40-17G/A

ICI MUTUAL INSURANCE COMPANY

INVESTMENT COMPANY BLANKET BOND

RIDER NO. 10

INSURED		BOND NUMBER
The Parnassus Funds		87175108B
EFFECTIVE DATE	BOND PERIOD	AUTHORIZED REPRESENTATIVE
July 24, 2008	April 15, 2008 to April 15, 2009	/S/ Matthew Link

In consideration of the premium charged for this Bond, it is hereby understood and agreed that Item 1 of the Declarations, Name of Insured, shall include the following:

Parnassus Funds Distributor

Except as above stated, nothing herein shall be held to alter, waive or extend any of the terms of this Bond.

EX-99.1

Exhibit 99.1

Parnassus Funds

Copy of Resolutions of Board of Trustees
Concerning Joint Fidelity Bond

Rule 17g-1(g)(1)(B)(ii) – Copy of the resolution of a majority of the board of trustees who are not “interested persons” of the Parnassus Funds approving the amount, type, form and coverage of the bond and the portion of the premium to be paid by the Parnassus Funds:

PARNASSUS FUNDS
PARNASSUS INCOME FUNDS

        MINUTES OF REGULAR MEETING OF COMBINED BOARDS OF TRUSTEES (Excerpts relating to renewal of Fidelity Bond and D&O for the period April 15, 2008 to April 15, 2009)

        March 19, 2008

        A regular meeting of the combined Boards of Trustees (the “Board”) of the Parnassus Funds and the Parnassus Income Funds was held, following notice duly given, on Wednesday, March 19, 2008, at 10:15 a.m. at the offices of Parnassus Funds and Parnassus Income Funds (the “Funds”), One Market — Steuart Tower, Suite 1600, San Francisco, California, immediately following the conclusion of the meeting of the combined Audit Committee of the Board.

        After discussion, upon motion duly made by Mr. Houston, seconded by Mr. Potter and unanimously carried, it was:

        RESOLVED, that the Investment Company Blanket Bond issued by ICI Mutual Insurance Company, in the form presented to this meeting, is hereby approved; and

        FURTHER RESOLVED, that the minimum amount of the coverage for the Investment Company Blanket Bond shall continue to be determined as provided in the regulations of the Securities and Exchange Commission, and that the Two Million Dollars ($2,000,000.00) current amount of such coverage shall be continued; and

        FURTHER RESOLVED, that for the Investment Company Blanket Bond covering Parnassus Investments and the Funds, Parnassus Investments shall pay 25% of the premiums, reserve premiums and cost of the letter of credit and shall provide 33 1/3% of the Bond Deposit and 33 1/3% of the fees for the related Letter of Credit with the balance to be allocated among the Funds and portfolios in accordance with their net assets; and

        FURTHER RESOLVED, that the amount of the regular coverage of the D&O/E&O insurance for the Funds and Parnassus Investments shall be Two Million Five Hundred Thousand Dollars ($2,500,000.00) and that the amount of the Independent Directors Safety Net Liability Policy shall be Five Hundred Thousand Dollars ($500,000.00); and

        FURTHER RESOLVED, that for the D&O/E&O Insurance, Parnassus Investments shall pay 50% of the premiums, with the balance to be allocated among the Funds and portfolios in accordance with their net assets; and

        FURTHER RESOLVED, that the Funds shall enter into a joint recovery agreement with Parnassus Investments, to be effective as long as the Funds and Parnassus Investments maintain a joint fidelity bond, providing that if a recovery is received under that bond as a result of a loss sustained by either or both Funds and Parnassus Investments, then each of the Funds shall be entitled to recover an equitable and proportionate share of the recovery according to their net assets, but at least equal to the amount which each Fund would have received had it provided and maintained a single insured bond with the minimum coverage required by Rule 17g-1. Both the Funds and Parnassus Investments shall be entitled to recover the entire face amount of the bond, but should the loss be more than the amount of the bond, then the Funds shall receive their pro-rata recoveries before Parnassus Investments receives any reimbursement; and

        FURTHER RESOLVED, that common expenses incurred by the Funds shall be allocated among the Funds and portfolios of the Funds based upon their relative net assets as of the end of the previous fiscal year.

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EX-99.2

Exhibit 99.2

Parnassus Funds

Filing Statement
Concerning Joint Fidelity Bond

1. Rule 17g-1(g)(1)(B)(iii) — Statement showing the amount of the single insured bond which Parnassus Funds would have provided and maintained had they not been named as insureds under a joint insured bond:

Amount of Single Insured Bond for Joint Insureds
Period of Coverage: April 15, 2008 - April 15, 2009

Entity	Single Insured Bond Coverage
Parnassus Funds	$750,000
Parnassus Income Funds	$1,000,000
Aggregate Single Bond Coverage
(as if not maintained under joint coverage)	$1,750,000
Total joint Investment Company Bond
(Bond Number 87175108B)	$2,000,000

2. Rule 17g-1(g)(1)(B)(iv) — Statement as to the period for which premiums have been paid:

Premiums have been appropriately paid for the period from April 15, 2008 to April 15, 2009.

EX-99.3

Exhibit 99.3

ALLOCATION AGREEMENT

        THIS ALLOCATION AGREEMENT, dated as of October 3, 2008 (this “Agrement”), is made by and among Parnassus Funds and Parnassus Income Funds (collectively, the “Trusts”), management investment companies registered under the Investment Company Act of 1940, as amended (the “1940 Act”), Parnassus Investments, the investment adviser to the series of the Trusts (the “Advisor”), and Parnassus Funds Distributor, the distributor to the series of the Trusts (the “Distributor”). The Trusts, the Advisor and the Distributor are referred to collectively in this Agreement as the “Insureds”.

RECITALS

        WHEREAS, pursuant to the requirements of Rule 17g-1 under the 1940 Act, the Trusts are required to maintain a fidelity bond against larceny and embezzlement covering certain of their officers and employees; and

        WHEREAS, Rule 17g-1 provides that when two or more investment companies are managed and/or distributed by the same person or persons, such investment companies may obtain a joint insured bond covering themselves and such person or persons and their affiliates; and

        WHEREAS, the series of the Trusts are managed by Parnassus Investments and distributed by Parnassus Funds Distributor; and

        WHEREAS, the Insureds have entered into a joint Investment Company Bond (the “Bond”); and

        WHEREAS, the Insureds desire to provide for: (1) the method by which the amount of coverage provided under the Bond will be determined from time to time and (2) an equitable and proportionate allocation of any proceeds received under the Bond in the event that two or more of the Insureds suffer loss and consequently are entitled to recover under the Bond.

AGREEMENT

        NOW THEREFORE, it is hereby agreed among the parties hereto as follows:

        1.    Amount of Coverage Maintained. The amount of the fidelity coverage under the Bond shall at all times be at least equal in the amount to the sum of (i) the total amount of coverage which the Trusts would have been required to provide and maintain individually pursuant to the schedule set forth in paragraph (d) of Rule 17g-1 under the 1940 Act had the Trusts not been a named Insured under the Bond, and (ii) the amount of each bond which each Insured other than the Trusts would have been required to provide and maintain pursuant to federal statutes or regulations had it not been a named Insured under the Bond. The amount of fidelity coverage under the Bond shall be approved at least annually by the Boards of Trustees of the Trusts, including a majority of those Trustees who are not “interested persons” of the Trusts as defined by Section 2(a)(19) of the 1940 Act.

        2.    Allocation of Recovery. In the event an actual pecuniary loss is suffered by any two or more of the Insureds under circumstances covered by the terms of the Bond, any recovery under the Bond shall be allocated among such Insureds as follows:

            a.     If the total amount of coverage provided under the Bond exceeds or is equal to the amount of the combined total amount of loss suffered by the Insureds suffering loss, then each such Insured shall be entitled to recover the amount of its actual loss.

            b.     If the amount of loss suffered by each Insured suffering loss exceeds its minimum coverage requirements as set forth in Section 1 hereof and the amount of such Insureds’ combined actual losses exceeds the total amount of coverage provided under the Bond, then each such Insured shall be entitled to recover (i) its minimum coverage requirement (ii) to the extent there exists any excess coverage, the proportion of such excess coverage which its minimum coverage requirement bears to the amount of the combined minimum coverage requirements of the Insureds suffering actual loss; provided, however, that if the actual loss of any of such Insureds is less than the sum of (i) and (ii) above, then such difference shall be recoverable by the other Insured or Insureds in proportion to their relative minimum coverage requirements.

            c.     If (i) the amount of actual loss suffered by any Insured is less than or equal to its minimum coverage requirement, (ii) the amount of actual loss of another Insured or the other Insureds exceeds its or their minimum coverage requirement or requirements, and (iii) the amount of the combined actual losses of the Insureds exceeds the total amount of coverage provided under the Bond, then any Insured which has suffered an amount of actual loss less than or equal to its minimum coverage requirement shall be entitled to recover its actual loss. If only one other Insured has suffered actual loss, it shall be entitled to recover the remainder of the amount of the coverage under the Bond. If more than one other Insured has suffered actual loss in excess of the remaining coverage, then they shall allocate such remaining amount of coverage in accordance with Paragraph b of this Section 2.

        3.    Allocation of Premium. No premium shall be paid under the Bond unless the Board of Trustees of the Trusts, including a majority of those Trustees who are not “interested persons” of the Trusts as defined by Section 2(a)(19) of the 1940 Act, shall approve the portion of the premium to be paid by the Trusts. The premium payable on the Bond shall be allocated between the Trusts and the other Insured as determined by the Boards of Trustees of the Trusts.

        4.    Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by the parties.

        5.    Filing with the Commission. A copy of this Agreement and any amendment thereto shall be filed with the Securities and Exchange Commission within 10 days after the execution thereof to the extent required by Rule 17g-1(g) under the 1940 Act.

        6.    Applicable Law. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the California.

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        7.    Limitation of Liability of Trustees and Shareholders. A copy of the organizational documents each of the Trusts is on file with the Secretary of State of the state of such Trust’s organization, and it is hereby agreed that this Agreement is executed on behalf of the Trustees of the Trusts as Trustees and not individually and that the obligations of this Agreement are not binding upon any of the Trustees, officers and shareholders of the Trusts individually but are binding only upon the assets and property of the Trusts and their series. With respect to any obligation of the Trusts or their series arising under this Agreement, payment or satisfaction of such obligation shall be sought solely by looking to the assets and property of the series to which such obligation relates, and under no circumstances shall there be any right to set off claims relating to such series by applying property of any other series of the Trusts.

PARNASSUS FUNDS	PARNASSUS INCOME FUNDS
By:  /s/ Jerome L. Dodson	By:  /s/ Jerome L. Dodson
Jerome L. Dodson	Jerome L. Dodson
President	President
PARNASSUS INVESTMENTS	PARNASSUS FUNDS DISTRIBUTOR
By:  /s/ Jerome L. Dodson	By:  /s/ Jerome L. Dodson
Jerome L. Dodson	Jerome L. Dodson
Chairman	Chairman

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