This annual report of the Carnegie Foundation is dedicated to the work of Ernest L. Boyer, former President of the Foundation. It includes a detailed summary of Boyer's accomplishments as a leader in American education and his specific accomplishments as President of the Carnegie Foundation. A bibliography of books written by Ernest L. Boyer is included as is a list of books published or undertaken by the Carnegie Foundation during his presidency (1981-1997). The Foundation's annual report contains tabular financial reports including: 10-year record of investments, expenditures in retirement allowances and widows' pensions, the auditor's report with statement of financial position, statement of activities, statements of cash flows, schedule of functional expenses, schedule of educational and research expenditures, and schedule of investments (broken down into common stock, fixed income, and short-term investments). Other Carnegie philanthropies are briefly described including the Carnegie Institution of Washington and the public library buildings donated by Andrew Carnegie. (JLS)