QUICKLINKS

On the Corporate Governance of the SGI-USA

Thank you for your interest in SGI-USA.  We would like to take this opportunity to provide you with a report on SGI-USA’s corporate status and how your contributions are being used to further advance American kosen-rufu.

1. OVERVIEW

SGI-USA was established in California under that state’s Nonprofit Religious Corporation Law and is an exempt church organization under Section 501(c)(3) of the U.S. Internal Revenue Code.  As such, all of SGI-USA's assets (cash, equipment, real estate, etc.) are irrevocably dedicated to its religious purposes and all contributions are fully tax-deductible to the donor.

There are several conditions attached to this granting of tax-exempt status.  None of the assets of the organization may benefit any private individual, nor may they be used on behalf of or in opposition to any candidate for public office. 

SGI-USA provides support to its members in their efforts to practice and propagate Nichiren Daishonin’s Buddhism.  It has clearly defined sources of income and expenses.  The overwhelming majority of its revenue comes from direct contributions by members. 

All contributions are used for SGI-USA's exempt religious purposes: to support the faith and practice of SGI-USA members and promote the propagation of Nichiren Buddhism and the SGI philosophy throughout the United States.

2. REVENUES

SGI-USA is funded in the following ways:

• Contributions (including those given during the May Commemorative Contribution period, at World Peace Prayer meetings, or mailed in during the course of a year)—which are by far our most important source of funds;
  
  
• Subscriptions to our periodicals—World Tribune and Living Buddhism—and bookstore sales.  In general, we try to price the World Tribune and Living Buddhism so that we just cover our costs.  Our goal is to make these two vital publications as widely accessible as possible.
  
  
• Fees for participation in conferences (primarily those held at the Florida Nature and Culture Center) and larger events; and
  
  
• Other sources, including income from our long-term investment program.

Please see the pie chart below for the proportion of revenue from different sources in 2007.

3. EXPENSES

Please see the chart below showing how SGI-USA made use of operating funds in 2007:

Thanks to the support of SGI-USA contributors like you, we are able to carry out a wide variety of programs and facilities construction and maintenance efforts. Some examples are:

        a. Community Relations Programs

• The "Gandhi, King, Ikeda: A Legacy of Building Peace" exhibition has been seen by over one million viewers at 100 locations since its launch in 2001.
  
  

• The "Building a Culture of Peace for the Children of the World" exhibition was launched in the United Nations public lobby in February of 2003.  It is now available to all SGI countries and has been shown more than 100 times in countries around the world.
  
  

• The establishment of Culture of Peace Resource Centers in Santa Monica, Chicago and New York which have sponsored the Culture of Peace Distinguished Speaker Series. Thirteen speakers were featured in 2007, including former U.N. Under-Secretary-General Anwarul K. Chowdhury and Nobel Peace laureate Betty Williams.
  
  

• Community engagement in the form of relief efforts centering around SGI-USA youth during the Southern California wild fires in 2007 as well as efforts to assist Hurricane Katrina victims in 2005.
  
  

• Diversity Festivals including members of SGI-USA’s gay, lesbian, bi-sexual and trans-gender (GLBT) group as well as events in the Cambodian, Chinese, Japanese, Korean Lao, Thai and Vietnamese communities.
  
  

• Establishment of a Peace and Community Relations Department in the Central, East and West Territories.
  
  

• Interfaith initiatives like involvement in the Los Angeles Westside Martin Luther King Jr. Birthday Coalition and SGI-USA’s co-sponsorship of the annual 9/11 Unity Walk under the aegis of the Interfaith Conference of Metropolitan Washington, DC.
  
  
• The Victory Over Violence (VOV) initiative to help young people identify and counteract the root causes of violence in their lives and in their communities. VOV outreach programs began in 1999 as a response to growing concerns over the rise in youth-related violence.  Since then, Over 10,000 small group discussions have been held throughout the United States, and more than 500,000 non-violence pledges have been signed.

        b. Facilities and Maintenance

Thanks to members’ generous contributions in 2007, we were able to undertake or continue a number of important facilities projects, including:

• Construction of the Washington D.C. Culture Center;
  
  
• Continued restoration of the Florida Nature and Culture Center following Hurricane Rita;
  
  
• Completion of key renovations at the San Francisco Culture Center
  
  
• Opening of a new center in Burbank, CA; and
  
  

• Relocation of centers in Atlanta, GA and Tampa, FL.

        c. Long-term Savings

Looking toward the long-term future of kosen-rufu in America, SGI-USA sets aside a portion of the income it receives each year in a long-term savings and investment program, managed professionally by independent financial advisers with long experience and a solid track record.

        d. Administration

This includes expenses related to insurance, accounting, legal and other professional services; personnel expense; travel; and purchase of office supplies and equipment.

        e. Fundraising

SGI-USA does not use third-party media, specialized fundraising organizations, or other such outside services to promote contributions from its membership. Instead, all fundraising is conducted through person-to-person dialogue, individual encouragement and study of Buddhist concepts related to the spirit of contribution. The only fundraising expenses incurred by SGI-USA are for printing receipts and envelopes, purchasing acknowledgment gifts for contributors (photographs, calendars, etc.), database administration, postage and related travel.

During 2007, SGI-USA’s fundraising expenses accounted for approximately 1 percent of total contributions received from member donations. This fundraising expense ratio is far less than the 35 percent benchmark contained in the Standards for Charity Accountability established by the Better Business Bureau’s Wise Giving Alliance.

4. AUDIT

An independent audit of SGI-USA’s business affairs is conducted annually. The audit is designed to sample and test compliance with restrictions and intent of members’ donations.

The firm of Moss-Adams LLP, one of the leading accounting and auditing firms on the West Coast, currently serves as the auditor of the SGI-USA. Moss-Adams was selected based on that firm’s reputation for integrity, independence and experience in auditing not-for-profit organizations.

Moss-Adams gave an unqualified opinion that the organization’s 2007 financial statements were in conformity with Generally Accepted Accounting Principles in the U.S. and accurately reflect its financial condition following their most recent audit of the SGI-USA which was conducted during 2008.

5. THE SGI-USA BOARD OF DIRECTORS

The primary functions of SGI-USA’s Board of Directors are to oversee the operations of the corporation, establish policies with respect to those operations, and review its
financial statements and internal controls.

The Board of Directors is composed of nine members (please visit the corporate governance section of our Web site for more information on the individual directors). All directors are long-term SGI-USA members who bring a variety of professional expertise to their fiduciary responsibilities. The SGI-USA General Director is a member of the Board of Directors.

Directors receive no compensation for their service on the Board.