CharityWatch's rating of ChildFund International includes the financial activities of the ChildFund international office, national offices, fundraising offices, and India Society, which are consolidated in the ChildFund International audited financial statements for the fiscal year ended June 30, 2020, according to the ChildFund consolidated audit (Note 2 re: Principles of Consolidation). Also according to Note 2: "All significant transactions between the organizations, including all inter-organization balances, have been eliminated in consolidation. In compliance with local laws, certain of these national offices and fund raising offices are separate legal entities."
According to the ChildFund International consolidated audit of June 30, 2020 (Note 1, Organization):
"Most of the [child] sponsorships...are supported by U.S. donors; the remainder are supported by in-country fundraising offices and international donors who sponsor children through autonomous organizations in Australia, Canada, Denmark, France, Germany, Ireland, Japan, Korea, New Zealand, Sweden, and Taiwan. ChildFund is a member of ChildFund Alliance, a global network of 11 child development organizations."
[Note: The financial activities of the ChildFund "autonomous organizations" noted above are not included in CharityWatch's rating of ChildFund International. According to Note 12 of the ChildFund fiscal 2020 consolidated audit: "These autonomous organizations are incorporated in their respective countries for the purpose of initiating and overseeing programs that are distinct and unique to their mission. Because ChildFund does not control these organizations, their related assets, liabilities, net assets, revenues and expenses are not reflected in the accompanying [audited] consolidated financial statements."]
According to the ChildFund International consolidated audit of June 30, 2020 (Note 2 re: Principles of Consolidation):
"ChildFund established the [India] Society in 1984. The Society is registered...and exists under the laws of India. ChildFund has majority voting power of the Society's governing body."
According to the ChildFund International consolidated audit of June 30, 2020 (Note 14, Related Party Transactions):
"In April 2002, ChildFund Alliance was established for charitable purposes to promote the well-being of children and their families. The Board of Directors of ChildFund Alliance consists of a significant percentage of ChildFund Board and staff; however, ChildFund does not have an economic or controlling interest in ChildFund Alliance; accordingly, ChildFund Alliance is not consolidated in ChildFund's [audited] consolidated financial statements..."
According to the ChildFund International audited Consolidated Statement of Activities for the year ended June 30, 2020, ChildFund received contributions of gifts-in-kind on which it placed a total value of $42,432,252. Included in this value is "$24,652,910 of in-kind media and broadcast time in the form of public service announcements," and "$11,064,681 of gifts-in-kind pharmaceuticals," according to Note 2 of the ChildFund fiscal 2020 consolidated audit.
[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 ChildFund International consolidated audit of June 30, 2020 (Note 2 re: Paycheck Protection Program Loan):
"ChildFund received loan proceeds in the amount of $3,233,600 on April 21, 2020, under the Paycheck Protection Program ('PPP'). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act ('CARES Act'), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loan and accrued interest are forgivable after eight or twenty-four weeks as long as the borrower has initially qualified for the loan and uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight or twenty-four week period..."
According to the ChildFund International consolidated audit of June 30, 2020 (Note 9, Debt):
"Proceeds from the PPP loan were received on April 21, 2020 and totaled $3,233,600. ChildFund currently believes it has spent the PPP loan proceeds in accordance with the provisions of the PPP as required by the Small Business Administration ('SBA') and expects the loan to be forgiven. If the PPP loan is not forgiven, the unforgiven portion will be payable over five years at an interest rate of 1.00%, with a deferral of payments until forgiveness amount remitted to lender by SBA."
According to the ChildFund International consolidated audit of June 30, 2020 (Note 15, Contingencies, Other Matters):
"The COVID-19 pandemic has developed rapidly in 2020. The resulting impact of the virus on the operations and measures taken by various governments to contain the virus have negatively affected ChildFund's results in the reporting period.
"The currently known impacts of COVID-19 on ChildFund are a decline in acquisition of new sponsors, volatility in investments, increase in pension liability and decline in planned programming activities through our local partners.
"In response to these matters, the entity has taken the following actions: We have launched a global COVID-19 response campaign, shifted programming dollars to direct cash payments, implemented more digital campaign activities and obtained the PPP loan as discussed in Note 9 [cited in a separate Analysts' Note, above].
"Management has determined that theses actions that it has taken are sufficient to mitigate the uncertainty as of the date of this report [November 30, 2020]. The full impact of the COVID-19 outbreak continues to evolve... As such, it is uncertain as to the full magnitude that the pandemic will have on the ChildFund's financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, ChildFund is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021."