The Revealing Truth of the Money Trail of EWG

With every stand that you take there are those that will stand with you, those that will digest the information and think about it and others who will take a stand against you.  I know that is a risk that I took when I chose to publicly stand against the Environmental Working Group (EWG) and their Skin Deep Database. 

    

I debated posting what I found after I followed the money trail, since just my mention on social media that I was doing the research lost me a customer.  I'd prefer to remain neutral, but I fear that neutrality would result in continued damage to small businesses around the country by an organization that sadly lacks the science to back up their claims.  Being outspoken against the EWG may continue to cost me some customers, but I believe education is the key to fact based decisions and safe cosmetics.

In the past few months I have been terribly disturbed to see the Environmental Working Group send repeated emails requesting just another $10 donation.  Each letter sounds more dire than the next as if the world would literally end if the EWG didn't meet their budget. 

This inspired me to do a little digging to see just what Mr. Cook himself makes annually since he was making the earth shattering pleas for donations.  The only 990 I could get a hold of for the EWG was 2008. 

According to BA Carrington with Empowerment Enterprises, LTD, "They (EWG) have not filed a tax return on the 501 c 3 since 2008, according to the 990 database Exempt World, which is a subscription service to track 990’s.  Even though EWG is categorized as a charitable organization, it is still required to file a return under IRS codes and submit their “list of activities” to the IRS on an annual basis, even if they file an extension."  It could be that they have filed an extension and the deadline for the information has not yet passed based on their calender fiscal year.  For more details on this possibility click here. 

The EWG has stepped up it's fundraising to now include promoting the purchase of the very same sunscreens that they claim are bad for you through Amazon to raise money for the EWG.  Read more about that topic click here.

According to 2008 IRS Tax Filings

In 2008 Ken Cook was paid $219.401.00 plus another $21,295.00 estimated amount of other compensation from organization and related organizations. 

Richard Wiles $179,218.00 plus $20,998.00 estimated amount of other compensation from the organization and related organizations. 

Jane Houlihan $150,226.00 plus $19,448.00 estimated amount of other compensation from the organization and related organizations. 

William Walker made $136,448.00 plus 19,743.00 estimated amount of other compensation from the organization and related organizations.

Susan Comfort $115,752.00 plus $7932.00 estimated amount of other compensation from the organization and related organizations.

Sandra Schubert $127,229.00 plus $4884.00 estimated amount of other compensation from the organization and related organizations.

Alexander Formuzis $120.592.00 plus $10,920.00.  Christopher Campbell $136,909.00 plus $11,988.00 estimated amount of other compensation from the organization and related organizations.

Breaking it all Down

In case you got sick of reading the pay that is a total of $1,185,775.00 being paid to the top 8 employees of the Environmental Working Group just in 2008.  The total estimated amount of other compensation from the organization or related organizations for the top 8 at EWG was $117,248.00.  The total reported 2008 salaries for EWG was $3,203,747.00 in 2008.  The 2008 total revenue at EWG was $6,242,570.00.  Over half of their total revenue went into paying the employees of EWG. 

I am not opposed to making a profit.  I believe in Capitalism.  I also appreciate that it takes time, money and resources to pursue any public policy position. But still, more than half of the operating budget is a lot.  I am troubled when a non-profit that asks for $10 via email and $5 most of the time you click on their Skin Deep website as if they are on the verge of going out of business is spending so much of your money on their executives. 

In 2006 Ken Cook was reported to have been paid $192,000.00.  If Ken Cook continued at the same rate of pay increase over the past two years as he did from 2006 to 2008 he may be making as much as $245,000.00 (only an estimate based on the pay rate of increase from 2006 to 2008).

No wonder I get so many requests for another $5 or $10 donation from the EWG. At 2008 pay rates they need at least 118,578 people to donate $10 just to cover their top 8 executives pay...who knows how much is needed to cover it in 2009 and 2010?!

You have to wonder if the EWG is really hurting for money or if they just like to keep their budget at a certain number.  In 2008 the net assest or fund balances were $5,171,374.00 at the end of the year.  They were given gifts, grants, contributions and memberships fees in 2004 of $4,975,899.00, 2005 of $3,539,214.00, 2006 of $3,478,044.00, 2007 of $4,004,846.00 and 2008 another $5,963,800.00. 

A very revealing, carefully documented and thoroughly research of the history of and who is behind the EWG can be found on the Personal Care Truth website (click here to read.)

The EWG, Skin Deep and the Campaign for Safe Cosmetics have made many claims that cosmetic companies are financially driven to claim that ingredients are safe, I am simply wondering if EWG has a financial interest in saying that they are not safe.  I don't know many small business cosmetic owners who are making as much money as the top 8 at EWG. 

I'm just saying...in this economy do they really need your $10?  What do you think?  Does knowing the money trail color your impression of the EWG as a non-profit? 

To read just a few articles regarding the lack of science behind claims made by EWG and the organizations it works with read:
Straight From the Horse’s Mouth
David Steinberg Speaks Out Regarding the Battle Against Cosmetics
Are We Being Duped? :: Guest Post by Lisa Rodgers
Scratching Below the Surface :: Dene Godfrey Article Regarding Skin Deep
"We Don't Have the Science"
The Real Truth About Cocamidopropyl Betaine

Comments

[David]

Thanks for the reply Kayla. I'm going to read you past postings about EWG. It's great that you have compiled responses about their claims. It's such a shame that a company that is supposed to help consumers is just confusing them with either half-truths, bad research, or just plain lies. But I still need to figure out their motivation for doing so. Thanks again.

[Kayla]

David - all good questions. I brought up the money because the EWG was on a major marketing campaign to raise money and leaving comments that accused cosmetic companies of harming consumers for profit. It made me have to look at that side of the story.

There is a great website giving the other side of the story to what the EWG is saying. It is full of ingredient safety information and can be found at www.personalcaretruth.com

I have done several blogs debunking the safety claims that the EWG has done and they can be found in the "ingredients" segment of this blog as well.

[David]

I am reading a variety of blogs about this issue (including Donna Maria's Indie Beauty pieces about the proposed federal legislation pushed by EWG). I think following the money trail is good research for anything. But that is just one part of the answer. It's not really the whole story.

Let's say the leaders of EWG made 1 cent each for salary. So you wouldnt be able to focus on salary. You'd be left to focus on what they are actually saying.

I've been to their site several times. Their charts and values for what is potentially dangerous seems confusing and contradictory.

So what I want to read is a synthesis of what ingredients EWG are saying is damaging for consumer health, and whether their opinions are true or not.

Has that information been compiled anywhere?

Or is this whole thing about what is dangerous a matter of opinion? Does EWG say ingredient x can cause cancer (and show their data to back it up) and then Essential Wholesale says no it doesn't (and show their data to prove it).

Federal legislation that protects consumers from unsafe ingredients is a good thing. But who is going to decide what those ingredients are?????

[Kayla]

Sara,

I guess if you haven't read any of my other blogs showing repeatedly that the EWG does not have science to back up their claims then your statement might be true. I will have to add links to all the blogs showing their lack of science in order to back up that portion of the statement.

What I am saying is that the EWG has repeatedly made claims that cosmetic companies are only about the profit...it appears that EWG is about the profit as well of at least the top 8 executives. They profit from their agenda much more than the small businesses that are making cosmetics.

[Anne-Marie]

Wow. I'm on the board of two non profit organizations - and have been on different boards for the last fifteen years consecutively - and I have never, ever seen such high wages in any of the non-profits I've worked with.

You're right - it leaves a sour taste in the mouth to continue to ask for $5 and $10 here and there (all in the name of, my opinion only, fear mongering). I wonder if their constituents would be so thrilled to pay that $5 and $10 if they knew what the top execs were making.

Like you, I'm a fan of free market capitalism. I'm self-employed and I wouldn't have it any other way but I sell a product - I don't sell fear and I don't ask for donations to do it.

[Sara]

I don't understand the point of this article? Are you trying to suggest that because the EWG executives make a lot of money that the findings of their research isn't valid? I don't hear one argument for why you believe the EWG "doesn't have the science to back up their claims." You believe because Ken Cook makes 1,000,000 a year that the findings of EWG are bogus? That just doesn't even make any sense. The EWG does a great job of keeping people informed about the risks associated with the products most people use every day. You can choose to ignore that information. But to take a public stand because you believe it's hurting small business owners (again something you don't draw any evidence of in your piece) is irresponsible. Poor argument.

[Lynda Hatches]

When I first started my business I did research. Who did I find but skin deep. I read their post and soon clicked away. Being a Professional hair stylist I just couldn't find their claims to be true.
If any of what they said were true all hair stylist would have cancer and be seriously sick.
I also feel that if you Kayla are loosing clients because of this reporting it is ridiculous. People only want to hear what they want to.
My understanding of a non profit organization is that their financial status is to be public. Their should be a way to see what exactly they spend the money on. It should be open to public record.
You are doing a great job keep up the good work. I feel the true always wins.

[Marcia Elston]

Wonderful research and reporting, Kayla. I agree that it is difficult to maintain your own integrity and ethics when it comes to volatile issues such as this. Far easier to keep quiet than to suffer the potential ire of those who don't want to have to make the hard choices associated with moral or ethical challenge. There has been much speculation that good, honest, critical journalism is hard to find these days, hence wrong or shoddy political or business practices often go unnoticed by the general public. I applaud you for your willingness to ferret out the facts and report them, even if it may mean you lose a customer or two. I believe that most of us in the indie community will support your effort and maybe some will even join in. A chorus is more effective than a soloist. Just keep in mind those famous words, "There is nothing to fear except fear itself." Thank you heartily from another truth-seeker.