August 20, 2008

During a review of internal records in March 2008, Tides Foundation discovered that an employee had diverted funds for personal use—approximately $45,000 from Tides Foundation per year for three years. Within two days of being discovered the malfeasance was confirmed, the employee was dismissed and a police report was filed.

The Tides board of directors was also immediately notified of the matter and we retained an independent forensic auditor to investigate the incident. The auditor’s investigation confirmed that only one donor advised fund was involved and that no other staff members were complicit in the malfeasance. The advisor to that fund had been immediately notified of the activity when it was discovered and the monies were quickly restored to that fund through Tides’ operating reserves. Clients and partners of Tides Foundation were also notified of this incident by letter.

Tides has long been known for not only its commitment to positive social change, but also for its meticulous compliance record, oversight and sound financial management. As a public charity, maintaining strong internal controls and keeping pace with changes in regulatory compliance is a big part of our work, and it is something we take very seriously.

Using this as an opportunity to further strengthen extensive systems already in place, independent, external experts assisted in conducting a comprehensive review of financial controls and protocols.

For more than three decades, Tides has been committed to supporting economic justice, robust democratic processes and the opportunity for everyone to live in a healthy and sustainable environment where human rights are preserved and protected. We hope our response to this incident has served to underscore to the Tides community our deep commitment to our guiding principles, ethical culture and strong financial protections.

Tides is located in San Francisco’s Presidio, a national park on federal property. Therefore, this matter falls under the jurisdiction of the U.S. Attorney General. On August 19, 2008 a federal grand jury indicted the former employee who is charged with the theft. Tides will continue to cooperate fully with the investigation.

About Tides Foundation:

Founded in 1976, Tides Foundation partners with donors to increase and organize resources for positive social change. Our mission is to partner with philanthropists, foundations, activists and organizations across the country and across the globe to promote economic opportunity, robust democratic processes and the opportunity to live in a healthy and sustainable environment where human rights are preserved and protected. Tides Foundation is part of the Tides network of organizations which together provide an array of services that amplify your efforts to make the world a better place. With offices in San Francisco and New York City, Tides Foundation, Tides Center and Tides Shared Spaces provide fiscal sponsorship for over 200 groups across the country, operate and supports green nonprofit centers and have granted more than $600 million since 2000 alone. For more information, visit www.tides.org and www.tidesfoundation.org.

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