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Rainforest Alliance

Rainforest Alliance Inc.
665 Broadway, Ste 500
New York, NY 10012
U.S.A.
(212) 677-1900
www.ra.org

Founded in 1987


Where do they work?
Who works there?
What do they do?
What have they accomplished?
Financial data
How do they raise money?
Media and public discussion of the organization
Assessment by greendonor contributors

WHERE DO THEY WORK?


The Rainforest Alliance (RA) works in North, Central and South America and the Caribbean, Europe, China, India, Southeast Asia, Indonesia, the Phillipines, Japan, Australia, New Zealand, and one country (Guinea) in Africa.

WHO WORKS THERE?


RA has ___ full-time staff and ___ part-time or part-year staff.

The 25-member Board of Directors includes five people from business world, two who combine business with writing/editing, an investment analyst, three writers and a biologist/journalist, three attorneys, two physicians, a photographer, a banker, an actress, a graduate student (science), a former World Bank advisor, and a former United Nations program director, and a former real estate agent.

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WHAT DO THEY DO?


RA's approach is to "transform land-use practices, business practices and consumer behavior" so as to achieve sustainable land use and ecosystem protection. To that end it has developed certification programs for forestry and agricultural products and it's getting into such work with the tourist industry. Certification involves independent auditing to assess compliance with guidelines protecting the environment, wildlife, workers and local communities.
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WHAT HAVE THEY ACCOMPLISHED?


Since 1989 RA has certified (as of May 2005) 17.2-million hectares (42.5-million acres) of forest in 1205 operations in 50 countries.

The organization was a pioneer in sustainable agricultural certification, and RA says it now certifies 15 percent of the international market of bananas (65% of all bananas Chiquita gets from independent suppliers are certified), along with coffee, cocoa, citrus, ferns and cut-flowers.

RA says it has recently conserved two-million acres of forestland, and enrolled 40 new coffee and banana farms in its sustainable agriculture program. RA also developed certification systems for its tourism program, and it has disseminated best management practices to more than 25 tourism operators in four "biodiversity hotspots."

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FINANCIAL DATA



Table 1: Basic financial data for the Rainforest Alliance for the most recent years.
FISCAL YEAR
FINANCIAL DATA
rounded to million (M) or thousand (K)
EXPENDITURES
percent of total expenses
2003
(ending June 30, 2003)
Total revenue:
Total expenses:

Total assets (yr-end):
Total liabilities (yr-end):

$6.98M
$7.69M

$2.46M
$3.06M

Programs:
Administration:
Fundraising:
------------------
wages/benefits:
professional & consulting fees:
87%
2%
12%
------------------
49%
9%
2002
(ending June 30, 2002)
Total revenue:
Total expenses:

Total assets (yr-end):
Total liabilities (yr-end):

$6.11M
$6.61M

$2.40M
$2.29M

Programs:
Administration:
Fundraising:
------------------
wages/benefits:
professional & consulting fees:
87%
2%
12%
------------------
45%
13%
2001
(ending June 30, 2001)
Total revenue:
Total expenses:

Total assets (yr-end):
Total liabilities (yr-end):

$M
$5.25M

$2.33M
$1.72M

Programs:
Administration:
Fundraising:
------------------
wages/benefits:
professional & consulting fees:
84%
2%
13%
------------------
47%
12%
NOTES:
Source: IRS Form 990 (courtesy of www.guidestar.org).
Assets: in the most recent year (2002-2003), the main components were:
  • grants receivable (50%)
  • savings and temporary cash investments (25%)
  • security deposits (8%)
  • prepaid expenses and deferred charges (8%)
  • land, buildings, & equipment (5%)
  • other investments (3%)
  • Liabilities: in the most recent year (2002-2003), the main components were:
  • mortgages & other notes payable (82%)
  • accounts payable & accrued expenses (15%)
  • deferred rent liability (2%)
  • annuities payable (1%)
  • The figure for wages/benefits is the amount across all 3 categories (program, administrative and fundraising) as a percent of total expenses. Likewise for professional/consulting/contract fees.
     

    Table 2: Breakdown of revenue for the 2002-2003 financial year.
    Revenue Category
    As percent of total revenues
    Program service revenue (including government contracts) 39%
    Private individuals, companies, foundations1 38%
    Other2 9%
    Government grants 7%
    Membership dues 6%
    Net investment income & interest 1%
    1 We will ask for a breakdown of this category into the three components.
    2 "Other" revenue: net revenue from rent, asset sales other than securities, inventory sales, and special events, plus "other income".

    The Rainforest Alliance did give a breakdown of program spending by program in its latest IRS Form 990. We will ask the organization for that information.

    Table 3: Compensation for senior full-time staff for the 2002-2003 financial year.
    Compensation Number of individuals Job title(s)
    $134,160 1 Executive Director
    $117,480 1 Director of SmartWood certification program
    $100,152 1 Associate Director

    Compensation for outside professional services was very minor (just $56,317 for fundraising consultants).

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    HOW DO THEY RAISE MONEY?


    Program service revenue is the largest revenue component (39%; see table above); along with revenue from donations (38%).

    Major corporate donors ($100,000 to $250,000) in 2003 included

    Other major corporate donors ($50,000 to $99,999) in 2003 included
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    MEDIA AND PUBLIC DISCUSSION OF THE ORGANIZATION


    A recent book — Smart Alliance: How a Global Corporation and Environmental Activists Transformed a Tarnished Brand, by J. Gary Taylor and Patricia J. Scharlin, Yale University Press, 2004 — details the major transformation of Chiquita Brands International after it began partnering with the Rainforest Alliance.

    Discussion of the relationship between Rainforest Alliance and Chiquita described problems and shortcomings but indicated that significant progress has been made, particularly with regard to the environmental impacts of banana farming. Another source said that the relationship has improved working conditions but not workers' rights, and that this has strained relations between the NGO and "various stakeholders", particularly trade union organizations.

    A 1998 Cincinnati Enquirer article (since retracted) described Chiquita's unsafe use of toxic chemicals and disregard for workers' safety and alleged that Rainforest Alliance was effectively involved in green-washing Chiquita's bananas.

    The book Environmental And Social Standards, Certification And Labelling For Cash Crops (by Cora Dankers, Food and Agriculture Organization of the United Nations, Rome, 2003) reviews standards for organic and fair-trade cash crops in developing countries, including an assessment of the economics of Rainforest Alliance's Sustainable Agriculture program.

    An article in The Guardian points to an upsurge in RA coffee certification relative to (British-based) Fairtrade Foundation certification, which is attributes to the lower costs for buyers. (Fairtrade guarantees a very generous price for coffee, has a 5-cent "social premium" to invest in community projects regardless of whether the market price is currently high or low, and charges a licence fee of 2% to use the Fairtrade logo.)

    An online article compares the similarly named Fair Trade certification (by Transfair USA) with coffee certification by Rainforest Alliance. The former is more prevalent, covering about 300 cooperatives and half a million farmers, and standards differ, but the article suggests that the two systems complement each other.

    On its website, Kraft Foods discusses the partnership between itself and the Rainforest Alliance in the marketing of certified coffees.

    The book Green Gold: On Variations of Trush in Plantation Forestry by P. Romeijn (reviewed here and here) described a "international collusion" around a teak plantation scheme in Costa Rica owned by a Dutch citizen. The investment opportunity was heavily promoted as a business opportunity and as having conservation benefits. It had unrealistic stated expectations and yet was endorsed by WWF (World Wide Fund for Nature), Rainforest Alliance, and the Forest Stewardship Council, to the discredit of each.

    Finally, there is an argument that ecotourism promoted by NGOs like the Rainforest Alliance has opened the doors to more destruction of natural resources and ecosystems, disrupted community life in affected areas, and in some cases, forced indigenous people out of their traditional lands.

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    ASSESSMENT BY GREENDONOR CONTRIBUTORS


    [This section awaits the accumulation of input from visitors to the greendonor site.]

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