CREATIVE COMMONS CORPORATION(A NONPROFIT CORPORATION)DECEMBER 31, 2017

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 - 10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, 2017, 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 entity’s internal control. Accordingly, we express nosuch opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.

275 Battery Street, Suite 900
San Francisco, CA 94111
415.781.0793

1

60 South Market Street, Suite 200
San Jose, CA 95113
408.998.8400

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, 2017 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
September 26, 20182

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

December 31, 2017
AssetsCash and cash equivalents
Investments
Grants receivable
Prepaid expenses and other assets
Total assets$

894,738
7,504,681
548,853
35,965$

8,984,237$

53,314
290,402

Liabilities and Net Assets
Liabilities
Accounts payable
Accrued expenses
Total liabilities

343,716

Net Assets:
Unrestricted
Temporarily restricted7,389,600
1,250,921

Total net assets

8,640,521

Total liabilities and net assets$

See accompanying notes to consolidated financial statements.
3

8,984,237

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

For the Year Ended December 31, 2017
Temporarily
Restricted

Unrestricted
Revenues:
GrantsContributions
In-kind contributions
Investment income
Foreign currency translation loss
Satisfaction of Program Restrictions$

361,005
548,765
69,747
211,969(648)
1,012,231

Total revenues$

2,203,069

Expenses:
Program services:
Supporting services:Management and GeneralFundraising579,587

Total$(1,012,231)

940,592
548,765
69,747
211,969(648)-(432,644)

1,770,425

2,756,446

2,756,446

428,461499,775

428,461499,775

Total expenses

3,684,682

3,684,682

Change in Net Assets(1,481,613)(432,644)(1,914,257)

Net Assets, beginning of year

8,871,213

1,683,565

10,554,778

Net Assets, end of year$

7,389,600$

1,250,921

See accompanying notes to consolidated financial statements.
4$

8,640,521

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

For the Year Ended December 31, 2017
Program Services

Education
Salaries
Payroll Taxes
Employee Benefits$

Accounting Fees
Bank Charges
Consulting and Design
Insurance
Legal Fees
Licenses & Fees
Membership and Dues
Occupancy
Printing
Project Support
Publicity and Communication
Recruiting
Special Events
Supplies
Technology
Telephone
Training
Travel and Conferences
WebsiteTotal expenses

410,800
26,49050,352

International
Affiliates$$

126,077
8,130
15,453

Technology$

241,298
15,56029,576

Science$

76,804
4,953
9,414

Culture$273,819
17,65733,562$

Management
andGeneral1,241,302
80,045
152,147$

217,460
14,02326,654

Fundraising$276,432
17,82533,882$

Total
Supporting
Services

2017
Total
Expenses493,892
31,84860,536$ 1,735,194
111,893
212,683

487,642

133,549

149,660

286,434

91,171

325,038

1,473,494

258,137

328,139586,276

2,059,770

6,450
10,647104,973
15,081
21,095
404
44
1,202
4,602

1,767
2,916
194,382
4,130
5,777
111
12
329
1,260
5,080
1,425
210
11,746
1,006
3,473
755
481
32,236
3,988

1,980
3,268
93,550
4,628
6,474
124
13
369
1,412

3,789
6,254
16,392
8,858
12,391
237
26
706
2,703

1,206
1,991
(5,150)
2,819
3,944
76
8
225
860

4,300
7,097
83,476
10,052
14,061
269
29
801
3,068

3,415
5,636
31,491
7,983
11,167
214
23
636
2,436

4,341
7,164
(4,349)10,14814,195
272
29
809
3,097

7,756
12,80027,142
18,131
25,362
486
52
1,445
5,533

1,597
235
13,163
1,128
3,892
847
539
36,125
4,470

3,057
450
25,192
2,158
7,449
1,620
1,032
69,140
8,554

973
143
8,018
687
2,371
516
329
22,007
2,723

3,469
511
28,587
2,449
8,453
1,839
1,172
78,4589,707

19,492
32,173
487,623
45,56863,742
1,221
132
3,632
13,905
5,080
15,7262,315
129,595
11,10238,3208,335
5,311
355,674
44,0062,755
405
22,703
2,339
6,713
1,460
930
62,309
7,709

3,503
515
28,860
2,472
8,534
1,856
1,183
79,207
9,800

6,258
920
51,563
4,811
15,2473,316
2,113
141,516
17,50927,24844,973514,765
63,69989,104
1,707
184
5,077
19,4385,080
21,984
3,235
181,158
15,91353,567
11,651
7,424
497,190
61,515928,236$ 3,684,682

5,205
766
42,8893,674
12,682
2,758
1,758
117,708
14,564$

112,504
7,255
13,790Legal

Supporting Services
Total
ProgramServices

854,144$404,633$

323,474$

456,442$

134,917$582,836$

2,756,446$

See accompanying notes to consolidated financial statements.
5428,461$499,775$

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

For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Change in net assets
Adjustments to reconcile change in net assets to net cash
provided by operating activities:
Net realized and unrealized gain on investments
Change in operating assets and liabilities:
Grants receivable
Prepaids and other assets
Accounts payable
Accrued expenses$(1,914,257)(78,111)569,282
45,675(42,170)
59,681

Net cash used by operating activities(1,359,900)

Cash Flows from Investing Activities:
Purchase of investments
Proceeds from sale of investments(9,018,522)
1,591,952

Net cash used by investing activities(7,426,570)

Net Decrease in Cash

(8,786,470)

Cash and Cash Equivalents, beginning of year

9,681,208

Cash and Cash Equivalents, end of year$

See accompanying notes to consolidated financial statements.
6894,738

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 CC license is applied 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 and databases freely available.
The Creative Commons public domain dedication tool is used to remove all copyright
restrictions.
Creative Commons also provides the legal infrastructure that powers Open Educational
Resources (OER). OER are free resources that are developed by institutions, communities,
and individuals to further universal access to education. Creative Commons’ licenses enableeducational materials to be translated for use around the world. Creative Commons is also
developing software and metadata standards to improve search and discovery of educational
resources.
Creative Commons’ licenses and tools have been developed in consultation with legal experts
and Creative Commons’ affiliate institutions in over 85 jurisdictions. Over 1 billion Creative
Commons-licensed works have been published by authors on the Internet.
In 2012, a Canadian subsidiary, 0941176 B.C. LTD, was established to enable 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.

Note 2 -Summary of Significant Accounting Policies
a. Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrualbasis of accounting in accordance with U.S. generally accepted accounting principles.

7Creative Commons Corporation (a Nonprofit Corporation)
Notes to Consolidated Financial Statementsb. Basis of Presentation
Creative Commons reports information regarding its financial position and activities
according to three classes of net assets: unrestricted net assets, temporarily restricted net
assets, and permanently restricted net assets.
Unrestricted Net Assets – the portion of net assets that is neither temporarily nor
permanently restricted by donor-imposed stipulations. These net assets are intended foruse by management and the Board of Directors for general operations.
Temporarily Restricted Net Assets – 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.
Permanently Restricted Net Assets – the portion of net assets the use of which is limitedby donor-imposed stipulations that neither expire by passage of time nor can be removedby actions of Creative Commons. Creative Commons has no permanently restricted net
assets.
c. Estimates
Management uses estimates and assumptions in preparing consolidated financial
statements. Those estimates and assumptions affect the reported amounts of asset andliabilities, the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Actual results could differ from those estimates.
d. Cash and Cash Equivalents
For purposes of the statement of cash flows, Creative Commons considers all unrestricted
highly liquid investments with an initial maturity of three months or less to be cash
equivalents.
e. Revenue Recognition
Unconditional promises to give, which include grants and contributions, are recognized
upon receipt and are recorded as increases in unrestricted, temporarily restricted, or
permanently restricted net assets, 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 temporarily restricted net
assets are reclassified to unrestricted net assets.
Unconditional contributions and grants receivable are recorded at net realizable value if
expected to be collected in one year and at fair value if expected to be collected in morethan one year. No allowance for uncollectible receivables has been recorded based on
management’s evaluation of collections.

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

At December 31, 2017, all receivables are due within one year. At December 31, 2017,
there was one conditional promise to give in the amount of $250,000 that Creative
Commons expects to recognize in 2018, upon fulfillment of conditions.
Grants and contract revenue are recorded when earned.
f.

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

g. Fair Value Measurements
Creative Commons classifies its financial assets and liabilities measured at fair value on arecurring basis based on a fair value hierarchy with three levels of inputs. Fair value isthe price that would be received to sell an asset or paid to transfer liability in an orderlytransaction between market participants at the measurement date. Level 1 values 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.
h. 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 an organization that is not a private
foundation under Section 509(a)(1).
Creative Commons recognizes the effect of income tax positions only if those positions
are more than not 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.
Creative Commons’ federal and state income tax returns are generally subject toexamination by federal and state taxing authorities for three and four years, respectively,
after filing.

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

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

Note 3 -Investments:
Investments consist of the following at December 31, 2017:
Cash and cash equivalents
Equities
Fixed income
Mutual funds – equities & fixed income$

21,607
1,389,590
5,483,602
609,882$ 7,504,681

All investments are measured at Level 1.
Investment income is comprised of the following at December 31, 2017:

Note 4 -Interest and dividend income
Realized gains and losses
Unrealized gains and losses$

133,858
16,841
61,270Total investment income$

211,969

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

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

Note 5 -Temporarily Restricted Net Assets:
Restricted as to purpose and time as of December 31, 2017:

Note 6 -Learning Resource Metadata Initiative
International Network Development
Sponsorship for 2018 Global Summit
Collaborative Library Process
GLAM Oriented Certificate$

63,577722,344
200,000
250,000
15,000Total$ 1,250,921

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, 2017 totaled $94,777.

Note 7 -Subsequent Events:
Creative Commons has evaluated subsequent events with respect to the consolidated financial
statements for the year ended December 31, 2017 through September 26, 2018, the date these
consolidated financial statements were available to be issued. There were no material
subsequent events that required recognition or additional disclosure in these consolidated
financial statements.

11