2011 Q3 Donor Update
Dear Donors,
From all the staff and volunteers at SCTNow, we want to say THANK YOU for continuing to make a
difference in our mutual calling to eliminate child sex trafficking. We simply cannot do what we do
without your generosity and support.
As SCTNow enters the peak of its annual walk season, we wanted to take a moment to discuss our
strategy, update you on our accomplishments to date, and highlight our plans going forward.
As many of you are aware, SCTNow—to our knowledge—is one of only a few nonprofit organizations
focused on child trafficking that concentrates on the demand side of this heinous crime. As such, we are
engaged in an ultra-marathon of sorts, where the inherent nature of our strategy requires a long-term,
disciplined focus and an ongoing commitment of time, effort and resources.
Our aim is to:
• develop an unparalleled partnership with local, state, federal and international law enforcement
officials and agencies
• provide factual, real-time intelligence that will enable law enforcement to focus limited
resources where they will have the greatest impact on commercial sexual exploitation
• become the premier provider of intelligence on human trafficking in the United States and
abroad
Our strategy will take time to bear significant, measurable results in the form of conventional
benchmarks such as x arrests in y cities. This is the unfortunate reality given the sophistication of the
illicit networks involved in child trafficking and the inherent nature of our legal system, which requires
proof beyond a reasonable doubt to convict.
However, our operations team, headed by Clark Stuart, a retired U.S. Navy SEAL, has been making
meaningful headway to this end—working as a “force multiplier” to police departments and building a
world-class, first-of-its-kind database on child trafficking networks.
The seeds that Clark and his team have carefully sewn will yield significant, measurable results over time
as we stay this course, and we will have far fewer perpetrators on the streets preying on our children.
Importantly, our operatives collect intelligence and make it available to law enforcement officials who
have the statutory authority to make arrests. We are not a substitute or replacement for law
enforcement or systems that are currently in place to combat human trafficking.
We are pleased to share with you some measurable results of our efforts both now and on a quarterly
basis going forward. As we get further into this ultra-marathon, we will add relevant statistics to these www.SCTNow.org P a g e | 2
SCTNow donor updates as they become available. Ultimately, our measurements will include those that
showcase a reduction in demand and its corresponding effects.
Thanks to your generosity, we are well on our way to realizing this objective while also making
significant headway in our awareness efforts nationwide. Awareness is a critical component of
educating America to the pervasiveness and seriousness of child trafficking with hopes of activating
every citizen to do their part in ending this horror in our nation and around the world.
Below is a summary of recent developments and accomplishments organized by SCTNow’s three focus
areas of (i) operations, (ii) awareness, and (iii) partnerships, along with a current snap-shot of our
organization and how we put your donations to work:
Recent Developments and Accomplishments
Operations
• Identified and documented more than 1,000 encounters with sexual predators, with an
additional 4-5 predators on average identified and recorded every day
• Launched SCTNow Cyber Division to monitor and capture online predator activity
• In coordination with DataTactics, created the Sexual Exploitation Network Analysis Tool (SENAT)
Database, an innovative, first-of-its kind proprietary database that serves as a central repository
for criminal evidence and is shared with law enforcement officials in order to seek prosecutions
and convictions against predators
• Executed a Memorandum of Understanding with the U.S. Department of Homeland Security and
three law enforcement agencies to provide them with access to the SENAT Database
• Established a first of its kind pilot program focused on ending child trafficking in Tulsa,
Oklahoma. The pilot program included:
o Close collaboration with Tulsa’s Mayor, Police Chief and Sheriff as they declared war on
child sex predators (Watch Press Conference)
o Working side-by-side with top Oklahoma legislators to develop a detailed plan to fight
child trafficking in Oklahoma
o Executing a detailed assessment of Tulsa’s human trafficking networks, providing
essential intelligence to Tulsa law enforcement officials
• Executed Phase 1 Operations in 17 cities including San Jose, Kansas City, Phoenix, Indianapolis,
Portland and Austin. Phase 1 includes initial research and assessment of the human trafficking
networks within a community, including the mapping of physical sites as well as internet
commercial sexual exploitation activity
• Received confirmation from the San Jose Police Department that they have been awarded a
grant from the Office for Juvenile Justice and Delinquency Programs to combat the sexual
exploitation of minors. The grant proposal included using the SENAT Database
Awareness
• Organized National Walk/Run Campaigns for three consecutive years in 63 cities across the
United States and Canada, spreading awareness and raising funds to stop child sex trafficking
• Educated approximately 200,000 individuals (a SCTNow estimate) on the issue of child slavery in
cities around the U.S. and in Canadawww.SCTNow.org P a g e | 3
• Worked with numerous organizations including World Vision, California Against Slavery,
Change.org and The Body Shop to advocate for important legislation for victims of sex trafficking
• Worked with Woodland Hills Church in Ashville, North Carolina to establish a victim outreach
call center, providing sex victims assistance with housing, medical care, transportation to safe
shelters and moral support. SCTNow provided the initial training and is assisting with the final
installation of equipment at the center
• Worked with Jerry Fralick, former Chief Information Officer (CIO) of the Office of Justice
Programs, U.S. Department of Justice, and currently CIO for the State of North Carolina to
promote awareness and programs of SCTNow on a national level with other State CIOs
• Secured free advertising on the NASDAQ billboard and the Thomson Reuters sign from Times
Square
2
(a Thomson Reuters/NASDAQ alliance) valued at $156,000 to run an awareness
campaign in Times Square, New York City. Below is a picture of one of the ads:
Partnerships
• Entered into a strategic alliance with Facebook, Inc. to utilize our expertise and technological
savvy to police Facebook for photos, videos and content that exploit children. This partnership
results in the removal of 10-20 predator accounts per day (Press Release)
• Since 2009, donated $5,400 and placed a product order of $19,000 with Nomi Networks, a
leading non-profit organization focused on using free enterprise and education to end human
trafficking. These funds protected the livelihood of 23 women and kept them from returning to
the sex trade as a means for basic survival
• Provided over $40,000 in grant funds since 2009 to 15 partner organizations focused on human
trafficking, including Abolish Slavery, Restore NYC, Chab Dai, Crossing Borders, DC Stop Modern
Slavery, Destiny Rescue, Good Weave By Rugmark, Not for Sale TN, Pearl Alliance, The Home
Foundation, Jacksonville Task Force, Shanyia Speaks, Mercy Ministries, The Sold Project and
World Relief NCwww.SCTNow.org P a g e | 4
Here is just a glimpse of what some of our strategic partners are saying:
“Facebook and SCTNow share a determination to protect children. Since
last year, we have partnered with Stop Child Trafficking Now to coordinate
our resources and cast a wider safety-net for those online. By working
together and leveraging SCTNow’s resources, we are able to make the web
and Facebook an even safer place for children and families.”
Fred Wolens, Public Policy Director
Facebook, Inc.
“Nomi produced 3,300 awareness-raising tote bags made by the survivors
at our partner organization in Cambodia, with 800 bags prominently
featuring our trademarked slogan, “Buy Her Bag, Not Her Body®.” The
remaining totes were produced for SCTNow. Your order helped us
generate revenue that prevented our partner organization from shutting
down, thereby protecting the livelihood of 23 women.”
Diana Mao, President & Co-Founder
Nomi Network
“Sex+Money would like to give a special thanks to Stop Child Trafficking
Now (SCTNow) for their collaboration in fighting sex trafficking in America.
SCTNow was filmed for the documentary back in 2009 and then rejoined
efforts with Sex+Money Campaign to host one of their 50 State Tour
screening events in New York City in August 2011. Through this
event, Sex+Money and SCTNow were able to raise awareness to about 200
people in the NYC area. The Sex+Money team is very grateful to SCTNow
for their generosity and support which made these efforts possible.”
Lindsay Diederichs, Associate Producer
Sex + Money: A National Search for Human Worth
“SCTNow’s methodology is new, effective, and does not duplicate previous
efforts. SCTNow has taken an asymmetric approach to combating human
trafficking and found a key need that is not being met by other nongovernmental/non-profit organizations. SCTNow has taken painstaking
efforts to ensure that their strategy complies with strict legal parameters
and is synergistically coordinated with city, state, and federal law
enforcement efforts.”
Dave Yarborough, Special Agent (Retired)
Federal Bureau of Investigationwww.SCTNow.org P a g e | 5
SCTNow—still very small but with a national reach
Historic timeline:
2008
- Lynette & Ron Lewis begin pursuing options for an awareness and fundraising campaign in New York City
- Ron and Lynette are introduced to Clark Stuart by Dr. Greg Wark; “demand-side” concept incubates
- Stop Child Trafficking Now becomes an initiative under parent organization, Strategic Global Initiatives (SGI)
- NYC offices of law firm Hogan and Lovell invite SCTNow to be their pro-bono client
- Sundy Goodnight begins as first part-time staff member focused on National Walk Campaign Development
- Ron, Lynette, Greg and Sundy attend White House briefing on human trafficking in Washington, D.C.
- Plans begin for full-scale national awareness and fundraising campaign
- SCTNow partners with Nomi Network to host 16 screenings of anti-trafficking documentary, Call & Response
- Local NYC church donates office space for SCTNow Headquarters
2009
- Faith Network donates website and logo redesign
- Ron and Lynette travel and promote SCTNow’s mission to churches, media and potential sponsors
- SCTNow partner program established to assist non-profits engaged in the fight against human trafficking
- SCTNow named as Project 7 “Help Those In Need” Grand Prize Winner
- SCTNow co-establishes first-ever Freedom Week NYC to promote awareness of human trafficking
- SCTNow National Walk Campaign covered by the CBS Morning Show, ABC, AM New York, and the AP
- SCTNow receives endorsement letter from U.S. Secretary of State, Hillary R. Clinton
- 8,000 walkers participate in inaugural SCTNow National Walks in 40 cities, raising over a half million dollars
- SCTNow Stilettos Run in NYC breaks Guinness World Record for most women running in high heels (318)
- CPA Firm Heveron & Heveron retained for financial auditing and reporting
- SCTNow presents operatives with first check for $300,000 to begin initial development phase
2010
- Operatives implement proof of concept in Tulsa, Oklahoma
- SCTNow hires 4 part-time staff to assist with 2nd
year national campaign
- SCTNow joins Do The Extraordinary to launch “Red With Love” anti-trafficking awareness campaign
- SCTNow establishes staff presence in Tulsa, Oklahoma
- 10,000 walkers participate in 2
nd
annual National Walk in 37 cities in the US, Canada and Australia
- SCTNow grants $400,000 to operatives
- SCTNow adds runners to the 2011 National Walk/Run Campaign
2011
- SCTNow enters into a strategic alliance with Facebook
- Times Square2
donates premiere advertising space in NYC Times Square for public awareness campaign
- SCTNow’s 3rd
annual National Walk/Run Campaign commences in 30 cities across the U.S. and Canadawww.SCTNow.org P a g e | 6
Current headcount:
- 1 full-time salaried staff
- 6 part-time salaried staff (with no benefits)
- 3 part-time volunteers
- 30 SCTNow Ambassadors (volunteer)
- 22 SCTNow Campus Ambassadors (volunteer) covering 26 Campuses
- 7 volunteer Directors
Current footprint:
- National headquarters in New York City provided pro-bono by Elegran Real Estate Company
- Additional presence in Tennessee, Virginia and Oklahoma
- Website provided pro-bono by Faith Network
- Legal Counsel provided pro-bono by Hogan Lovells LLC
- 30 cities holding walks in 2011
- 1,000 plus walk volunteers
- 9,518 e-news recipients
Social Media:
- 17,644 Twitter followers
- 66,325 Facebook followers
Historical Financial Results:
- Below are the links to our audited financial statements for 2009 & 2010:
• 2010 SGI Audit
• 2009 SGI Audit
We have received feedback that our accounting for SCTNow is difficult to understand because it resides
within Strategic Global Initiatives (SGI). Quite frankly, we agree.
The size and success of SCTNow relative to other SGI initiatives is such that it needs to be separated into
its own 501(c)(3) that will be independently audited and reported to the IRS. This will greatly simplify
our reporting and will be accomplished by year end with a targeted effective date of January 1
st
, 2012.
In parallel with this action, SCTNow is in the process of using an independent CPA to complete detailed
SCTNow standalone financials. These are forthcoming and will be posted to our website following the
2011 Walk Season.
These initiatives will greatly enhance the readability and interpretability of SCTNow’s financial reporting,
both historically and going forward.
Q4 & 2012 Strategic Objectives
Operations
• Transition to Phase II and III Operations in target communities and provide a community report
card to local officials. Each report card will address all commercial sexual exploitation within the
community, including individuals within the networks, physical locations and cyber activity www.SCTNow.org P a g e | 7
• Solidify our relationships with community law enforcement officials. Establish customized
protocols for turning actionable information over to law enforcement so that they can initiate
investigations and cases. Each jurisdiction operates differently—with its own policies and
procedures—so each protocol must be adapted accordingly
• Establish Memorandums of Understanding with 2 to 3 states. This is the key to ensuring good
dissemination of information captured in the Sexual Exploitation Network Analysis Tool (SENAT)
Database
• Run a 6-month trial operation in Chiang Mai, Thailand aimed at international child trafficking
networks
• Expand and develop a volunteer and part time pool of qualified support for operations
Administrative
• Hire a full-time Executive Director to build upon the extraordinary work done by Dr. Greg Wark,
who has served in this capacity on a part-time basis
• Enlarge SCTNow’s Board of Directors. As our organization grows, so does our need for
professionals who can provide strategic input and oversight
• Evaluate setting up a Junior Board comprised of young professionals who have a passion for the
cause of child sex trafficking and want to get involved in a meaningful way
• Separate SCTNow from Strategic Global Initiatives into its own 501(c)(3) with separate books
and records. This will greatly simplify and streamline our accounting, reducing the
administrative burden on SCTNow’s staff. It also will make our annual audits and IRS Forms 990
easier to decipher for current and potential donors
• Prepare and distribute SCTNow’s first Annual Report
The goal of these quarterly SCTNow donor updates is to highlight the impact that your donations are
having on our mission to combat child sex trafficking. As you can see, you are making a meaningful
difference! Since this is our first quarterly update, we felt the need to provide additional detail for those
who may not be fully aware of SCTNow’s history or strategy. We endeavor to focus principally on
developments and accomplishments in subsequent quarterly updates, so they will be much shorter.
As we continue to grow as an organization, we welcome your feedback on our activities and how
donations are being used. Our most important role is that of a fiduciary—it is a responsibility that we do
not take lightly, and we are always looking at ways to maximize the impact of our financial resources.
As always, feel free to reach out to SCTNow’s Executive Director, Dr. Greg Wark, at 619-405-7080 /
greg.wark@sctnow.org, or our National Director, Sundy Goodnight, at 212-333-7286 x401 /
sundy.goodnight@sctnow.org if you have any comments or questions or if you would like information
on how you can serve as a SCTNow volunteer.
Since this letter will also be posted to our website, it is important to note to non-donor readers that we
do not respond to inquiries from individuals or entities that choose to remain anonymous or that are
suspected of engaging in the illicit activity we seek to eradicate. We also do not provide detailed
information regarding ongoing field operations, as doing so would jeopardize the safety of our operators
and the success of their efforts.www.SCTNow.org P a g e | 8
We started SCTNow three short years ago to make a difference in what we see as the most abhorrent of
criminal activities. We’ve come a long way, but we have a lot of work to do to fulfill our mission, and we
simply can’t do what we do without your support. We thank you from the bottom of our hearts, but
more importantly, the children thank you!
Kindest regards,
The SCTNow Team
2011 Q3 Donor UpdateDear Donors,From all the staff and volunteers at SCTNow, we want to say THANK YOU for continuing to make a difference in our mutual calling to eliminate child sex trafficking. We simply cannot do what we do without your generosity and support. As SCTNow enters the peak of its annual walk season, we wanted to take a moment to discuss our strategy, update you on our accomplishments to date, and highlight our plans going forward. As many of you are aware, SCTNow—to our knowledge—is one of only a few nonprofit organizationsfocused on child trafficking that concentrates on the demand side of this heinous crime. As such, we are engaged in an ultra-marathon of sorts, where the inherent nature of our strategy requires a long-term, disciplined focus and an ongoing commitment of time, effort and resources. Our aim is to:• develop an unparalleled partnership with local, state, federal and international law enforcementofficials and agencies• provide factual, real-time intelligence that will enable law enforcement to focus limited resources where they will have the greatest impact on commercial sexual exploitation• become the premier provider of intelligence on human trafficking in the United States and abroadOur strategy will take time to bear significant, measurable results in the form of conventional benchmarks such as x arrests in y cities. This is the unfortunate reality given the sophistication of the illicit networks involved in child trafficking and the inherent nature of our legal system, which requires proof beyond a reasonable doubt to convict. However, our operations team, headed by Clark Stuart, a retired U.S. Navy SEAL, has been making meaningful headway to this end—working as a “force multiplier” to police departments and building a world-class, first-of-its-kind database on child trafficking networks. The seeds that Clark and his team have carefully sewn will yield significant, measurable results over time as we stay this course, and we will have far fewer perpetrators on the streets preying on our children. Importantly, our operatives collect intelligence and make it available to law enforcement officials who have the statutory authority to make arrests. We are not a substitute or replacement for law enforcement or systems that are currently in place to combat human trafficking.We are pleased to share with you some measurable results of our efforts both now and on a quarterly basis going forward. As we get further into this ultra-marathon, we will add relevant statistics to these www.SCTNow.org P a g e | 2SCTNow donor updates as they become available. Ultimately, our measurements will include those that showcase a reduction in demand and its corresponding effects. Thanks to your generosity, we are well on our way to realizing this objective while also making significant headway in our awareness efforts nationwide. Awareness is a critical component of educating America to the pervasiveness and seriousness of child trafficking with hopes of activating every citizen to do their part in ending this horror in our nation and around the world. Below is a summary of recent developments and accomplishments organized by SCTNow’s three focus areas of (i) operations, (ii) awareness, and (iii) partnerships, along with a current snap-shot of our organization and how we put your donations to work:Recent Developments and AccomplishmentsOperations• Identified and documented more than 1,000 encounters with sexual predators, with an additional 4-5 predators on average identified and recorded every day• Launched SCTNow Cyber Division to monitor and capture online predator activity• In coordination with DataTactics, created the Sexual Exploitation Network Analysis Tool (SENAT) Database, an innovative, first-of-its kind proprietary database that serves as a central repository for criminal evidence and is shared with law enforcement officials in order to seek prosecutions and convictions against predators• Executed a Memorandum of Understanding with the U.S. Department of Homeland Security andthree law enforcement agencies to provide them with access to the SENAT Database• Established a first of its kind pilot program focused on ending child trafficking in Tulsa, Oklahoma. The pilot program included:o Close collaboration with Tulsa’s Mayor, Police Chief and Sheriff as they declared war on child sex predators (Watch Press Conference)o Working side-by-side with top Oklahoma legislators to develop a detailed plan to fight child trafficking in Oklahoma
Executing a detailed assessment of Tulsa’s human trafficking networks, providing essential intelligence to Tulsa law enforcement officials• Executed Phase 1 Operations in 17 cities including San Jose, Kansas City, Phoenix, Indianapolis, Portland and Austin. Phase 1 includes initial research and assessment of the human trafficking networks within a community, including the mapping of physical sites as well as internet commercial sexual exploitation activity• Received confirmation from the San Jose Police Department that they have been awarded a grant from the Office for Juvenile Justice and Delinquency Programs to combat the sexual exploitation of minors. The grant proposal included using the SENAT DatabaseAwareness• Organized National Walk/Run Campaigns for three consecutive years in 63 cities across the United States and Canada, spreading awareness and raising funds to stop child sex trafficking• Educated approximately 200,000 individuals (a SCTNow estimate) on the issue of child slavery in cities around the U.S. and in Canadawww.SCTNow.org P a g e | 3• Worked with numerous organizations including World Vision, California Against Slavery, Change.org and The Body Shop to advocate for important legislation for victims of sex trafficking• Worked with Woodland Hills Church in Ashville, North Carolina to establish a victim outreach call center, providing sex victims assistance with housing, medical care, transportation to safe shelters and moral support. SCTNow provided the initial training and is assisting with the final installation of equipment at the center• Worked with Jerry Fralick, former Chief Information Officer (CIO) of the Office of Justice Programs, U.S. Department of Justice, and currently CIO for the State of North Carolina to promote awareness and programs of SCTNow on a national level with other State CIOs• Secured free advertising on the NASDAQ billboard and the Thomson Reuters sign from Times Square2(a Thomson Reuters/NASDAQ alliance) valued at $156,000 to run an awareness campaign in Times Square, New York City. Below is a picture of one of the ads:Partnerships• Entered into a strategic alliance with Facebook, Inc. to utilize our expertise and technological savvy to police Facebook for photos, videos and content that exploit children. This partnership results in the removal of 10-20 predator accounts per day (Press Release)• Since 2009, donated $5,400 and placed a product order of $19,000 with Nomi Networks, a leading non-profit organization focused on using free enterprise and education to end human trafficking. These funds protected the livelihood of 23 women and kept them from returning to the sex trade as a means for basic survival• Provided over $40,000 in grant funds since 2009 to 15 partner organizations focused on human trafficking, including Abolish Slavery, Restore NYC, Chab Dai, Crossing Borders, DC Stop Modern Slavery, Destiny Rescue, Good Weave By Rugmark, Not for Sale TN, Pearl Alliance, The Home Foundation, Jacksonville Task Force, Shanyia Speaks, Mercy Ministries, The Sold Project and World Relief NCwww.SCTNow.org P a g e | 4Here is just a glimpse of what some of our strategic partners are saying:“Facebook and SCTNow share a determination to protect children. Since last year, we have partnered with Stop Child Trafficking Now to coordinate our resources and cast a wider safety-net for those online. By working together and leveraging SCTNow’s resources, we are able to make the web and Facebook an even safer place for children and families.”Fred Wolens, Public Policy DirectorFacebook, Inc.“Nomi produced 3,300 awareness-raising tote bags made by the survivors at our partner organization in Cambodia, with 800 bags prominently featuring our trademarked slogan, “Buy Her Bag, Not Her Body®.” The remaining totes were produced for SCTNow. Your order helped us generate revenue that prevented our partner organization from shutting down, thereby protecting the livelihood of 23 women.”Diana Mao, President & Co-FounderNomi Network“Sex+Money would like to give a special thanks to Stop Child Trafficking Now (SCTNow) for their collaboration in fighting sex trafficking in America. SCTNow was filmed for the documentary back in 2009 and then rejoined efforts with Sex+Money Campaign to host one of their 50 State Tour screening events in New York City in August 2011. Through this event, Sex+Money and SCTNow were able to raise awareness to about 200 people in the NYC area. The Sex+Money team is very grateful to SCTNow for their generosity and support which made these efforts possible.”Lindsay Diederichs, Associate ProducerSex + Money: A National Search for Human Worth“SCTNow’s methodology is new, effective, and does not duplicate previous efforts. SCTNow has taken an asymmetric approach to combating human trafficking and found a key need that is not being met by other nongovernmental/non-profit organizations. SCTNow has taken painstaking efforts to ensure that their strategy complies with strict legal parameters and is synergistically coordinated with city, state, and federal law enforcement efforts.”Dave Yarborough, Special Agent (Retired)Federal Bureau of Investigationwww.SCTNow.org P a g e | 5SCTNow—still very small but with a national reach Historic timeline:2008- Lynette & Ron Lewis begin pursuing options for an awareness and fundraising campaign in New York City- Ron and Lynette are introduced to Clark Stuart by Dr. Greg Wark; “demand-side” concept incubates- Stop Child Trafficking Now becomes an initiative under parent organization, Strategic Global Initiatives (SGI)- NYC offices of law firm Hogan and Lovell invite SCTNow to be their pro-bono client- Sundy Goodnight begins as first part-time staff member focused on National Walk Campaign Development- Ron, Lynette, Greg and Sundy attend White House briefing on human trafficking in Washington, D.C.- Plans begin for full-scale national awareness and fundraising campaign- SCTNow partners with Nomi Network to host 16 screenings of anti-trafficking documentary, Call & Response- Local NYC church donates office space for SCTNow Headquarters2009- Faith Network donates website and logo redesign- Ron and Lynette travel and promote SCTNow’s mission to churches, media and potential sponsors- SCTNow partner program established to assist non-profits engaged in the fight against human trafficking- SCTNow named as Project 7 “Help Those In Need” Grand Prize Winner- SCTNow co-establishes first-ever Freedom Week NYC to promote awareness of human trafficking- SCTNow National Walk Campaign covered by the CBS Morning Show, ABC, AM New York, and the AP- SCTNow receives endorsement letter from U.S. Secretary of State, Hillary R. Clinton- 8,000 walkers participate in inaugural SCTNow National Walks in 40 cities, raising over a half million dollars- SCTNow Stilettos Run in NYC breaks Guinness World Record for most women running in high heels (318)- CPA Firm Heveron & Heveron retained for financial auditing and reporting- SCTNow presents operatives with first check for $300,000 to begin initial development phase2010- Operatives implement proof of concept in Tulsa, Oklahoma - SCTNow hires 4 part-time staff to assist with 2ndyear national campaign- SCTNow joins Do The Extraordinary to launch “Red With Love” anti-trafficking awareness campaign- SCTNow establishes staff presence in Tulsa, Oklahoma- 10,000 walkers participate in 2ndannual National Walk in 37 cities in the US, Canada and Australia- SCTNow grants $400,000 to operatives- SCTNow adds runners to the 2011 National Walk/Run Campaign2011- SCTNow enters into a strategic alliance with Facebook- Times Square2donates premiere advertising space in NYC Times Square for public awareness campaign- SCTNow’s 3rdannual National Walk/Run Campaign commences in 30 cities across the U.S. and Canadawww.SCTNow.org P a g e | 6Current headcount:- 1 full-time salaried staff- 6 part-time salaried staff (with no benefits)- 3 part-time volunteers- 30 SCTNow Ambassadors (volunteer)- 22 SCTNow Campus Ambassadors (volunteer) covering 26 Campuses- 7 volunteer DirectorsCurrent footprint:- National headquarters in New York City provided pro-bono by Elegran Real Estate Company- Additional presence in Tennessee, Virginia and Oklahoma- Website provided pro-bono by Faith Network- Legal Counsel provided pro-bono by Hogan Lovells LLC- 30 cities holding walks in 2011- 1,000 plus walk volunteers- 9,518 e-news recipientsSocial Media:- 17,644 Twitter followers- 66,325 Facebook followersHistorical Financial Results:- Below are the links to our audited financial statements for 2009 & 2010:• 2010 SGI Audit• 2009 SGI AuditWe have received feedback that our accounting for SCTNow is difficult to understand because it resides within Strategic Global Initiatives (SGI). Quite frankly, we agree. The size and success of SCTNow relative to other SGI initiatives is such that it needs to be separated into its own 501(c)(3) that will be independently audited and reported to the IRS. This will greatly simplify our reporting and will be accomplished by year end with a targeted effective date of January 1st, 2012. In parallel with this action, SCTNow is in the process of using an independent CPA to complete detailed SCTNow standalone financials. These are forthcoming and will be posted to our website following the 2011 Walk Season.These initiatives will greatly enhance the readability and interpretability of SCTNow’s financial reporting, both historically and going forward. Q4 & 2012 Strategic ObjectivesOperations• Transition to Phase II and III Operations in target communities and provide a community report card to local officials. Each report card will address all commercial sexual exploitation within the community, including individuals within the networks, physical locations and cyber activity www.SCTNow.org P a g e | 7• Solidify our relationships with community law enforcement officials. Establish customized protocols for turning actionable information over to law enforcement so that they can initiate investigations and cases. Each jurisdiction operates differently—with its own policies and procedures—so each protocol must be adapted accordingly • Establish Memorandums of Understanding with 2 to 3 states. This is the key to ensuring good dissemination of information captured in the Sexual Exploitation Network Analysis Tool (SENAT) Database• Run a 6-month trial operation in Chiang Mai, Thailand aimed at international child trafficking networks • Expand and develop a volunteer and part time pool of qualified support for operationsAdministrative• Hire a full-time Executive Director to build upon the extraordinary work done by Dr. Greg Wark,who has served in this capacity on a part-time basis• Enlarge SCTNow’s Board of Directors. As our organization grows, so does our need for professionals who can provide strategic input and oversight• Evaluate setting up a Junior Board comprised of young professionals who have a passion for the cause of child sex trafficking and want to get involved in a meaningful way• Separate SCTNow from Strategic Global Initiatives into its own 501(c)(3) with separate books and records. This will greatly simplify and streamline our accounting, reducing the administrative burden on SCTNow’s staff. It also will make our annual audits and IRS Forms 990 easier to decipher for current and potential donors• Prepare and distribute SCTNow’s first Annual ReportThe goal of these quarterly SCTNow donor updates is to highlight the impact that your donations are having on our mission to combat child sex trafficking. As you can see, you are making a meaningful difference! Since this is our first quarterly update, we felt the need to provide additional detail for those who may not be fully aware of SCTNow’s history or strategy. We endeavor to focus principally on developments and accomplishments in subsequent quarterly updates, so they will be much shorter.As we continue to grow as an organization, we welcome your feedback on our activities and how donations are being used. Our most important role is that of a fiduciary—it is a responsibility that we do not take lightly, and we are always looking at ways to maximize the impact of our financial resources. As always, feel free to reach out to SCTNow’s Executive Director, Dr. Greg Wark, at 619-405-7080 / greg.wark@sctnow.org, or our National Director, Sundy Goodnight, at 212-333-7286 x401 / sundy.goodnight@sctnow.org if you have any comments or questions or if you would like information on how you can serve as a SCTNow volunteer. Since this letter will also be posted to our website, it is important to note to non-donor readers that we do not respond to inquiries from individuals or entities that choose to remain anonymous or that are suspected of engaging in the illicit activity we seek to eradicate. We also do not provide detailed information regarding ongoing field operations, as doing so would jeopardize the safety of our operators and the success of their efforts.www.SCTNow.org P a g e | 8We started SCTNow three short years ago to make a difference in what we see as the most abhorrent of criminal activities. We’ve come a long way, but we have a lot of work to do to fulfill our mission, and we simply can’t do what we do without your support. We thank you from the bottom of our hearts, but more importantly, the children thank you! Kindest regards,The SCTNow Tea