CharityWatch's rating of Rainforest Alliance (RA) includes the financial activities of the RA "branches and affiliates in various countries" included in the RA audited consolidated financial statements for the year ended December 31, 2019.
According to the Rainforest Alliance (RA) 2019 consolidated audit (Note 1, Organization and Nature of Activities):
"Rainforest Alliance...is an international non-profit organization, organized in 1987 in the State of New York with branches and affiliates in various countries. ... All the activities of its branches and affiliates are included in these [audited] consolidated financial statements. RA conducts the majority of its activities throughout North America, Central America, South America, Africa, Europe and Southeast Asia."
[All significant intercompany accounts and transactions have been eliminated in the audit consolidation.]
According to the Rainforest Alliance (RA) consolidated audit of December 31, 2019 (Note 9, In-Kind Contributions), RA received in-kind contributions during 2019 on which it placed a total value of $1,130,601. Of the total value, $750,225 consisted of in-kind legal services.
[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 Rainforest Alliance (RA) consolidated audit of December 31, 2019 (Note 16, Sale of RA-Cert and Discontinued Operations):
"During 2018, RA sold its assets in connection with its RA-Cert line of business. This sale represented a strategic shift in RA's operations and as such was recorded as a discontinued operation... RA sold certain assets such as customer lists and other assets which had no basis and transferred certain liabilities amounting to approximately $380,000 in connection with its RA-Cert line of business. The total sale amount is contingent upon future revenues. RA received a $750,000 nonrefundable payment upon transfer of assets and liabilities in 2018. In addition, for 5 years after the sale, RA will receive amounts ranging from 4.87% to 7.42% of applicable annual revenue. RA recognized a gain from discontinued operations of $573,000 and $370,000 for the years ended December 2019 and 2018, respectively. During 2018, RA-Cert revenues prior to the sale were $6,820,920 and expenses were $7,773,604."
RA will continue to collect revenues each year of the term based on a percentage of applicable annual revenues. In addition to the collection of the receipts from applicable annual revenue, RA signed a license agreement with the buyer whereby the buyer will have the right to utilize the Rainforest Alliance Certified Seal at no charge."
According to the Rainforest Alliance (RA) consolidated audit of December 31, 2019 (Note 18, Subsequent Events):
"RA has evaluated subsequent events occurring after the consolidated statement of financial position date through the date of May 13, 2020, which is the date the [audited] consolidated financial statements were available for release. Based upon this evaluation, RA has determined that the following events occurred:"
"Risks Related to Contagious Diseases
The current outbreak of a novel strain of coronavirus (COVID-19)...is significantly impacting businesses across the world. On January 30, 2020, the World Health Organization declared the coronavirus outbreak a 'Public Health Emergency of International Concern.' While the duration of business interruption from this outbreak and related financial impact cannot be reasonably estimated at this time, financial results, including investment results, and exchange rate fluctuations may be adversely affected in 2020. The extent to which the coronavirus impacts operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others."
During April 2020, the Organization received a loan from a financial institution authorized through the Paycheck Protection Program authorized by the Coronavirus Aid, Relief and Economic Security Act ('CARES Act') in the amount of approximately $1,782,000. The loan may be forgiven upon a review by the financial institution of the Organization's use of the loan proceeds in accordance with the CARES Act. If the financial institution determines that the criteria for debt forgiveness has not been met, the loan matures 2 years from the date of the loan and interest accrues at 1% per year. Any such debt forgiveness would be recognized at the time that the financial institution completed the aforementioned review and approved the forgiveness of the loan."