Traffick911 is a nonprofit organization whose mission is to free youth from sex trafficking through trust-based relationships. Traffick911 is principally funded through contributions and federal awards. Traffick911 was selected by the Office of the Governor in Texas to deliver the Voice & Choice Advocacy Program as a part of formally coordinated regional multi-disciplinary teams (MDT) in North Texas Counties. The Voice & Choice Advocacy Program began to grow exponentially in 2017 when these MDTs formed, which include formal partnerships with law enforcement agencies, district attorney offices, juvenile justice departments, child advocacy centers, state child protective services, and others, who work collaboratively within agreed-upon county protocols in order to best serve child sex trafficking victims. Currently, Traffick911 provides services to Dallas, Tarrant, Collin, Denton, and Ellis counties, serving over 200 child sex trafficking victims every year.
ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. FINANCIAL STATEMENT PRESENTATION The accompanying financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of Traffick911 and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions: Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. Net Assets With Donor Restrictions: Net assets subject to donor (or certain grantor) imposed restrictions. Some donor imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor imposed restrictions are released when a restriction expires, that is when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. INCOME TAXES Traffick911 is an organization other than a private foundation exempt from Federal income taxes under IRS Code Section 501(c)(3). Therefore, no provision has been made for Federal income taxes in the accompanying financial statements. FIXED ASSETS Fixed asset purchases of $5,000 and greater are recorded at cost. Contributions of fixed assets, other than software, valued at $5,000 and greater and contributed software with estimated useful lives greater than one year are recorded at their estimated fair value at the date of donation. Depreciation on fixed assets is provided using the straight-line method over estimated useful lives of the respective assets, ranging from 3 to 5 years. Leasehold improvements are depreciated over the length of the lease. Upon sale or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected as an increase or decrease in net assets without donor imposed restrictions. Maintenance and repairs are charged to expense and expenditures for improvements that extend the useful life of the assets are capitalized. FEDERAL AWARDS AND CRYSTAL CHARITY BALL RECEIVABLE Traffick911 has not recorded an allowance for uncollectible accounts because the receivables are considered to be 100% collectible. Traffick911 estimates allowances for uncollectible accounts by evaluating the creditworthiness, the historical collections, and the aging of the accounts. Once an account is deemed uncollectible, it is written off. Receivables are considered delinquent based on how recently payments have been received. FEDERAL AWARDS A significant portion of Traffick911’s revenue is derived from cost-reimbursable federal awards, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue when Traffick911 has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as refundable advances in the statement of financial position. Traffick911 has contracts for cost reimbursable grants of $1,943,868 for which qualifying expenditures have not been incurred and accordingly have not been recognized at 31 December 2025, with advance payments of $45,643 recognized in the statement of financial position as a grant advance. CONTRIBUTIONS Traffick911 recognizes contributions when cash, securities or other assets, an unconditional promise to give, or a notification of a beneficial interest is received. Conditional promises to give, those with measurable performance requirements or other barrier, and a right of return, are recognized when the conditions on which they depend have been met. FUNCTIONAL ALLOCATION OF EXPENSES The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, some expenses require allocation on a reasonable basis that is consistently applied. Wages, personnel benefits, and payroll taxes are allocated based on estimates of time and effort by personnel. Travel and mileage, professional services, fees, dues and subscriptions, office supplies, postage and printing, cell phone service, and other expenses are allocated based on management’s knowledge and review of individual transactions. SUBSEQUENT EVENTS Traffick911 has evaluated subsequent events for disclosure through the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
Funding from one grantor accounted for 59% of Traffick911’s total revenue for the year and two grantors accounted for 90% of total receivables at year end. At year end, Traffick911 had deposits in excess of FDIC coverage of $209,570.
Traffick911 receives grants for specific purposes that are subject to grantor review. Such reviews could result in a request for reimbursement by the grantor if unallowable costs are identified. Traffick911’s management believes that any liability for reimbursement which could arise as the result of these audits would not be material to the financial position of Traffick911.
Traffick911 evaluated current contracts to determine which met the criteria of a lease. The ROU assets represent Traffick911’s right to use underlying assets for the lease term, and the lease obligation represents Trafficik911’s obligation to make lease payments arising from these leases. The ROU asset and lease obligation, all of which arise from operating leases, were calculated based on the present value of future lease payments over the lease terms. The discount rate applied to calculate lease obligation as of 31 December 2025 was 3.65%, based on the risk free rate. Traffick911’s operating leases consist of leases for office space located in Addison, Texas. For the year ended 31 December 2025, total operating lease cost was approximately $120,000, excluding contributed rent of $30,000. As of 31 December 2025, the remaining lease term for Traffick911’s operating leases was 15 months. During the year, Traffick911 modified their lease to extend the lease term for one year. As a result of this modification, Traffick911 remeasured the lease liability, resulting in an increase of $117,595 to both the operating lease obligation and the ROU lease asset, respectively, based on a new discount rate of 3.65%. Future maturities of lease liabilities are presented in the following table, for the years ending 31 December: See reporting package for table
Traffick911 was provided facilities at below market rate for office space as a part of a noncancellable lease agreement through March 2026. Traffick911 recognized $30,000 in office lease expense for contributed facilities during the year ended 31 December 2025. Using publicly available commercial real estate rental listings, Traffick911 estimated the monthly rental payments to be $2,500 less than market value. The contribution revenue related to these facilities was recorded in 2021 when the lease was signed. The amount of contributed rent over the remaining lease term is reported as contributed facilities use receivable in the statement of financial position, and the related office lease expense is recorded straight line over the life of the lease in the statement of activities. The contributed space is used for Traffick911’s program activities.
See reporting package for table
Traffick911 provides a retirement benefit plan to its employees. Employees may contribute to the plan via payroll deductions and Traffick911 may make matching contributions at a discretionary rate. Traffick911 did not make any employer contributions to the plan during 2025.
See reporting package for table. As a part of Traffick911’s liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. The policy is that monthly revenues are to cover monthly expenses. Monthly revenues and expenditures are deposited in and deducted from Traffick911’s operating account. See Note 12 for details regarding the nature of donor imposed restrictions on net assets. Traffick911 has an existing line of credit totaling $40,000 which can be drawn upon in the event of an unanticipated liquidity need. Traffick911 made no draws on the line of credit during the year, and there was no balance outstanding at year end.
Traffick911 receives donated services from unpaid volunteers. These volunteers provide services to help around the office. These services are valued at approximately $1,722 and have not been recognized in the accompanying statement of activities, as they do not meet the requirements for recognition.
During the year ended 31 December 2025, Traffick911’s board and staff contributed $86,215.
See reporting package for table.
See reporting package for table.
As of 31 December 2024, net assets with donor restrictions were understated by $506,730, contributions receivable were understated by $262,091 and deferred revenue was overstated by $244,639 due to revenue not being recognized in accordance with GAAP. A prior period adjustment has been recorded to correct beginning net assets. The change in net assets with donor restrictions increased by $506,730 for the year ended 31 December 2024 as a result of this adjustment.