CREATIVE COMMONS CORPORATION(A NONPROFIT CORPORATION)DECEMBER 31, 2019

INDEPENDENT AUDITORS’ REPORTAND

CONSOLIDATED FINANCIAL STATEMENTS

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

Independent Auditors’ Report

1-2

Consolidated Financial Statements

Consolidated Statement of Financial Position

3

Consolidated Statement of Activities and Change in Net Assets

4Consolidated Statement of Functional Expenses

5

Consolidated Statement of Cash Flows6

Notes to Consolidated Financial Statements

7 - 12

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, 2019, 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, 2019 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
July 8, 20202

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

December 31, 2019
AssetsCash and cash equivalents
Investments
Grants receivable
Prepaid expenses and other assets
Total assets$

737,530
4,457,007
327,980
88,828$5,611,345$

64,178
153,81036,000Liabilities and Net Assets
Liabilities:
Accounts payable
Accrued expenses
Deferred revenue
Total liabilities

253,988

Net Assets:
Without donor restrictions
With donor restrictions

5,051,357
306,000

Total net assets

5,357,357

Total liabilities and net assets$

See accompanying notes to consolidated financial statements.
3

5,611,345

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

Year Ended December 31, 2019
Without Donor
Restrictions
Revenues:
GrantsContributions
In-kind contributions
Program service fees
Special events income
Investment income
Satisfaction of program restrictions$

1,745,000
117,425
45,426
223,089
149,245
308,353
793,700

Total revenues

With Donor
Restriction$

3,382,238

Expenses:
Program services
Supporting services:Management and generalFundraising

112,200
587,500

Total$(793,700)

1,857,200
704,925
45,426
223,089
149,245
308,353-(94,000)

3,288,238

2,880,768

2,880,768

977,397
400,936

977,397
400,936

Total expenses

4,259,101

4,259,101

Change in Net Assets(876,863)(94,000)(970,863)

Net Assets, beginning of year

5,928,220

400,000

6,328,220

Net Assets, end of year$

5,051,357$

306,000

See accompanying notes to consolidated financial statements.
4$

5,357,357

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

Year Ended December 31, 2019
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$

206,727
14,54429,823$

114,879
8,082
16,573

Legal$

151,402
10,651
21,842

Supporting Services

Technology$

602,771
42,406
86,957

Total
ProgramServices

Culture$245,313
17,25835,389$1,321,092
92,941
190,584

Management
andGeneral$504,00935,45872,709Total
Supporting
Services

Fundraising$

193,400
13,60627,900$697,409
49,064
100,6092018
Total
Expenses$

2,018,501
142,005
291,193251,094

139,534

183,895

732,134

297,960

1,604,617

612,176

234,906

847,082

2,451,699

831
5,353

462
2,975

608
3,921

2,422
15,609986
6,352

215,381
3,140
1,624
938
445
1,094
67
24,856
628
1,720
7,373
407
5,962
1,083
3,425
28,5108,786

11,024
4,139
2,140
1,236
587
1,442
89
488
827
2,267
9,718
536
7,858
1,428
4,514
37,575
11,580169,971
16,477
8,521
4,921
2,336
5,741
353
1,941
3,294
9,027
38,6882,134
31,284
5,684
17,971
149,594
46,102

3,645
6,706
3,468
2,003
951
2,336
144
790
1,341
3,674
15,745869
12,732
2,313
7,314
60,881
18,762

2,025
13,051
15,00247,453
13,777
7,125
4,115
1,953
4,800
295
1,623
2,754
7,548
32,3491,785
26,158
4,752
15,026125,083
38,547777
5,008

58,030
5,651
2,922
1,688
801
1,969
121
666
1,130
3,096
13,269732
10,7291,949
6,163
51,305
15,811

5,309
34,210458,051
36,113
18,675
10,786
5,120
12,582774
28,741
7,220
19,78484,793
4,678
68,565
12,45739,387
327,865
101,041

2,802
18,05915,002
97,30319,064
9,859
5,694
2,702
6,642
408
2,246
3,811
10,44444,762
2,470
36,196
6,576
20,792
173,080
53,3398,111
52,26915,002555,354
55,17728,534
16,4807,822
19,224
1,182
30,987
11,03130,228
129,555
7,148
104,761
19,03360,179500,945
154,380

433,310$448,410$285,872$

1,264,204$

448,972$

2,880,768$

977,397

See accompanying notes to consolidated financial statements.
549,850
5,287
2,734
1,579
749
1,842
113
623
1,057
2,896
12,413685
10,0381,824
5,766
47,997
14,792$400,936$

1,378,333$

4,259,101

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

Year Ended December 31, 2019
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 gain on investments
Change in operating assets and liabilities:
Grants receivable
Prepaid expenses and other assets
Accounts payable
Accrued expenses
Deferred revenue$(970,863)(212,850)
79,244
77,913(24,989)(151,942)(4,714)

Net cash used by operating activities(1,208,201)

Cash Flows from Investing Activities:
Purchase of investments
Proceeds from sale of investments(4,343,176)
4,565,176

Net cash provided by investing activities

222,000

Net Decrease in Cash

(986,201)

Cash and Cash Equivalents, beginning of year

1,723,731

Cash and Cash Equivalents, end of year$

See accompanying notes to consolidated financial statements.
6

737,530

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 the
public 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 openly licensed educational resources that are developed byinstitutions, communities, and individuals to further universal access to education. Creative
Commons’ licenses enable educational materials to be translated for use around the world.
Creative Commons is also developing software and metadata standards to improve search anddiscovery of educational resources.
Creative Commons’ licenses and tools have been developed in consultation with legal experts
and Creative Commons’ affiliate institutions in over 85 jurisdictions. Nearly 2 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 Creative
Commons 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.

7

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

Note 2 -Summary of Significant Accounting Policies
a. Basis of Accounting and Consolidation
The consolidating financial statements of Creative Commons are prepared on the accrualbasis of accounting and in conformity with accounting principles generally accepted in
the United States of America specific to nonprofit organizations. The consolidating
financial statements include the accounts of its subsidiary (see Note 1). All materialintercompany transactions and balances have been eliminated.
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.
b. 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.
c. 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.
d. 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.

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

At December 31, 2019, all receivables are due within one year.
Program service fees are recorded when earned.
Donated services are reported at fair value in the financial statements when those services
create or enhance non-financial assets or (b) require specialized skills, are performed bypeople with those skills, and would otherwise be purchased by Creative Commons.
Donated services of legal services totaling $45,426 were recorded for the year ended
December 31, 2019.
e. Investments
Investments consisting primarily of cash and money market funds are carried at fairmarket value with realized and unrealized gains and losses reflected in the Statement of
Activities and Changes in Net Assets.
f.

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 are
based on unadjusted quoted prices in active markets for identical securities. Level 2
values 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.

g. Income Taxes
Creative Commons is exempt from income taxes under Internal Revenue Section
501(c)(3) and is exempt from California tax under Section 23701(d) of the Revenue
Taxation Code.
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.
h. Functional Expense Allocations
Expenses are allocated directly to program activities if they can be specifically identified
with a program. If not specifically identifiable, expenses are allocated to programs basedon estimated usage by each program. These allocation ratios are reviewed periodically bymanagement.
9Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statementsi.

Subsequent Events
Creative Commons evaluated subsequent events with respect to the consolidated financial
statements for the year ended December 31, 2019 through July 8, 2020, the date these
consolidated financial statements were available to be issued. There were no material
subsequent events, except as described below, that required recognition or additional
disclosure in these consolidated financial statements.
On January 30, 2020, the World Health Organization declared the coronavirus outbreak a"Public Health Emergency of International Concern" and on March 11, 2020, declared it
to be a pandemic. Actions taken around the world to help mitigate the spread of thecoronavirus include restrictions on travel, and quarantines in certain areas, and forced
closures for certain types of public places and businesses. The coronavirus and actions
taken to mitigate the spread of it have had and are expected to continue to have an
adverse impact on the economies and financial markets of many countries, including thegeographical area in which Creative Commons operates. On March 27, 2020,
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted toamongst other provisions, provide emergency assistance for individuals, families andbusinesses affected by the coronavirus pandemic.
In response to the coronavirus, Creative Commons made the difficult decision to cancel
the 2020 annual in-person Global Summit. This is not expected to have a significant
financial impact. It is unknown how long the adverse conditions associated with thecoronavirus will last and what the complete financial effect will be to the company. On
April 16, 2020, Creative Commons received a loan in the amount of $342,523 from the
U.S. Small Business Administration Paycheck Protection Program. On May 20, 2020,
Creative Common’s Canadian subsidiary 0941176 B.C. LTD received a loan in theamount of $40,000 Canadian dollars from the Canadian government. It is not expectedthat Creative Commons will experience adverse near-term financial impact as a result of
the coronavirus.

j.

Recent Accounting Pronouncements
AdoptedIn June 2018, the Financial Accounting Standards Board (FASB) issued AccountingStandards Update (ASU) 2018-08, Clarifying the Scope and the Accounting Guidance forContributions Received and Contributions Made. This ASU clarifies and improves
current guidance about whether a transfer of assets, or the reduction, settlement orcancellation of liabilities, is a contribution or an exchange transaction. It provides aframework for determining whether a contribution is conditional or unconditional, andfor distinguishing a donor-imposed condition from a donor-imposed restriction. The ASU
was adopted as of January 1, 2019 as it relates to contributions received, but it did nothave a significant impact on Creative Common’s financial statements. The ASU is
effective for contributions made (resource providers and granting entities) for years
beginning after December 15, 2019.
10

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

Upcoming
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers(Topic 606), to supersede nearly all existing revenue recognition guidance under U.S.
GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised
goods or services are transferred to customers in an amount that reflects the consideration
to which an entity is expected to be entitled for those goods or services. ASU 2014-09
defines a five step process to achieve this core principle and, in doing so, it is possible
more judgment and estimates may be required within the revenue recognition process
than required under existing U.S. GAAP, including identifying performance obligationsin the contract, estimating the amount of variable consideration to include in thetransaction price and allocating the transaction price to each performance obligation.
ASU 2014-09 will be effective for annual reporting periods beginning after December 15,
2019 using either of two methods: (a) retrospective to each prior reporting period
presented with the option to elect certain practical expedients as defined within ASU
2014-09; or (b) retrospective with the cumulative effect of initially applying ASU 201409 recognized at the date of initial application and providing certain additional
disclosures as defined in ASU 2014-09. Creative Commons has not yet selected atransition method and is currently evaluating the effect that the updated standard will
have on the financial statements.
Note 3 -Investments:
Investments consist of the following at December 31, 2019:
Cash and money market funds
Equities
Fixed income$ 4,456,740
199
68$ 4,457,007

All investments are measured at Level 1.
Investment income is comprised of the following at December 31, 2019:
Interest and dividend income
Realized and unrealized gains and losses, net$

95,503
212,850

Total investment income$

308,35311

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

Note 4 -Concentrations of Risk:
Creative Commons maintains cash balances at several financial institutions which from time
to time exceed federally insured limits. Investments consist of cash and money market funds.

Note 5 -Net Assets With Donor Restrictions:
Net assets of $793,700 were released in accordance with respective donor restrictions.
Net assets are restricted as to purpose and time as of December 31, 2019:

Note 6 -Creative Commons Search
Diversity, equity and inclusion grant
Creative Commons Global Summit 2020
Creative Commons Global Summit 2021
CEO Search$

175,000
57,00025,00025,00024,000

Total$

306,000

Pension Plan:
Creative Commons has a tax-sheltered annuity under IRC Section 403(b), which allows all
employees 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, 2019 totaled $96,611.

Note 7 -Liquidity and Availability:
Creative Common’s financial assets at December 31, 2019 that are available to meet general
expenditures over the next twelve months are as follows:
Financial assets:
Cash and cash equivalents
Grants receivable
Investments$

737,530
327,980
4,457,007
5,522,517

Less:
Net assets with donor restrictions
Financial assets available to meet general expenditures
within one year

12(306,000)$ 5,216,517