Conservation International
Foundation and Affiliates
Consolidated Financial Report
June 30, 2021

Contents
Independent auditor’s report

1-2

Financial statements
Consolidated balance sheets3

Consolidated statements of activities

4

Consolidated statements of functional expenses
Consolidated statements of cash flows
Notes to consolidated financial statements

5-6
7
8-28

Independent Auditor’s Report
Board of Directors
Conservation International Foundation
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of Conservation International
Foundation and Affiliates (CI), which comprise the consolidated balance sheets as of June 30, 2021 and2020, the related consolidated statements of activities, functional expenses, and cash flows for the years
then ended, and the related notes to the consolidated financial statements (collectively, the financial
statements).
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance 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 fairpresentation 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 audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free frommaterial 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 theassessment 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 areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity’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 financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

1

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Conservation International Foundation and Affiliates as of June 30, 2021 and 2020,
and the changes in their net assets and their cash flows for the years then ended in accordance withaccounting principles generally accepted in the United States of America.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 20,
2021, on our consideration of CI’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements, and othermatters. The purpose of that report is solely to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion on theeffectiveness of CI’s internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering CI’s internal
control over financial reporting and compliance.

McLean, Virginia
December 20, 20212

Conservation International Foundation and Affiliates
Consolidated Balance Sheets
June 30, 2021 and 2020
(In Thousands)
2020

2021
AssetsCash and cash equivalents
Investments
Grants and promises to give, net
Grant advances
Prepaid expenses and other assets
Project advances to partners
Notes receivable
Property and equipment, net
Total assets$

162,693
263,000
39,186
6,329
4,754
4,237
4,178
4,867

$

101,969
246,818
39,670
5,723
3,862
4,867
2,760
5,828

$

489,244$

411,497$

7,304
10,4861,359
1,130
88,374
108,653

$

7,044
9,750
328
1,340
70,90989,371

Liabilities and Net Assets
Liabilities:
Accounts payable and accrued expenses
Accrued salaries, vacation and employee benefits
Notes payable
Grants payable
Deferred revenue and refundable advance
Total liabilities
Commitments and contingencies (Notes 4, 15, and 16)
Net assets:
Without donor restrictions
With donor restrictions
Total net assets

18,139303,987
322,126

28,073352,518
380,591

Total liabilities and net assets$

See notes to consolidated financial statements.

3489,244$

411,497

Conservation International Foundation and Affiliates
Consolidated Statements of Activities
Years Ended June 30, 2021 and 2020
(In Thousands)
2021

2020

Without
Donor

With
Donor

Restrictions

Restrictions

Total

Without
Donor

With
Donor

Restrictions

Restrictions

Total

Support and revenue:
Grants and Contributions:Foundations$

Public funding

4,340

$

69,390$73,730

$

7,034

$

49,539$56,57339

45,73345,772

82

36,59036,672

Individuals

10,742

10,812

21,554

4,048

8,377

12,425

Corporations

2,274

7,272

9,546

2,310

33,99936,309

7

1,176

1,183

60

1,256

1,316

11,424

(230)
-

(230)
11,424

9,991(4,250)-(4,250)
9,991

Other
Cancellations and de-obligations
Contract revenue
Other revenue
Investment income, net
Net assets released from donor restrictions
Total support and revenue

560

3,712

4,272

502

3,709

4,211

4,553

45,84850,401

162

9,190

9,352

135,380(135,380)-

129,763(129,763)-

169,319

48,333

217,652

153,952

8,647

162,599

Expenses:
Program services:
Field programs

70,188-70,18870,270-70,270Grantmaking divisions

36,792-

36,79232,197-32,197

Moore Center for Science

7,886

-

7,886

8,016

-

8,016

Communications

5,090

-

5,090

4,984

-

4,984

Center for Sustainable Lands and Waters

4,112

-

4,112

4,192

-

4,192

Center for Natural Climate Solutions

3,674

-

3,674

2,807

-

2,807

Other programs

8,384

-

8,384

8,250

-

8,250

136,126-

136,126

130,716-

130,716

Management and operations

10,633-

10,633

10,816-

10,816

Fundraising

12,626-

12,626

12,005-12,005

Total supporting services

23,259-23,25922,821-

22,821

Total expenses

159,385-

159,385

153,537-

153,537

9,934

48,33358,267

415

8,647

9,062

-

198

198

-

(2,203)(2,203)

-

-

-

-

(2)

(2)

9,934

48,531

58,465

415

6,442

6,857

18,139303,987

322,126

17,724

297,545

315,269

Total program services
Supporting services:

Changes in net assets before
other income and losses
Other income and losses:
Gain (loss) on translation of affiliate andfield office net assets
Loss on translation of grants
and pledges receivable
Changes in net assets
Net assets:
Beginning
Ending$28,073$352,518

See notes to consolidated financial statements.

4$

380,591$

18,139$303,987$

322,126

Conservation International Foundation and Affiliates
Consolidated Statement of Functional Expenses
Year Ended June 30, 2021
(In Thousands)

Field
Programs
Salaries and benefits
External grants
Professional services
Occupancy
Equipment and furniture
Travel, meetings and events
Depreciation
Other expenses

Moore
Centerfor
ScienceGrantmaking
Divisions

Communications

Center for
Sustainable
Lands andWatersCenter for
Natural Climate
Solutions

Other Programs

Management
andOperations

Fundraising

Total

$

35,86014,277
10,163
3,069
3,599
2,617
283
320

$

7,783
25,851
2,177
638
86
3
114
140

$

5,604
520
794
510
137
19
145
157

$

3,385
1,136
348
77
28
54
62

$

2,977
396
319
185
50
17
41
127

$

2,407
610
345
195
44
13
40
20

$

5,996
430
1,162
465
65
173
91
2

$

8,623
1,220
11
182
176
132
289

$

9,228
1,771
543
110
320
84
570

$

81,86342,08419,087
5,964
4,350
3,366
984
1,687

$

70,188$36,792

$

7,886

$

5,090

$

4,112

$

3,674

$

8,384

$

10,633$

12,626$

159,385

See notes to consolidated financial statements.

5Conservation International Foundation and Affiliates
Consolidated Statement of Functional Expenses
Year Ended June 30, 2020
(In Thousands)

Field
Programs

Moore
Centerfor
ScienceGrantmaking
DivisionsCenter for
Sustainable
Lands andWatersCommunications

Center for
Natural Climate
SolutionsManagement
andOperations

Other Programs

Fundraising

Total

Salaries and benefits$
External grants
Professional services
Travel, meetings and events
Occupancy
Equipment and furniture
Depreciation
Other expenses

34,52813,479
9,352
5,983
3,000
3,098
319
511

$

7,899
20,989
1,709
522
694
102
132
150

$

5,817
375
385
419
524
222
120
154

$

3,279
10
1,062
127
367
39
64
36

$

3,166
127
289
269
197
27
38
79

$

1,621
14
712
215
182
15
34
14

$

5,252
589
965
711
462
87
92
92

$

8,639
883
469
179
201
134
311

$

8,667
1,460
615
631
106
114
412

$

78,86835,583
16,817
9,330
6,236
3,897
1,047
1,759

$

70,270$32,197

$

8,016

$

4,984

$

4,192

$

2,807

$

8,250

$

10,816$

12,005$

153,537

See notes to consolidated financial statements.

6

Conservation International Foundation and Affiliates
Consolidated Statements of Cash Flows
Years Ended June 30, 2021 and 2020
(In Thousands)
2020
Cash flows from operating activities:
Changes in net assets
Adjustments to reconcile changes in net assets to net cash
provided by operating activities:
Depreciation and amortization
Net realized and unrealized gain on investments
Net realized and unrealized (gain) loss on other assets
Net loss on translation of foreign denominated grants
and promises to give receivable
Increase (Decrease) in allowance for doubtful grants
and promises to give
Decrease in discount to present value for
grants and promises to give
Cancellations and de-obligations
Changes in assets and liabilities:(Increase) Decrease in:
Grants and promises to give
Project advances to partners
Grant advances
Prepaid expenses and other assets
Increase (Decrease) in:
Accounts payable and accrued expenses
Accrued salaries, vacation and employee benefits
Grants payable
Deferred revenue and refundable advanceNet cash provided by operating activities$

2020
58,465$984(46,612)
(17)

1,048
(5,124)
301-

Cash flows from investing activities:
Proceeds from sales of investments
Purchases of investments
Purchases of property and equipment
Collections on notes receivable
Disbursements on notes receivable
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from notes payable
Principal payments on notes payable
Net cash provided by (used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents:
Beginning
EndingSupplemental disclosure of cash flow information:
Cash paid for interest

See notes to consolidated financial statements.

7

6,857

2

(204)

1,046

230

(221)
4,250

458
630
(606)
(892)

(16,037)
402
(190)
798

260
736
(210)
17,46530,687(1,822)(703)(719)
24,86914,757

130,643(100,196)(23)
760(2,178)29,006111,680(88,943)(262)
300(1,960)20,815

1,250
(219)
1,031

(219)
(219)

60,72435,353

101,969

66,616$

162,693$

101,969

$

4

$

6

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 1.

Nature of Activities

Nature of activities: Conservation International Foundation and Affiliates (CI) is a nonprofit organization
headquartered in Arlington, Virginia, with offices in over 30 countries. The Conservation International
Foundation was established in 1987 under the laws of the state of California and is tax-exempt under
Section 501(c)(3) of the Internal Revenue Code (IRC).
CI works to protect nature for the benefit of people. We need nature for many things: a stable climate,clean air, fresh water, abundant food, cultural resources and much more. Yet unsustainable economic
development can have negative impacts on nature. CI works at every level—from remote villages to theoffices of presidents and prime ministers—to help move society toward a smarter development path.
CI focuses its efforts on four areas:
Confronting climate change by protecting nature: CI works to reverse the destruction oftropical forests, which could provide at least one-third of the global action needed to avoid theworst climate scenarios.
Creating holistic models of sustainability: CI creates self-sustaining, scalable conservation
models within larger geographic landscapes and seascapes, ensuring that humans and nature
can thrive together.
Protecting our oceans at scale: CI works to protect the ocean on an unprecedented global
scale while balancing ocean production. Its goal is to help to double the area of protected ocean
by 2025.
Innovating science and finance to accelerate conservation: CI works to create and apply
science-based evidence and solutions to conservation policies, and works to unlock greater
investment in nature.
Affiliates: The accompanying consolidated financial statements include the operations of CI-Brazil,
CI-Europe in Belgium, CI-Guyana, Cl-Hong Kong, CI-Japan, CI-Mexico, CI-New Zealand, CI-Philippines,
CI-Singapore, CI-Suriname, CI-UK, CI-Australia, and Conservation South Africa. All of theaforementioned organizations are separately incorporated in their respective countries. Due to thesignificant amount of oversight and support (financial and programmatic) provided by CI, their financial
activities have been consolidated with CI’s financial activities.
Additionally, Conservation International Foundation is the sole member of Conservation International
Ventures LLC (CI Ventures). CI Ventures is an investment facility designed to accelerate investment insmall and medium enterprises (SMEs) that have the potential to deliver measurable, scalable
conservation impact alongside financial returns. In partnership with leading investors, project developers
and conservation-oriented entrepreneurs, CI Ventures delivers targeted capacity building, and bridgefinancing and other resources to de-risk and scale-up investible projects in sustainable land andseascapes. The overarching goal of CI Ventures is to increase the pipeline of high-quality, bankableprojects that maximize environmental and social outcomes and unlock additional finance for conservation
impact. Accordingly, all financial activities of CI Ventures have been consolidated with CI.

8Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 1.

Nature of Activities (Continued)

Conservation International Foundation is also the sole member of the African Conservancies Fund LLC.
This Fund is a loan facility created to support conservancies in Africa, such as the Maasai Mara
Landscape in Kenya. The COVID-19 pandemic highlighted the need to financially support those working
to preserve these vital ecosystems, which are under constant threat, especially when the ecotourism
industry struggles. All financial activities of the African Conservancies Fund LLC have been consolidatedwith CI.
Note 2.

Significant Accounting Policies

A summary of CI’s significant accounting policies follows:
Principles of consolidation: All transactions between Conservation International Foundation and its
affiliates have been eliminated in consolidation.
Adopted accounting pronouncement: In May 2014, the Financial Accounting Standards Board (FASB)
issued Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic
606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for thetransfer of promised goods or services to customers. The updated standard replaced most existing
revenue recognition guidance in generally accepted accounting principles in the United States of America
when it becomes effective and permits the use of either a full retrospective or retrospective withcumulative effect transition method. This ASU was applied on retrospective with cumulative effecttransition method. CI’s revenue streams from contracts with customers is mainly composed of service
contracts with corporations, public funding entities and other non-governmental organizations oruniversities. Revenue is recognized when a given performance obligation is satisfied, either over a periodof time or at a point in time. Revenue for most of CI’s contracts is recognized over a period of time. CI’s
revenue from contracts with customers are generally for one year or less. The contracts do not include
financing components or significant variable considerations. CI did not have any impairment or credit
losses on any receivables or contract assets arising from contracts with customers. This ASU was
adopted as of July 1, 2020. There was no material impact to the consolidated financial statements as aresult of his adoption.
In June 2018, the FASB issued ASU No. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scopeand the Accounting Guidance for Contributions Received and Contributions Made. The purpose of the
ASU is to clarify and improve the scope and accounting guidance for contributions received andcontributions made. Where CI is a resource provider, the ASU was effective for the fiscal year ending
June 30, 2021. The adoption of this new standard did not have a material impact on the consolidated
financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure
Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The ASU results in
the removal, modification and addition of certain disclosure requirements related to transfers between
levels within the fair value hierarchy, valuation processes and unrealized gains/losses presentation forLevel 3 measurements, and liquidation timing for investments held at net asset value. The changes in thisASU should generally be applied on a retrospective basis in the year that the ASU is first applied except
for the changes related to Level 3 measurements, which should be applied prospectively. ASU No. 201813 was effective for CI for the fiscal year ending June 30, 2021. There was no material impact to theconsolidated financial statements as a result of adoption.

9

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 2.

Significant Accounting Policies (Continued)

Basis of presentation: The consolidated financial statements have been prepared in accordance withthe provisions of the FASB Accounting Standards Codification (ASC) 958, Not-for-Profit Entities, which
stipulated that net assets, support and revenue are classified into two categories according to donorimposed restrictions: net assets without donor-imposed restrictions and net assets with donor-imposed
restrictions.
Net assets without donor restrictions: Net assets without donor restrictions consist ofcontributions, contract revenue, investment income, and other inflows of assets whose use is not
subject to donor imposed stipulations. The Board of Directors may designate a portion of these
net assets for a specific purpose; however, these funds are classified as net assets without donor
restrictions. Investment income generated by the endowment fund supports training and general
CI operations, up to the limits set by the endowment spending policy.
Net assets with donor restrictions: Net assets with donor restrictions include contribution, grant
revenue, investment income, and other inflows of assets whose use is subject to donor-imposed
stipulations that either expire by the passage of time, will be met by actions of CI pursuant tothose stipulations (e.g., usage of specific programs), or requires that the principal must be
maintained permanently by CI. When a stipulated time restriction ends or purpose restriction issatisfied, net assets with donor restrictions are reclassified to net assets without donor restrictions
and are reported on the consolidated statement of activities as net assets released from donor
restrictions. This includes conditional grants and promises to give that are recognized as earnedin the year in which CI meets the conditions stipulated by the donor.
Use of estimates: The preparation of the consolidated financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect theamounts reported in the consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.
Foreign currency transactions: The consolidated financial statements and transactions of CI’s foreign
operations are generally maintained in the relevant local currency. Monthly expenses that are incurred byfield offices and affiliates in foreign countries are paid at local currency and then translated into U.S.
dollars at the rate of exchange in effect during the month of the transaction.
Foreign currency translation: The functional currency of CI is the U.S. dollar. Gains and losses
resulting from translations of foreign currencies into U.S. dollars are recognized as other income andlosses in the consolidated statements of activities. Where local currencies are used, assets and liabilities
are translated into U.S. dollars at the consolidated balance sheet date at the exchange rate in effect onthat date.
Allocation of functional expenses: The costs of providing the various programs and other activities
have been summarized on a functional basis in the consolidated statements of activities. Accordingly,
certain costs have been allocated among the programs and supporting services benefited. Due to thebroad responsibilities and cross-functional nature of the executive leadership, their expenses areallocated based on estimates of time and effort. Certain costs of the Communications department arealso allocated based on estimates of time and effort. Depreciation, information technology and otheroffice operating costs are allocated based on the number of employees.

10Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 2.

Significant Accounting Policies (Continued)

CI reorganized their internal department structure for the year ended June 30, 2021. As a result, theschedule of functional expenses for the year ended June 30, 2021, added new programs of the Center for
Sustainable Lands and Waters, the Center for Natural Climate Solutions, and Other Programs whileremoving Policy and Strategy, Center for Environmental Leadership in Business, and the Center forCommunities and Conservation.
Foreign operations: The accompanying consolidated financial statements include the worldwide
operations of CI (affiliate and branch offices). At June 30, 2021 and 2020, assets held in foreign countries
totaled $18,204,000 and $17,848,000, respectively. The consolidated statements of activities include
support and revenue of $14,487,000 and $16,626,000 from foreign country programs for the years ended
June 30, 2021 and 2020, respectively.
Cash and cash equivalents: Cash and short-term investments with maturities at dates of purchase of
three months or less are classified as cash and cash equivalents, except that any such cash orinvestments purchased with endowment funds or with management-designated investment funds areclassified as investments.
Investments: Investments are carried at estimated fair value in the consolidated balance sheets. Fairvalue of investments are estimated based on quoted market prices where available. Investments may
include some short-term investments, which consist primarily of money market funds and other short-term
investments temporarily held by investment managers.
Investments in investment partnerships are valued at fair value, based on the applicable percentage
ownership of the underlying partnership’s net assets as of the measurement date, as determined by CI. In
determining fair value, CI utilizes valuations provided by the fund manager of the underlying investment
partnerships. The underlying investment partnerships value securities and other financial instruments on
a fair value basis of accounting. The estimated fair values of certain investments of the underlying
investment partnerships, which may include private placements and other securities for which prices are
not readily available, are determined by CI for the respective investment partnerships and may not reflect
amounts that could be realized upon immediate sale, nor amounts that may be ultimately realized.
Accordingly, the estimated fair values may differ significantly from the values that would have been used
had a ready market existed for these investments.
The fair value of CI’s investments in other investment partnerships generally represents the amount CI
would expect to receive if it were to liquidate its investment in the investment partnerships, excluding any
redemption charges that may apply. CI may adjust the respective manager’s valuation whencircumstances support such an adjustment.
Investment income and net appreciation (depreciation) on investments are reported as follows, whenearned:As increases (decreases) in net assets with donor restrictions, if the terms of the gift or state law
impose restrictions on the current use of the investment income or net appreciation (depreciation).



As increases (decreases) in net assets without donor restrictions in all other cases.

11Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 2.

Significant Accounting Policies (Continued)

Concentrations of credit and market risk: CI’s financial instruments that are exposed to concentrationsof credit risk consist primarily of its cash and cash equivalents, investments and grants and pledges
receivable. CI invests its excess cash and cash equivalents and maintains its investments withhigh-quality financial institutions. CI had $9,671,000 and $9,073,000 of cash and cash equivalents on
hand and at financial institutions in foreign countries at June 30, 2021 and 2020, respectively. The
majority of the funds invested in foreign countries are uninsured. At times, CI maintains cash balances atfinancial institutions in the United States in excess of Federal Deposit Insurance Corporation (FDIC)
limits. CI has not experienced any losses in such accounts, and management believes the risk in thesesituations to be minimal. The composition and maturities of investments, as well as investment
performance, are regularly monitored by management.
CI invests in common stocks, mutual funds, money market funds, fixed income securities, exchange
traded funds, partnerships and private equities. These investments are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated with such investments, and the level of
uncertainty related to changes in the value of such investments, it is possible that changes in risks in thenear term could materially affect investment balances and amounts reported in the consolidated financial
statements.
Grants, contributions and promises to give: Grants, contributions and promises to give are recognizedas support in the year that they are unconditionally received from the donor. They are reported asincreases in the appropriate category of net assets. Grants, contributions and promises to give that will
not be collected within one year have been discounted at a rate commensurate with the risks involved at
the time the gift was pledged, based upon anticipated payment dates. CI has established an allowance
for uncollectible pledges in the amount of $1,304,000 and $1,508,000 at June 30, 2021 and 2020,
respectively. This allowance is mainly based on potential de-obligations of existing restricted pledges.
Historically, de-obligations mainly arose in cases where CI has completed the project at less than the fullamount of the associated grant, and less frequently, when the donor chooses to discontinue funding for
economic or other reasons.
Contributions include in-kind gifts that mainly consisted of donated professional fees, equipment andairfare. The in-kind contributions are recorded at their fair value as of the date the goods or services areprovided. In-kind contributions were $1,167,000 and $1,204,000 for the years ended June 30, 2021 and2020, respectively.
Contracts: Contract revenue is recognized when it satisfies a performance obligation by transferring apromised good to, or performing a service for, a customer. The amount of revenue recognized reflects theconsideration CI expects to receive in exchange for satisfying distinct performance obligations. If a
performance obligation does not meet the criteria to be considered distinct, CI combines it with otherperformance obligations until a distinct bundle of goods or services exists. Most performance obligations
are satisfied over time and the related revenue is recognized as services are rendered.
Notes receivable: Notes are recorded as receivables at face value when the agreement is signed byboth parties. Related interest income is recognized as it is earned based on stated interest rates applied
to the face value of the applicable notes. An allowance for uncollectible notes is based on an evaluationof the collectability of the principal and interest. There was no allowance for uncollectible notes receivable
as of June 30, 2021 or 2020.

12

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 2.

Significant Accounting Policies (Continued)

Property and equipment: Property and equipment are stated at cost and depreciated on the straight-line
basis over their related estimated useful lives, generally three to five years. Assets with a unit cost of$5,000 or more are capitalized. Expenditures for maintenance and repairs that do not improve or extend
the lives of the respective assets are expensed as incurred. Leasehold improvements are recorded atcost and are amortized over the lesser of the asset’s useful life or the life of the lease. Land and buildings
are stated at cost; buildings are depreciated on the straight-line basis over an estimated useful life of 30
years. When assets are retired or sold, the related cost and accumulated depreciation are removed fromthe accounts and any gain or loss on retirement or disposal of the assets is recorded as revenue or
expense.
Impairment of long-lived assets: CI requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of
the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the amount by which thecarrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed ofare reported at the lower of the carrying amount or fair value, less costs to sell.
Notes payable: Notes payable are recognized as liabilities in the year funds are received from thelender.
Grants payable: For agreements considered to be unconditional contributions, grants are recognized asliabilities in the year CI makes the unconditional commitment. For agreements considered to beconditional contributions, the payable is recognized when the condition is met. Which is typically as
expenses are incurred by grantees over the reporting period.
Deferred revenue: CI records grant payments received in advance of satisfying the donor-imposed
conditions as deferred revenue.
Income taxes: CI is exempt from income taxes under Section 501(c)(3) of the IRC. In addition, CI has
been determined by the Internal Revenue Service (IRS) not to be a private foundation. CI is subject tounrelated business income taxes under Section 512 of the IRC; however, in the opinion of management,
no provision for income taxes is required to be made.
CI follows the accounting standard on accounting for uncertainty in income taxes, which addresses thedetermination of whether tax benefits claimed or expected to be claimed on a tax return should berecorded in the consolidated financial statements. Under this guidance, CI may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on
examination by taxing authorities, based on the technical merits of the position. The tax benefits
recognized in the consolidated financial statements from such a position are measured based on thelargest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The
guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification,interest and penalties on income taxes, and accounting in interim periods.
Management evaluated CI’s tax positions and concluded that CI had taken no uncertain tax positions that
require adjustment to the consolidated financial statements to comply with the provisions of this guidance.
Generally, CI is no longer subject to income tax examinations by the U.S. federal, state or local tax
authorities for years before 2018.

13

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 2.

Significant Accounting Policies (Continued)

The aforementioned field offices are organized as tax-exempt entities in their respective countries, withthe exception of CI-Guyana. This field office is organized under the Companies Act of Guyana
regulations. Its by-laws prohibit the accumulation or distribution of profits.
Reclassification: Certain expenses items within the consolidated statement of activities for the year ended
June 30, 2020 have been reclassified to conform to the financial statement presentation for the year ended
June 30, 2021. The reclassifications had also affected the presentation of previously reported net assets.
The change is disclosed in Note 11.
Recent accounting pronouncements: In February 2016, the FASB issued ASU No. 2016-02, Leases(Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the
new guidance, lessees are required to recognize lease assets and lease liabilities on the consolidatedbalance sheets for all leases with terms longer than 12 months. Leases will be classified as either financeor operating, with classification affecting the pattern of expense recognition in the consolidated income
statement. The new standard will be effective for CI for the fiscal year ending June 30, 2023. A modified
retrospective transition approach is required for lessees for capital and operating leases existing at, or
entered into after, the beginning of the earliest comparative period presented in the consolidated financial
statements, with certain practical expedients available. CI is currently evaluating the impact of thepending adoption of the new standard on the consolidated financial statements.
On September 2020, the FASB issued ASU No. 2020-07, Not-for-Profit Entities (Topic 958): Presentation
and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The amendments in thisASU make improvements to the information provided in financial statements and accompanying notes of
not-for-profit entities with contributed nonfinancial assets, or gifts-in-kind. The amendments in this ASU
should be applied on a retrospective basis and are effective for annual periods beginning after June 15,
2021, and interim periods within annual periods beginning after June 15, 2022. Early adoption ispermitted. CI is currently evaluating the impact of the pending adoption of the new standard on the
consolidated financial statements.
Subsequent events: CI evaluated subsequent events through December 20, 2021, which is the date theconsolidated financial statements were available to be issued.
Note 3.

Liquidity

Contributions without donor restrictions, contributions with donor restrictions for use in current activities
and programs, investment income without donor restrictions, and earnings appropriated fromendowments with donor restrictions and board-designated endowments are considered to be available tomeet cash needs for general expenditures. General expenditures include administrative and general
expenses, fundraising expenses and grant commitments expected to be paid in the subsequent year.
Annual operations are defined as activities occurring during, and included in the budget for, a fiscal year.
CI manages its cash available to meet general expenditures following three guiding principles:Operating within a prudent range of financial soundness and stability
Maintaining a sufficient level of asset liquidity
Monitoring and maintaining reserves to provide reasonable assurance that long-term grantcommitments will continue to be met

14Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 3.

Liquidity (Continued)

CI regularly monitors liquidity required to meet its annual operating needs and other contractual
commitments while also striving to maximize the return on investment of its funds not required for annual
operations. As of June 30, 2021 and 2020, the following financial assets are available to meet annual
operating needs for the upcoming fiscal year (in thousands):
2021

2020

Financial assets at year-end:
Cash and cash equivalents$

162,693$

101,969

Investments

263,000

246,818

Grants and promises to give, net

39,186

39,670

Project advances to partners

4,237

4,867

Notes receivable

4,178

2,760

473,294

396,084

Total financial assets available
Less amounts not available to be used within one year:
Investments related to board-designated endowment

22,346

12,278Grants and promises to give due after one year

3,739

10,983

Project advances to partners due after one year

4,237

4,867

Notes receivable due after one year

3,397

2,210

Deferred revenue to be recognized after one year

44,34628,227

Time and purpose restricted net assets released after one year

234,387

206,633

Perpetual restricted net assets

13,321

13,318

325,773278,516

Total amounts not available to be used within one year
Financial assets available to meet general expenditures within one year$

147,521$

117,568

CI has various sources of liquidity at its disposal, including cash and cash equivalents, amounts due fromdonors within one year, and investments in marketable securities. Additionally, CI has a board-designatedendowment of $22,346,000 and $12,278,000 as of June 30, 2021 and 2020, respectively. Although there
is no intention to spend from its board-designated endowment funds other than amounts appropriatedeach year for general expenditures, the amounts from its board-designated endowment could be madeavailable if necessary. Note that the board-designated endowment fund, donor-restricted endowments,and several other investments cannot be redeemed and made available within one year (see Note 4 fordisclosures about investments).
Note 4.

Investments and Fair Value Measurements

Investment income for the years ended June 30, 2021 and 2020, consists of the following (in thousands):

2021
Realized and unrealized gain, net
Interest and dividends
Investment management fees

$

$

15

46,612
4,951(1,162)50,401

2020
$

$

5,124
5,072
(844)
9,352

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 4.

Investments and Fair Value Measurements (Continued)

The Fair Value Measurement Topic of the FASB ASC establishes a fair value hierarchy that is based on
the valuation inputs used in the fair value measurement. Fair value is defined as the price that would bereceived to sell an asset or paid to transfer a liability in an orderly transaction between market participantsat the measurement date, and sets out a fair value hierarchy. The fair value hierarchy gives the highest
priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority
to unobservable inputs (Level 3). Inputs are broadly defined as data that market participants would use inpricing an asset or liability. The three levels of the fair value hierarchy are described below:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting
entity has the ability to access at the measurement date. The types of investments included in
Level 1 include listed equities such as common stocks, mutual funds, money market funds andexchange traded funds.
Level 2: Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either
directly or indirectly, and fair value is determined through the use of models or other valuation
methodologies. Investments which are generally included in this category include fixed income
securities, less liquid and restricted equity securities and certain over-the-counter derivatives.
Level 3: Inputs are unobservable for the asset or liability and include situations where there is little, ifany, market activity for the asset or liability. The inputs into the determination of fair value arebased upon the best information in the circumstances and may require significant management
judgment or estimation. CI has no investments classified as Level 3 at June 30, 2021 and 2020.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value
hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest levelof input that is significant to the fair value measurement. CI’s assessment of the significance of aparticular input to the fair value measurement in its entirety requires judgment and considers factors
specific to the investment.

16

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 4.

Investments and Fair Value Measurements (Continued)

The table below presents the balances of assets measured at fair value on a recurring basis by levelwithin the hierarchy as of June 30, 2021 (in thousands):

2021
Description
Cash and cash equivalents:
Money market funds
Investments:
Common stocks:
Consumer goods
Industrial goods
Financial services
Technology
Services
Healthcare
Total common stocks
Mutual funds:
Multi-sector equity funds
Multi-sector bond funds
Total mutual funds
Fixed income:Corporate bonds
U.S. government bonds
Municipal bonds
Total fixed income
Other assets:
Money market funds
Gold exchange traded fundTotal other assets
Total publicly traded securities
Other investments measured at
net asset value (a)Level 1

Level 2

Level 3Total

$ 105,849

$

-

$

-

$ 105,849

$

$

-

$

-

$

4,576
684
2,163
1,160
167
269
9,019

$

17

4,576
684
2,163
1,160
167
269
9,019

21,938170
22,108--21,938170
22,108-55,66147,85815,573
119,092-

55,66147,85815,573
119,092

15,776
1,491
17,267
48,394

119,092-

15,776
1,491
17,267
167,486

48,394$ 119,092-

95,514$ 263,000$

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 4.

Investments and Fair Value Measurements (Continued)

The table below presents the balances of assets measured at fair value on a recurring basis by levelwithin the hierarchy as of June 30, 2020 (in thousands):
2020
Description
Cash and cash equivalents:
Money market funds
Investments:
Common stocks:
Consumer goods
Industrial goods
Financial services
ServicesTechnology
Healthcare
Basic materials
Real estate
Total common stocks
Mutual funds:
Multi-sector equity funds
Multi-sector bond funds
Total mutual funds
Fixed income:Corporate bonds
U.S. government bonds
Municipal bonds
Total fixed income
Other assets:
Money market funds
Gold exchange traded fundTotal other assets
Total publicly traded securities
Other investments measured at
net asset value (a)Level 1

Level 2

Level 3

Total$

50,984

$

-

$

-

$

50,984

$

6,647
4,421
3,993
757
653
351
278
58
17,158

$

-

$

-

$

6,647
4,421
3,993
757
653
351
278
58
17,158$35,985
114
36,099--35,985
114
36,099-49,88029,56014,69094,130-49,88029,56014,69094,13019,491
1,506
20,99774,254

94,130-19,491
1,506
20,997
168,384

74,254$ 94,130-

78,434$ 246,818$(a) In accordance with ASC Topic 820-10, certain investments that are measured at fair value using the
net asset value per share (or its equivalent) practical expedient have not been classified in the fairvalue hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of
the fair value hierarchy to the amounts presented in the consolidated balance sheets.

18

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 4.

Investments and Fair Value Measurements (Continued)

Alternative investments are less liquid than CI’s other investments. The following tables set forth
additional disclosures of CI’s investments whose fair value is estimated using net asset value per share(or its equivalent) as of June 30, 2021 and 2020.
The following table provides additional information about the investments by strategy (in thousands):
Fair Value at June 30,
2021
2020

Investment Strategy
Equity (a)Fixed income (b)$$93,802
1,712
95,514$$

UnfundedCommitments

77,3501,084
78,434$$25,03825,038

Redemption
Frequency

Redemption
Notice Period

Semi-monthly annually
N/A

5-90 days
N/A(a) This category includes investments in equities across all sectors and geographic regions, including
several long and short hedge funds. The investment strategies of these funds focus on an event or acatalyst that will move an equity price, an equity spread, a credit spread or an implied volatility
spread, offering a blend of both growth and value investing styles. Most of the securities underlying
the funds are marketable equities. As of June 30, 2021, about 46% of the funds have a redemption
frequency between weekly to quarterly. The remaining funds can be redeemed annually or at the timeof their termination.
(b) This category includes a variety of fixed income investments. It includes investment in a multi-sector
fixed-income relative-value fund, as well as investment in secured U.S. middle market secured loans
and private debt. The investments held as of June 30, 2021, cannot be liquidated in advance of theirnatural termination.
Note 5.

Grants and Promises to Give Receivable

CI considers grants and promises to give receivable to be collectible within one year, unless otherwise
stated by the donor. Unconditional grants and promises to give as of June 30, 2021 and 2020, are due asfollows (in thousands):
2021
Within one year
Two to five years
Gross grants and promises to give
Discount to present value
Allowance for doubtful pledges
Net grants and promises to give receivable$$

36,7683,739
40,507(17)(1,304)
39,1862020$$

30,212
10,983
41,195(17)(1,508)39,670CI’s grants and promises to give receivable balance include receivables from the federal government,
foreign governments and private donors. CI’s ten largest contributors during the year ended June 30,
2021, comprised approximately 41% or $88,749,000 of total support and revenue. CI’s ten largest
contributors during the year ended June 30, 2020, comprised approximately 39% or $63,777,000 of total
support and revenue. CI’s ten largest grants and promises to give receivable balances, before net present
value and allowance for uncollectible pledges, comprised approximately 59% or $24,093,000 at June 30,
2021, and 81% or $33,339,000 at June 30, 2020.

19

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 5.

Grants and Promises to Give Receivable (Continued)

CI receives both conditional and unconditional grants and promises to give. Grants and promises to giveare considered to be conditional if the donor agreement stipulates both a donor imposed barrier that must
be overcome before being entitled to the assets transferred or promised, as well as a right of return to thedonor of any assets transferred or a right of release of the donor’s obligation to honor the promise.
Unconditional grants and promises to give are recognized when the agreement is signed; whereas
conditional grants and promises to give are recognized as earned in the year in which CI meets theconditions stipulated by the donor. As of June 30, 2021 and 2020, CI was awarded the following amountsof conditional grants and promises to give but not yet recognized or earned (in thousands):

Public funding
Foundations
Corporations
Individuals
Others$$2021
196,149
93,072
6,535
3,158
8,361
307,275$$

2020
137,519
92,494
1,170
1,815
1,524
234,522

The amount of conditional grant and promises to give left to earn are not reported in the accompanying
consolidated balance sheets or consolidated statements of activities.
Note 6.

Project Advances to Partners

As an accredited implementing agency of the Global Environment Fund (the GEF), CI has entered into alimited partnership agreement in an impact investment fund. The investment objectives of the fund are (1)to generate measurable social and environmental outcomes and provide reasonable financial returns forinvestors by making debt and equity investments in fishing and seafood-related enterprises and (2) todemonstrate the effectiveness of private capital investment as a catalyst to help coastal fisheries toachieve economic, social, and environmental sustainability.
As of the year ended June 30, 2020, CI committed and paid $6,000,000 to the fund, of which $1,133,000
had been deployed as a capital contribution, leaving a balance of $4,867,000 as a project advance to thepartner. During the year ended June 30, 2021, an additional $630,000 was deployed, resulting in$4,237,000 remaining as a project advance to the partner.
Note 7.

Notes Receivable

CI made loans to small and medium-sized enterprises, which support conservation and conservationoriented employment in the regions in which CI works. The outstanding notes receivable balance atJune 30, 2021, bears interest at rates ranging from 3% to 9.5% and are due between July 2021 and June
2026.
At June 30, 2021 and 2020, notes receivable, totaled $4,178,000 and $2,760,000, respectively. There
was no allowance for uncollectible notes at June 30, 2021 and 2020.

20

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 7.

Notes Receivable (Continued)

The following schedule shows required future minimum repayments (in thousands) at June 30, 2021:

Years ending June 30:
2022
2023
2024
2025
2026

$

$
Note 8.

781
1,290
1,274
507
326
4,178

Property and Equipment

Property and equipment at June 30, 2021 and 2020, consist of the following (in thousands):
2021
Furniture and equipment
Leasehold improvements
Land
Buildings$

Accumulated depreciation and amortization
Net property and equipment

$

6,891
5,627
131
564
13,213(8,346)
4,867

2020
$

$

6,897
5,627
131
564
13,219(7,391)
5,828

Depreciation and amortization expense for the years ended June 30, 2021 and 2020, was $984,000 and$1,048,000, respectively.
Note 9.

Notes Payable

Notes payable at June 30, 2021 and 2020, consist of the following (in thousands):
2021
L’Agence Française de Développement
Private investors

$
$

109
1,250
1,359

2020
$
$

328
328

CI entered into a note agreement with L’Agence Française de Développement (AFD) to provide loans tosmall and medium-sized enterprises, which support biodiversity conservation and conservation-oriented
employment in the areas where CI works. Through CI’s African Conservancy Fund LLC, CI also enteredinto loan agreements with several private investors in order to fund this entity, which identifies andprovides financing to African conservancies in need. The remaining loan principals are due between July
2021 and December 2027 and bear interest rates between 1.12%-2%. The AFD loan agreement has
several covenants, including ratios regarding liquidity and debt-to-net assets.

21

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 9.

Notes Payable (Continued)

The following schedule shows required future principal payments as of June 30, 2021 (in thousands):

Year ending June 30:
2022
2023
2024
2025
2026
Thereafter

$

109
1,250
1,359

$

Interest expense for the years ended June 30, 2021 and 2020, was $9,000 and $5,000, respectively.
Note 10.

Grants Payable

CI enters into grant agreements with various domestic and foreign organizations. For agreements
considered to be unconditional contributions, CI expenses the grant obligation and records thecorresponding liability when the grant agreements are signed. For agreements considered to beconditional contributions, CI recognizes the liability based on expenses incurred by grantees over thereporting period. As of June 30, 2021 and 2020, CI’s total grant payable were $1,130,000 and$1,340,000, respectively. CI disburses grant funds to grant recipients based upon the recipients’ cashneeds and does not schedule these payments in advance. CI estimates that the majority of this balance
will be paid to recipients within the next fiscal year, so no discount on these payments is calculated.
Note 11.

Net Assets

The components of CI’s net assets were as follows as of June 30, 2021 and 2020 (in thousands):
2021
Without donor restrictions:
UndesignatedBoard-designatedTotal net assets without donor restrictions$$

With donor restrictions:Time and purpose restriction
Perpetual in nature
Total net assets with donor restrictions

$
$

22

2020

5,727
22,34628,073$

339,197
13,321
352,518

$

$

$

5,861
12,27818,139290,669
13,318303,987

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 11.

Net Assets (Continued)

Net assets with donor restrictions are funds with time or purpose stipulations imposed by the donor.
During the year ended June 30, 2021, there were $183,713,000 in new funds with donor restrictions and$135,380,000 released from restrictions. These funds also incurred a net gain of $198,000 due to foreign
currency translations. These activities resulted in a $352,518,000 net asset with donor restrictionsbalance as of June 30, 2021, consisting of the following amounts by program (in thousands):
June 30, 2020
Management and operations *Field programs
Grantmaking divisions
Other programsCenter for Natural Climate
Solutions
Moore Center for Science
Communications
Center for Sustainable Lands
and Waters$

Operating
AdditionsOperatingReleases

157,21764,17843,645
17,529$ 32,711
61,30532,74817,196$(32,986)(54,124)(32,341)(4,120)

3,844
7,180
6,504

26,632
7,955
2,208(4,033)(4,674)
(722)

3,890
$ 303,987

2,958$ 183,713(2,380)$ (135,380)

Non-Operating
Activity$

198-

June 30, 2021
$

198

$

157,140
71,35944,05230,60526,443
10,461
7,990

$

4,468
352,518* This amount is restricted due to time or is unallocated flexible funding for future years.
During the year ended June 30, 2020, there were $138,410,000 in new funds with donor restrictions and$129,763,000 released from restrictions. These funds also incurred a net loss of $2,205,000 due toforeign currency translations. These activities resulted in a $303,987,000 net asset with donor restrictionsbalance as of June 30, 2020, consisting of the following amounts by program (in thousands):
Operating
Additions

June 30, 2019
Management and operations *Field programs
Grantmaking divisions
Other programs
Moore Center for Science
Communications
Center for Sustainable Lands
and Waters
Center for Natural Climate
Solutions
Policy and strategy
Center for Environmental
Leadership in BusinessCenter for Communities
and Conservation$ 206,401
29,21839,389
5,740
2,405

$

11,61771,28229,5164,251
2,624

OperatingReleases

Non-Operating
Activity
Reclassifications

June 30, 2020

$

$

$

(5,401)(57,851)(34,416)(6,594)(8,642)(2,190)(15)-$(53,210)
21,544
9,156
17,529
3,783
10,117

157,21764,17843,645
17,529
7,180
6,504

-

-

-

-

3,890

3,890

11,9806,642(9,370)-3,844(9,252)

3,844
-

953

9,024

(3,338)-(6,639)-1,459$ 297,545

3,454$ 138,410(4,151)$ (129,763)$(2,205)$* This amount is restricted due to time or is unallocated flexible funding for future years.

23

(762)
-

$

303,987

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 12.

Endowment Funds

Management has interpreted the Uniform Prudent Management of Institutional Funds Act of 2006
(UPMIFA) as requiring the preservation of the fair value of original donor-restricted contributions as of thedate of the gift, absent explicit donor stipulations to the contrary. As a result of this interpretation, CI
classifies as donor restricted endowments: (a) the original value of permanently restricted cash
contributions and (b) the discounted value of the future perpetually restricted cash contributions. The
remaining portion of the donor-restricted cash contributions are classified as net assets with donor
restrictions (time and purpose restricted) until those amount are appropriated for expenditure in a mannerconsistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, CI
considers the following factors in making a determination to appropriate or accumulate donor-restrictedcash contributions:








The purpose of CI and donor-restricted endowment fund
The duration and preservation of the fund
General economic conditions
The possible effect of inflation and deflation
The expected total return from income and the appreciation of investments
Other available financial resources
Investment policies

CI’s endowment funds consist of the following at June 30, 2021 and 2020 (in thousands):
2021
With Donor Restrictions
Time and Purpose
Perpetual In Nature

Without Donor
Restrictions
Donor-restricted endowment funds
Board-designated endowment funds$$

22,34622,346$$$$

12,27812,278$$13,321
13,321$$

2020
With Donor Restrictions
Time and Purpose
Perpetual In Nature

Without Donor
Restrictions
Donor-restricted endowment funds
Board-designated endowment funds

16,24916,249

Total

$
$

24

10,132
10,132$$

13,31813,31829,57022,346
51,916

Total$$

23,45012,27835,728

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 12.

Endowment Funds (Continued)

Endowment fund activity for the years ended June 30, 2021 and 2020, consists of the following (inthousands):

Endowment net assets, beginning of year
Investment return:Interest and dividends
Realized and unrealized
gains on investments, net
Amounts appropriated for expenditure
Contributions
Endowment net assets, end of year

Endowment net assets, beginning of year
Investment return:Interest and dividends
Realized and unrealized
gains on investments, net
Amounts appropriated for expenditure
Contributions
Endowment net assets, end of year

Without Donor
Restrictions

2021
With Donor Restrictions
Time and Purpose
Perpetual In Nature

$

$

$

12,278

10,132$

13,318$35,728

122

194

-

316

4,417
(648)
6,177
22,346

7,122(1,199)16,2493
13,321

11,539(1,847)
6,180
51,916$$

Without Donor
Restrictions

2020
With Donor Restrictions
Time and Purpose
Perpetual In Nature

$

$

$

Total

12,708

11,077$

13,318$

Total$

37,103

114

219

-

333

4
(624)
76
12,278

7(1,171)
10,132

13,318

11(1,795)76
35,728$$$Endowment funds are invested in the following manner as of June 30, 2021 and 2020 (in thousands):

2021
Common stocks
Alternative investments
Fixed income
Mutual funds
Commodities

$

$

25

17,052
22,347
8,368
2,658
1,491
51,9162020$$

10,78614,990
7,307
1,139
1,506
35,728

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 12.

Endowment Funds (Continued)

Investment and spending policies: CI has adopted investment and spending policies for endowment
assets that attempt to provide a predictable stream of funding to programs supported by its endowment,
while seeking to maintain the purchasing power of the endowment assets. CI’s spending and investment
policies work together to achieve this objective through diversification of asset classes. The current longterm return objective is to generate a return that supports a 5% spending rate, while generating sufficient
return to maintain the purchasing power of the corpus of the funds.
To satisfy its long-term rate of return objectives, CI relies on a total return strategy in which investment
returns are achieved through both capital appreciation (realized and unrealized) and current yield (interestand dividends). CI targets a diversified asset allocation that places a greater emphasis on equity-based
investments to achieve its long-term return objectives within prudent risk parameters.
The spending policy calculates the amount of appropriations annually distributed from CI’s various
endowed funds for grant making and administration. The current spending policy is to distribute the lesserof the accumulated earnings or 5% of the total endowment assets’ average balance of the preceding
calendar year. If economic indicators suggest a downturn in investments, CI may choose to reduce thespending percentage to ensure the corpus is preserved.
Annual returns in excess of spending are re-invested in the endowment assets. In the event that anendowment fund experiences investment losses in a particular year, these losses will be attributed to thatfund.
Unspent earnings on the endowment fund, net of expenses incurred, totaled $16,249,000 and$10,132,000 at June 30, 2021 and 2020, respectively, and are included in net assets with donor
restrictions (time and purpose).
Note 13.

Retirement Plans

Eligible U.S. paid employees participate in a defined contribution retirement plan. CI matches employee
contributions up to 6% of basic salary. Contributions made by CI during the years ended June 30, 2021
and 2020, amounted to $2,097,000 and $2,037,000, respectively.
CI has established an International Retirement Savings Plan (IRSP) for in-country staff working in CI’s
field offices. CI adopted the IRSP with an effective participation date of January 1, 2001. In accordancewith the IRSP, CI makes annual contributions of 3% of each eligible staff person’s annual salary.
Contributions for the years ended June 30, 2021 and 2020, were $238,000 and $204,000, respectively.
CI’s Board of Directors has established a Section 457(b) supplemental employee retirement plan (thePlan). Under the terms of the Plan, eligible employees elect to deposit a percentage of theircompensation into the Plan, subject to IRS limits. Employee deposits and accumulations are accounted
for as an asset and offsetting liability on CI’s consolidated balance sheets until they are distributed to theparticipants. The amount of deposits and related accumulations were $155,000 and $100,000 at June 30,
2021 and 2020, respectively.

26

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 14.

Related Party Transactions

During the year ended June 30, 2021 and 2020, CI continued to support a related party under a services
agreement to provide technical and programmatic services. This organization’s mission, which CI shares,
places a specific focus on ensuring indigenous peoples have the economic power and cultural
independence to steward, support, and protect their livelihoods and territories. For the year ended June30, 2021 and 2020, CI received, respectively, $3,250,000 and $2,150,000 in grant revenue for work withindigenous people, and $1,000 and $150,000 in contract revenue for services provided. At June 30, 2021
and 2020, there were also remaining related party net receivable balances of $2,175,000 and $60,000,
respectively.
Note 15.

Commitments and Contingencies

Leases: CI leases office space in Arlington, Virginia; Seattle, Washington; Honolulu, Hawaii and foreigncountries. CI is also obligated under several non-cancelable leases for office equipment. In addition, CI
holds land concessions in Guyana.
The lease for CI’s Arlington, Virginia headquarters was signed on March 31, 2006, and began on
December 1, 2006. On December 26, 2017, an amendment to the lease agreement was signed reducing
the rentable square footage occupied by CI and cost per square foot of the lease. Additionally, the term of
the lease was extended an additional 15 years, expiring on November 30, 2036.
CI has entered into several noncancelable lease agreements, and the following is a schedule of future
minimal payments by year (in thousands):
Years ending June 30:
2022
2023
2024
2025
2026
Thereafter

$

$

3,763
2,653
2,473
2,211
2,234
25,12438,458

Total rent expense for the years ended June 30, 2021 and 2020, was $4,097,000 and $4,403,000,
respectively. Rent expense is recorded on a straight-line basis over the entire lease term. Lease
incentives, including rent abatements, are being amortized over the remaining life of the lease. The
unamortized portion of these incentives is included in accounts payable and accrued expenses in theaccompanying consolidated balance sheets.
U.S. federal grants: CI receives grants from various agencies of the U.S. government. Such grants are
subject to audit and periodic reviews by grantor agencies. The ultimate determination of amounts
received under the U.S. government grants is based upon the allowance of costs reported to andaccepted by the U.S. government as a result of the audits. Until such audits have been accepted by the
U.S. government, there exists a potential contingency to refund any amount received in excess ofallowable costs. Management is of the opinion that no material liability will result from such audits.
CI’s undrawn letter of credit with the U.S. government at June 30, 2021 and 2020, was $6,570,000 and$5,916,000, respectively. CI draws funds quarterly, based on the prior quarter’s spending.

27

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 15.

Commitments and Contingencies (Continued)

Litigation: CI is involved in various claims and legal actions arising in the ordinary course of business.
Based upon information currently available, management believes the ultimate disposition of thesematters will not have a material adverse effect on the consolidated financial position, changes in net
assets or cash flows.
Self-insured health plan: CI has a self-insured health insurance plan for its employees and their
qualifying dependents. CI holds stop-loss insurance coverage, which limits CI’s liability to an aggregate
maximum claim liability per policy year of $1,000,000 and $150,000 per individual claim. At June 30, 2021
and 2020, CI had medical claims accruals of $336,000 and $337,000, respectively, which are included in
accrued salaries, vacation and employee benefits in the accompanying consolidated balance sheets.
The following is a breakdown by region of Field Program related expenses (in thousands):

2021
South and Central America
Asia Pacific
Africa and Madagascar
Oceans$$
Note 16.

29,841
19,19013,107
8,050
70,1882020$$

33,16816,543
14,525
6,034
70,270COVID-19

The continued global pandemic in 2020 has created substantial volatility in financial markets
and the economy, including the geographic areas in which CI operates. While CI has
mitigated the financial impact to its business, it is unknown how long these conditions will last.
Accordingly, there could be further negative impact to operations, the extent to which will depend on
future developments, which are highly uncertain and cannot be predicted and as such cannot be
determined.

28