FOUNDERS FUNDS, INC.
Supplement to Prospectus Dated August 12, 1996
FOUNDERS SPECIAL FUND
The information concerning Michael W. Gerding appearing on page 27 of the Funds'
prospectus is hereby amended to indicate that, in addition to his other
portfolio management responsibilities, Mr. Gerding also has served as co-lead
portfolio manager for Founders Special Fund since 1996. Michael K. Haines and
Edward F. Keely continue to serve as the other co-lead portfolio managers for
Founders Special Fund.
ILLIQUID SECURITIES
The first sentence of the section of the Funds' prospectus entitled "Investment
Policies Involving Special Risks - Illiquid Securities," appearing on page 35,
is hereby amended to read as follows:
Each of the Funds except Money Market Fund may invest up to 15% of the
market value of its net assets, measured at the time of purchase, in
securities that are not readily marketable, including repurchase
agreements maturing in more than seven days.
RETIREMENT PLANS AND IRAS
The section of the Funds' prospectus entitled "Investing in the Founders Funds -
Opening Your Account With Founders" is amended to add the following paragraph on
page 42:
The Small Business Job Protection Act, enacted in August 1996, creates
a new retirement plan vehicle for small employers, the Savings
Incentive Match Plan for Employees ("SIMPLE") effective January 1,
1997; provides that new SAR-SEP plans may not be established after
December 31, 1996; and raises the annual imit on joint IRA
contributions for married couples in which one spouse has no
compensation from $2,250 to $4,000 for tax years beginning after
December 31, 1996. Call 1-800-525-2440 or consult your tax adviser for
more information.
The date of this Supplement is September 10, 1996.
