Where Does $100 to Oceana Go?

Oceana is a non-profit, tax-exempt 501 (c) (3) ocean conservation organization that advocates for policy changes by governments and corporations in order to preserve ocean life.

Based in Washington, DC, Oceana has offices across the world and is considered the largest ocean conservation advocacy group in the world. They do this by conducting their own scientific research, making policy recommendations, lobbying for specific legislative action, and filing and litigating lawsuits. Hence, the organization is staff intensive with 167 employees (as of 2017) that work on responsible fishing, plastics in the ocean, seafood fraud, climate change, and energy (i.e. drilling, blasting, and wind farms).

In 2017, Oceana raised $48 million (compared to $25 million the prior year) which came primarily from contributions, gifts, and grants.

Expenses totaled $38 million (79% of revenue) and can be viewed two ways:  by broad general category (i.e. grants, program services, fundraising, and management and general expenses) or by specific line item category (i.e. compensation, office-related expenses, travel and conferences, fees for services, grants, etc). Both are beneficial with the latter approach providing more detail on how revenue was spent.

The $10 million in unspent revenue was added to the general fund which increased from $27 million at the beginning of the year to $37 million at year-end. So, if you donated $100, $21 out of the $100 went to the general fund.  Let’s look at where the other $79 was spent:

Expenses by Broad General Category

The $38 million in expenses were categorized as follows:

• $23 million (48% of revenue):  Program Services
• $  5 million (11% of revenue):  Grants
• $ 7 million (14% of revenue):  Management and General Expenses
• $ 3 million (6% of revenue):  Fundraising

As illustrated above, program services used the largest portion of revenue (48%).

Grants totaled $5 million and primarily consisted of 3 grants: $3 million to Global Fishing Watch (a 501 (c) (3)) to operate and further develop the global fishing watch web platform; $700,000 to SkyTruth (a 501 (c) (3)) to create in partnership with Oceana global fishing watch software; and $200,000 to Walden Woods Project (a 501 (c) (3)) in Lincoln, MA to support land preservation and legacy of Henry David Thoreau.

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 48:  Program Services

-$  11:  Grants

-$ 59: Subtotal Program Services and Grants

$ 41:  Revenue Remaining

-$ 14:  Management and General Expenses

-$  6:  Fundraising

-$ 20: Subtotal Management and General Expenses and Fundraising

 $ 21:  Revenue Remaining:  To General Fund

As illustrated above, $59 out of every $100 was spent on program services and grants. $20 out of every $100 was spent on management and general expenses and fundraising leaving $21 unspent and allocated to the general fund.

Expenses by Specific Line Item Category

The $38 million in expenses were categorized as follows:

• $19 million (40% of revenue):  Compensation
• $ 4 million (8% of revenue):  Office-related Expenses
• $ 4 million (8% of revenue):  Fees for Services
• $ 3 million (6% of revenue):  Travel and Conferences
• $ 1 million (2% of revenue):  Advertising and Promotion
• $ 1 million (2% of revenue):  Equipment Rental and Maintenance
• $ 1 million (2% of revenue):  Other Expenses
• $ 5 million (11% of revenue):  Grants

Compensation is the largest expense for Oceana. 167 employees were compensated $19 million which equates to an average compensation of $114,000.  28 employees received more than $100,000 in compensation with the most highly compensated employee, Andrew F Sharpless, the CEO receiving $411,262.

Fees for services include primarily ($2.6 million) other fees with no other detail provided beyond a classification of program service ($1. million), fundraising ($.6 million), and management and general expenses ($.1 million) .  However, 12 independent contractors received more than $100,000 in 2017 with the five most highly compensated reported to be:

• $1.0 million:  M & R Strategic Services of Wash, DC for fundraising and advertising
• $ .8 million:  SkyTruth of Shephardstown, WV for consulting
• $ .6 million:  Neptune SPF of Torshavn for vessels lease for sea expedition
• $ .2 million:  Event Eleven of Los Angeles, CA for SeaChange event services
• $ .2 million:  Instalaciones Submarinas Barcelona of Barcelona, Spain for consulting

The $1 million in other expenses include dues and subscriptions, taxes, and fees, and depreciation.

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 40:  Compensation

-$  8:  Office-related Expenses

-$  8:  Fees for Services

-$  6:  Travel and Conferences

-$  2:  Advertising and Promotion

-$  2:  Equipment Rental and Maintenance

-$  2:  Other Expenses

-$ 68: Subtotal: Comp, Office, Fees, Travel, Conf, Advert, Equipment, and Other

 $ 32:  Revenue Remaining

-$ 11:  Grants

$ 21:  Revenue Remaining:  To General Fund

As illustrated above, the use of revenue is readily seen when broken down by specific categories.  Nearly half of revenue was used to compensate the 167 employees and paying for office-related expenses.  20% of revenue was used for fees for services (outside the organization), travel and conferences, advertising, equipment, and other expenses. 11% of revenue was used for grants to other non-profits. The unspent revenue – 21% – or $10 million – went to the general fund.  Given the spike in revenue from 2016 to 2017 ($25 million to $48 million) it is clear the organization is also growing their endowment.

To read the IRS Form 990 (2017), click here.