CharityWatch's rating of the American Diabetes Association (ADA) also includes the financial activities of the American Diabetes Association Research Foundation (RF), which are consolidated in the ADA financial statements for the year ended December 31, 2021. All significant inter-Association transactions are eliminated in the audit consolidation.
According to the American Diabetes Association (ADA) consolidated audit of December 31, 2021 (Note 1, Consolidation and Organization):
"On December 31, 2021, the RF [ADA Research Foundation] was merged into the American Diabetes Association, and the RF was dissolved. Assets and liabilities of the RF were received by the American Diabetes Association at their book value in a net asset transfer (see Note 20 [referenced in part, below])."
According to the ADA consolidated audit of December 31, 2021 (Note 20, Merger), the ADA Research Foundation's activities for the year ended December 31, 2021 prior to the merger with ADA included approximately $9,825,000 in Total Revenue and $16,391,000 in Total Expenses. The amount of the "Net assets transfer to ADA" was approximately $(8,404,000).
According to the American Diabetes Association (ADA) consolidated audit of December 31, 2021 (Note 13, Contributed Services and In-Kind Contributions), ADA received in-kind contributed services in 2021 on which it placed a total value of approximately $530,000.
[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 on the Our Process page.]
According to the American Diabetes Association (ADA) consolidated audit of December 31, 2021 (Note 4, Risks and Uncertainties):
"In January 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus (COVID-19) and the risks to the international community... In March 2020, the WHO classified the COVID-19 outbreak as a pandemic...
"In March 2020, [the] CARES [Coronavirus Aid, Relief, and Economic Security] Act was signed into law. The CARES Act, among other things, includes provisions related to refundable payroll tax credits... It also appropriated funds for the SBA [Small Business Administration] Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19.
"ADA applied for, and in April 2020 received, funds under the Paycheck Protection Program (PPP) as part of the CARES Act in the amount of $8,322,000. The application for these funds required the ADA to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the ADA. This certification further required the ADA to take into account their current business activity and their ability to access other sources of liquidity... The receipt of these funds, and the recognition of the advance attendant to these funds, was dependent on the ADA having initially qualified for the funding and qualifying for the forgiveness of such funding based on their future adherence to the forgiveness criteria. ADA complied with the conditions required by the lender and applied for loan forgiveness. As a result, the loan was forgiven in June 2021 and the amount of $8,322,000 was recognized as a contribution without donor restrictions during 2021.
"On December 28, 2020, the Consolidated Appropriations Act, 2021 (the 2020 Act) was signed into law, which includes $900 billion in stimulus relief as a result of the COVID-19 pandemic. The 2020 Act included provisions to allow a second round of PPP loans... In February 2021, ADA applied for and received additional funding of $2,000,000 pursuant to the Paycheck Protection Program. ADA complied with the conditions required by the lender and applied for loan forgiveness. As a result, the loan was forgiven in September 2021, and the amount of $2,000,000 was recognized as a contribution without donor restrictions during 2021.
"On March 11, 2021, the American Rescue Plan Act of 2021 (the 2021 Act) was signed into law which includes $1.9 trillion in stimulus relief as a result of the COVID-19 pandemic. ADA did not opt to adopt any provisions under the 2021 Act."
According to the American Diabetes Association (ADA) 2021 tax filing, ADA reports for Business Transactions Involving Interested Persons a transaction in the amount of $1,045,139 involving Stephanie Silverman, Director, and described as "Government Relations Consulting" (IRS Form 990, Schedule L, Part IV). The reported Supplemental Information for transaction is:
"The American Diabetes Association hired Venn Strategies to provide government relations consulting services. Stephanie Silverman, the Chief Executive Officer of Venn Strategies, served on the Board of Directors of American Diabetes Association in 2021. This service relationship was reviewed and approved pursuant to the ADA's conflict of interest policy. As a result of this review. Ms. Silverman will recuse herself from board actions that could be perceived as a conflict of interest" (IRS Form 990, Schedule L, Part V).
According to the American Diabetes Association (ADA) 2021 tax filing, ADA includes in its reporting for Compensation Information re: Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees, "Bonus & incentive compensation" paid to two individuals, including $207,014 paid to Tracey D. Brown, Chief Executive Officer (through 10/6/2021). The reported total compensation in 2021 for T. Brown is $838,363 (IRS Form 990, Schedule J, Part II).
Also according to the ADA 2021 tax filing, ADA reports re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):
Regarding severance payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, line 4a):
"Kathy Nesbitt, Chief Operating and Strategy Officer, received a severance payment in the amount of $46,923. The terms and conditions of the severance agreement were consistent with ADA policies."
"Christa Wilson, Vice President, Information Technology, received a severance payment in the amount of $80,490. The terms and conditions of the severance agreement were consistent with ADA policies."
The reported total compensation in 2021 for K. Nesbitt and C. Wilson is $255,653 and $188,821, respectively (IRS Form 990, Schedule J, Part II).