CharityWatch Analysts perform an in-depth analysis of charities' audited financial statements and IRS tax filings, and often review other documents such as state filings, annual reports, and fundraising contracts during their evaluations. Below are select notes that CharityWatch believes may be of interest to donors.
Any time an Analysts' Note refers to a charity's Audited Financial Statements or IRS tax form, CharityWatch encourages interested donors to obtain a copy of the referenced documents so that they may view the information in context. Please contact the charity directly to request a copy of any referenced document. Charity tax forms and audits may also be obtained from a number of online databases. For a list of sources, please visit our LINKS page.
|CharityWatch's rating of the ACLU Foundation (ACLUF) is for the 501(c)(3) public charity (tax ID #13-6213516).|
The rating does not include the financial activities of the local ACLU affiliates or of the related 501(c)(4) tax-exempt, social welfare organization, the American Civil Liberties Union (ACLU) (tax ID #13-3871360). CharityWatch issues a separate rating for the ACLU.
Whenever practicable, CharityWatch obtains audited consolidated financial statements that include all of the entities of a nonprofit. Such an audit eliminates transactions among related entities, and allows us to determine how efficiently an organization is operating on the whole. In the case of the ACLU, its local affiliates are separate legal entities whose financial activities are not included in its consolidated financial reporting.
According to the ACLUF consolidated audit of March 31, 2017 (Note 1, Organization):
"Both the ACLU Foundation and the Union [the ACLU] are affiliated with 50 nonprofit, tax-exempt organizations in every state in the United States, the District of Columbia and Puerto Rico. All affiliates include reference to the 'American Civil Liberties Union' or some variation thereof in their names (the affiliates). The affiliates also operate through related Section 501(c)(3) and Section 501(c)(4) organizations. The affiliates share the same overall mission and purpose as the ACLU, but their programs focus more on local or regional issues, while the ACLU's program activities are focused on overarching civil liberties issues and initiatives. Although the ACLU plays no direct role in the governance of and, except in very limited instances, does not share employees with, the affiliates, the organizations jointly fundraise and work together on certain programs and the ACLU, through either the Union [the ACLU] or the ACLU Foundation, as appropriate, at its sole discretion provides targeted financial and other support to the affiliates."
CharityWatch issues separate ratings for 501(c)(3) & 501(c)(4) organizations, even when they are included together in a combined or consolidated audit, due to their different tax treatment by the IRS. For more information on this topic, please see our sections on Types of Non-Profits, Tax Status, and Treatment of Related Organizations, which can be found in "Criteria & Methodology" under the "About Us" navigation header.
For more information about things to consider when donating to organizations that have related public charity and social welfare entities, click on the "Donor Alerts & Articles / Media" tab (above), and read "Sorting Out Non-Profit Pairs."
|According to the ACLU Foundation audited Consolidated Statement of Activities for the year ended March 31, 2017, the Foundation reports receiving in-kind donated legal services on which it placed a value of $2,202,732 in fiscal 2017.|
[Note: CharityWatch generally excludes the value of in-kind (non-cash) donations of goods and services from its calculations of Program % and Cost to Raise $100. More information on how grades are calculated and the treatment of in-kind donations can be found by clicking on "About CharityWatch" from the navigation bar and then clicking on "Criteria & Methodology".]
|According to the ACLU Foundation audit of March 31, 2017 (Note 2, Donor concentration):|
"Approximately 9% of the total grants, contributions and bequests revenue for the year ended March 31, 2017 were provided by three donors..."
|According to the ACLU Foundation tax filing for the fiscal year-ended March 31, 2017, the Foundation reports for Business Transactions Involving Interested Persons, a transaction in the amount of $241,380 paid to Gary D. Sowards, spouse of an officer/key employee, for legal services (IRS Form 990, Schedule L, Parts IV & V).|
The transaction is further described as follows:
"During fiscal year 2017 Gary D. Sowards, the spouse of officer/key employee, Dorothy Ehrlich, provided legal services in connection with the ACLU Foundation's John Adams Project, which has arranged for the representation of an individual charged with a capital crime. A nationally known expert in capital punishment, Mr. Sowards was retained via a decision making process that did not involve the officer/key employee and at rates that are customary for the services provided" (IRS Form 990, Schedule L, Part V).