Conservation International
Foundation and Affiliates
Consolidated Financial Report
June 30, 2022

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 Audit of the Financial Statements
OpinionWe have audited the consolidated financial statements of Conservation International Foundation and
Affiliates (CI), which comprise the consolidated balance sheets as of June 30, 2022 and 2021, the related
consolidated statements of activities, functional expenses and cash flows for the years then ended, andthe related notes to the consolidated financial statements (collectively, the financial statements).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of Conservation International Foundation and Affiliates as of June 30, 2022 and 2021, and thechanges in their net assets and their cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United Statesof America (GAAS) and in accordance with the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States (Government
Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of CI and to meet our other ethical responsibilities, in accordance with the relevant ethicalrequirements relating to our audits. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in the United States of America, and for thedesign, 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about CI’s ability to continue as a going
concern within one year after the date that the financial statements are issued or available to be issued.

1

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not an absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, internal omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in theaggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we

Exercise professional judgment and maintain professional skepticism throughout the audit.



Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of CI’s internal control. Accordingly, no such opinion is expressed.



Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of thefinancial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, thatraise substantial doubt about CI’s ability to continue as a going concern for a reasonable period oftime.

We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 6,2023 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
January 6, 2023

2

Conservation International Foundation and Affiliates
Consolidated Balance Sheets
June 30, 2022 and 2021
(In Thousands)
2021

2022
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$

214,368
273,551
54,503
7,263
5,743
2,874
6,854
4,131

$

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

$

569,287$

489,244$

9,349
11,465
1,500
2,276
111,401
135,991$

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

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 5, 16, and 18)
Net assets:
Without donor restrictions
With donor restrictions
Total net assets

28,073352,518
380,591

29,200404,096433,296

Total liabilities and net assets$

See notes to consolidated financial statements.

3569,287$

489,244

Conservation International Foundation and Affiliates
Consolidated Statements of Activities
Years Ended June 30, 2022 and 2021
(In Thousands)
2022

2021

Without
Donor

With
Donor

Restrictions

Restrictions

Total

Without
Donor

With
Donor

Restrictions

Restrictions

Total

Support and revenue:
Grants and Contributions:Foundations

$

3,791

$

115,772$

119,563

$

4,340

$

69,390$73,730

Corporations

1,556

62,09063,646

1,113

7,266

8,379

Public funding

29

56,30856,33739

45,73345,772

6,467

15,72722,194

10,742

10,812

21,554

13

4,626

4,639

7

1,176

1,183

1,267
-

13
(68)

1,280
(68)

1,161
-

6
(230)

1,167
(230)
11,424

Individuals
Other
Contributed nonfinancial assets
Cancellations and de-obligations
Contract revenue

14,824-

14,824

11,424-

Other revenue

1,682

2,668

4,350

560

3,712

4,272

Investment (loss) income, net(3,638)(17,360)(187,501)(20,998)-

4,553
135,380

45,848(135,380)

50,401-

52,275

265,767

169,319

48,333

217,652

Net assets released from donor restrictions

187,501
213,492

Total support and revenue
Expenses:
Program services:
Field programs

99,865-99,86570,188-70,188Grantmaking divisions

46,961-

46,961

36,792-

36,792

Moore Center for Science
Center for Natural Climate Solutions

8,834
7,913

-

8,834
7,913

7,886
3,674

-

7,886
3,674

Center for Sustainable Lands and Waters

5,191

-

5,191

4,112

-

4,112

Communications

4,338

-

4,338

5,090

-

5,090

Other programs

10,397-

10,397

8,384

-

8,384

183,499-

183,499

136,126-

136,126

Management and operations

11,862-Fundraising-

11,862
17,004

10,633
12,626-

10,633
12,626

Total supporting services

17,004
28,86628,86623,259-23,259Total expenses

212,365-

212,365

159,385-

159,385

1,127

52,27553,402

9,934

48,33358,267

-

(697)

(697)

-

198

198

1,127

51,57852,705

9,934

48,531

58,46528,073352,518

380,591

18,139303,987

322,126

Total program services
Supporting services:

Changes in net assets before
other income and losses
Other income and losses:(Loss) gain on translation of affiliate andfield office net assets
Changes in net assets
Net assets:
Beginning
Ending$29,200$404,096

See notes to consolidated financial statements.

4$433,296$

28,073$352,518$

380,591

Conservation International Foundation and Affiliates
Consolidated Statement of Functional Expenses
Year Ended June 30, 2022
(In Thousands)

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

Moore
Centerfor
ScienceGrantmaking
DivisionsCenter for
Natural Climate
SolutionsCenter for
Sustainable
Lands andWatersCommunications

Management
andOperations

Other Programs

Fundraising

Total

$

44,517
20,847
17,275
7,994
3,173
4,424
225
1,410

$

9,081
33,944
2,491
343
559
162
94
287

$

6,044
434
1,338
175
443
140
80
180

$

3,127
3,701
549
135
163
66
42
130

$

3,314
942
407
169
168
47
30
114

$

2,941
936
37
293
41
34
56

$

6,329
1,508
1,317
578
453
130
82
-

$

9,463
1,308
333
140
217
99
302

$

10,792
2,736
1,504
504
183
77
1,208

$

95,60861,37628,357
11,268
5,896
5,410
763
3,687

$

99,865$46,961

$

8,834

$

7,913

$

5,191

$

4,338

$

10,397$

11,862$

17,004$

212,365

See notes to consolidated financial statements.

5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 supplies
Travel, meetings and events
Depreciation
Other expenses

Moore
Centerfor
ScienceGrantmaking
Divisions

Communications

Center for
Sustainable
Lands andWatersCenter for
Natural Climate
SolutionsManagement
andOperations

Other Programs

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.

6

Conservation International Foundation and Affiliates
Consolidated Statements of Cash Flows
Years Ended June 30, 2022 and 2021
(In Thousands)
2021

2022
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 loss (gain) on investments
Net realized and unrealized gain on other assets
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$

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 (used in) provided by investing activities
Cash flows from financing activities:
Proceeds from notes payable
Principal payments on notes payable
Net cash provided by 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$52,70558,465763
23,725(124)

984(46,612)
(17)

199

(204)

695
68

230

(16,279)
1,363
(934)
(989)

458
630
(606)
(892)

2,045
979
1,146
23,02788,389

260
736
(210)
17,46530,687

99,796(133,948)(27)
405(3,081)(36,855)

130,643(100,196)(23)
760(2,178)29,006

250
(109)
141

1,250
(219)
1,031

51,67560,724

162,693

101,969$

214,368$

162,693

$

1

$

4

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 sustainable development path.
CI focuses its efforts on four areas:
Confronting climate change by protecting nature: CI works to reverse the destruction of tropicalforests; protecting and restoring these ecosystems could provide at least one-third of all global actionneeded to avoid the worst climate scenarios.
Protecting our oceans at scale: CI works to protect the ocean on an unprecedented global scale while
sustaining fisheries, which provide food security for billions of people. CI’s goal is to help double the areaof protected ocean area by 2025.
Creating holistic models of sustainability: CI creates self-sustaining, scalable conservation models
within larger geographic landscapes and seascapes, ensuring that nature and people can thrive together.
Innovating science and finance to accelerate conservation: CI works to generate and apply policyrelevant research while working to unlock greater investment in nature.
Affiliates: The accompanying consolidated financial statements include the operations of
CI-Aotearoa in New Zealand, CI-Brazil, CI-Europe in Belgium, CI-Guyana, CI-Hong Kong, CI-Japan, CIMexico, CI-Philippines, CI-Singapore, CI-Suriname, CI-UK, Conservation South Africa, and Yayasan
Konservasi Cakrawala Indonesia. All the aforementioned organizations are separately incorporated intheir respective countries. Due to the significant amount of oversight and support (financial andprogrammatic) 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, 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.
Accordingly, all financial activities of CI Ventures have been consolidated with CI.
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 — which dealt a blow to lucrative ecotourism in the region— highlighted the need to financially support those working to conserve these vital ecosystems. All
financial activities of the African Conservancies Fund LLC have been consolidated with CI.

8Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
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: On September 2020, the Financial Accounting Standards Board(FASB) issued Accounting Standards Update (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 this ASU is intended to increase the transparency of contributed nonfinancial assets, or
gifts-in-kind, for not-for-profit entities through enhanced presentation and disclosure. This ASU requiresthat nonfinancial assets are presented as separate line items in the statements of activities anddisclosures include a disaggregation of the amount contributed by category, a description of donor
restrictions if any, and valuation techniques for the contributed nonfinancial assets received. The update
was applied on a retrospective basis to the contributions recognized in the fiscal years ended June 30,
2022 and 2021. The adoption resulted in expanded disclosures around contributed nonfinancial assets(see Note 4).
Basis of presentation: The financial statement presentation follows the recommendations of the
Financial Accounting Standards Board (FASB) Not-for-Profit Entities topic of the Accounting Standards
Codification (ASC). CI is required to report information regarding its financial position and activities
according to two classes of net assets: net assets without donor restrictions and net assets with donor
restrictions.
Net assets without donor restrictions: Net assets without donor restrictions consist of contributions,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 specificpurpose; 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 theendowment 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 to those
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 is satisfied, net assets
with donor restrictions are reclassified to net assets without donor restrictions and are reported on the
consolidated statements of activities as net assets released from donor restrictions. This includes
conditional grants and promises to give that are recognized as earned in the year in which CI meets theconditions stipulated by the donor.
Use of estimates: The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (U.S. GAAP) requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue andexpenses during the reporting period. Actual results may 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.

9

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

Significant Accounting Policies (Continued)

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 sheets 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.
Foreign operations: The accompanying consolidated financial statements include the worldwide
operations of CI (affiliate and branch offices). At June 30, 2022 and 2021, assets held in foreign countries
totaled $32,219,000 and $18,204,000, respectively. The consolidated statements of activities include
support and revenue of $18,169,000 and $14,487,000 from foreign country programs for the years ended
June 30, 2022 and 2021, 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.

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

Significant Accounting Policies (Continued)

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.

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 $17,855,000 and $9,671,000 of cash and cash equivalents on
hand and at financial institutions in foreign countries at June 30, 2022 and 2021, 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 promised, based upon anticipated payment dates. CI has established an allowance
for uncollectible pledges in the amount of $1,503,000 and $1,304,000 at June 30, 2022 and 2021,
respectively. This allowance is mainly based on potential de-obligations of existing restricted promises togive. Historically, de-obligations mainly arose in cases where CI has completed the project at less than
the full amount 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 $1,280,000 and $1,167,000 for the years ended June 30, 2022 and
2021, respectively.
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.

11

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

Significant Accounting Policies (Continued)

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, 2022 and 2021, CI was awarded the following amountsof conditional grants and promises to give but not yet recognized or earned (in thousands):
2022
Public funding
Foundations
Corporations
Individuals
Others$$307,009
88,951
20,084
3,130
10,169429,3432021$$

196,149
93,072
6,535
3,158
8,361
307,275

CI has made conditional promises (conditional grants) to implementing partners of $69,472,000 and$16,559,000 as of June 30, 2022 and 2021, respectively. Future payments are contingent upon theimplementing partners carrying out certain activities (meeting donor-imposed barriers) stipulated by the
grant or contract.
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.
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.
The timing of revenue recognition may not align with the right to invoice the customer. CI records
accounts receivable when it has the unconditional right to issue an invoice and receive payment,
regardless of whether revenue has been recognized. If revenue has not yet been recognized, a contract
liability (deferred revenue) also is recorded. If revenue is recognized in the advance of the right to invoice,a contract asset (accounts receivable) is recorded. Deferred revenue and refundable advances include$6,590,000 and $6,233,000 of contract liabilities as of June 30, 2022 and 2021, respectively. Grants andpromises to give include $1,373,000 and $1,199,000 of contract receivables as of June 30, 2022 and
2021, respectively. The opening balances as of July 1, 2020 were $4,608,000 for contract liabilities and$1,183,000 for contract receivables.
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, 2022 or 2021.

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 and refundable advance: CI records both grant payments received in advance ofsatisfying the donor-imposed conditions in addition to contract liabilities as deferred revenue andrefundable advance.
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.
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.
13

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

Significant Accounting Policies (Continued)

Pending 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.
Subsequent events: CI has evaluated subsequent events through January 6, 2023, the date on which
consolidated financial statements were available to be issued.
Note 3.

Liquidity and Availability of Resources

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

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, 2022 and 2021, the following financial assets are available to meet annual
operating needs for the upcoming fiscal year (in thousands):
2022
Financial assets at year-end:
Cash and cash equivalents
Investments
Grants and promises to give, net
Notes receivable
Total financial assets available
Less amounts not available to be used within one year:
Investments related to board-designated endowment
Grants and promises to give due after one year
Notes receivable due after one year
Deferred revenue to be recognized after one year
Time and purpose restricted net assets released after one year
Perpetual restricted net assets
Total amounts not available to be used within one year
Financial assets available to meet general expenditures within one year

14

$

$

214,368
273,551
54,503
6,854
549,276
22,90417,016
4,863
72,365
270,667
13,321
401,136
148,1402021$$

162,693
263,000
39,186
4,178
469,057
22,346
3,739
3,397
44,346234,387
13,321
321,536
147,521

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

Liquidity and Availability of Resources (Continued)

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 $22,904,000 and $22,346,000 as of June 30, 2022 and 2021, 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 5 fordisclosures about investments).
Note 4.

Contributions of Nonfinancial Assets

Contributed nonfinancial assets utilized in programs and activities for the years ended June 30, 2022 and
2021, are as follows (in thousands):
Category

Utilization in
Programs/Activities

Professional Services

Legal Services

Service Providers

Communications andfundraising

Other

Airfare, sublease office space, No associated donor
staff morale costs
restrictions

Donor Restrictions
No associated donor
restrictions

Valuation Techniques and Inputs
Fair market value provided by firm basedon lawyer rate and hours worked

No associated donor
restrictions

Estimated fair market value of media
provided by service provider
Estimated fair market value based onwholesale values for similar ticket pricing,
local real estate or products in the UnitedStates

2022
$

$

850

2021
$

1,161

368

-

62

6

1,280

$

1,167

The above contributed nonfinancial assets were utilized in operational and program activities consistent
with donor restrictions, where applicable.
Note 5.

Investments and Fair Value Measurements

Investment (loss) income for the years ended June 30, 2022 and 2021, consists of the following (inthousands):
2022
Realized and unrealized (loss) gain , net
Interest and dividends
Investment management fees

$

$

15

(23,725)
3,681
(954)
(20,998)

2021
$

$

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

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

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, 2022 and 2021.
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 5.

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, 2022 (in thousands):
2022
Description
Cash and cash equivalents:
Money market funds
Certificates of deposit

Investments:
Common stocks:
Consumer goods
Financial services
Technology
Industrial goods
Healthcare
Basic materials
Services
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 245,50075,000$ 120,500

$

$

$

$

17

5,348
3,118
1,098
1,095
485
333
58
11,535$--

Level 3
$
$

$

Total

-

$

45,50075,000$ 120,500

-

$

5,348
3,118
1,098
1,095
485
333
58
11,535

23,117
175
23,292--

23,117
175
23,292-

47,66634,204
12,482
94,352-

47,66634,204
12,482
94,35244,503
1,516
46,01980,846

94,352-44,503
1,516
46,019175,198

80,846$ 94,352-

98,353$ 273,551$

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

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
Financial services
Technology
Industrial goods
Healthcare
Services
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
2,163
1,160
684
269
167
9,019

4,576
2,163
1,160
684
269
167
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$(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 5.

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, 2022 and 2021.
The following table provides additional information about the investments by strategy (in thousands):
Fair Value at June 30,
2022
2021

Investment Strategy
Equity (a)Fixed income (b)$$89,0609,293
98,353$$

UnfundedCommitments

93,802
1,712
95,514$$

28,694
28,694

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, 2022, about 36% 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, 2022, cannot be liquidated in advance of theirnatural termination.
Note 6.

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, 2022 and 2021, are due asfollows (in thousands):
2022
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$$

39,702
17,01656,718(712)(1,503)54,5032021$$

36,7683,739
40,507(17)(1,304)
39,186

CI’s grants and promises to give receivable balance include receivables from the federal government,
foreign governments and private donors. CI’s 10 largest contributors during the year ended June 30,
2022, comprised approximately 57% or $150,673,000 of total support and revenue. CI’s 10 largest
contributors during the year ended June 30, 2021, comprised approximately 41% or $88,749,000 of total
support and revenue. CI’s 10 largest grants and promises to give receivable balances, before net present
value and allowance for uncollectible pledges, comprised approximately 63% or $35,541,000 at June 30,
2022, and 59% or $24,093,000 at June 30, 2021.

19

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

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, 2021, CI committed and paid $6,000,000 to the fund, of which $1,763,000
had been deployed as a capital contribution, leaving a balance of $4,237,000 as a project advance to thepartner. During the year ended June 30, 2022, an additional $1,563,000 was deployed, resulting in$2,674,000 remaining as a project advance to the partner.
In addition, CI Ventures also provided a project advance to an investment partner of $200,000 as of June30, 2022.
Note 8.

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, 2022, bears interest at rates ranging from 2% to 10% and are due between December 2022 andMarch 2032.
At June 30, 2022 and 2021, notes receivable, totaled $6,854,000 and $4,178,000, respectively. There
was no allowance for uncollectible notes at June 30, 2022 and 2021.
The following schedule shows required future minimum repayments (in thousands) at June 30, 2022:

Years ending June 30:
2023
2024
2025
2026
2027
Thereafter

$

$

20

1,991
1,484
1,502
718
1,003
156
6,854

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

Property and Equipment

Property and equipment at June 30, 2022 and 2021, consist of the following (in thousands):
2022
Furniture and equipment
Leasehold improvements
Land
Buildings$

Accumulated depreciation and amortization
Net property and equipment

$

6,111
4,151
131
564
10,957(6,826)
4,131

2021
$

$

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

Depreciation and amortization expense for the years ended June 30, 2022 and 2021, was $763,000 and$984,000, respectively.
Note 10.

Notes Payable

Notes payable at June 30, 2022 and 2021, consist of the following (in thousands):
2022
Private investors
L’Agence Française de Développement

$
$

1,500
1,500

2021
$
$

1,250
109
1,359

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. This agreement ended in July 2021. Through CI’s African
Conservancies Fund LLC, CI also entered into loan agreements with several private investors in order tofund this entity, which identifies and provides financing to African conservancies in need. The remaining
loan principals are due in December 2027 and bear interest rates of 2%.
Interest expense for the years ended June 30, 2022 and 2021, was $40,000 and $9,000, respectively.
Note 11.

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, 2022 and 2021, CI’s total grant payable were $2,276,000 and$1,130,000, 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.

21

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

Net Assets

The components of CI’s net assets were as follows as of June 30, 2022 and 2021 (in thousands):
2022
Without donor restrictions:
UndesignatedBoard-designatedTotal net assets without donor restrictions

$

6,296
22,90429,200$390,775
13,321
404,096$$

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

$
$

2021
5,727
22,34628,073$

339,197
13,321
352,518$

Net assets with donor restrictions are funds with time or purpose stipulations imposed by the donor.
During the year ended June 30, 2022, there were $239,776,000 in new funds with donor restrictions and$187,501,000 released from restrictions. These funds also incurred a net loss of $697,000 due to foreign
currency translations. These activities resulted in a $404,096,000 net asset with donor restrictionsbalance as of June 30, 2022, consisting of the following amounts by program (in thousands):

Management and operations *Field programs
Grantmaking divisions
Other programsCenter for Natural Climate
Solutions
Moore Center for Science
Communications
Center for Sustainable Lands
and Waters

June 30,2021

Operating
AdditionsOperatingReleases$ 157,140
71,35944,05230,605$ 55,109
94,09847,155479

26,443
10,461
7,990

21,944
10,308
8,625(7,753)(6,588)
(481)

4,468
$ 352,518

2,058$ 239,776(3,233)$ (187,501)$(43,184)(71,964)(49,869)(4,429)Non-Operating
Activity
Reclassifications

June 30,2022$(31,013)
8,266
4,263
10,972$ 137,355
101,759
45,601
37,627

274
1,103
5,204

40,90815,284
21,338

931
-

4,224
$ 404,096

(697)
-

$

-

$

(697)

$

* This amount is restricted due to time or is unallocated flexible funding for future years.

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

Net Assets (Continued)

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 $352,518,000 net asset with donor restrictionsbalance as of June 30, 2021, consisting of the following amounts by program (in thousands):
June 30,
2020
Management and operations *Field programs
Grantmaking divisions
Other programsCenter for Natural Climate
Solutions
Moore Center for Science
Communications
Center for Sustainable Lands
and Waters$ 157,217
64,17843,645
17,529$OperatingOperating

Non-Operating

June 30,

Additions

Releases

Activity

2021

32,711
61,30532,74817,196$(32,986)(54,124)(32,341)(4,120)$198-$ 157,140
71,35944,05230,605

3,844
7,180
6,504

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

26,443
10,461
7,990

3,890

2,958

(2,380)-4,468

183,713$ (135,380)

198$ 352,518$ 303,987$$* This amount is restricted due to time or is unallocated flexible funding for future years.

23Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 13.

Endowment Funds

Management has interpreted the state of California’s enacted version of Uniform Prudent Management ofInstitutional Funds Act of 2006 (UPMIFA) as requiring the preservation of the fair value of original donorrestricted contributions as of the date of the gift, absent explicit donor stipulations to the contrary. As aresult of this interpretation, CI classifies as donor restricted endowments: (a) the original value ofpermanently restricted cash contributions and (b) the discounted value of the future perpetually restrictedcash 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 manner consistent with the standard of prudence prescribed by UPMIFA. In accordancewith UPMIFA, CI considers the following factors in making a determination to appropriate or accumulate
donor-restricted cash 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, 2022 and 2021 (in thousands):
2022
With Donor Restrictions
Time and Purpose
Perpetual In Nature

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

22,90422,904$$$$

22,34622,346$$

13,321
13,321$$

2021
With Donor Restrictions
Time and Purpose
Perpetual In Nature

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

10,451
10,451

Total

$
$

24

16,24916,249$$13,321
13,321

23,772
22,904
46,676

Total$$

29,57022,346
51,916

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 13.

Endowment Funds (Continued)

Endowment fund activity for the years ended June 30, 2022 and 2021, consists of the following (inthousands):

Endowment net assets, beginning of year
Investment return:Interest and dividends
Realized and unrealized
losses 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

2022
With Donor Restrictions
Time and Purpose
Perpetual In Nature

$

$

$

22,346

16,249$13,321$

51,916

124

134

-

258

(3,840)(726)
5,000
22,904(4,774)(1,158)10,451

13,321(8,614)(1,884)5,000
46,676$$

Without Donor
Restrictions

2021
With Donor Restrictions
Time and Purpose
Perpetual In Nature

$

$

$

Total

12,278

10,132$

13,318$

Total$

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$$$

Endowment funds are invested in the following manner as of June 30, 2022 and 2021 (in thousands):
2022
Common stocks
Alternative investments
Fixed income
Mutual funds
Commodities

$

$

25

16,59020,396
6,550
1,624
1,516
46,6762021$$

17,052
22,347
8,368
2,658
1,491
51,916

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 13.

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 $10,451,000 and$16,249,000 at June 30, 2022 and 2021, respectively, and are included in net assets with donor
restrictions (time and purpose).
Funds with deficiencies: From time to time, the fair value of assets associated with individual donorrestricted endowment funds may fall below the level that the donor requires CI to retain as a fund of
perpetual duration. As of June 30, 2022 and 2021, there were no funds with deficiencies.
Note 14.

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, 2022
and 2021, amounted to $2,258,000 and $2,097,000, 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, 2022 and 2021, were $292,000 and $238,000, 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 $163,000 and $155,000 at June 30,
2022 and 2021, respectively.

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

Related-Party Transactions

During the years ended June 30, 2022 and 2021, 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 years ended
June 30, 2022 and 2021, CI received $0 and $3,250,000, respectively, in grant revenue for work withindigenous people, and $0 and $1,000 in contract revenue for services provided. At June 30, 2022 and
2021, there were also remaining related party net receivable balances of $1,125,000 and $2,175,000,
respectively.
Note 16.

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:
2023
2024
2025
2026
2027
Thereafter

$

$

3,408
2,929
2,654
2,569
2,497
22,96937,026

Total rent expense for the years ended June 30, 2022 and 2021, was $3,938,000 and $4,097,000,
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.

27

Conservation International Foundation and Affiliates
Notes to Consolidated Financial Statements
Note 16.

Commitments and Contingencies (Continued)

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, 2022 and 2021, was $5,485,000 and$6,570,000, respectively. CI draws funds quarterly, based on the prior quarter’s spending.
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. For individual claims, CI’s liability is capped at$175,000 and $150,000 as of June 30, 2022 and 2021, respectively. At June 30, 2022 and 2021, CI had
medical claims accruals of $475,000 and $336,000, respectively, which are included in accrued salaries,
vacation and employee benefits in the accompanying consolidated balance sheets.
Note 17.

Analysis of Field Program Expenses

The following is a breakdown by region of Field Program related expenses for the years ended June 30,
2022 and 2021 (in thousands):

2022
South and Central America
Asia Pacific
Africa and Madagascar
Oceans$$
Note 18.

44,23224,80818,622
12,20399,8652021$$

29,841
19,19013,107
8,050
70,188COVID-19

The continued global pandemic in 2020 has created substantial volatility in financial markets and theeconomy, 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 befurther negative impact to operations, the extent to which will depend on future developments, which arehighly uncertain and cannot be predicted and as such cannot be determined.

28