfluenceElection>
        <GrantsToIndividuals>false</GrantsToIndividuals>
        <GrantsToOrganizations>false</GrantsToOrganizations>
        <NoncharitablePurpose>false</NoncharitablePurpose>
        <TrFailToQualifyAsExceptions>false</TrFailToQualifyAsExceptions>
        <MaintExpendResponsibility>false</MaintExpendResponsibility>
        <RcvFundsToPayPrsnlBnftContract>false</RcvFundsToPayPrsnlBnftContract>
        <PayPremiumsPrsnlBnftContract>false</PayPremiumsPrsnlBnftContract>
        <ProhibitedTaxShelterTransactn>false</ProhibitedTaxShelterTransactn>
        <ProceedsOrNetIncome>false</ProceedsOrNetIncome>
      </StatementsRegardingActy4720>
      <OfcrDirTrusteesKeyEmployeeInfo>
        <OfcrDirTrusteesOrKeyEmployee>
          <PersonName>Sheila Holmes</PersonName>
          <USAddress>
            <AddressLine1>7215 N Dewey Ave</AddressLine1>
            <City>Madera</City>
            <State>CA</State>
            <ZIPCode>93636</ZIPCode>
          </USAddress>
          <Title>Secretary/Tres</Title>
          <AvgHoursPerWkDevotedToPosition>2.00</AvgHoursPerWkDevotedToPosition>
          <Compensation>0</Compensation>
        </OfcrDirTrusteesOrKeyEmployee>
        <OfcrDirTrusteesOrKeyEmployee>
          <PersonName>Jean Pennycook</PersonName>
          <USAddress>
            <AddressLine1>7215 N Dewey Ave</AddressLine1>
            <City>Fresno</City>
            <State>CA</State>
            <ZIPCode>93711</ZIPCode>
          </USAddress>
          <Title>President</Title>
          <AvgHoursPerWkDevotedToPosition>2.00</AvgHoursPerWkDevotedToPosition>
          <Compensation>0</Compensation>
        </OfcrDirTrusteesOrKeyEmployee>
        <CompOfHighestPaidEmplNONE>NONE</CompOfHighestPaidEmplNONE>
        <CompOfHghstPaidCntrctNONE>NONE</CompOfHghstPaidCntrctNONE>
      </OfcrDirTrusteesKeyEmployeeInfo>
      <MinimumInvestmentReturn>
        <AvgMonthlyFMVOfSecurities>0</AvgMonthlyFMVOfSecurities>
        <AvgMonthlyCashBalances>0</AvgMonthlyCashBalances>
        <FMVAllOtherNoncharitableAssets>0</FMVAllOtherNoncharitableAssets>
        <TotalFMVOfUnusedAssets>0</TotalFMVOfUnusedAssets>
        <ReductionClaimed>0</ReductionClaimed>
        <AdjTotalFMVOfUnusedAssets>0</AdjTotalFMVOfUnusedAssets>
        <CashDeemedCharitable>0</CashDeemedCharitable>
        <NetNoncharitableAssets>0</NetNoncharitableAssets>
        <MinimumInvestmentReturn>0</MinimumInvestmentReturn>
      </MinimumInvestmentReturn>
      <DistributableAmount>
        <TaxBasedOnInvestmentIncome>6</TaxBasedOnInvestmentIncome>
        <TotalTax>6</TotalTax>
        <DistributableAmountBeforeAdj>6</DistributableAmountBeforeAdj>
        <DistributableAmountBeforeDed>6</DistributableAmountBeforeDed>
        <DistributableAmountAsAdjusted>0</DistributableAmountAsAdjusted>
      </DistributableAmount>
      <QualifyingDistributions>
        <ExpensesAndContributions>100000</ExpensesAndContributions>
        <QualifyingDistributions>100000</QualifyingDistributions>
        <AdjQualifyingDistributions>100000</AdjQualifyingDistributions>
      </QualifyingDistributions>
      <UndistributedIncome>
        <DistributableAmountAsAdjusted>0</DistributableAmountAsAdjusted>
        <ExcessDistriCarryoverYear4>110000</ExcessDistriCarryoverYear4>
        <ExcessDistriCarryoverYear3>60000</ExcessDistriCarryoverYear3>
        <ExcessDistriCarryoverYear2>50000</ExcessDistriCarryoverYear2>
        <ExcessDistriCarryoverYear1>50000</ExcessDistriCarryoverYear1>
        <TotalExcessDistriCarryover>270000</TotalExcessDistriCarryover>
        <QualifyingDistributions>100000</QualifyingDistributions>
        <TreatedAsDistriFromCorpus>0</TreatedAsDistriFromCorpus>
        <RemainingDistriFromCorpus>100000</RemainingDistriFromCorpus>
        <TotalCorpus>370000</TotalCorpus>
        <UndistributedIncomeCY>0</UndistributedIncomeCY>
        <ExcessDistriCyovToNextYear>370000</ExcessDistriCyovToNextYear>
        <ExcessFromYear4>110000</ExcessFromYear4>
        <ExcessFromYear3>60000</ExcessFromYear3>
        <ExcessFromYear2>50000</ExcessFromYear2>
        <ExcessFromYear1>50000</ExcessFromYear1>
        <ExcessFromCurrentYear>100000</ExcessFromCurrentYear>
      </UndistributedIncome>
      <SupplementaryInformation>
        <OnlyContributesToPreselected>X</OnlyContributesToPreselected>
        <GrantOrContriPaidDuringYear>
          <RecipientPersonName>Madera Community Hospital Fnd</RecipientPersonName>
          <RecipientUSAddress>
            <AddressLine1>1270 E Almond Ave</AddressLine1>
            <City>Madera</City>
            <State>CA</State>
            <ZIPCode>93637</ZIPCode>
          </RecipientUSAddress>
          <RecipientRelationship>None</RecipientRelationship>
          <RecipientFoundationStatus>none</RecipientFoundationStatus>
          <PurposeOfGrantOrContribution>Promote public health</PurposeOfGrantOrContribution>
          <Amount>100000</Amount>
        </GrantOrContriPaidDuringYear>
        <TotGrantOrContriPaidDuringYear>100000</TotGrantOrContriPaidDuringYear>
      </SupplementaryInformation>
      <AnalysisIncomeProducingActy>
        <IntOnSavingsAndTempCashInvst>
          <UnrelatedBusinessIncomeAmount>279</UnrelatedBusinessIncomeAmount>
        </IntOnSavingsAndTempCashInvst>
        <OtherRevenueDescribed>
          <Description>Victor Becerra note &amp; TD</Description>
          <ExclusionCode>1</ExclusionCode>
          <RelatedOrExemptFunctionIncome>38996</RelatedOrExemptFunctionIncome>
        </OtherRevenueDescribed>
        <SubtotalsPartXVIA>
          <UnrelatedBusinessIncomeAmount>279</UnrelatedBusinessIncomeAmount>
          <RelatedOrExemptFunctionIncome>38996</RelatedOrExemptFunctionIncome>
        </SubtotalsPartXVIA>
        <TotalPartXVIA>39275</TotalPartXVIA>
      </AnalysisIncomeProducingActy>
      <TrnsfrTrRlnWithNoncharitableEO>
        <TrnsfrOfCashToNoncharitableEO>false</TrnsfrOfCashToNoncharitableEO>
        <TrnsfrOthAssetsNoncharitableEO>false</TrnsfrOthAssetsNoncharitableEO>
        <SalesOrExchangesOfAssets>false</SalesOrExchangesOfAssets>
        <PurchaseAssetsNoncharitableEO>false</PurchaseAssetsNoncharitableEO>
        <RentalOfFacilitiesEtc>false</RentalOfFacilitiesEtc>
        <ReimbursementArrangements>false</ReimbursementArrangements>
        <LoansOrLoanGuarantees>false</LoansOrLoanGuarantees>
        <PerformanceOfServicesEtc>false</PerformanceOfServicesEtc>
        <SharingOfFacilitiesEtc>false</SharingOfFacilitiesEtc>
        <RelationshipsNoncharitableEOs>false</RelationshipsNoncharitableEOs>
      </TrnsfrTrRlnWithNoncharitableEO>
    </IRS990PF>
    <IRS990ScheduleB documentId="IRS990ScheduleB" softwareId="11000144" softwareVersion="2011v1.2">
      <Organization501c3ExemptPF>X</Organization501c3ExemptPF>
      <GeneralRule>X</GeneralRule>
      <ContributorInfo>
        <ContributorNumber>1</ContributorNumber>
        <ContributorNameIndividual>Rbt Nancy Arnold Trust</ContributorNameIndividual>
        <ContributorAddressUS>
          <AddressLine1>7215 N Dewey Ave</AddressLine1>
          <City>Fresno</City>
          <State>CA</State>
          <ZIPCode>93711</ZIPCode>
        </ContributorAddressUS>
        <AggregateContributions>997500</AggregateContributions>
        <PersonContributionType>X</PersonContributionType>
      </ContributorInfo>
    </IRS990ScheduleB>
    <AccountingFeesSchedule documentId="AccountingFeesSchedule" softwareId="11000144" softwareVersion="2011v1.2">
      <AccountingFees>
        <Amount>450</Amount>
        <NetInvestmentIncome>0</NetInvestmentIncome>
        <AdjustedNetIncome>450</AdjustedNetIncome>
        <DisbursementsCharitablePrps>0</DisbursementsCharitablePrps>
      </AccountingFees>
    </AccountingFeesSchedule>
    <OtherExpensesSchedule documentId="OtherExpensesSchedule" softwareId="11000144" softwareVersion="2011v1.2">
      <OtherExpenses>
        <Description>BOD Expense - Travel</Description>
        <RevenueAndExpensesPerBooks>641</RevenueAndExpensesPerBooks>
        <AdjustedNetIncome>641</AdjustedNetIncome>
      </OtherExpenses>
      <OtherExpenses>
        <Description>BOD Expense - Mileage</Description>
        <RevenueAndExpensesPerBooks>150</RevenueAndExpensesPerBooks>
        <AdjustedNetIncome>150</AdjustedNetIncome>
      </OtherExpenses>
    </OtherExpensesSchedule>
    <OtherIncomeSchedule2 documentId="OtherIncomeSchedule2" softwareId="11000144" softwareVersion="2011v1.2">
      <OtherIncome>
        <Description>Victor Becerra note &amp; TD</Description>
        <RevenueAndExpensesPerBooks>38996</RevenueAndExpensesPerBooks>
        <AdjustedNetIncome>38996</AdjustedNetIncome>
      </OtherIncome>
    </OtherIncomeSchedule2>
    <TaxesSchedule documentId="TaxesSchedule" softwareId="11000144" softwareVersion="2011v1.2">
      <Taxes>
        <Category>FTB 10/17/11</Category>
        <Amount>10</Amount>
        <AdjustedNetIncome>10</AdjustedNetIncome>
      </Taxes>
      <Taxes>
        <Category>Calif AG 10/17/11</Category>
        <Amount>25</Amount>
        <AdjustedNetIncome>25</AdjustedNetIncome>
      </Taxes>
    </TaxesSchedule>
  </ReturnData>
</Return>