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Consumer Reports the T Success at Consumers Union®: After Five Years “Bible” for Smart Shoppers

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Consumer Reports the T Success at Consumers Union®: After Five Years “Bible” for Smart Shoppers EXPERT INDEPENDENT NONPROFIT ANNUAL REPORT FISCAL YEAR 2006 OUR MISSION To work for a fair, just, and safe marketplace 8 for all consumers and to empower consumers to protect themselves ELECTRONICS FRANCHISE CONTENTS >> 3 From the Board Chair 4 From the President 6 Content Franchises 10 12 Action 14 CU Impact by the Numbers 18 Products & Awards HEALTH & FAMILY FRANCHISE 20 Donors & Fundraising 24 Policies & Practices 25 Financials 26 Board of Directors 27 Senior Leadership Team 20 Eleanor and Ray Devereaux, who are receiving a tax advantage and supporting CU with a gift of their home. DONORS & FUNDRAISING FROM THE BOARD CHAIR onsumers Union celebrated its 70th anniversary C in February, and that milestone caused me to reflect on CU and its early roots. Our founders conceived OUR VISION IS A of an organization that would pair a sense of realism about WORLD WHERE: how the marketplace actually is with an idealism about the way the market could—and should—be. Products and One of CU’s founding members was A. Philip Randolph, services are safe, the legendary civil rights and labor leader. Another board reliable, and affordable. member,Betty Furness, served in the Johnson administration as Special Assistant for Consumer Affairs. Today’s board members recognize the need to safeguard and continue the Consumers have the great legacy of our many distinguished predecessors. information and know-how To do justice to this legacy and to ensure that the 18-member to make good choices. board is always governed by leaders with an optimal mix of talents and expertise, we changed our election process in October 2005. Rather than being asked to vote for six Businesses treat members from a longer list of 10 to 12 candidates, you are consumers honestly, fairly, asked to vote yes or no for a slate of six nominees selected and with respect. by the board of directors. As a result, this year we’ll be adding three members to the CU board who bring new skills and energy from diverse experiences. From now on, Consumers Union is a we’ll infuse our board with new talent on a more regular basis; our bylaws now include term limits of no more than strong, powerful force in four three-year terms. making that happen. For all of us on the board, that means we must dedicate our energies diligently and consistently toward serving you, our members and subscribers, our other constituencies, and the larger community of realists and idealists interested in a fair, just, and safe marketplace. Thanks so much for your support as we carry forward the torch of our rich heritage. —Sharon Nelson CONSUMERS UNION3 ANNUAL REPORT FISCAL YEAR 2006 FROM THE PRESIDENT his was the year I achieved a new kind of free samples. It’s why many call Consumer Reports the T success at Consumers Union®: After five years “bible” for smart shoppers. as president and more than 20 before that as chair of the board, I received the ultimate affirmation: My 28-year-old daughter At the end of fiscal year 2006, we had a record 7.4 million told me that CU was finally talking to her generation. subscriptions to our flagship publication, Consumer Reports, our Web site ConsumerReports.org®, and our She had just seen the magazine featured in a spoof on the health and finance newsletters.That number doesn’t include Comedy Central network, in which the satirist Steven the 1.5 million copies of the magazine sold on newsstands— Colbert poked fun at the value of Consumer Reports® and an 18 percent increase over last year.Nearly 1 million readers consumer reporting in his regular diatribe. After all, he said, participated in our Annual Questionnaire, a survey that helps consumers already have an entire industry dedicated to telling us gather data on everything from how often your dishwasher people what to buy; it’s called, he said proudly,“advertising.” breaks down to your overall satisfaction with your bank. Colbert’s parody underscored the heart of CR’s mission. It’s We have 360,000 online activists who helped us pass a magazine that was born in 1936, when consumers lacked consumer-protection bills in more than 30 states on issues reliable information they could trust about the products and such as the disclosure of hospital infection rates and protection services they used in their daily lives. Not only did against identity theft. In college classrooms and doctors’ Consumer Reports take aim at ads by honestly testing offices, and on Capitol Hill, we mobilized around the issue their claims, but we’ve also refused to accept advertising or of prescription drugs, teaching our first college course on CONSUMERS UNION 4 ANNUAL REPORT FISCAL YEAR 2006 #7. Consumer Reports. Few industries have been quite so polluted by commercial interests as magazines, with too many advertorials and too much advertiser-friendly content raising serious questions about editorial objectivity. So let us all please remember this old war horse, eschewing advertising and giving us the straight scoops on our consumer culture, be it running shoes or life insurance policies.” —“50 Best Magazines,” Chicago Tribune, June 15, 2006 grassroots campaigning, bringing some of our best activists advocates, and others.And we would certainly not have the to Washington to lobby for pro-consumer legislation, and resources to achieve our ambitious goals without the support partnering with health-care professionals to disseminate of our readers and our loyal donors, especially those who credible drug information. have become members of the President’s Circle and the Leadership Circle.To all of you, I say thanks for making this Our impact echoed throughout the marketplace. In the year a hallmark one for CU—and for my daughter. spring, a bike helmet manufacturer, in conjunction with the —Jim Guest Consumer Product Safety Commission, recalled several thousand helmets just days after we alerted them to our test results of two models showing significant safety failures. Our report on potentially hazardous floor cleaners prompted one maker to put childproof caps on the product bottles. We were recognized by our peers in the journalism commu- nity for our public-service contributions, winning prestigious awards for our work on air cleaners and annuities. None of that would be possible without a mission-driven and innovative staff of more than 500 writers, editors, engineers, accountants, computer programmers, analysts, CONSUMERS UNION5 ANNUAL REPORT FISCAL YEAR 2006 >> CONTENT FRANCHISES HOW WE WORK: Consumer Reports, the granddaddy of watchdog publications ... won’t CU’S FIVE FRANCHISES let companies use its name in hining examples of the “one enterprise” culture at marketing materials.” S Consumers Union are our franchises, teams of —San Francisco Chronicle, July 24, 2005 staff members who oversee five content areas: autos, electronics, finance, health and family, and home. business, editorial, and technical divisions. Tech engineers are in charge of lab testing, editorial staff members over- Franchises speak to our unity of purpose in two ways. see newsgathering and the creation of our reports, They’re responsible for creating content tailored for each of advocates spearhead public-service campaigns and work our products, so that readers get the information they need, to effect legislative and regulatory change, and business when and how they want it. Franchises also exemplify our representatives make sure we consider all possible markets one-enterprise organization in that each one includes and opportunities. Working as a team ensures that our representatives from Consumers Union’s advocacy, voice is heard wherever it can make a difference. WE COULDN’T DO IT WITHOUT THEM MYSTERY SHOPPERS SURVEY RESEARCHERS CU’s anonymous shoppers buy the products you buy, so 2,000 people who have had knee or hip replacement have that we can test the products you use. But sprees with taught us a lot about how to deal with that painful surgery. CU mystery shoppers are unlike any other shopping trip. They might leave the store with 50 pregnancy-test kits 66,000 diners know more than we ever could about or 10 high chairs or 400 bottles of wine.They might have the food and service in 103 restaurant chains. to pull every can of paint off the shelf (or from behind And 23,000 readers have walked miles of aisles in the the counter) in search of the right manufacturing date. 54 supermarket chains we rated, to give us the low- And they might dig through the supermarket ice cream down on price, service, and cleanliness. case for so long that the manager asks them to leave. he Consumer Reports National Research Center™, CU’s 9 full-time in-house shoppers and close to 180 Twith its professional survey research staff, teams up out-of-town part-time shoppers work on multiple with our subscribers to go beyond lab tests. The Annual projects with short deadlines, to meet testing and Questionnaire is one of the largest surveys of its kind: publishing schedules. Close to 1 million subscribers participated this year, with And since our shoppers operate anonymously, they more 700,000 responses sent online. It not only covers can’t explain to curious, annoyed, or downright angry consumer experiences with services, but also measures store employees just why they need that box of laun- product reliability—how most makes and models of auto- dry detergent … no, not this one, that one. mobiles, for example, hold up on the road. CU shoppers succeed in buying thousands of the prod- CU’s state-of-the-art labs tell our readers which appli- ucts that you buy each year so that we can test them ances and electronics perform well in testing, but our and report back to you, in the hopes that we’ll make readers tell us which brands fail in the real world of your next shopping trip a little easier.
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