Creative Commons Corporation
Financial Statements
Year Ended December 31, 2006

Creative Commons Corporation

Table of Contents
Page
Independent Auditors' Report

1Financial Statements:
Statement of Financial Position

2Statement of Activities

3

Statement of Functional Expenses

4

Statement of Cash Flows5

Notes to FinanCial Statements6I,

G/!,od~~ler, Up_CERTIFIED PUBLIC ACCOUNTANTS
Daniel J. Harrington, CPA
Bruce J. Wright, CPA
Michael J. Ellingson, CPA

Independent Auditors' Report

Board of Directors
Creative Commons Corporation
We have audited the accompanying Statement of Financial Position of CreativeCommons Corporation (a nonprofit organization) as of December 31,2006, and therelated Statements of Activities, Functional Expenses, and Cash Flows for the year thenended. These financial statements are the responsibility of the Organization'smanagement. The prior year summarized comparative information has been derived
from the Organization's 2005 financial statements and, in our report dated April 7,2006,
we express an unqualified opinion on those financial statements.
We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of Creative Commons Corporation as of December 31,
2006, and the changes in its net assets and its cash flows for the year then ended inconformity with accounting principles generally accepted in the United States ofAmerica.

February 19, 2007

Page 1 of 9
P.O. Box 271 .262 Grand Avenue • South San Francisco, CA 94083-0271(650) 872-7600· FAX (650) 872-7615 www.gfllp.com

Creative Commons Corporation
Statement of Financial Position
December 31,2006(With Comparative Totals at December 31,2005)

2006

2005

ASSETS
CURRENT ASSETS
CashGrants Receivable
Contributions Receivable
Other ReceivablesPrepaid Expenses
Total Current Assets$NONCURRENT ASSETS
Investments
Grants Receivable
Property and Equipment - Net
Total Noncurrent Assets$1,133,805. 2,155,000

27,7493,316,554

17,066250,000
24,760274,760

20,51337,579$Total Assets

1,429,432
250,000
200,376
23,23422,356
1,925,398

1,962,977$

3,591,314$

27,780

LIABILITIES AND NET ASSETSCURRENT LIABILITIES
Accounts Payable
Funds Held for Sponsor
Accrued Vacation
Accrued Expenses
Total Liabilities$NET ASSETS
Unrestricted
Temporarily RestrictedTotal Net Assets

Total Liabilities and Net Assets

25,045
19,20922,387567
67,20814,877
11,42554,082

972,023
923,746
1,895,769$

1,962,977

See Notes to Financial Statements
Page 2 of 9

1,132,232
2,405,000
3,537,232$

3,591,314

Creative Commons Corporation
Statement of Activities
Year Ended December 31, 2006
(With Comparative Totals at December 31,2005)

Unrestricted
REVENUE AND GAINSFoundation Grants$Contributions
In-Kind Contributions
Contracts
Interest Income
Foreign Currency Translation Gain (Loss)
Investment IncomePrizes
Sales
Net Assets Release from Restrictions
Satisfaction of Program Restrictions
Total Revenue and Other Support

TemporarilyRestricted$

207,509538,364
31,21360,0007,119(23,389)541
10,122
684
832,163(1,481,254)(1,481,254)

1,481,254
2,313,417

TotalTotal

2006

2005

207,509 $538,364
31,21360,0007,119(23,389)541
10,122
684
832,1633,500,000
438,941
61,56730,00016,073
14,9364,878
1,019
4,067,414

832,163

4,067,414

EXPENSES
Program Services
Supporting Services
Management and General Expenses
Fundraising Expenses
Total Expenses

1,923,679

1,923,679

1,276,646

339,019210,928
2,473,626

339,019
210,928
2,473,626

232,175
127,280
1,636,101

CHANGE IN NET ASSETS(160,209)(1,481,254)(1,641,463)

2,431,313

NET ASSETS, BEGINNING OF YEAR

1,132,232

2,405,000

3,537,232

1,105,919

NET ASSETS, END OF YEAR$

972,023$

923,746

See Notes to Financial Statements
Page 3 of 9$

1,895,769$

3,537,232

Creative Commons Corporation
Statement of Functional Expenses
Year Ended December 31, 2006
(With Comparative Totals at December 31, 2005)

Supporting Services
ProgramServices
Salaries
Payroll Taxes
Employee BenefitsTravel and Conferences
Consulting and Design
Occupancy
Professional Services
Publicity and Communication
Supplies
Insurance
Legal Fees
Technology
Fund Raising Expenses
Depreciation
Membership and DuesInterns
Accounting Fees
Printing
Bank Charges
Research Expenses
Training
Recruiting
Website Development and Hosting
Miscellaneous
Total Expenses$

774,255
51,29320,072
845,620

ManagementandGeneral$493,234
166,388
138,788
67,06365,70849,86586,613
11,28470,461
168,358

FundRaising$

18,346
67,410125,772
13,5788,260
147,610$

42,1486,797
22,395
14,26913,335
11,016
11,0007,130
5,815
3,1631,400$

1,923,679$

339,019$

See Notes to Financial Statements
Page 4 of9

210,928

Total

2006

2005

986,640
76,15598,793
1,161,588$

511,580
274,721
138,788
67,06366,02149,86542,14838,01034,31922,395
14,26913,335
11,016
11,000
7,130
5,815
3,163
1,400

40,923313

31,21334,319Total$

2,473,626$

614,629
53,89528,864
697,388
190,453
341,695
93,016
14,94563,901
27,53342,55772,072
9,978
9,653
11,586
6,170
15,165
15,400
3,266
4,602
1,043
1,077
1,3945,843
7,364
1,636,101

Creative Commons Corporation
Statement of Cash Flows
Year Ended December 31,2006(With Comparative Totals at December 31,2005)

2006
CASH FLOWS FROM OPERATING ACrlVITIES
Change iii Net Assets
Adjustments to Reconcile Change in Net Assets to
Net Cash Provided by Operating Activities
Depreciation
Donated Investments
Unrealized (Gain) on Investments
Donated Equipment(Increase) Decrease in Operating Assets
Grants Receivable
Loan Receivable
Contributions Receivable
Other Receivables
Prepaid Expenses
Increase (Decrease) in Operating Liabilities
Accounts PayableFunds Held for Sponsor
Accrued VacationAccrued Expenses
Net Cash Provided by Operating Activities2005$ (1,641,463) $14,269(16,525)(541)

2,431,313

11,586(750)
2,155,000(2,215,000)
12,865(200,376)(23,234)
5,393(4,421 )(2,735)
4,818
19,209
7,510
7,236
9,253
(10,858) _ _---'-_
256,900
305,649

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment
Net Cash (Used) by Investing Activities(12,176)(10,022) _-----"-----"-----'(12,176)(10,022) _-----"----'-----'NET INCREASE IN CASH

295,627

244,724

1,133,805

889,081

CASH, BEGINNING OF YEAR
CASH, END OF YEAR

$1,429,432

See Notes to Financial Statements
Page 5 of9$

1,133,805

Creative Commons CorporationNotes to Financial Statements
December 31, 2006

1.

Summary of Organization and Significant Accounting Policies
Organization - Creative Commons Corporation (Creative Commons) is a
Massachusetts nonprofit public benefit corporation devoted to expanding therange of creative work available for others to build upon and share. CreativeCommons also acts as a fiscal sponsor for a small program. The Organizationcould participate in providing fiscal sponsorship for other programs.
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 - Financial statement presentation follows therecommendations of the Financial Accounting Standards Board in its Statementof Financial Accounting Standards No. 117, Financial Statements for Not-for­
Profit Organizations. Under SFAS No. 117, Creative Commons is required toreport information regarding its financial position and activities according to threeclasses 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 assumptions in preparing financialstatements. Those estimates and assumptions affect the reported amounts ofasset and liabilities, the disclosure of contingent assets and liabilities, and thereported revenues and expenses. Actual results could differ from thoseestimates.
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.
Grants Receivable - No allowance for doubtful accounts is considerednecessary since the receivables relate primarily to foundation agencies.
Pledges Receivable - Unconditional pledges receivable are recognized asrevenue in the period received and as assets, decreases of liabilities, orexpenses depending on the form of the benefits received. Pledges receivable
are recorded at net realizable value if expected to be collected in one year and atfair value if expected to be collected in more than one year. No allowance foruncollectible pledges has been recorded based on management's evaluation ofcollections.

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Creative Commons Corporation
Notes to Financial Statements
December 31, 2006
(Continued)

1.

Summary of Organization and Significant Accounting Policies - continued
Investments - Investments, consisting of nationally traded securities, are stated
at fair market value.
Property and Equipment - Creative Commons capitalizes all expenditures forproperty and equipment in excess $1,000. Purchased property and equipment
are carried at cost. Donated property and equipment are carried at theapproximate fair value at the date of donation. Depreciation is computed using
the straight-line method over the estimated useful lives on the property andequipment.
Restricted and Unrestricted Revenue - Contributions that are restricted by thedonor are reported as increases in unrestricted net assets if the restrictions
expire (that is, when a stipulated time restriction ends or purpose restriction isaccomplished) in the reporting period in which the revenue is recognized. Allother donor-restricted contributions are reported as increases in temporarily or
permanently restricted net assets, depending on the nature of the restrictions.
When a restriction expires, temporarily restricted net assets are reclassified tounrestricted net assets and reported in the Statement of Activities as net assets
released from restrictions.
Donated Services - The financial statements reflect $31,213 for donated legal
services to evaluate the copyright and copy protection implications andconsequences of its licensing, music storage, and collaborative artisticoperations.
Income Taxes - Creative Commons is exempt from income taxes under Internal
Revenue Section 501(c)(3). Creative Commons qualifies for the charitable
contribution deduction under Section 170(b)(1 )(A) and has been classified as anorganization that is not a private foundation under Section 509(a)(1).
Functional Allocation of Expenses - Costs of providing programs and otheractivities are accumulated into separate groupings as either direct or indirect.
Indirect or shared costs are allocated to the programs and supporting services bya 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.
Reclassifications - Certain accounts in the prior year financial statements havebeen reclassified for comparative purposes to conform to the presentation in thecurrent year financial statements.

Page 7of9

Creative Commons Corporation
Notes to Financial Statements
December 31, 2006
(Continued)

2.

Concentration of Credit Risk
Creative Commons maintains cash balances at several financial institutions.
Accounts at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. At December 31,2006, the uninsured cash
balances total $1,162,484.

3.

Investments$17,066Common Stock
The composition of investment income is as follows:$49348Net Unrealized Gain
Dividends
Total

4.

5.

$ 541

Property and Equipment
Computer Equipment
Less: Accumulated Depreciation$ 58,433(37,920)

Total Computer Equipment$ 20,513

Temporarily Restricted Net Assets
Restricted as to purpose:
General Support for 2007
International work
Book and Public Domain Wiki
iCommons
Science Commons
OSI - DNL Phase I
Total$ 250,000
240,946
194,322
126,375
92,585309$ 904,537

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Creative Commons Corporation
Notes to Financial Statements
December 31, 2006
(Continued)

6.

Pension Plan

Creative Commons has a Tax Sheltered Annuity under IRC 403(b), which allows
all employees to contribute through payroll deductions. Matching contributions
made during the year ending December 31,2006 totaled $35,197.

7.

Subsequent Event

Creative Commons entered into a five year building lease agreement for its
program facilities in San Francisco, California for base rent of $7,105 per month.
The lease begins April 16, 2007 or such later date as the landlord completes theimprovement of the premises as specified in the lease agreement.

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