CharityWatch Assigns The Cousteau Society a "?" Rating

CharityWatch has issued a rating of "?" to The Cousteau Society (the Society), which indicates that we have specific concerns about the organization's financial reporting. Among our concerns:

1) CharityWatch obtained The Cousteau Society's 2019 IRS Form 990 from a public source. As of March 17, 2022, the Society has not responded to our December 7, 2021 request for copies of its audited financial statements and IRS Forms 990 for its fiscal years 2019 or 2020.

2) In its 2019 IRS Form 990, The Cousteau Society reports that it is required to file a copy of its Form 990 in the following states: Arkansas, Arizona, California, Florida, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Oregon, Pennsylvania, Virginia, and Washington. Charity regulators in some of these states host online databases where the public may obtain copies of charity audited financial statements, tax filings, and other registration documents. Though our research was not exhaustive, CharityWatch has thus far identified the following issues with the Society's registrations in the following states:

California:  The Cousteau Society's "Registry Status" is listed as "Delinquent" as of 3/16/2022, with a cited Renewal Due / Expiration Date of 5/15/2020.

New Mexico:  For the tax year 2020, the Society's "Registration Status" is listed as "Registration Submission Delinquent" as of a status date of 7/8/2021. Its registration for the tax year 2021 is listed as "Open" as of a status date of 1/1/2022. 

North Carolina:  In a notice dated June 27, 2021, the Charitable Solicitation Licensing Division (CSL) communicated to the Society that its license application for licensure as a charitable organization "is incomplete and will be placed in a 'Holding' status until CSL receives all pertinent documents." The documents cited include a completed and signed copy of the Society's IRS Form 990 and Schedule A for the fiscal year ended December 2020; and a "Notary Page" signed by the charity's Treasurer or Chief Financial Officer "under oath as required by law."

If at some future date CharityWatch is able to obtain more current copies of The Cousteau Society's audited financial statements and IRS Forms 990 for the years 2019 or 2020, we will update the charity's rating at that time.

Judgement Against The Cousteau Society By An Administrative Court in France

As previously reported by CharityWatch, according to The Cousteau Society audit of December 31, 2018 (Note 5, Foreign VAT Payable):

"During 2014 an administrative court in France rendered a judgment against the Society in the amount of $557,945 related to VAT [Value Added Tax] liabilities. During the year ended December 31, 2016 the Society suspended its efforts to contest the judgment and began making payments in satisfaction of the liability. The remaining unpaid balance at December 31, 2018 and 2017 was $252,888 and $310,196, respectively. Because the taxes stem from costs incurred in restoring the Calypso vessel, the entire amount was included in construction in progress in the accompanying [audited] statement of net assets."

Transactions With Officers and Related Organizations

As previously reported by CharityWatch, according to The Cousteau Society audit of December 31, 2018 (Note 2, Transactions with Officers and Related Organizations, Related organizations):

"The Society shares certain expenses with Equipe Cousteau and Cousteau Divers, two French nonprofit organizations under common management..." At December 31, 2018, Cousteau Society owed $111,648 to Equipe Cousteau and $20,268 to Cousteau Divers.

Family Or Business Relationships Among Officers, Directors, Trustees, or Key Employees

According to The Cousteau Society 2019 tax filing, the Society reports re: the existence of family or business relationships among officers, directors, trustees, or key employees (IRS Form 990, Part VI, Section A, line 2):

"Francine Cousteau, President, and Michael Garin, Director[,] are married. Diane Cousteau, Director, is the daughter of Francine Cousteau, President. Pierre Yves Cousteau, Director, is the son of Francine Cousteau, President" (IRS Form 990, Schedule O).

[The Society reports that only two of the six voting members on the board of directors at year-end 2019 are independent (IRS Form 990, Part VI, Section A, line 1a & 1b).]

Transactions With Officers and Related Organizations

As previously reported by CharityWatch, according to The Cousteau Society audit of December 31, 2018 (Note 2, Transactions with Officers and Related Organizations, Officers):

"During his lifetime, Jacques Y. Cousteau made interest-free loans to the Society to support the production of films. The amount due the Estate of Jacques Y. Cousteau was $2,568,388 at December 31, 2018 and 2017 and does not bear interest. The estate is still in probate and repayment terms have not yet been established.

"During 2009 the Society's board set the annual salary of its president at $200,000. Due to its financial condition the Society has not paid the entire balance of this salary each year. At December 31, 2018 and 2017 the balance of unpaid salary was $53,032... The total amount due to officers, including the unpaid salaries, was $186,338 at December 31, 2018 and 2017."