Family-friendly media review site web is organized as a charity, which allows a peek inside this dot-com operation.
It was odd to see a charity quoted in the the AP article (by Rachel Konrad) about the shareholder revolt at Take-Two Interactive Software, publisher of the video game Grand Theft Auto. But there was a gloating quote from James Steyer, CEO and founder of Common Sense Media (EIN 41-2024986 Form 990), whose web site offers family friendly reviews of movies, DVDs, TV, music, and books. Common Sense lobbied successfully on behalf of a California law that restricts the sale of violent video games to minors, and of course Grand Theft Auto
Common Sense Media has a reasonably successful web site that captures about 0.00265% of global Internet users, which is about ten times more than the Dove Foundation (EIN 38-3040503 Form 990), a Christian media review group that we talked about not too long ago (September 21, 2006). Common Sense Media is what pops up if you Google family friendly movie reviews. Still, it's nowhere near Rotten Tomatoes (part of Rupert Murdoch's News Corporation empire), with 0.114% of web users, 40 times what CSM pulls.
The Form 990 shows that the operation has $1.8 million in income, essentially all from fundraising and special events. The main expense, believe it or not, is executive salaries. Mr. Steyer and COO Susan Sachs each pull down $200,000 per year. There are six other staff over $50,000 a year that together earn $439,128. That leaves just $171,869 for other staff. The total number of staff isn't reported—line 90b is zero even though we know there are at least eight on staff (but it's a pretty common error to forget to report the number of staff on line 90b). The web site lists 38 reviewers, but it's anyone's guess wether they are compensated.
These executive salaries are pretty impressive for such a small operation. For comparison, Consumers Union (EIN 13-1776434 Form 990) is about 100 times the size of Common Sense Media and generates its income mostly from paid subscriptions to Consumer Reports. Of course it has a web site quite a bit more extensive than CSM's (not to mention spending about $2.5 million a year on product testing). CU's Executive director James Guest earns $393,345, VP Joel Guerin $368,225, and CFO Richard Gannon $295,453, not even double what the executives at CSM are taking home. It's worth noting, too, that unlike CU, there is no CFO in sight at CSM.
The actual costs of the web site are really pretty modest. There's $35,173 listed for web site host and maintenance and $77,871 for software development.
Eclipsing these costs is a consulting fee of $142,924. This is explained as a payment to Bridgespan Group (EIN 31-1625487 Form 990) for development of a five-year strategic plan. Bridgespan Group is the nonprofit arm of the Boston management consulting firm Bain & Company. (Bridgespan has income a little over $10 million a year, mostly earned income from consulting. Its CEO Jeffrey Bradach takes home $260,000 and VP Susan Colby $245,000.)
The note tells us that the strategic plan was paid for by a grant from Atlantic Philanthropies. The secretive, Bermuda-based Atlantic Philanthropies include a number of entities including in the US the Atlantic Foundation of New York (EIN 13-3562971 Form 990). The foundations assets are from the fortune of Charles F. Feeney, who made billions in duty-free shops in airports. According to the group's web site, its goal is to spend its entire multi-billion endowment by 2020 and wind up shop. But don't bother to apply for a grant—they call you if they're interested.
Getting back to CSM, I'll bet that strategic plan has something in it about developing sources of earned income, which is really tricky for a site whose value is based on its trustworthiness. The common source of income on the Internet is advertising, but any advertising would compromise the organization's mission. My suggestion is that they seek a merger with Consumers Union.