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 is unable to provide sufficient salary information for PetSmart Charities because it outsources its management/staff through the for-profit company, PetSmart, Inc., which acts as a management company to PetSmart Charities. The IRS does not require nonprofit organizations to disclose compensation for management/staff outsourced through a for-profit entity.|
|According to the PetSmart Charities (PSC) audit of January 31, 2016 (Note 5, Transactions with PetSmart, Inc. and PetSmart Charities of Canada):|
"The Organization is highly dependent upon the viability of PetSmart as this is the primary source of donated revenue received in the stores from customers and from PetSmart employees. Royalty income is generated on specific campaigns where the Organization receives a percentage of the purchase price on selected merchandise items sold in PetSmart stores that bear its trademark during a certain timeframe..."
"The Organization entered into a management services agreement with PetSmart to cost-effectively outsource certain business and administrative management services. The fees paid to PetSmart are capped annually and the value of contributed rent, services, products and supplies received by the Organization under the agreement overwhelmingly exceeds the payments made to PetSmart."
"The Organization incurred approximately $7,400,000...of expenses under the management services agreement..." in fiscal 2016.
"The Organization entered into a formal management services agreement with PetSmart Charities of Canada ('PCC') consistent with prior years' practice of providing business management, finance, strategy and other services..."
According to the PetSmart Charities (PSC) tax filing for the fiscal year-ended January 31, 2016, five of PSC's thirteen directors serving during the fiscal year were officers of PetSmart, Inc., which is an independent contractor to PSC under the terms of a management services agreement. Three additional officers of PSC were also employees of PetSmart, Inc. (IRS Form 990, Schedule L, Part V).
|According to the PetSmart Charities audit of January 31, 2016 (Note 2, Contributed Goods and Services):|
"...[T]he Organization recorded contributed rent, goods and services" from PetSmart, Inc. valued at $14,664,035 in fiscal 2016.
The Organization also reports receiving contributed goods and services valued at $788,940, "primarily relate[d] to pet food supplies and advertising from entities other than PetSmart, Inc.," in fiscal 2016.
[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".]