Mercy Corps

CharityWatch's rating of Mercy Corps includes the financial activities of the entities consolidated in the Mercy Corps & Affiliates audited financial statements for the fiscal year ended June 30, 2021.

According to the Mercy Corps fiscal 2021 consolidated audit (Note 1(a) re: Business and Organization): "The consolidated financial statements include the accounts of Mercy Corps Global and its controlled affiliates under common control. ... All material intercompany transactions and balances have been eliminated..."

According to Note 1(a) of the consolidated audit, the active consolidated affiliates in fiscal 2021 are: (1) Kompanion Development Institution; (2) Kompanion Bank Closed Joint Stock Company; (3) Kompanion Invest; (4) MC Nigeria LTD/GTE; (5) Mercy Corps Development Holdings, LLC; (6) Mercy Corps Europe; (7) Mercy Corps India; (8) Mercy Corps Corporate Fund (previously Asian Credit Public Fund); (9) Mercy Corps Netherlands; and (10) CIT Services, LLC.

According to the Mercy Corps & Affiliates audited Consolidated Statement of Activities for the year ended June 30, 2021, Mercy Corps reports receiving in-kind "Material aid" and donated "Gifts in kind" on which it placed a value of $1,386,000 and $1,335,000, respectively. The value of the donated "Gifts in kind" received in fiscal 2021 includes approximately $996,000 "of gifts in kind legal services," according to Note 2(c) of the Mercy Corps fiscal 2021 audited financial statements.

[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 Mercy Corps & Affiliates consolidated audit of June 30, 2021 (Note 7, Debt) [$s in thousands, as noted]:

"...The Organization received $7,612 [thousand] in funding from The Small Business Administration's (SBA) Paycheck Protection Program (PPP) on April 23, 2020. The Organization received a letter from the SBA stating the debt and interest was forgiven in full on June 16, 2021."

According to the Mercy Corps & Affiliates consolidated audit of June 30, 2021 (Note 11, Commitments and Contingencies) [$s in thousands, as noted]:

"The Organization receives a substantial portion of its funding in the form of grants from government and multilateral agencies. These grants contain certain compliance and internal control requirements that, if violated, may result in the disallowance of certain costs incurred under the grant programs. Additionally, the Organization is involved in various legal proceedings and claims arising in the normal course of business. The Organization adjusts the contingent liabilities each year based on settlement of accrued amounts and potential liabilities that are reasonably likely and estimable. At June 30, 2021 and 2020, the Organization had total accrued contingent liabilities of $3,083 [thousand] and $2,894 [thousand], respectively...

"While it is not possible to determine the ultimate liability, if any, in these matters at this time, in the opinion of management, such matters will not have a material adverse effect on the financial condition of the Organization in excess of the recorded contingent liability."

According to the Mercy Corps & Affiliates consolidated audit of June 30, 2021 (Note 2(s) re: COVID-19):

"The spread of coronavirus (COVID-19) around the world has caused significant volatility in U.S. and international markets. There is still significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies. To date [November 2, 2021], COVID-19 has had an impact on how the Organization runs programs and accomplishes its mission, but has not had a material impact on its ability to operate."

According to the Mercy Corps & Affiliates consolidated audit of June 30, 2021 (Note 15, Subsequent Events):

"The Organization has performed an evaluation of subsequent events through November 2, 2021, which is the date the [audited] consolidated financial statements were available to be issued. Subsequent to year end Mercy Corps acquired Energy 4 Impact through a transfer agreement which transferred all membership interests from the Directors of Energy 4 Impact to Mercy Corps on September 30, 2021. Energy 4 Impact seeks to reduce poverty by accelerating access to clean energy, helping businesses and communities make better use of that expanded access, and working with the private sector to support the sustainability of these efforts."

According to the Mercy Corps (MC) tax filing for the fiscal year ended June 30, 2021, MC 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):

"Keny-Guyer, N $437,000 severance. Centrella, J $73,347 severance."

[Neal Keny-Guyer and Jeremiah Centrella are each reported as a "former officer," with total compensation of $437,412 and $215,238, respectively, in calendar year 2020 (IRS Form 990, Schedule J, Part II).]

Regarding nonfixed payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, Line 7):

"Mercy Corps evaluates the reasonableness of maximum variable compensation regardless of whether the maximum of the variable compensation amount is actually paid. Non fixed payment of a bonus was provided to [a] few employees of the organization based on compensation and performance reviewed. The bonus was determined based on performance in comparison to peer organizations and in context of the challenges faced by the organization during the year. Schrader, L $2,500; McKenna, T $15,000."

[Leesa Shrader is reported as "AgriFin Accelerate - Program Director," with total compensation of $290,769 in calendar year 2020; Tjada D'Oyen McKenna is reported as Chief Executive Officer, with total compensation of $113,871 in calendar year 2020 (IRS Form 990, Schedule J, Part II).]