D.E.L.T.A. Rescue

CharityWatch has assigned a "?" rating to Dedication and Everlasting Love to Animals (D.E.L.T.A. Rescue) for its fiscal year ended December 31, 2023, which signifies that CharityWatch has significant concerns about the charity's financial reporting. 

CharityWatch has identified two additional 501(c)(3) public charities with the same 3 board members or officers as D.E.L.T.A. Rescue. The related organizations include Horse Rescue of America (Tax ID#95-4342386) and Living Earth Productions (Tax ID#95-4287079). The 3 board members or officers reported for all 3 organizations include Leo Grillo, Founder/President; Charles Leonard, Board of Directors; and John Rustin, Board of Directors. Officer titles are not disclosed in any of the tax filings indicating Leonard's or Rustin's positions and responsibilities within the organizations. 

Horse Rescue of America and Living Earth Productions are reported as related organizations in D.E.L.T.A. Rescue's 2023 IRS tax Form 990, Schedule R, Transactions With Related Organizations. In fiscal 2023, D.E.L.T.A. Rescue reports granting $491,963 and $914,587 to Horse Rescue of America and Living Earth Productions, respectively. This $1,406,550 in grants to related organizations comprises  18.2% of D.E.L.T.A. Rescue's total reported expenses of $7,711,740 and 19.1% of its reported program spending for 2023. According to the fiscal 2023 tax filings of the related organizations, the financial statements of Horse Rescue of America and Living Earth Productions were not audited by an independent accountant in 2023. 

Because IRS tax Forms 990 are not audited according to Generally Accepted Auditing Standards (GAAS) and are not required to be presented according to Generally Accepted Accounting Principles (GAAP) in the United States, they are less reliable and may be of limited use when attempting to discern the efficiency with which a charity is operating. IRS Form 990 reporting is frequently incomplete, inaccurate, inconsistent, and/or incomparable, and for this reason, analyzing a charity's audited financial statements is a critical component in any meaningful charity evaluation.

Because all three organizations share the same governing body and the related charities rely significantly on D.E.L.T.A. Rescue for financial support, it is CharityWatch's understanding that the financial activities of all three organizations should be reported in aggregate in a consolidated audit in order to comply with GAAP. Not only does D.E.L.T.A. Rescue  omit the financial activities of HRA and LEP from its audited financial statements--the tax filings of both HRA and LEP indicate that those charities' books were not audited at all. 

Living Earth Productions reports that its total revenue for the year January 1, 2023 to December 31, 2023 amounted to $121,790 and consisted entirely of investment revenue. This contradicts D.E.L.T.A. Rescue's IRS Tax Form 990 reporting for the same period in which it reports granting $914,587 to Living Earth Productions. In addition, Living Earth Productions reports that its total net assets decreased during 2023 by $313,966 from the prior year and that it spent only $435,756 in total expenses during 2023. If D.E.L.T.A. granted $914,587 to Living Earth Productions in 2023, the net assets of Living Earth Productions should have increased by $600,621, not decreased, all else equal. Living Earth Productions does not include a Schedule R, Transactions With Related Organizations, in its 2023 IRS Form 990 tax filing. 

Living Earth Productions reported total net assets of $5,705,335 as of December 31, 2023. Based on its fiscal 2023 cash spending of $435,756, it could continue to operate for about 13 years without raising another penny of revenue. The charity's primary expenses in 2023 consisted of $375,621 in "Production Expense," according to its IRS tax Form 990 of the same year. Living Earth Productions reports its "mission or most significant activities" as including "Video development, production & distribution..."

Horse Rescue of America reports its mission as "Rescue and care of abused, neglected and abandoned horses and burros." This charity's financial activities are reported on a fiscal year basis that includes the period July 1st through June 30th each year versus calendar year. The charity reported total revenue of $460,948 and $331,245 in fiscal 2023 and 2022, respectively, and reported on its revenue statements that $0 of either amount was received from a related organization (IRS Form 990, Part VIII, line 1d). In its 2023 and 2022 IRS Forms 990, D.E.L.T.A. Rescue reports that it granted $491,963 and $339,478 to Horse Rescue of America, respectively. (IRS Form 990, Schedule R) 

The 3 officers and/or directors of each organization are reported as receiving $0 compensation in 2023 from D.E.L.T.A. Rescue, Horse Rescue of America, or Living Earth Productions. In the fiscal 2023 tax filings of the related organizations, Leo Grillo is reported as working 40 hours per week for D.E.L.T.A. Rescue, 2 hours per week for Horse Rescue of America, and 40 hours per week for Living Earth Productions, for a total of 82 hours per week. Such compensation reporting can be a red flag since it is highly unusual for a charity employee to work more than 80 hours per week while receiving zero compensation. It creates a concern that the tax form reporting may be incorrect and/or that an employee might be compensated by a charity in a way not required to be reported in Part VII of the tax filing (IRS Tax Form 990, Part VII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors)