QUICKLINKS

On the Corporate Governance of the SGI-USA

Thank you very much for your interest in SGI-USA. Below is 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 are irrevocably dedicated to its religious purposes and all contributions are fully tax-deductible to the contributor to the extent allowed by law.

2. YOUR CONTRIBUTIONS AND HOW THEY ARE USED

SGI-USA is funded largely through the charitable contributions of its members, including:

• Those given during the May Commemorative Contribution period;
• Our Sustaining Contribution program; or
• General contributions made at World Peace Prayer meetings or mailed in during the year.

Regardless of source or timing, these contributions are used in the following ways:

1. Facilities and Maintenance



SGI-USA owns 30 facilities around the country for use by members, and leases an additional 65 more. With your support, we are moving steadily towards our short-term goal of 100 facilities for members' activities. Thank you very much!

Because of members' generous contributions in 2010, we were able to undertake or continue a number of important facilities projects, including:

• Purchase of a new community center in Oakland, California—now under construction;
• Purchase and renovation of the Oregon Buddhist Center in Lake Oswego, Oregon, outside Portland;
• Key improvements to the Florida Nature and Culture Center, celebrating the 15th year since its opening in June 1996;
• Opening of larger, improved rental facilities (including 2011) in Columbus, Milwaukee, and Ft. Walden City (Florida); and
• Rental of facilities for the Rock The Era festivals in 2010, as well as for monthly World Peace Prayer meetings in many outlying locations.


2. Activities for Members



In 2010, SGI-USA members' generous contributions helped fund many aspects of the four historic "Rock The Era" festivals held in Philadelphia, Chicago, Long Beach and Hawaii. Thanks to your support, we were able to gather more than 30,000 youth who commemorated the 50th anniversary of SGI President Ikeda's visit to the U.S. and pledged to take full responsibility to achieve kosen-rufu.



3. Community Relations Programs



Your contributions are used to fund a number of important 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 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
• 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.
• Establishment of a Peace and Community Relations Department in the Central, East and West Territories.
• Diversity Festivals including members of SGI-USA's lesbian, gay, bi-sexual and trans-gender (LGBT) group as well as events in the Cambodian, Chinese, Japanese, Korean Lao, Thai and Vietnamese communities.
• Interfaith initiatives like involvement in the Los Angeles Westside Martin Luther King Jr. Birthday Coalition.


4. Long-term Savings



Laying the foundation for 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.

5. General Expenses



This includes expenses related to insurance, accounting, legal and other professional services; human resources/compensation; travel; and purchase of office supplies and equipment.

6. Fundraising



SGI-USA does not use third-party media or fundraising organizations 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.

Our fundraising expenses consist of credit card discounts (i.e., fees deducted from members' credit card contributions by credit card issuers), printing, the purchase of acknowledgment gifts for contributors, database administration, postage and related travel.

During 2010, SGI-USA's fundraising expenses, the great majority of which were fees paid to credit card companies when members make contributions via that method, comprised less than 2 percent of total contributions.

3. OTHER INCOME SOURCES

Some other important sources of income for SGI-USA include:

• 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.
  
  (Later this year we will be starting out with an exciting new program that will enable our members to subscribe to both World Tribune and Living Buddhism, and have access to electronic version of both of these, for a single, lower subscription fee!)
  
  
• Fees for participation in conferences (primarily those held at the Florida Nature and Culture Center); and

Please see the pie chart below for a breakout of income and expenses from different sources in 2010.

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.

In 2010, Moss-Adams gave an opinion that the organization's 2010 financial statements were in conformity with Generally Accepted Accounting Principles in the U.S. and accurately reflect its financial condition.

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 ten members (please visit the Board of Directors page 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.

Directors receive no compensation for their service on the Board.