CREATIVE COMMONS CORPORATION(A NONPROFIT CORPORATION)DECEMBER 31, 2018

INDEPENDENT AUDITORS’ REPORTAND

CONSOLIDATED FINANCIAL STATEMENTS

Creative Commons Corporation (a Nonprofit Corporation)
Independent Auditors’ Reportand Consolidated Financial Statements

Independent Auditors’ Report

1-2Consolidated Financial Statements

Consolidated Statement of Financial Position

3

Consolidated Statement of Activities and Change in Net Assets

4Consolidated Statement of Functional Expenses

5Consolidated Statement of Cash Flows

6Notes to Consolidated Financial Statements

7 - 11

Independent Auditors’ Report
THE BOARD OF DIRECTORSCREATIVE COMMONS CORPORATION (A NONPROFIT CORPORATION)
MOUNTAIN VIEW, CALIFORNIA
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of CREATIVE COMMONSCORPORATION (Creative Commons) which comprise the consolidated statement of financial
position as of December 31, 2018, and the related consolidated statements of activities and change in net
assets, functional expenses and cash flows for the year then ended and the related notes to theconsolidated financial statements.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated 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 preparationand fair presentation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to Creative Commons’ preparation and fair presentation of the consolidated 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 Creative Commons’s internal control. Accordingly, we
express no such opinion. An audit 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 consolidated financial statements.

San Francisco ● San Jose ● San Mateo ● Petaluma

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Creative Commons as of December 31, 2018 and the changes in its net
assets and its cash flows for the year then ended in accordance with accounting principles generally
accepted in the United States of America.

San Francisco, California
March 2, 2020

2Creative Commons Corporation (a Nonprofit Corporation)
Consolidated Statement of Financial Position

December 31, 2018
AssetsCash and cash equivalents
Investments
Grants receivable
Prepaid expenses and other assets
Total assets$

1,723,731
4,466,157
407,224
166,741$

6,763,853$

89,167305,752
40,714

Liabilities and Net Assets
Liabilities:
Accounts payable
Accrued expenses
Deferred revenue
Total liabilities

435,633

Net Assets:
Without donor restrictions
With donor restrictions

5,928,220
400,000

Total net assets

6,328,220

Total liabilities and net assets$See accompanying notes to consolidated financial statements.
36,763,853

Creative Commons Corporation (a Nonprofit Corporation)
Consolidated Statement of Activities and Change in Net Assets

Year Ended December 31, 2018
Without Donor
Restrictions
Revenues:
GrantsContributions
In-kind contributions
Program service fees
Special events income
Investment income
Foreign currency translation loss
Satisfaction of program restrictions$257,190
632,52149,32770,49850,725(17,195)(4)
1,685,821

Total revenues

With Donor
Restriction$2,728,883

Expenses:
Program services
Supporting services:Management and generalFundraising

834,900

Total$(1,685,821)

1,092,090
632,52149,32770,49850,725(17,195)(4)-(850,921)

1,877,962

3,153,291

3,153,291

540,350
496,622

540,350
496,622

Total expenses

4,190,263

4,190,263

Change in Net Assets(1,461,380)(850,921)(2,312,301)

Net Assets, beginning of year

7,389,600

1,250,921

8,640,521

Net Assets, end of year$

5,928,220$

400,000

See accompanying notes to consolidated financial statements.
4$

6,328,220

Creative Commons Corporation (a Nonprofit Corporation)
Consolidated Statement of Functional Expenses

Year Ended December 31, 2018
Program Services
International
Affiliates

Education
Salaries
Payroll taxes
Employee benefits$

Accounting fees
Bank charges
Board cultivation and meetings
Consulting and design
Insurance
Legal fees
Licenses and fees
Membership and dues
Occupancy
Printing
Project support
Publicity and communication
Recruiting
Special events
Supplies
Technology
Telephone
Training
Travel and conferences
WebsiteTotal expenses

421,670
29,48357,039$$126,9888,879
17,177

Technology$

558,493
39,05075,546

Science$78,8205,511
10,662

Culture$272,899
19,081
36,915$

1,555,958108,792
210,472

Management
andGeneral$

268,871
18,79936,370Total
Supporting
Services

Fundraising$272,799
19,07436,901$

541,670
37,87373,271

2018
Total
Expenses$

2,097,628
146,665
283,743

508,192

117,009

153,044

673,089

94,993328,895

1,875,222

324,040

328,774

652,8142,528,036

7,097
14,583

1,634
3,358

2,137
4,392

9,400
19,314

1,327
2,726

4,593
9,438

262,203
2,887
2,988
(38)
453
516
229
41,797
1,167
221
2,502
281
4,626
642
460
26,6005,266

16,835
3,776
3,909(50)
592
675
300

26,386
16,60917,190(220)
2,605
2,967
1,320

8,427
2,344
2,426
(31)
368
419
186

16,788
8,116
8,400
(107)
1,273
1,450
645

4,525
9,298
29,187
38,149
7,996
8,276
(106)
1,254
1,428
635

4,591
9,434

43,506
12,54012,979
(166)
1,967
2,240
997

16,6948,113
8,397(107)
1,272
1,449
645

1,526
290
3,272
368
6,051
840
602
34,792
6,888

6,712
1,274
14,392
1,619
26,613
3,696
2,648
153,01730,295

947
180
2,031
228
3,756
522374
21,595
4,275

3,280
622
7,033
791
13,004
1,806
1,294
74,77014,803

26,18853,811
374,145
46,27247,892
(612)
7,258
8,267
3,677
41,797
18,7003,549
40,096
4,509
74,143
10,296
7,377
426,304
84,400

3,231
613
6,929
779
12,812
1,779
1,275
73,666
14,584

3,279
622
7,030
791
12,9991,805
1,294
74,742
14,7989,116
18,732
29,187
54,843
16,10916,673
(213)
2,526
2,877
1,280
6,510
1,235
13,9591,570
25,811
3,584
2,569
148,408
29,38235,30472,54329,187428,988
62,38164,565(825)
9,784
11,144
4,957
41,79725,2104,784
54,055
6,079
99,954
13,8809,946
574,712
113,782

5,068
962
10,866
1,222
20,093
2,790
1,999
115,530
22,873$97,088
6,788
13,133

Legal

Supporting Services
Total
ProgramServices785,338$

474,801$240,239$

1,008,926$

147,093$496,894$

3,153,291$

See accompanying notes to consolidated financial statements.
5540,350$

496,622$

1,036,972$

4,190,263

Creative Commons Corporation (a Nonprofit Corporation)
Consolidated Statement of Cash Flows

Year Ended December 31, 2018
Cash Flows from Operating Activities:
Change in net assets
Adjustments to reconcile change in net assets to net cashused by operating activities:
Net realized and unrealized loss on investments
Change in operating assets and liabilities:
Grants receivable
Prepaid expenses and other assets
Accounts payable
Accrued expenses
Deferred revenue$(2,312,301)

178,021
141,629(130,776)
35,853
15,35040,714

Net cash used by operating activities(2,031,510)

Cash Flows from Investing Activities:
Purchase of investments
Proceeds from sale of investments(637,735)
3,498,238

Net cash provided by investing activities

2,860,503

Net Increase in Cash

828,993

Cash and Cash Equivalents, beginning of year

894,738

Cash and Cash Equivalents, end of year

$See accompanying notes to consolidated financial statements.
6

1,723,731

Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statements

Note 1 -Organization:
Creative Commons Corporation (Creative Commons) is a Massachusetts nonprofit
corporation that develops, supports, and stewards legal and technical infrastructure thatmaximizes digital creativity, sharing, and innovation. Because it can be expensive andburdensome to secure legal permission to use a copyrighted work published to the Web,
Creative Commons provides a set of free copyright licenses and public domain tools thatenable everyone to grant copyright permissions to their creative works so that they can belegally used by others. Creative Commons’ public domain tools allow creators to waive allrights to a work and place it in the public domain, or to mark a work that is already in thepublic domain.
Creative Commons enables scientific research and innovation by enabling open accessjournals and the open exchange of scientific data. When a Creative Commons license isapplied to a journal or scientific data, the journal and data can be freely reused by others.
Creative Commons’ licenses and public domain tools are also used to make data anddatabases freely available. The Creative Commons public domain dedication tool is used toremove all copyright restrictions.
Creative Commons also provides the legal infrastructure that powers Open Educational
Resources (OER). OER are free resources that are developed by institutions, communities,and individuals to further universal access to education. Creative Commons’ licenses enableeducational materials to be translated for use around the world. Creative Commons is also
developing software and metadata standards to improve search and discovery of educationalresources.
Creative Commons’ licenses and tools have been developed in consultation with legal experts
and Creative Commons’ affiliate institutions in over 85 jurisdictions. Over 1 billion Creative
Commons-licensed works have been published by authors on the Internet.
In 2012, a Canadian subsidiary, 0941176 B.C. LTD, was established to enable CreativeCommons to engage the services of Canadian-based individuals. Creative Commons is thesole shareholder of the subsidiary. A management services agreement is in place between theorganizations and provides the structure for provision of those services to Creative Commonsby the subsidiary through its employees and its operations are reported in the consolidated
financial statements.

Note 2 -Summary of Significant Accounting Policies
a. Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrualbasis of accounting in accordance with U.S. generally accepted accounting principles(U.S. GAAP).
7Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statementsb. Basis of Presentation
Creative Commons reports information regarding its financial position and activities
according to two classes of net assets: net assets without donor restrictions and net assets
with donor restrictions.
Net Assets Without Donor Restrictions – the portion of net assets that is neither time andpurpose nor permanently restricted by donor-imposed stipulations. These net assets areintended for use by management and the Board of Directors for general operations.
Net Assets With Donor Restrictions – the portion of net assets the use of which is limitedby donor-imposed stipulations that either expire by passage of time or can be fulfilled andremoved by actions of Creative Commons.
c. Estimates
Management uses estimates and assumptions in preparing consolidated financial
statements. Those estimates and assumptions affect the reported amounts of asset andliabilities, the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could differ from those estimates.
d. 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 three months or less to be cash
equivalents.
e. Revenue Recognition
Unconditional promises to give, which include grants and contributions, are recognized
upon receipt and are recorded as increases in net assets without donor restrictions or withdonor restrictions, depending on the existence and/or nature of any donor restrictions.
When a donor-specified restriction expires (that is when a stipulated time restriction ends
or purpose restriction is accomplished), the net assets with donor restrictions arereclassified to net assets without donor restrictions.
Unconditional contributions and grants receivable are recorded at net realizable value if
expected to be collected in one year and at present value if expected to be collected in
more than one year. No allowance for uncollectible receivables has been recorded basedon management’s evaluation of collections.
At December 31, 2018, all receivables are due within one year.
Grants and contract revenue are recorded when earned.

8Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statementsf.

Investments
Investments are carried at fair market value with realized and unrealized gains and losses
reflected in the Statement of Activities and Changes in Net Assets.

g. Fair Value Measurements
Creative Commons classifies its financial assets and liabilities measured at fair value on arecurring basis based on a fair value hierarchy with three levels of inputs. Fair value isthe price that would be received to sell an asset or paid to transfer liability in an orderlytransaction between market participants at the measurement date. Level 1 values arebased on unadjusted quoted prices in active markets for identical securities. Level 2values are based on significant observable market inputs, such as quoted prices for
similar securities and quoted prices in inactive markets. Level 3 values are based on
significant unobservable inputs that reflect Creative Commons’ determination ofassumptions that market participants might reasonably use in valuing the securities. The
valuation levels are not necessarily an indication of the risk or liquidity associated withthe assets and liabilities measured at fair value.
h. Income Taxes
Creative Commons is exempt from income taxes under Internal Revenue Section
501(c)(3).
Creative Commons recognizes the effect of income tax positions only if those positions
are more than not likely 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.
i.

Functional Expense Allocations
Costs of providing programs and other activities are accumulated into separate groupings
as either direct or indirect. Indirect or shared costs are allocated to the programs andsupporting services by a method which best measured the relative degree of benefit.
Accordingly, certain costs have been allocated between the program and the supporting
services in reasonable ratios determined by management.

j.

Subsequent Events
Creative Commons has evaluated subsequent events with respect to the consolidated
financial statements for the year ended December 31, 2018 through March 2, 2020, thedate these consolidated financial statements were available to be issued. There were nomaterial subsequent events that required recognition or additional disclosure in these
consolidated financial statements.

9Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statements

k. Recent Accounting Pronouncements
AdoptedOn January 1, 2018 Creative Commons adopted Financial Accounting Standards Board(FASB) Accounting Standards Updated (ASU) 2016-14: Not-for-Profit Entities –Presentation of Financial Statements of Not-for-Profit (Topic 958). The guidance in thisASU changes presentation and disclosure requirements for nonprofit entities to provide
more relevant information about their resources (and the changes in those resources) todonors, granters, creditors, and other users. These include qualitative and quantitativerequirements in the following areas: net asset classes, investment return, expenses, andliquidity.
Note 3 -Investments:
Investments consist of the following at December 31, 2018:
Cash and cash equivalents
Equities
Fixed income
Mutual funds – equities & fixed income$6,306591,9323,544,019
323,900$ 4,466,157

All investments are measured at Level 1.
Investment income is comprised of the following at December 31, 2018:

Note 4 -Interest and dividend income
Realized gains, net
Unrealized losses, net$160,824
19,785(197,806)

Total investment income$(17,195)

Concentrations of Risk:
Creative Commons maintains cash balances at several financial institutions which from time
to time exceed federally insured limits.

10Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statements

Note 5 -Net Assets With Donor Restrictions:
Net assets are restricted as to purpose and time as of December 31, 2018:

Note 6 -Learning Resource Metadata Initiative$400,000

Total$

400,000

Pension Plan:
Creative Commons has a tax sheltered annuity under IRC Section 403(b), which allows allemployees to contribute through payroll deductions. Creative Commons provides
discretionary matching contributions of 5% of annual salary for all employees who work 20
hours or more per week. Creative Commons’ contributions made during the year ending
December 31, 2018 totaled $114,771.

Note 7 -Liquidity and Availability:
Creative Common’s financial assets at December 31, 2018 that are available to meet general
expenditures over the next twelve months are as follows:
Financial assets:
Cash and cash equivalents
Grants receivable
Investments$ 1,723,731
407,224
4,466,157

Financial assets available to meet general expenditures
within one year

$ 6,597,112

11