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WE Charity

CharityWatch report issued
November 2021

 
CharityWatch Grade
 

Contact Information

WE Charity
6500 Main Street
Suite 5
Williamsville, NY 14221

Other Names

Free the Children—(formerly)

Tax Status

501(c)3

Website

www.we.org

Stated Mission

Empowers youth around the world to make a positive change in their communities.

View similar charities
Data based on Fiscal Year Ended 08/31/2020

*Why a Question Mark Rating?

CharityWatch currently has concerns about this organization and/or is unable to provide complete rating information due to the organization's nondisclosure of financial information. Please see the Analysts' Notes section for a more detailed explanation.


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.
WE Charity
does not meet governance benchmarks.
 
WE Charity
does not meet transparency benchmarks.

CharityWatch Governance Concerns

See Analysts' Notes for Explanation
Transparency
Provides Financial Information
Audit Accessibility
Governance: Policies
Reports regularly & consistently monitoring & enforcing compliance with a written Conflict of Interest Policy
Reports required, annual disclosure by officers, directors, and key staff of interests that could give rise to conflicts
Reports having a written Whistleblower Policy
Reports having a written Document Retention and Destruction Policy
Governance: Financials
Reports providing copy of tax form to all board members prior to filing it with IRS
Reports that financial statements were audited by an independent accountant
Governance: Board of Directors
Reports at least 5 voting board members
51% or more of voting board members reported as independent
Reports documenting minutes of board and board committee meetings
Privacy Policy
Privacy Policy Opt-In Policy  

Unable to Provide Salaries

CharityWatch is unable to provide a range of Top Three Salaries for this charity for the above fiscal reporting year because we lack complete salary data for the organization. Except for officers, directors, and trustees, the IRS does not require breakouts of salaries totaling less than $100,000.

For example, XYZ charity would be required to provide a breakout in its tax form of compensation to its president of $55,000, but would not be required to provide a breakout of $99,000 in compensation to its top medical researcher if that person is not also an officer, director, or trustee of the organization.

This charity reports that compensation to its officers, directors, and trustees is under $100,000 per individual. Donors who would like to view limited salary data for this organization should refer to its tax form, which may be available on the charity's web site or from a number of third-party sources. See CharityWatch's Links page for information on obtaining copies of charity tax forms.


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.
CharityWatch analyzed WE Charity's 2020 audited financial statements and IRS Form 990 tax filing for its U.S.-based legal entity (tax ID #16-1533544). CharityWatch is unable to rate WE Charity at this time in consideration of concerns raised about the charity by various media outlets related to the organization's governance, transparency, and accounting of claimed program accomplishments. These concerns may impact the reliability of WE Charity's financial reporting for purposes of determining how efficiently and effectively it uses donors' contributions.

Concerns Raised By Journalists:

According to an investigation conducted by journalists at the CBC program, The Fifth Estate: "WE Charity told a [Canadian] parliamentary ethics committee it had built hundreds of schools in Kenya with donors' money, but an unhappy donor told MPs [members of Parliament] he felt defrauded because another donor funded the same school he was told he had paid for." 

Charity Intelligence Canada, a Canadian charity watchdog and rating organization, reported the following about WE Charity in 2020:

"Recent news: WE Charity announces closure: September 9, 2020. Co-founders Craig and Marc Kielburger announce WE Charity’s Canadian operations will close down, with net proceeds from the asset sales transferred to a new foundation as an endowment for WE Charity’s programs in Kenya, Ecuador and China. At this time, the closure is only WE Charity’s Canadian operations not affecting WE Charity US, WE Charity UK, ME to WE social enterprise, or other WE entities." 

"DONOR ADVISORY: July 17, 2020, WE Charity has a nearly completely new board. Six of last year’s directors were replaced with four new directors, with Greg Rogers as the new board chair. In June 2020, one new director resigned."

"On June 25, 2020 for the COVID-19 pandemic response, the Canadian government awarded a $912m [million] contract to WE Charity to recruit, manage, and fund student volunteers. On July 3, WE Charity withdrew from this contract."


Additional articles and media may be viewed here


CharityWatch's Findings:

In addition to WE Charity’s affiliation with other nonprofit organizations in the U.S. and elsewhere, WE Charity is also associated with the for-profit B Corporation, ME to WE Social Enterprises, Inc., through which WE’s co-founders receive employment income, according to an "independent assessment of certain topics related to WE Charity and ME to WE Social Enterprises, Inc.," dated May 23, 2019, posted on we.org. The financial statements of B Corporations are not a matter of public record. For this reason, CharityWatch is unable to verify the accuracy of the reported employment income amounts.

Charities are, however, required to report transactions among their related organizations on IRS Form 990, Schedule RRelated Organizations and Unrelated Partnerships, of their annual tax filing if they respond "Yes" to the following question: "Was the organization related to any tax-exempt or taxable entity? If 'Yes,' complete Schedule R, Part II, III, or IV, and Part V, line 1" (IRS Form 990, Part IV, line 34). WE Charity responded "No" to this question on its fiscal year 2020 and 2019 tax filings.

For purposes of Form 990, Schedule R, the IRS defines a related organization as "[a]n organization, including a nonprofit organization, a stock corporation, a partnership or limited liability company (LLC), a trust, and a governmental unit or other governmental entity...[that] stands, at any time during the tax year, in one or more of the following relationships to the filing organization (among others, as detailed at irs.gov): 

  • Parent – An organization that controls the filing organization. 
  • Subsidiary – An organization controlled by the filing organization.
  • Brother/Sister – An organization controlled by the same person or persons that control the filing organization.
  • Supporting Organization  An organization that carries out its exempt purpose by supporting other exempt organizations, usually other public charities, within the IRS's definitions of Type I, Type II, or Type III. 

Whether or not transactions among WE Charity's related organizations meet the IRS's definitions of "control" and "related organizations" for the purposes of Form 990, Schedule R, it is clear that significant transactions did occur among them. 

WE Charity's audited financial statements for fiscal years 2020 and 2019 each report significant related party transactions between WE Charity and Me to We Foundation. The U.S. tax filings of WE Charity (tax ID #16-1533544) and ME to WE Foundation (tax ID #27-3338929) for fiscal years 2020 and 2019 analyzed by CharityWatch do not include a Form 990, Schedule R. On this schedule, charities are required to report the nature and amounts of certain financial transactions with related organizations, including transactions with related for-profit companies, if any. 

WE Charity’s fiscal 2020 audited financial statements (Note 11, Related Party Transactions) disclose that the U.S. entity of WE Charity made payments to WE Charity – Canada in fiscal 2020 that amounted to $15,744,490. This $15.7 million is allocated to WE Charity’s program services expenses, at approximately $6.3 million and $9.4 million to international projects and domestic projects, respectively, according to the audited Statement of Functional Expenses. Other than the general descriptions of its international and domestic program services provided in audit Note 9 (Program Services), no additional details are reported about how the $15.7 million was expended.

WE Charity’s fiscal 2019 audited financial statements (Note 11, Related Party Transactions) disclose that the U.S. entity of WE Charity made payments to WE Charity – Canada in fiscal 2019 that amounted to $18,789,912. The $18.8 million is allocated to WE Charity’s program services expenses, at approximately $8.0 million and $10.8 million to international projects and domestic projects, respectively, according to the audited Statement of Functional Expenses. Other than the general descriptions of its international and domestic program services provided in audit Note 9 (Program Services), no additional details are reported about how the $18.8 million was expended.

"?" Rating of WE Charity by CharityWatch:

CharityWatch has assigned WE Charity a "?" rating for its fiscal year ended 8/31/2020 due to the above-cited concerns related to its governance, transparency, and accounting of program accomplishments. If additional information becomes available in the future that would allow us to provide a meaningful rating of WE Charity, we will update our information as we are able to assess that information. 

Related External Articles

The Price WE Paid: An investigation into WE Charity’s Rise and Fall From Grace
What happened behind the scenes of our WE Charity investigation
Former WE Charity chair says she resigned over ‘concerning developments’ at the organization
We Charity’s donor deception in Kenya: Finding School No. 4
WE Charity misled donors about building schools in Kenya, records show
Finding School No. 4: WE Charity's donor deception in Kenya
Multiple WE Charity donors raised money for same borehole well in Kenyan village
The White Saviors: The story of a charity that did well when it was supposed to be doing good.
Nonprofit involved with 1,400 California schools being investigated by Canadian parliamentary committee
WE Charity’s Actions Leave a Trail of Enraged, Grieving Donors
Reed Cowan Testimony on WE Charity in Canadian Parliment
Donor Asks IRS to Open Fraud Investigation Into WE Charity
Canadian Lawmakers Agree to Expand Scope of WE Charity Probe
How a Charity Superstar Innovated Its Way to Political Scandal
WE Charity hearings reveal troubling governance structure: Watchdog
WE Charity profile, Charity Intelligence Canada
Ethics investigation into the prime minister’s relationship to WE Charity (Audio)
We have been dragged into 'political firestorm' of WE scandal, head of speakers agency tells MPs
Speakers’ Spotlight faced threats, abuse due to WE Charity controversy
Speakers' Spotlight threatened after being caught up in WE affair: co-founder
Trudeau Faces Ethics Questions on Family Ties to Charity Given Government Contract
We Charity pulls out of $664m Canada student grant contract