CharityWatch's rating of The Humane Society of the United States (HSUS) is based on an in-depth analysis of its audited consolidated financial statements and the tax filings for the following 501(c)(3) public charity entities, which are included in the HSUS consolidated audit and in CharityWatch's rating of HSUS: (1) The Humane Society of the United States, (2) The Fund for Animals, (3) Humane Society International, Inc., (4) Humane Society Veterinary Medical Association, (5) South Florida Wildlife Center, Inc., (6) Humane Society Wildlife Land Trust, and (7) Project Chimps. All significant inter-organizational balances and transactions have been eliminated in the audit consolidation.
The HSUS 2019 consolidated audit (Note 1) reports that Humane Society International "encompasses the [following] related affiliates throughout the world:" (1) Humane Society International (UK), (2) Humane Society International Latin America, (3) Humane Society International / Canada, (4) Friends of Humane Society International for the Protection and Conservation of Animals, (5) Humane Society International - India, (6) Humane Society International - Europe, (7) Humane Society International - Mexico, (8) Humane Society International - Africa, and (9) Humane Society International - Korea.
With respect to The Fund for Animals (FFA), the HSUS 2019 consolidated audit (Note 1) states: "FFA, since 2005, has been the entity responsible for most HSUS animal care facilities, including the Cleveland Amory Black Beauty Ranch (TX), the Duchess Sanctuary (OR), and the Fund for Animals Wildlife Center (CA). ... FFA also includes RAVS (Rural Area Veterinary Services), which offers veterinary medical treatment for animals on Native American reservations in the United States and remote locations abroad."
Also included in the HSUS 2019 consolidated audit is Doris Day Animal League (tax ID# 95-4117651). CharityWatch issues a separate rating for Doris Day Animal League since it is organized as a 501(c)(4) tax-exempt, social welfare organization.
CharityWatch separates the ratings for 501(c)(3) & 501(c)(4) organizations, even when their financial activities are included together in a consolidated audit, due to their differing tax treatments under the IRS tax code. For more information on this topic, please see our sections on Types of Non-Profits, Tax Status, and Treatment of Related Organizations, which can be found on the Our Process page.
According to The Humane Society of the U.S. (HSUS) consolidated audit of December 31, 2019 (Note 1 re: Revenue Recognition, In-kind contributions), HSUS reports receiving donated in-kind public service announcements (PSAs) & other advertising in 2019 on which it placed a value of $25,674,898. HSUS also reports receiving donated in-kind services and donated equipment & supplies in 2019 on which it placed a value of $6,297,393 and $7,771,599, respectively. [The combined value of these reported in-kind contributions is $39,743,890.]
[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 Humane Society of the United States and Affiliates (HSUS) consolidated audit of December 31, 2019 (Note 1 re: Revenue recognition, Contribution revenue):
"During 2018, a major donor made a $4 million pledge to SFWC [South Florida Wildlife Center, Inc.] that was recorded in contribution revenue in 2018. SFWC received $800,000 in fulfillment of the pledge in 2019. Due to potential management changes at SFWC (see Note 20 [cited below]), the donor terminated the agreement with SFWC on December 24, 2019. Correspondingly, the $4 million contribution has been removed from SFWC and the funds received have been classified as a refundable advance pending finalization of a new contribution agreement between the donor and the Society. The donor and the Society are negotiating a new agreement for use of the funds received to-date. No agreement has been finalized as of the date of this report [May 5, 2020]."
According to the HSUS consolidated audit of December 31, 2019 (Note 20, Subsequent Events, Disaffiliation with SFWC):
"On May 1, 2020, the HSUS Board of Directors approved a resolution to disaffiliate SFWC [South Florida Wildlife Center, Inc.] from the HSUS. The transaction is scheduled to close on July 1, 2020. As part of the agreement, the HSUS will provide SFWC a one-time grant totaling $4,050,000 and transfer to SFWC all remaining unused restricted net assets subject to specific use for SFWC purposes."
According to The Humane Society of the United States and Affiliates (HSUS) consolidated audit of December 31, 2019 (Note 20, Subsequent Events, Sale of Headquarters):
"On February 25, 2020, the HSUS entered into a Purchase and Sale Agreement (the Agreement) to sell the Gaithersburg, Maryland property. The sales price is $14,750,000. The settlement date will be no earlier than 12 months from the date of the Agreement and no later than 21 months from the date of the Agreement. The HSUS has the option to lease back the property for up to 9 months."
According to the HSUS consolidated audit of December 31, 2019 (Note 20, Subsequent Events, Impact of COVID-19):
"On March 11, 2020 the World Health Organization declared the novel coronavirus (COVID-19) a global pandemic. As of the date of issuance [May 5, 2020], this public health emergency stands to substantially impact the global economy, including significant volatility in the financial markets. The coronavirus pandemic and government responses are creating disruption in global supply chains and adversely impacting many industries. The outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown. The Society's investment loss through March 2020 was $33.2M, a 12.8% loss from the investment balance as of December 31, 2019 and less than the Standard and Poor (S&P) 500 loss of 19.6% for the first quarter of 2020. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the novel coronavirus. Nevertheless, the novel coronavirus presents potential material uncertainty and risk with respect to the Society, its performance, and its financial results.
"On March 27, 2020, the President of the United States signed into law the 'Coronavirus Aid, Relief and Economic Security (CARES) Act.' The CARES Act, among other things, includes provisions relating to refundable payroll tax credits...
"We continue to examine the impact that the CARES Act may have on our business. Currently, we are unable to determine the impact that the CARES Act will have on our financial condition, results of operations or liquidity."
According to The Humane Society of the U.S. (HSUS) consolidated audit of December 31, 2019 (Note 9, Severance Pay Plan (Employment Longevity Retirement Enhancement Benefit)):
"The Society established the Humane Society of the United States Severance Pay Plan (Severance Pay Plan) on September 13, 1997, to grant severance benefits to eligible employees. These benefits and related expenses are paid from the general assets of the Society. Only employees hired in full-time or part-time positions before January 1, 1998, who have completed a minimum of 15 years of continuous full-time employment with HSUS, are eligible to become participants in the Severance Pay Plan. Upon termination of employment (for reasons other than gross misconduct), a participant receives a lump sum equal to 2% of the average of his or her annual base salary for the three calendar years before cessation of employment, multiplied by the number of years of continuous full-time employment accrued by the employees, subject to a maximum benefit of two years base salary. The benefit obligation of the Severance Pay Plan as of December 31, 2019, was calculated by an actuary, based on a census provided by the Society, using an assumed discount rate of 2.69%. There was no assumed compensation increase. The amount of the liability related to the Severance Pay Plan was $660,308."
According to The Humane Society of the U.S. (HSUS) 2019 tax filing, HSUS 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):
"Jill Little: $111,086 received as severance."
[Jill Little is reported as SVP Human Capital & Development, with total compensation in 2019 of $217,971 (IRS Form 990, Schedule J, Part II).]