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 American Civil Liberties Union (ACLU) is for the 501(c)(4) tax-exempt, social welfare organization (tax ID #13-3871360).|
The rating does not include the financial activities of the local ACLU affiliates or of the related 501(c)(3) public charity entity, the American Civil Liberties Union Foundation (tax ID #13-6213516). CharityWatch issues a separate rating for the ACLU Foundation.
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 ACLU consolidated audit of March 31, 2017 (Note 1, Organization):
"The ACLU is affiliated with 50 nonprofit, tax-exempt organizations and has a presence in every state in the United States and in 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 [ACLU] Foundation, as appropriate, at its sole discretion provides targeted financial and other support to the affiliates."
CharityWatch issues separate ratings for 501(c)(4) & 501(c)(3) 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."