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Governance & Transparency
CharityWatch evaluates certain criteria related to a charity's Governance and Transparency. Donors may want to consider a charity's willingness to be open and transparent with CharityWatch to be a good litmus test for determining its commitment to public accountability.
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See Analysts' Notes for explanation.Analysts' Notes
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.
Compassion International is not required to file an annual return (Form 990) with the IRS or state regulators because it is a religious organization. CharityWatch is therefore unable to provide salary information for this group. CharityWatch's letter grade rating of Compassion International is based on the Compassion International and Affiliates audited consolidated financial statements for the fiscal year ended June 30, 2022. |
CharityWatch's rating of Compassion International also includes the financial activities of its international affiliates, which are consolidated in the Compassion International audited financial statements for the fiscal year ended June 30, 2022. "All material inter-affiliate accounts and transactions have been eliminated in the consolidated financial statements," according to audit Note 1. According to the Compassion International and Affiliates consolidated audit of June 30, 2022 (Note 1 re: Affiliates): "Compassion's international affiliates are consolidated based on the level of control exercised by Compassion International, Inc. and the presence of an economic interest. Compassion's consolidated international affiliates at June 30, 2022 and 2021 include:
CharityWatch's rating of Compassion International does not include the financial activities of the "11 unaffiliated international organizations" that, along with Compassion International, are part of the "Global Partner Alliance." "Compassion does not exercise the level of control to consolidate unaffiliated international organizations and therefore their operations are not reflected in the accompanying consolidated financial statements," according to audit Note 1. The "11 unaffiliated international organizations" in the Global Partner Alliance (GPA) with Compassion include organizations located in South Korea, Australia, the United Kingdom, Canada, the Netherlands, Germany, Switzerland, Italy, France, and New Zealand, as well as "Compassion Norden (Nordic countries)," according to audit Note 9 (GPA Contributions), which also reports that Compassion received $280,876,000 in total contributions from those 11 GPA organizations in fiscal 2022. [Note: The above-noted $280,876,000 in Global Partner Alliance contributions Compassion received in fiscal 2022 are excluded from CharityWatch's calculation of Compassion International's Cost to Raise $100 ratio.] |
According to the Compassion International and Affiliates consolidated audit of June 30, 2022 (Note 1 re: Child Development Programs): "Last fiscal year, the significant impact of the COVID-19 pandemic on the world required Compassion and our global partners to adapt in how we reach new and existing donors. Compassion and our local church partners also needed to change how we minister to children during this crisis. Throughout fiscal year 2021, in compliance with local government regulations, Compassion temporarily halted large group activities, which included much of our regular child program activities. We focused instead on meeting emergency needs in response to COVID-19... In fiscal year 2022 we began adapting to a post-pandemic environment with a renewed focus on the contextualization needed to support the people and communities we work in." |
According to the Compassion International and Affiliates consolidated audit of June 30, 2022 (Note 2 re: Severance Benefits): "Compassion provides certain severance benefits to eligible former or inactive employees during the period subsequent to employment but prior to retirement through plans individualized for each geography in accordance with local laws and regulations or common market practices. ... Accrued severance for years ended June 30, 2022 and 2021, was $3.2 million and $4.2 million, respectively... Compassion's severance expense was $4.6 million and $8.4 million for the years ended June 30, 2022 and 2021, respectively..." |