Charity Review

  • Issued: December 2016
  • Expires: December 2018

Restore the Earth Foundation

Standards Not Met

  • 4
  • 5
  • 12
  • 13
  • 16

607-257-8855

95 Brown Road, Suite 139
Ithaca, NY 14850

http://www.restoretheearth.org

607-257-8855

95 Brown Road, Suite 139
Ithaca, NY 14850

http://www.restoretheearth.org

Standards Not Met

This organization does not meet one or more of the 20 Standards for Charity Accountability. Click the conclusions section below for more information.

Standards For Charity Accountability

Governance

  1. Board Oversight

    Oversight of Operations and Staff: Standard 1

    Description
    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Number of Board Members: Standard 2

    Description
    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Frequency and Attendance of Board Meetings: Standard 3

    Description
    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Compensated Board Members: Standard 4

    Description
    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    REF does not meet this Standard because:

    • Two members out of the five member board of directors (40%) are indirectly compensated as direct relatives of a paid staff member.
    • The treasurer of the boad of directors is compensated indirectly as a direct relative of a paid staff member. 

    In response to this finding, the organization stated:

    • "The REF paid staff member serves in the role of Director of Sustainable Projects, and does not serve on the Board of Directors. She is an employee of the foundation, and is located remotely from the foundation headquarters. REF Board members who are relatives of this paid staff member do not receive any direct or indirect compensation for their service on the Board or for their work at REF."

  5. Conflict of Interest

    Conflict of Interest: Standard 5

    Description
    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    REF does not meet this Standard because:
    • In BBB WGA’s opinion, there is a conflict of interest involving products and services purchased by the organization. The organization purchased products totaling $924,950 from a company that includes REF’s board chair and CEO as its members. The spouse of the organization's CEO serves as a board member and Treasurer, and their daughter serves as paid staff. In addition, the organization purchased services from a company whose CEO is the organization’s Chief Strategy Officer. According to the organization’s audited financial statements for the fiscal year ended December 31, 2014, the purchase of these products and services represents 39% and 9% of the organization’s total overall expenses ($2,361,785), respectively.

    In response to this finding, the organization stated:

    • "The amount of products purchased includes all of the contracts and consultants hired and managed under EKOsystems Partners LLC. EKOsystems Partners is a related party that provides project management services to the foundation, in the form of managing third party contracts such as growing trees and on-site planting. All contracts are fully transparent and reviewed and approved by the independent members of the board under the board approved conflict of interest policy. Consultants hired by REF are paid under documented consulting agreements approved by the board of directors and at no time served as officers of the foundation or had any executive authority. The titles referred to were only working titles in representing the foundation in support of other senior executives."
     

Measuring Effectiveness

  1. Effectiveness Policy

    Board Policy on Effectiveness: Standard 6

    Description
    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    The organization meets this standard.

  2. Effectiveness Report

    Board Approval of Written Report on Effectiveness: Standard 7

    Description
    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    The organization meets this standard.

Finances

  1. Program Expenses

    Program Service Expense Ratio: Standard 8

    Description
    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fund Raising Expenses

    Fund Raising Expense Ratio: Standard 9

    Description
    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The organization meets this standard.

  3. Accumulating Funds

    Ending Net Assets: Standard 10

    Description
    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Financial Statements: Standard 11

    Description
    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Detailed Functional Breakdown of Expenses: Standard 12

    Description
    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    REF does not meet this Standard because, in the organization's 2014 financial statements, the detailed functional breakdown of expenses:

    • Was not included. 

  6. Accurate Expense Reporting

    Accuracy of Expenses in Financial Statements: Standard 13

    Description
    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    REF does not meet this Standard because its audited financial statements for the year ended December 31, 2014:

    • Did not include fund raising expenses, but the organization indicates that its fund raising expenses were included as program expenses. 

    In response to this finding, the organization stated:

    • "In our 2014 financials, fundraising expenses were inadvertently included in our program expenses. Fundraising was accomplished through outside consulting contracts which are fully disclosed in our 990's."

  7. Budget Plan

    Budget: Standard 14

    Description
    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    The organization meets this standard.

Fund Raising & Info

  1. Truthful Materials

    Misleading Appeals: Standard 15

    Description
    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The organization meets this standard.

  2. Annual Report

    Annual Report: Standard 16

    Description
    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    REF does not meet this Standard because:

    • The organization states it does not have an annual report covering activities conducted in 2015.

  3. Website Disclosures

    Web Site Disclosures: Standard 17

    Description
    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    The organization meets this standard.

  4. Donor Privacy

    Privacy for Written Appeals & Internet Privacy: Standard 18

    Description
    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Cause Related Marketing: Standard 19

    Description
    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Complaints: Standard 20

    Description
    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.

Conclusion

Restore the Earth Foundation does not meet the following 5 Standards for Charity Accountability:

Standard 4 - Compensated Board Members
Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

REF does not meet this Standard because:

  • Two members out of the five member board of directors (40%) are indirectly compensated as direct relatives of a paid staff member.
  • The treasurer of the boad of directors is compensated indirectly as a direct relative of a paid staff member. 

In response to this finding, the organization stated:

  • "The REF paid staff member serves in the role of Director of Sustainable Projects, and does not serve on the Board of Directors. She is an employee of the foundation, and is located remotely from the foundation headquarters. REF Board members who are relatives of this paid staff member do not receive any direct or indirect compensation for their service on the Board or for their work at REF."

Standard 5 - Conflict of Interest
No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

REF does not meet this Standard because:
  • In BBB WGA’s opinion, there is a conflict of interest involving products and services purchased by the organization. The organization purchased products totaling $924,950 from a company that includes REF’s board chair and CEO as its members. The spouse of the organization's CEO serves as a board member and Treasurer, and their daughter serves as paid staff. In addition, the organization purchased services from a company whose CEO is the organization’s Chief Strategy Officer. According to the organization’s audited financial statements for the fiscal year ended December 31, 2014, the purchase of these products and services represents 39% and 9% of the organization’s total overall expenses ($2,361,785), respectively.

In response to this finding, the organization stated:

  • "The amount of products purchased includes all of the contracts and consultants hired and managed under EKOsystems Partners LLC. EKOsystems Partners is a related party that provides project management services to the foundation, in the form of managing third party contracts such as growing trees and on-site planting. All contracts are fully transparent and reviewed and approved by the independent members of the board under the board approved conflict of interest policy. Consultants hired by REF are paid under documented consulting agreements approved by the board of directors and at no time served as officers of the foundation or had any executive authority. The titles referred to were only working titles in representing the foundation in support of other senior executives."
 

Standard 12 - Detailed Functional Breakdown of Expenses
Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

REF does not meet this Standard because, in the organization's 2014 financial statements, the detailed functional breakdown of expenses:

  • Was not included. 

Standard 13 - Accuracy of Expenses in Financial Statements
Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

REF does not meet this Standard because its audited financial statements for the year ended December 31, 2014:

  • Did not include fund raising expenses, but the organization indicates that its fund raising expenses were included as program expenses. 

In response to this finding, the organization stated:

  • "In our 2014 financials, fundraising expenses were inadvertently included in our program expenses. Fundraising was accomplished through outside consulting contracts which are fully disclosed in our 990's."

Standard 16 - Annual Report
Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

REF does not meet this Standard because:

  • The organization states it does not have an annual report covering activities conducted in 2015.

Restore the Earth Foundation meets the remaining 15 Standards for Charity Accountability.

Purpose

  • Year, State Incorporated

    2010, New York

  • Stated Purpose

    "to restore the Earth’s essential forest and wetland ecosystems, delivering outstanding environmental, social and economic value."

Programs

REF works to restore 1 million acres of degraded forests and wetlands in the Mississippi River Basin. The organization reports that of the originally 24 million acres of forest, now only 5 million acres remain. REF brings together public and private partners, local communities, experts and volunteers. In addition, the organization has created an assessment tool, our EcoMetrics™ Model, which uses in-depth analytics to measure the full value for each environmental, social and economic outcome produced by ecosystem restoration, and reports on those outcomes in monetary terms.

For the year ended December 31, 2014, REF's program expenses were:

Deployment costs 2,155,850
Facilities and equipment 20,144
Contract services 70,933
Awards and grants 11,500
Total Program Expenses: $2,258,427

Governance & Staff

  • Chief Executive

    Marvin Marshall, Chief Executive Officer

  • Compensation*

    None

  • Chair of the Board

    Dr. Donald Blancher

  • Chair's Profession / Business Affiliation

    Supervising Coastal Scientist, Moffatt & Nichol

  • Board Size

    5

  • Paid Staff Size

    5

*2014 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances. Note: As reported by the organization, salaries to senior executive have been deferred until such time as the Board agrees that the revenues coming into REF are sufficient to support paid executives.

Fund Raising

Method(s) Used:

Special events, grant proposals, Internet appeals, and in person meetings.

Fund raising costs were 0% of related contributions. (Related contributions, which totaled $2,112,040, are donations received as a result of fund raising activities.)

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.

Financial

The following information is based on REF's audited financial statements for the year ended December 31, 2014.

Source of Funds
Grants 1,605,500
Contributions in-kind 429,205
Contributions 77,335
Other revenue 234
Total Income $2,112,274
  • Programs: 96%
  • Fundraising: Less than 1%
  • Administrative: 4%
Total Income $2,112,274
Program expenses 2,258,427
Fundraising expenses $0
Administrative expenses $103,358
Total expenses: $2,361,785
Expenses in Excess of Income (-249,511)
Beginning Net Assets 21,902
Ending Net Assets -227,609
Total Liabilities 247,447
Total Assets 19,838

Note: As reported in the organization's audited financial statements for the year ended December 31, 2014, REF received in-kind donations totaling $429,205 in the form of equipment and materials ($260,301), engineering consultation ($164,700), and accounting services ($4,204).

An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.