CharityWatch REPORT
Issued December 2016

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.

Note(s)
CharityWatch's rating of the Sierra Club Foundation includes the activities of the 501(c)(3) public charity. The related Sierra Club, a 501(c)(4) tax-exempt social welfare organization, is rated separately by CharityWatch.
According to The Sierra Club Foundation (the Foundation) audit of December 31, 2015 (Note 19, Software hosting services):

"The Foundation has entered into two agreements for software hosting services with third parties. The first, for the period from November 1, 2013 through October 31, 2016, was at a total cost of $1,421,000. The second agreement, for the period January 1, 2015 through September 20, 2018 was at a total cost of $963,460. The fair value of the software hosting services purchased through the 2013 and 2015 agreements is estimated to be $5,000,000 and $1,755,160, respectively. In 2013, the Foundation recorded an in-kind contribution of $3,579,000. In 2015, the Foundation recorded a second in-kind contribution of $791,700..."

[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 Sierra Club Foundation (the Foundation) audit of December 31, 2015 (Note 18, Conditional contribution):

"The Foundation was awarded a grant totaling $40,000,000 in 2011, to be restricted to the Beyond Coal Campaign. During the year ended December 31, 2014, the final $5,000,000 of the grant was recorded as contribution revenue, per the terms of the grant."
According to The Sierra Club Foundation (the Foundation) audit of December 31, 2015 (Note 14, Transactions with related parties):

"The Foundation considers members of the Board of Directors, corporate officers, key employees, and their immediate family members to be related parties...Included in investments is a fund valued at $7,637,018 and $5,816,169 as of December 31, 2015 and 2014, respectively, which is managed by a registered investment advisor whose founder and CEO is a member of the Board of Directors."
According to The Sierra Club Foundation (the Foundation) audit of December 31, 2015 (Note 15, Transactions with the Sierra Club and its Chapters):

"In accordance with a contract between the Foundation and the Sierra Club, the Foundation agreed to reimburse the Sierra Club $5,700,000 and $5,200,000, or an amount not to exceed actual costs, for the years ended December 31, 2015 and 2014, respectively, for fundraising salaries and other fundraising expenses incurred on behalf of the Foundation. The Foundation paid $5,500,000 and $5,300,000 to reimburse Sierra Club for actual fundraising expenses for the years ended December 31, 2015 and 2014, respectively..."

"In accordance with the terms of the fiscal sponsorship relationship and an agreement between the Foundation and Sierra Club regarding the use of software hosting services, the two organizations share the use of the software hosting services and Sierra Club reimburses the Foundation for the portion of the use that is not for qualified charitable expenditures. During the years ended December 31, 2015 and 2014, respectively, Sierra Club paid $1,168,038 and $583,788, for the software services. See Note 19 [parts of which are cited above in a separate Analysts' Note]."

"The Foundation receives certain gifts and makes grants on an advisory basis to the Sierra Club and its Chapters and groups. The Foundation made grants to the Sierra Club National Programs of $47,429,009 and $46,048,577 for the years ended December 31, 2015 and 2014, respectively, and to the Sierra Club Chapters of $6,005,324 and $5,316,738 for the years ended December 31, 2015 and 2014, respectively."

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