Apr 30, 2013 - Website Development and Hosting. 4,751. 2,070. 1,710. 1,542. 1,050 .... a method which best measured the
Creative
Commons #ion Corpora
Financial Statements Year Ended
31, 2 12
December
Creative Commons Corporation Table of Contents Page Independent Auditors' Report
1
Financial Statements: Statement of Financial Posi#ion
3
Statement of Activities
4
S#atement of Functional Expenses
5
Statement of ~a~h Flows
6
Notes to Financial Statements
7
~~
O~V~+~'~" LL.P CERTIFIED PUBLIC ACCOUNTANTS Partners Daniel J. Harrington, CPA Bruce J. Wright, CPA Michael J. Ellingson, CPA Principal Mitchell Richstone, CPA
Independent Auditors' Report
Board of Directors Creative Commons Corporation We have audited the accompanying financial statements of Creative Commons Corporation (a nonprofit organization), which comprise the Statement of Financial Position as of December 31, 2012, and the related Statements of Activities, Functional Expenses, and Cash Flows for the year then ended, and the related notes to the financial statements. The prior year summarized comparative information has been derived from the Organization's 2011 financial statements.and, in our report dated April 26, 2012, we expressed an unqualified opinion on those financial statements. Management's Responsibility for the Financial Stater»ents Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Page 1 of 13 P.O. Box 271 •262 Grand Avenue •South San Francisco, CA 94083-0271 (650)872-7600 •FAX(650)872-7615 www.gfllp.com
Independent Auditors' Rept~r# {Ct~n~inued) Accordingly, we express no such opinion. An audi# also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Creative Commons Corporation as of December 31, 2012, and the changes in i#s net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
South San Francisco, California April 30, 2013
ood r~.~ _
l'owle~;~Lp CERTIFIED PUBLIG ACCOUNTANTS
Page 2 of 13
Creative Commons Corporation Statement of Financial Position December 31, 2012 {With Comparative Totals at December 31, 2011)
X012
2011
ASSETS .CURRENT ASSETS dash Grants Receivable Contributions and Other Receivables Prepaid Expenses Tc~ta1 Curren~ Assets
$
NONCURRENT ASSETS Grants Receivable Investments Security Deposi# Proper#y and Equipment -Net Total Noncurrent Assets Total Assets
$
2, 92,944 $ 2,557,988 ~0,08~ 30 98~ 4,732,003
3,~00,4~4 4,079,67 ~ X2,922 72 552 7,915,~9
7,161,932 5,263 78,291 80,793 1,326,279
2,~1 ~,819 2,088 85,395 100,391 2,503,693
~,0~8,282 $ 10,4~ 9,288
LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts Payable Accrued Expenses Total ~iabiiities
$
NET ASSETS Unrestricted (Deficit) Temporarily Restricted Total Net Assets
~ 29,23fl $ 22,438 361,:668
(505,956) x,202,570 ~,~96,614
Total Liabilities and Net Assets
$
852,823 8,675,~ 73 9,527,996
6,058,282 $ 10,419,288
See Notes to Financial Statements Pan~,~a ~ of 1
7 8,989 10~,303 891,292
Creative Commons Corporation Statement of Ac#ivities Year Ended December 31, 2012 (With Comparative Totals for the Year Ended December 37, 2011)
Total 2012
Total 2011
797,95 $ 277,680 192,930 21,080 31 350 1,057 31,862 1,322,955
9,328,440 414,424 135,614 21,081 _ (1,398) (1,061) 83,946 9,981,046
1,322,955
9,981,446
3,894,860
3,894,880
4,844,156
77~,~6~ 484,10 5,1 ~4,~37
775,~67 484,310 ' 5,~ 54,337
721,768` 3~2,7G4 5,928,688
(3,831,382)
4,052,358
Unrestricted REVENUE AND GAINS Foundation Grants Contributions !n-Kind Contributions Contrac#s In#erest income Foreign Currency Translation Gain (Loss) Net Realized and Unrealized Gain {Loss) on Investments Other Income
$
NET ASSETS RELEASED FROM RESTRICTIONS Saris€action ofi Program Restrictions Total Revenue and Gains
Temporarily Restricted
47,965 $ 93,G80 ~ 92,930 21,080 31 350 1,057 31,862 388,955 3,40 ,603 3,795.,558
EXPENSES Program Services Supporting Services Management and General Expenses Fundraising Expenses Total Expenses CHANGE IN NET ASSETS BEFORE OTHER ITEM
(1,358,779)
750,000 $ 184,00
934,U00 (3,406,G03) {2,472,603
-
{2,472,603)
Write-off of Receivables
(306,000)
CHANGE IN NET ASSETS
{1,358,'779)
NET ASSETS; BEGINNING OF YEAR NET ASSETS(DEFICIT), END OF YEAR
852,823 $
(505,956) $
See Notes to Financial Statements D~y~ ,,~I,r, ~f
(2,472,603)
{3,831,382)
3,746,358
8,675,173
9,527,996
5,781,638
6,202,570 $
5,696,14 $
9,57,996
Training Bank Charges _ Printing Moving Expenses ~ Licenses &Fees Board Cultivation &Meetings Publicity and Communication Total Expenses
~ Recruiting Depreciation Telephone Professional Services Accounting Fees Supplies Website Development and Hosting Technolo9Y Membership and Dues
Consulting and Design Contract Services Travel and Conferences Occupancy legal Fees. Special Events Insurance
Salaries Payroll Taues Employee Benefits
$
$
667. 579 315 139 87 60 313,153 $
980 851 462 205 128 89 400,150 $
1,087 `943 513 227 142 98
1,316 1,142 621 275 172 119 726,800 $
3,020 2,622 1,425 630 396 273.
1,723,278 $
433,384 $
-
2,820 2,472 1,805 1,587 1,516 1,316 1,176 941890
2,517 2,206 1,611 1,417 1,353 1,174 1,050 840 794
3,698 3,242 2,367 2,082 1,989 1,726 1,542 1,235 1..,167
4,099 3,593 2,626 2,307 2,204 1,913 1,710 1,368 1,294
4,964 4,352 3,177 2,794 2,669 2,31fi 2,070 1,657 1:,566
11,393 9,988 7,292 6,413 6,127 5,316 4,751 3,803 3,595
74? ` 649 353 156 98 68
See Notes to Financial Statements Page 5 of 13
-
29,491 25,853' 18,878 16,600 15,858 13,761 12,299 9,844 9,306
316,728 460,229 338,202 275,298 202,080 34,346 33,{~3~ -
775,167 $
1,656 1,438 781 346 217 150
6,248 5,477 3,999 3,517 3,360 2,909 2,606 2,086 1,972
71,648 58,321 42,810 7,276 8,998
114,647
365,691 $ 25,658 45,356 436,705
484,310 $
444 386 210 93 58 40
1,67? 1,470 1,073. 944 902 782 699 560 529
183,809 123,249 19,227 15,650 11,488 1,953 1,878
98,133 $ 6,885 12,171 117,189
37,416 32,800 23,950 21,061 20,120 17,452 15,604 12,490 11,807
615,184 583,478 429,077 349,269 256,378 43,575 41,907
2,190,015 $ 153,658 271,623 2,615,296
2012 Total Expenses
2,700 9,917 1,824 8,610 4,680 991 439 2,071 2?5 1,298 190 897 1,259,477 $ 5,154,337 $
7,925 6,947 5,072 4,461 ` 4,262 3,691 3,305 2,646 2,50'1
288,456 123,249 90,875 73,971 54,298 9,229 8,876
463,824 $ 32,543 57,521 553,894.
Supporting Services Managementi Total and Fund Supporting General Raising Services
1,726,191 $ 121,115 214,096 2,061,402
Tatai Program Services
7,817 6,786 3,689 1,632 1,023 707 298,095 $ 3,894,860 $
32,335 26,320 19,320 3,284 3,158
42,411 34,523 25,341 4;307 4,142
47,009: 38;266 28,089 4,774 4,591
56,927 46;339 34,015 5,781 5,560
201,987 `
68,500 450,229 130,659 106,357 78,070 13,269 12,761
239,937 $ 16,835 29,759 ' 286,531 37,080 10,040 28,861 23,493 17,2452,931 2,819
290,558 $ 20,386 36,037 346,981
666,885 $ 46,791 82,713. 796,389 9,161
Culture
~
Science 165,036 $ 11,579 20,469 197,084
Technology ` 147,309 $ 10,336 1827Q 175,915
legal 216,466 $ 15,188 26,848 258,502
Education
InternatianaU Affiliates
Program Services
Creative Commons Corporation Statement of Functional Expenses Year Ended December 31, 2012 (With Comparative Totals for the Year Ended December 31, 2011)
7,441 10,185 8,796 158,847 12,859 68,205 26,948 5,928,688
2,138 21,560 28,695 20,616 21,883 24,161 14,089 12,646 4,785
692,692 1,338,882 460,683 262,256 160,865 51,600 46,012
2,058,540 148,174 265,170 2,471,884
2011 Total Expenses
Creative Commons Corporation Statement of Cash Flows Year Ended December 31, 2012 (With Comparative Totals for the Year Ended December 3'1, 2011)
Zfl12 CASH FLOWS FRC'~M OPERATING ACTIVITIES change in Net Assets Adjus#rnen#s to Reconcile change in Net Assets to Net Cash I~rov ded {lased) by operating Ac#ivit es Deprecia#ion Donated investments Net Realised and Unrealised {Gain) Loss on Investments {:Increase) Decrease in Operating Assets Grants Receivable Contributions and Other Receivables Prepaid Expenses Security Deposit Increase (Decrease) in t)perating ~iabli#ies Accounts Payable Accrued Expenses Net Cash Provided (Used] by Operating Activities
$ X3,831,382) $
32,800 ~2 'I ~ 8) {1,057)
SASH FLOWS FROM INVESTING ACTIVITIES Purchase of Proper#y and Equipment Net Cash Used) by Investing Activ #ies
CASH, BEGINNING OF YEAR CASH,END OF YEAR
$
See Notes to Financial Statements Pa~~ ~ of 1
3,74 ,358
21,560 1,C~
2,675,567 112,834 41,568 7,1 Q~4
{3,158,923) {22,709) ~28,6~3) ~~8,29U)
{645,58} 115,9~~ {1,49 3fl9)
74,347 {38,985) 1,19~,~26
{13,2 1) {13,201)
NET INCREASE tDECREASE)IN CASH
X011
X104,544) x'104,544)
(1,507,510)
1,91,182
3,~00,45~
~,509,2~2
2,92,944 $
3,600,454
Creative commons.Corporation Notes to Financial Statements December 3~ , 2~~2 1.
+organization Creative commons Ct~rporation {Creative Commons)is a Massach~se#ts charitable corpora#ion that develops, suppt~rts, and stewards legal and. technical infrastructure that maximizes digital creativity, sharing, and.. innovation. ~r~a~ive Commons' vision is to realize the full potential of the In#ernet- universal access to research and education, participatory culture, and driving the new era o~ development, growth, and produc#ivy#y. Exis#ing copyright laws were es#ablished long before the emergence of the Internet, and can make it difficult #o legally."do things" we take for granted on the network: copy, paste, edit source, and post to the Web. Because i# can be expensive and burdensome to secure 1~egal permission to use a copyrighted work published to the V1/eb, Creative Commons provides a set of free copyright licenses and public domain tools that enable everyone, from individual creators to large companies and institutions; a simple, standardized way to grant copyright permissions to their creative work in advance. Creative Gornmons' public domain tools allow creators to waive all rights to a work and place it in th+e public domain, or to mark a work that is already in the public domain as such. Creative Commons plays an instrumental role in furthering scientific research :and innovation by enabling open access journals and the open exchange flf scientific data. The world's largest Open Access publishers use Creative Commons' licenses to publish their content online. Creative Commons' licenses and: public domain tools are also used to make data and databases freely available. The NCO public domain dedication tool is used to remove copyright restrictions that could otherwise limit the dissemination and reuse of scien#ifc and government data in the taxonomic:, energy, genomics, disease research, geospa#ial, polar, and bilbit~metric disciplines. Creative Commons also provides the legal infrastructure that powers Open Educational Resources(OER),free resources that are developed by institutions, communities, and individuals to further universal access to education. Creative Commons-licensed t~ER, such as textbooks and lesson plans, are easy to find, easy to share, and easy to customise and combine. Creative ~omrnons' licenses enable collaboration on linguistic and cultural translations of quality educational resources for use around the world. Creative Commons is also developing so#~ware and m~~adata standards .to improve search and discovery of educational resources.
Page 7 of 13
Creative Commons ~orporatian Notes to Financial Statements December 31, 2Q~2 (Continued) 1.
t~rganization ~con~inued Creative Comrnor~s' licenses and tools have been developed in consul#anon with legal +experts anr~ Creative Commons affiliate institutions in over 70 jurisdictions. fiver ~0~ million ~Crea#ive Commons-licensed works have been published by their authors on the Internet, Creative Commons is a major player in the "free culture,,,"open access,,,"open +~duca~ion," and "open government" env~ironrnents worldwide. In 20~ ~ a Canada subsidiary, Q941176 B.C. LTD,:was established to enable CC to engage the services of a Canadian-based individual. Creative Commons is the:: sole shareholder of the subsidiary. A management services agreement is in place between the organizations and provides the structure for provision of those services to CC by the subsidiary through its employee. Consolidated financial statemen#s are included for the year ended December 31,- 2012.
~.
Summary of Significant Accounting Policies Basis of Accounting —The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Basis of Presentation -Creative Commons is required to report infa►rmation regarding its financial position and activities a~~o►rding to three classes of net assets:. unrestricted net assets, temporarily restricted net assets, and permanently restricted .net:assets. The Organization has no permanently restricted net assets. Estimates - Management uses estimates and assume#ions in preparing financial statements. Those estimates and assumptions affect the reported amounts ~f asset and liabilities, the disclosure of continent assets:and liabilities, and the reported revenues and expenses. Actual results cc~uid differ from those
estimates. Cash and Cash Equivalents -For purposes of the Statement of Cash Flows, Creative Commons considers all unrestricted highly liquid investments with an -initial maturity of #hree months or less to be cash equivalents. Grants Receivable - No allowance for doubtful accounts is considered necessary since the receivables relate primarily to foundations and corporations. .• - :•
Creative Commons Corporation Notes to Financial Statements December ~1, 20~ 2 {Continued) 2.
-
Summary of Significant Accoun# ng Policies {icon#inued) Contributions Receivable — Uncon~ tic~nal receivables are recognized as revenue in the period received and as assets, decreases of liabilities, flr expenses depending on the form of the benefits received. Unconditional receivables are recorded a# net realizable value if ~xpect~d to be collected in one year and at fair value if expected to be collected in more than one year. No allowance for uncollectible receivables has been recorded based o►n rnan~gement'S evaluation of G~IleCtio►ns. Investments — Investmen#s, consisting of nationally traded securities, wi#h readily determinable.fair values are.s#ated at fair value in the statemen# of financial position. Property and Equipm~n#-Creative:Commons capitalizes all expenditures fQr property and equipment in excess $1,000. Purchased proper#y end equipment are carried at cost: Donated property and equipment ire carried at the approximate fair value at the date of donation. Depreciation is conr~pu#~d using the straight-line method over the estimated useful lives on the property and equipment. Restricted and Unrestricted Revenue — Contributions received are recorded as increases in unrestricted, #empo►rarily restricted, o►r permanently restricted net assets, depending an the existence andlor nature of any donor restrictions. When a do~nQr-specified restriction expires {that is when a stipulated time restriction ends or purpose restriction is accomplished), the temporarily restric#ed net assets are reclassified to unrestricted net assets and reported in the Statement of Ac#iv ties as Net Asse#s Released from Restrictions. Donated Services —The financial statements reflect $192,930 for donated legal services to evaluate ongoing tax, trademark, and copyright implications of its new programs and existing services. Fair Value of Financial Instruments -The carrying amount of cash, grants receivable, contributions and +other receivables, prepaid expenses, security deposit, accounts payable, and accrued liabilities, none of which are held for trading purposes, approximate the fair value due to the short-term maturities of those instruments.
:Page 9 of 13
Creative commons ~arporation Notes to Financial Statements December 31, 2012 (Continued) 2.
Summary of Significant Accounting Policies {continued) Income Taxes — Crea# ve commons is exempt from income #axes under internal Revenue Section 5~1{c){~), Creative ~flmrnons qualifies for the charitable contribution deduction ~r~d~r Section 170{b){1)CA) and has been classified as an c~rganizati~n that is no# a private foundation under Section 5~0~{a){1). Creative Commons recognizes the effect of income tax positions only if those positions are more than not to be sustained. Management continuously evaluates tax positions reflected in the Creative Commons'tax filings and does not believe that any material uncertain tax positions exist. The Organization's federal and state income ta~c returns are generally subject to examination by federal and state taxing authorities for three and four years, respectively, after filing.
Functional Allocation of Expenses -Costs of providing programs and other activities are accumulated in#o separate groupings as either direc# or indirect. indirect or shared cos#s are allocated to the p~rograrns and supporting services by a method which best measured the relative degree of benefit. Accordingly, certain costs have been allocated be#ween the program and the supporting services in reasonable ratios determined by management. Reclassifications — Certain accounts in the prior year financial statements have been reclassified .for comparative purposes to conform to the presentation in the current year financial s#atem~nts.
Comparative Totals —The financial statements include certain prier year summarized comparative information in total but not by net asset class. Such information dies not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with Creative Commons'financial statements for the year ended December 31, 2411 from which the summarized information was derive.
Page 10 of 13
Creative Commons Corporation Notes to Financial Statements December ~1, 20~2 Continued) 3.
~oncen#ration of Creel #Risk Creative ~ommt~ns manta r~s gash balances a# several financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $ 50,000. Moreover, the ~rgani~zation's banks take part in the FDIC's Transaction Account Guarantee Program, wh`i~h provides unlimited deposit insurance coverage for non-interest bearing accounts until December 31 2fl1 ~. At December 31, 2012, the Organiza#ifln had no uninsured cash balances.
4
Grants Receivable
Grants Receivable includes the following unconditional promises #o give: To#al Tempt~rarly Restricted Promises to Give
$ 3,719,920
Receivable in less than one year Receivable in one to five years Total uncondi#i~nal promises to give
$ 2,557,988 1,1X1,932 3,719,20
Net ~n+~onditi~nal promises to give at De~cernb~er 31, 2012
$ 3,719,92
Promises to give receivable in more than one year are discounted at .25%0, when material. 5.
Property and Equipment Computer Equipment Furniture and Equipment Leasehold Improvements Subto#al Less; Accumulated Depreciation
$ 64,299 12,050 84,314 1~0,6+~3 79 870 ~.~__)
Property and Equipment -Net
$ 80,793
Depreciation expense for year ended December 31,212 was ~3~,800.
Page 1 ~ of 13
Creative Cc~mmc~ns Corporation Notes ~o Financial Statements December 31, 2~~ ~ {Continued ~.
Temporarily Res#rioted Ne# Assets Restricted as #o purpose and time: 5upporf for DOL Trade. Adjustment ~~t grantees Education Learning Resource M~#adata Initiative OER Technology Develo~rnent and strategic Policy General Support Science Commons Total
7.
$ 4,334,973 8~6,7~~ 5 6,280 755,484 150,000 129,06~ $ +~,~20~,570
Operating Leases creative Commons leases office space and office equipment under noncancelable operating leases expiring through May 2016. The equipment lease expires June 2014. The office space in San Francisco was subleased efi~ective April 1, 2011 and expired concurrently with the master lease on April 15, 2012. The second lease for office space in Mountain View expires May 2016, with annual escalation of rental payments. Under this lease, the Company received two► (2) months of free rent which will be amartiZed over the entire Iife of the Lease tin astraight-line basis. Accounting principles also requires that the total rent commitment be recognized on a straight-line basis over the term of the lease. For the year ended December 3~ , 2412, total ren# expense under the leases was $3~'~,494 Minimum future lease payments are as follows: Fiscal Year Ending December 31, 2013 X014 X015 2016 Total
$ 280,788 290,899 300,375 127,474 $ 9~9,536.
Page 12 of 13
Creative Commons corporation Notes to Financial Statements December 3~ , X012 ~Continu+~d) 8.
Pension Plan Creative Commons has a Tax Sheltered Annuity under 1R~ Section 4~3~b), which allows all.. employees to contribute through payroll deductions. creative Commons provides discretionary matching contributions of 5°,!o cif annual salary for all ~mploye~s who work 2U hours or more per week. Crea#ive Cornm~n's con#rib~tit~ns made during the year ending December 31, 2072 #otaled $1~5 1 ~~.
9.
Subsequent Evens Management has evaluated subsequent events through April 30 2013, the date which the financial statements were avail~bie to be issued and determined that no reportable events occurred.
Page 13 of 13
