CharityWatch REPORT
Issued January 2018

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.

According to the Kars4Kids consolidated audit of December 31, 2016 (Note 5, Related Party Transactions):

"The organization distributed most of its grants to an affiliated nonprofit organization under common management. Total grants to related organizations during 2016 amounted to $18,723,073. In addition, the organizations share premises, and certain overhead costs are allocated between them based on usage."

"The organization is a guarantor on a $12,000,000 term note for the same affiliated organization with an outstanding balance of $10,756,144 at December 31, 2016. The note matures in September 2022 and is secured by real property of the related organization. The note accrues interest at a per annum rate equal to the bank's prime rate plus .75%, with an interest rate floor of 3.75% per annum. Interest and principal payments of $63,340 are paid by the related organization and are due monthly for the remaining term."

*NOTE: Oorah Inc. (tax ID# 22-3746051) is the "affiliated nonprofit organization under common management" referenced above. Kars4Kids' cash grant of approximately $18.2 million to Oorah in 2016 represents about 95% of Kars4Kids' total cash-based program spending for the year (adjusted for joint solicitation costs).

CharityWatch does not provide a separate rating for Oorah at this time, primarily because Oorah has historically received the vast majority of its cash contributions from Kars4Kids.
According to the Kars4Kids 2016 tax filing (IRS Form 990 Schedule M) and consolidated audit of December 31, 2016 (Consolidated Statement of Activities):

Approximately 94.6% of Kars4Kids' total contributions in 2016 were from donated cars, other vehicles, boats and planes; and approximately 5.1% was from donated real estate.
According to the Kars4Kids consolidated audit of December 31, 2016 (Note 8, Contingencies, Trademark Settlement):

"The organization had reached an agreement under the terms of a trademark infringement settlement in which Kars 4 Kids Inc. was required to make certain payments in exchange for specific trademark rights. The parties are currently disputing the enforceability of the settlement and the terms thereof and the case has been referred back to the court for a ruling."

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