250% clean water In Nepal, our water and sanitation programme reached over 40,000 people.
47,000 blankets distributed in the six months following the earthquake in Haiti.
Our work with the Batwa community in Burundi has resulted in an increase of 250% in school enrolment.
HIV Our aim is to reduce HIV incidence and to minimise the impact of HIV and AIDS among people living in extreme poverty.
4,394
Annual Report & Accounts 2010
Sierra Leone babies were delivered in Concernsupported Health Units in Sierra Leone.
After the flooding approximately one-fifth of Pakistan's total land area was underwater.
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20 million Concern undertook its biggest ever emergency response after the flooding in Pakistan affected 20 million people.
shelter provided for 58,000 people after the earthquake in Haiti.
83%
In Timor Leste, 83% of people we work with are now food secure with over 92% of households eating three times a day.
98%
11,000
of Somalian students in grades 1 to 8 passed their final exams in Concern-supported schools.
In Zimbabwe, 11,000 farmers in our Conservation Farming programme produced enough food to feed their families all year round.
31.2m
February 2010
Concern reached 31.2 million people either directly or indirectly in 28 countries.
In the first month of our six-month recovery plan in Haiti, Concern provided water, sanitation and shelter, reaching one third of the earthquake-affected people we targeted.
How money was spent
89.9% Relief & development
7.6% Fundraising
2%
Development education and advocacy
0.5%
Governance
Worldwide
499,635 people benefited directly from Concern’s education programmes across 13 countries
Pakistan
20 million people affected by flooding
Haiti
12 years providing support
Bangladesh
1.3m people were homeless after the earthquake
India
Rwanda Angola
5/10 participants in our Farmer Field Schools were women
87% of people that Concern works with now know how the HIV virus is transmitted
6,600 households received food following the floods in the remote Haor area
Foreword
from the Chief Executive Officer
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Concern Worldwide identity, vision, mission & values
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Legal and Administrative Information
12
Our Concern Works
Haiti
14
Report of the Council 19 Our overseas programmes
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Education 25 Food, Income and Markets 29 Health 35 HIV and AIDS 41 Emergency Response 45 Our Concern Works
Pakistan
52
Your Concern in 2010 56 Advocacy 56 Development Education 59 Information Technology 60
Fundraising
61
Review of financial outcome 2010
69
Governance
77
Statement of Council Members’ Responsibilities
81
Independent Auditors’ Report to the Members of Concern Worldwide
82
Financial Statements
2010
85
75%
Over 75% of the world’s poor are subsistence farmers, many of whom are women. Zinet Hussein (16), threshing the wheat with her father. South Wollo, Amhara region, Ethiopia. Photographer: Kim Haughton
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3/4 Three quarters of the world’s poorest people are subsistence or small holder farmers, but they cannot grow enough food to feed themselves all year round.
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Foreword from the Chief Executive Officer
On January 12, 2010, an earthquake hit Port-au-Prince, capital of Haiti, bringing death, devastation and misery to the stricken population. I saw the scale of that devastation for myself five days after the earthquake. Frantic efforts to find survivors were still going on but already it was clear there was massive loss of life. The final death toll was close to 250,000 and more than 1.3 million were made homeless. Concern has worked in Haiti since 1994 and our team of 100 staff on the ground responded immediately to the earthquake, reinforced by additional experienced resources from Concern Worldwide (US) Inc. and across the organisation.
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As the months went by, the life-saving response of providing water, food and the basic necessities of living changed to laying the foundations of longer-term recovery and rebuilding lives. The details of that longer-term response – nutrition and health services for mothers and children, disease prevention through providing water and sanitation, building houses and managing camps for the displaced – are given in this report. By year end, Concern continued to provide over 110,000 people with the means of survival and with the prospects for a better future. But the road to recovery in Haiti will be long and Concern will remain committed to this country for many years to come. Eight months later, in Pakistan, another natural disaster struck when massive floods impacted on the lives of almost 20 million people over a vast area of the country. Here again, Concern was in a good position to respond quickly and effectively, building on our long-term presence in the country and on the emergency response capacity of 36 local non governmental organisations (NGOs) which Concern had supported and trained over the previous three years. We rapidly provided shelter, food and household supplies to over one million people in 15 of the most affected districts. Our demonstrated response capacity was a key factor in the award of a significant grant from the US Government’s Office for Overseas Disaster Assistance (OFDA) (which we received via Concern Worldwide (US) Inc) to provide humanitarian assistance through our partner NGOs and from the UK Government’s Department for International Development (DFID) for recovery programmes. The two major emergencies in Haiti and Pakistan were among the largest and most complex disasters in recent years. I am very proud of Concern’s response in each case. That response was implemented while carrying on our programme in an additional 23 countries and completing our exit from Angola, Lao PDR, Nepal and Timor Leste. The decision to exit the latter four countries had been taken with regret during 2009 when Concern faced serious financial constraints and we were striving to use our financial and human resources to best effect. We passed on our programmes to partners and we left these countries with a sense of pride in what has been achieved. This report provides much fascinating detail of our work in all our programme countries during 2010. It highlights the many practical and exciting achievements in our work in education, in supporting livelihoods, in improving health services and in responding to the tragedy of HIV and AIDS. Many of these achievements bring important short improvements to the lives of our target group – the poorest people – but we always aim to situate such improvements within a vision of longer-term sustainability. The thread of innovative thinking and practice runs through the many examples of our work. For the past five years of our 2006-10 strategic plan, we have been committed to the 3Is – Innovation, Influence and Impact. This report provides ample evidence that the 3Is have been fully absorbed into the essence of how Concern thinks and operates.
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We are building on the breakthrough work some years ago of developing, in association with Valid International, the now internationally accepted best practice of how to treat severe malnutrition in children, Community Management of Acute Malnutrition (CMAM). We are intensifying our focus on developing innovative ways to prevent malnutrition, to improve nutrition during the first 1,000 days of life, from conception to two years old, and thus prevent physical and mental stunting of children. Our flagship programme in this focus on prevention of malnutrition is the RAIN (Realigning Agriculture to Improve Nutrition) project being conducted in Zambia in association with the International Food Policy Research Institute (IFPRI), with support from Irish Aid. In Niger we developed an innovative approach in anticipating and responding to an emerging food crisis during the early months of 2010. The response comprised three elements: responding to moderate and acute malnutrition through CMAM and early supplementary feeding; providing seeds and fertiliser inputs to farmers in good time for the next planting season so as to provide food security for the coming year; providing cash using mobile phones to the most vulnerable so that they could purchase food and other necessities in the short term. The Boston based Tufts University is working with Concern to evaluate the impact of this project. We are midway through the implementation of the Innovations project to develop new ideas for better maternal and child health, supported by the Bill and Melinda Gates Foundation (via Concern Worldwide (US) Inc). The past 18 months has seen us launch the project in Malawi, Sierra Leone and Orissa state in India and running competitions to find innovative ideas which could lead to breakthroughs in reducing maternal and child mortality. Six ideas over the three countries have been identified and they are now being field-tested and evaluated. The second phase of the Innovations project will commence during 2011. In terms of our work in influencing policy, two examples stand out from 2010. In May, Concern, in association with the UN High Level Task Force on Food Security and Irish Aid, hosted a meeting in Dublin for 150 representatives of global civil society to contribute to the revision of the Comprehensive Framework for Action (CFA), the set of short and long-term recommendations aiming at increased food security which the UN adopted in 2008 following the food price crisis of that year. The revised CFA, taking account of the conclusions of the Dublin meeting, was published in October 2010. Throughout 2010 Concern has played a leading role in the development of the Scaling-Up Nutrition (SUN) Initiative which promotes additional focus on improved nutrition during the first 1,000 days of a child’s life, from conception to two years. The SUN Initiative is a broad-based movement involving the UN, with leadership provided by Dr David Nabarro, the UN Secretary General’s Special Representative on Food Security and Nutrition; governments of developing and developed countries; the private sector; foundations and NGOs. In September, the Irish and US Governments, represented by Foreign Minister Micheál Martin and Secretary of State Hillary Clinton, held a meeting in New York during the UN
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Millennium Summit, at which they pledged to provide international leadership in support of the SUN Initiative. I had the honour, representing Concern and the wider Irish NGO movement, to speak at the meeting and advocate for significant support for the SUN Initiative. In addition to dealing with major emergencies and all our ongoing work, we carved out time during 2010 to consider how Concern can best contribute to achieving its mission over the next five years. At the beginning of the year we spelled out a timetable to frame and agree a strategic plan for 2011-15. The process involved considerable consultation throughout the organisation as well as drawing on external resources. In December the Council of Concern approved the plan ‘Greater impact in an increasingly vulnerable world’, a title which reflects both the world we feel we are facing into over the next five years, and Concern’s ambition in responding to the challenge of this increasing vulnerability. The 2011-15 plan affirms that Concern will build on our solid foundations and achievements. We will strive for the highest quality in our emergency, development and advocacy work. We will continue to address extreme poverty through our existing programmes of education; food, incomes and markets; health, and HIV and AIDS. Building on the need to deepen our learning from our programme work on the ground, we will bring additional focus and scale to our work in hunger and health. We will invest in further developing Concern UK and Concern Worldwide (US) Inc and, as a significant international NGO, we will aim to bring our communications about our work and its impact to a new level. The past year has been difficult for many people in the countries from which Concern draws its main funding support, in Ireland, the UK and US. Unemployment has risen and living standards have fallen as the economic recession has bitten. Nonetheless, the generosity of people towards their less fortunate brothers and sisters in disaster prone and poverty stricken countries has been remarkable and Concern has benefited from that generosity. We feel that, over the years, we have earned the trust of people to spend well their hardearned donations and we take that trust very seriously. Our 3,200 staff around the world are the other critical component in delivering our programme, which directly benefits approximately 10 million people. Concern continues to have the good fortune of having a remarkably committed and talented staff. We want to continue to invest in the personal and professional development of our staff and this will be an important part of our strategic plan over the next five years. I want to thank most sincerely all our staff for their work during a hugely challenging 2010. You have done Concern proud and have helped to improve the lives of millions of people.
Tom Arnold Chief Executive
Amader school Project, Bhadrachap Primary, Bangladesh. Photographer: Marie McCallan, Press 22.
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150 schools In Bangladesh, our Amader Schools’ Project, working across 150 schools, has seen pass rates more than double.
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In 2010 Concern worked in 28 countries as follows: Afghanistan Angola Bangladesh Burundi Cambodia Chad Democratic Republic of Congo Ethiopia Haiti India Kenya Democratic People’s Republic of Korea Lao People’s Democratic Republic Liberia Malawi Mozambique Nepal Niger Pakistan Rwanda Sierra Leone Somalia Sudan, North and South Tanzania Timor Leste Uganda Zambia Zimbabwe
Our Identity Who We Are Concern Worldwide is a non-governmental, international, humanitarian organisation dedicated to the reduction of suffering and working towards the ultimate elimination of extreme poverty in the world’s poorest countries.
Our Vision for Change A world where no-one lives in poverty, fear or oppression; where all have access to a decent standard of living and the opportunities and choices essential to a long, healthy and creative life; a world where everyone is treated with dignity and respect.
Our Mission What We Do Our mission is to help people living in extreme poverty achieve major improvements in their lives which last and spread without ongoing support from Concern.
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Core values
Concern’s core values derive from a single central value: extreme poverty must be targeted.
Concern’s core values derive from a single central value: extreme poverty must be targeted The quality of our overall endeavour must ultimately be measured by its contribution to the rapid elimination of the extreme form of poverty defined by the United Nations as “absolute poverty.”
Our other values, stated below, are subsidiary to this central value: » » » » » » » » »
Respect for people comes first Gender equality is a prerequisite for development Development is a process, not a gift Greater participation leads to greater commitment All governments have responsibility for poverty elimination Emergencies call for rapid response Democracy accelerates development The environment must be respected Good stewardship ensures trust
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Legal and Administrative Information Council Members
Officers and other information
The following were members of the Council of Concern Worldwide at the date on which the financial statements were approved:
Officers
Chairperson: Ms Frances O’Keeffe Mr Nurul Amin Ms Evanna Barry Ms Helen Burke Mr Liam Burke Ms Mary Considine Ms Anne Cummins Ms Mary Finn Ms Jacinta Flanagan Professor David Gwynn-Morgan Ms Mary Humphreys Professor Paul Jeffcutt Ms Sally-Anne Kinahan Mr Cyril Maybury Ms Teresa McColgan Mr Jim Miley Mr Nick North Mr Tom O’Higgins Ms Barbara O’Reilly Ms Nora Owen Mr Jan Rotte Mr Mark Shinnick Mr Tom Shipsey Mr John Treacy Since the last AGM: (i) Mr Chinedu Onyejelem and Mr Tom Lavin resigned from Council, (ii) Mr Cyril Maybury, Ms Jacinta Flanagan and Mr Liam Burke were appointed as Council members. (iii) Mr Jim Miley and Ms Frances O’Keeffe resigned as Chairperson and Company Secretary respectively during the year and were replaced by Ms Frances O’Keeffe who took over as Chairperson, and Mr Tom Shipsey who became Company Secretary.
Ms Sally-Anne Kinahan Ms Frances O’Keeffe – Chairperson Ms Barbara O’Reilly Ms Nora Owen Mr Jan Rotte Mr Tom Shipsey Mr John Treacy (i)
Mr Jim Miley and Ms Evanna Barry resigned as Officers during 2010 and were replaced by Mr Tom Shipsey and Professor David Gwynn-Morgan
(ii) Professor David Gwynn-Morgan retired as an Officer in January 2011 Finance Committee Ms Helen Burke Ms Vivienne Jupp Ms Sally-Anne Kinahan – Chairperson Mr Ged King Ms Teresa McColgan Ms Eileen Quinn Mr Michael Tutty Monitoring and Evaluation Committee Mr Nurul Amin Ms Kate Corcoran Mr Howard Dalzell Ms Mary Finn Mr Nick North Mr David Regan Mr Jan Rotte – Chairperson
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Audit and Risk Committee
Executive Management Team
Mr Tim Cohen Professor Paul Jeffcutt Mr Cyril Maybury Mr Tom O’Higgins – Chairperson Ms Una Owens Mr Mark Shinnick
Mr Tom Arnold Chief Executive
Active Citizenship Committee Ms Evanna Barry Mr Liam Burke Ms Mary Considine – Chairperson Ms Phena O’Boyle Mr Johnny Sheehan Ms Siobhan Toale Secretary Mr Tom Shipsey Principal Banker Bank of Ireland 2 College Green Dublin 2 Solicitors McKeever Rowan 5 Harbourmaster Place IFSC Dublin 1 Auditor KPMG Chartered Accountants 1 Stokes Place St Stephen’s Green Dublin 2 Registered Office 52-55 Lower Camden St Dublin 2 Registration No. 39647
Ms Rose Caldwell UK Executive Director Mr Richard Dixon Director of Public Affairs Mr Connell Foley Director of Strategy, Advocacy and Learning Mr Jim Hynes Chief Operations Officer Mr Paul O’Brien Overseas Director Ms Louise Supple Interim Human Resources Director
Erzulia Danus goes to get water with her daughter Renette (3), Haiti. Photographer: Kim Haughton.
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55,000 displaced people benefited from our camp management services
58,000 We provided access to clean water to 58,000 people following the earthquake.
Haiti
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Our Concern Works february 2010
62 yrs
59 yrs
In the first month of our six-month recovery plan Concern provided water, sanitation and shelter, reaching one third of the 150,000 earthquakeaffected people we targeted
Concern provided shelter for 58,000 people after the earthquake Approximately one million people are still living in emergency shelters
7.0
life expectancy of people in Haiti
Haiti’s earthquake magnitude
play, games & art We helped over 7,000 children deal with trauma through play, games and art
28 schools
blankets
72% of Haiti’s population live on less than $2 a day
tents
mosquito nets
5,000 96,000
were re-opened with our help
emergency response budget
2,300
hygiene kits pregnant women received extra food
clean water In the immediate aftermath of the Haitian earthquake, Concern delivered clean water to 130,000 people
Distributed in the six months following the earthquake in Haiti in January 2010
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In Haiti 6.5 ltrs
In Port-au-Prince, we have met the needs of 75,000 displaced people, providing 6.5 litres of water per person per day, installing latrines and showers
36,586 Households received emergency supplies distributed by Concern, these supplies reached 178,000 people
over 110,000 people in Haiti depend upon us for survival and basic needs
people were homeless after the earthquake
Two-thirds of all Haitians work in the agriculture sector, mainly small scale subsistence farming
2010 was dominated by two of the largest and most complex emergencies that the international community has responded to in recent years. The earthquake that struck Haiti in January 2010 devastated much of an already desperately poor country. The sheer scale of the damage combined with the existing frailty of the Haitian state and the immense poverty of its people posed enormous challenges to the response and recovery effort.
Amicille Theodore (105), Haiti. Photographer: Kim Haughton
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178,000 We delivered blankets, tarpaulins, tents, solar kits, rope, kitchen sets and emergency shelter sets to 36,586 households, helping approximately 178,000 people, in Haiti.
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2,000 In Quetta, Pakistan, more than 2,000 children who work in the slums visited Concern supported drop-in centres during the year.
The Council of Concern Worldwide presents its report and consolidated financial statements for the year ended December 31, 2010.
Report of the Council In 2010, Concern Worldwide worked either directly or indirectly with 31.2m of the poorest people in 28 of the world’s poorest countries. Many of the countries where we choose to work are sometimes referred to as ‘fragile states’ – countries marked by poor governance, weak institutions, often marred by conflict and subject to increasingly frequent natural disasters.
They are not easy places in which to work but they are the places where people are in most need of support and therefore where our mission takes us. 2010 demonstrated the increasing vulnerability of poor people in these places. During the year we responded to 41 emergency interventions, spending €59.4 million. The scale of catastrophes that hit the headlines such as the Haiti earthquake and the Pakistan floods was a major challenge, but we also continued to respond in the many places out of sight of the news cameras, where grinding poverty combines with shocks like droughts and flooding to rob people of what little coping capacity they have, putting them at risk of hunger, disease and death. Despite the huge challenges which exist in the places Concern chooses to work, we know that even the very poorest people are equipped with the resilience and energy to transform their lives and that simple solutions can make a world of difference. In 2010, we continued to work on the ground with people to deliver real and lasting improvements to their lives. Through our work in four sectors – Food, Income and Markets, Health, HIV and AIDS, and Education – we supported almost 28 million people to tackle immediate problems such as lack of food, water and healthcare, to move out of poverty through education and enterprise and to gain a voice in the decisions that affect them. In particular, we continue to focus on the position of women in the communities where we work; tackling gender discrimination and promoting equality – for example ensuring girls go to school – is core to development success. We continue to innovate, seeking solutions which can go beyond our own work and be scaled up by our peers across the globe to maximise the impact we have on the lives of poor people, and help the international community meet its Millennium Development Goal targets. In 2010, for example, we expanded our conservation farming programme across four new countries Malawi, Zambia, Tanzania and Liberia. This simple yet innovative approach could revolutionise the ability of small holder farmers to feed themselves and their families. In 2010, we were proud to be accredited with Humanitarian Accountability Partnership membership, attesting to our high standards of transparency and accountability, not only in emergencies but across the entire spectrum of our work. Due to the high priority we place on being accountable to our beneficiaries and carrying out work that genuinely meets their needs, six countries piloted ‘Complaints and Response Mechanisms,’ where our beneficiaries can feed back to us and lodge complaints about any aspect of the service we provide them.
Report of the Council
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Report of the Council
21
Partnership remains an underpinning value of all we do. Supporting local organisations to develop, improve and scale up their work not only permits us to maximise our impact now, but ensures we contribute to the development of a vibrant civil society and more effective government within the countries we work. In 2010, we supported 456 partners in 26 countries (to whom we gave 500 individual cash grants). Our partnerships with peer international NGOs allow us to scale up our work, while maintaining efficiencies through shared working. We remain a committed member of Alliance2015, a grouping of seven International Non-Governmental Organisations (INGOs) across Europe, collaborating in many fields as well as on advocacy campaigns targeted at the European Union. 2010 also saw us completing our withdrawal from four countries: Timor Leste, Nepal, Lao PDR and Angola. As a result of the economic downturn in 2009, we made the decision to focus our resources more narrowly in order to maintain and increase the quality of our programmes in the countries in which we remain. It was not an easy decision. However, each country put in place a detailed exit plan with a number of ongoing programmes handed over to trusted partners. At home, across Ireland, the UK and the US, our hundreds of thousands of supporters remained the backbone of our organisation, enabling us to put their concern to work to transform the lives of many of the world’s very poorest people.
$1.5 million
In April 2010, The Accenture Foundations awarded Concern $1.5 million to fund a conservation agriculture project to train 6,400 farmers in Malawi and Zambia over the next three years.
Katawa Banda with the goat he received from Concern in Malawi. Photographer: Pieternella Pieterse.
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Our Overseas Programmes
499,635 people
benefited directly from Concern’s education programmes across 13 countries.
Concern organises its work into five core organisational programmes, comprising: Education Food, Income and Markets Health HIV and AIDS Emergency Response Our programme approach links our work at grassroots to wider outcomes at local and national level aiming to improve services for poor people in each country we work in, as well as developing learning across countries to feed into international best practice and policy. The expenditure on each of our programmes during 2010 was as follows:
Programme Expenditure
€’000
Education Food, Income and Markets Health HIV and AIDS Emergency Response
7,763 37,044 27,335 3,905 59,420
Total Overseas Expenditure
135,467
72 million children around the world are not enrolled in school; Concern Worldwide focuses on providing basic education to those who need it most. Access to education is not only a basic human right, but also a key factor in reducing poverty and child labour.
Drama club pupils Jeremaiah Gbla, Almamy Conteh-Moi, Aminata Conteh, Ansarul Islamic Primary School, Sierra Leone. Photographer: Lyla Adwan
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1/10 More than one in 10 children in the developing world never get the chance to go to school.
Education In 2010, 499,635 people benefited directly, and 1.8 million indirectly, from Concern’s education programme. Over one million of the beneficiaries were girls. The programme aims to ensure that poor and vulnerable children, especially girls, can access primary school, that they are safe there and that they receive a quality education. Depending on the context, this can involve a variety of activities from assisting local authorities to provide and equip school buildings, to teacher training, to dealing with the underlying reasons why some children, often girls, do not go to school. Advocating with government to make primary education accessible to the poorest children is an increasing feature of our work, as is working to ensure schools are free of physical and sexual abuse.
Proven Results It is encouraging that our education work is reaping measurable results even in some of the toughest contexts in which we work. Despite prolonged fighting and a complex security challenge in Somalia, our education programme – run in 24 community-owned schools in Mogadishu and Lower Shabelle region – is making great strides. In 2010 enrolment increased by almost 1,000 students, 46% of whom were girls. An emphasis on quality ensured that 98% of students in grades one to eight passed their final exams. In Bangladesh, we work to ensure the poorest children access formal education. The Amader Schools Project, working across 150 schools, has seen excellent results. In 2010 the enrolment rate reached 100%, but most importantly the quality of education has greatly improved. An analysis of the exam results for the academic year 2009/2010 showed that pass rates had more than doubled from the baseline of 28% three years ago. In some grades they were as high as 62%. The majority of our education work in Ethiopia is through the Alternative Basic Education (ABE) programme, designed to reach school age children who cannot access formal education. During 2010, in rural areas of Wolayita alone, Concern created access to quality basic education for 2,516 children, 49% of whom were girls, through seven ABE schools and one formal school partnership. In Addis Ababa, 98% of students from the final stage of ABE passed the exam that allows them to move into the formal system. In Northern Ethiopia, 65 of the 430 orphans and vulnerable children given additional help outside class ranked in the top ten of their class.
Involved Parents In every education programme, the involvement of parents/guardians is a critical success factor. In Bangladesh, the commitment of voluntary school management committees and parent teacher associations was amply demonstrated by their fundraising success in country; amongst the poorest communities they succeeded in raising contributions of â‚Ź10,221. In Burundi, we work with the minority Batwa community. As parents had themselves been discriminated against at school, many elected not to send their children so as to save them potential humiliation. A huge element in the success of the programme has been the work we have done with parents to persuade them of the benefits of education for the next generation. Thanks in great part to changed parental attitudes, we have seen a 250% increase in school enrolment of Batwa children since the inception of the programme.
Good Teachers A classroom is only as good as its teacher, thus teacher-training always comprises a core part of our education work. In Sierra Leone, where the remoteness of the areas we work demands a distance learning approach, Concern collaborated with the District Education Authority to assess what impact our approach is having on the quality of teaching. Results were positive, observations of 130 teachers in 66 schools found that 86% have mastered their subject, understand lesson planning and are using better teaching techniques. In all education programmes reviewed in 2010, there was evidence that corporal punishment had decreased. In Niger, we worked nationally, supporting the Ministry of Education to develop tools to measure the quality of teacher training. We also led the process to harmonise the format of school inspections.
Safe Schools In some of the countries we work, some male teachers demand sex in return for giving good grades to students. Tackling sexual and other forms of abuse in schools is therefore of paramount importance and it is encouraging to see real changes emanating from our programmes. In Suba district in Kenya, following training for teachers and community members on effective responses to the issue, 11 teachers were indicted for sexually abusing pupils. Previously they would simply have been transferred. In Sierra Leone, Concern supported a major stakeholder meeting on the subject, bringing together relevant ministries, local authorities, human rights organisations and traditional chiefs. Meetings were also held with over 3,000 students. Protocols for dealing with abuse were agreed and a radio campaign aired. The results were immediate; within six months 15 cases of abuse were reported to the district Family Support Unit and forwarded to court. In Mozambique, Concern has prioritised putting the issue of abuse in schools onto the national education agenda. Programme teams reported this year that education authorities are beginning to accept the significance of the issue and are showing a willingness to address it.
Report of the Council_Overseas Programmes
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Report of the Council_Overseas Programmes
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Better Run Education Systems Concern recognises that ultimately a country’s government must bear responsibility for implementing an effective education system. Therefore we work with government to support them in their efforts, as well as advocating to ensure the poorest children in their societies enjoy an equal right to a good education. In Kenya, Concern supported radio programmes that helped citizens understand the provisions in the draft constitution which protect the education rights of children. The Kenya team also continued its support of the successful Urban Slums Basic Education Campaign. It completed an analysis of education financing in the urban slums which is being used to lobby for increased allocation of state resources to primary education in the slums. In Liberia, Concern provided training for District Education Officers in teaching standards, codes of conduct and ensuring there was no abuse within schools. We are also participating at national level in the development of the new curriculum, as we are in Burundi. Following efforts in Mozambique, the Provincial Education Authority committed to nominate a staff member in each district to support school councils, an important step in ensuring the continuance of these councils post Concern’s support. In Niger, we have been supporting the local government to deliver the National Ten Year Education Development Programme. In 2010, enrolment of girls had increased by one third since we began our programme five years ago.
Review of Progress and Lessons Learned In 2010, six of our education programmes – Somalia, Angola, Sierra Leone, Haiti, Kenya and Rwanda were evaluated; five were final evaluations and one (Kenya) a mid-term review. As well as documenting the important changes and outcomes achieved during the lifetime of the programmes (many of which are cited above), our evaluations are key to learning how we can make improvements. Three main findings emerged: firstly, while school management and parents’ committees have been very active in keeping children in school and monitoring education standards, there is a need to involve the wider community in a better way so they understand their responsibility to select good members for these committees and oversee their work. Secondly, our teacher training programmes would be stronger if they included more practical work along with theory. Finally, we need to continue our efforts to ensure that more women become teachers; indeed, in the Mozambique evaluation, female teachers were cited as the largest motivational factor for girls to stay in school. These lessons will now be incorporated into our education programme to continue to strengthen the impact of our work in 2011 and beyond.
70%
Given that up to 70% of those living in absolute poverty are female, empowering women is a key priority within our livelihoods’ programmes.
Alganesh Assefd got a loan to buy goats and set up her business. She started a year ago with 3 goats and now she has 10. She has also paid back half of her loan. Photographer: Kim Haughton.
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Food, Income and Markets
In Tanzania, where we supported the establishment of 309 Farmer Field Schools, over 80% of farmers adopted new skills to increase their yields.
Food, Income and Markets is Concern’s largest non-emergency programme. In 2010, 3.2 million people benefited directly from the programme and 14.3 million indirectly. In total 8.5 million of the beneficiaries were girls. Concern works holistically to address extreme poverty. We recognise there is seldom one clear solution to the complex problems encountered by the people we work with. However, we are sure of one thing; if there is no food, there is no progress. Without adequate nourishment, people will not have the physical or mental capacity to lift themselves out of poverty. Thus we strive not only to eliminate hunger, but to ensure that people receive the nutrients they need to flourish. Three-quarters of the world’s poorest people are subsistence or small holder farmers; the irony is that they cannot grow enough food to feed themselves all year round. Our programmes first work to close this ‘hunger gap,’ often through innovative agricultural interventions, and then to ensure people have surplus to sell so they can make an income. Urban and landless poor people are supported to start a business or trade, often through small ‘microfinance’ loans. Ensuring linkages to markets is an important factor in enabling people to sell their goods. Finally, across the developing world poor people seldom have control over the resources that they need to survive, not even owning the often tiny parcels of land on which they grow their food. Thus we advocate for land, water and other resource rights as well as better government support of agriculture and enterprise development for the very poor.
Higher Yields In many countries, a combination of trials of new techniques, training for farmers and the provision of seeds and tools continues to increase yields. In Southern Maniema, Democratic Republic of Congo, Concern’s work has contributed to increased agricultural productivity. Between 2006 and 2010 rice production has risen from 31,333 metric tons (mt) to 160,000 mt, maize from 26,004 mt to 155,000 mt and groundnuts from 6,601 mt to 240,000 mt. In Timor Leste, rice yields have risen by 62% in three years; 83% of people are now food secure with over 92% of households eating three times a day. Only 7% of people/households were food secure at the inception of the project, so in this final year of our work in Timor Leste we are satisfied that we are leaving these communities and our partners approaching self sufficiency. In 2010, the maize production of farmers in our Somalia programme increased 6.25% from the previous year, while in Mongu, Zambia, our efforts to diversify production is paying off, with 80% of participating farmers growing more than three different crops. Previously mono-cropping was the norm.
Farming Sustainably In Zimbabwe, 11,000 farmers in our Conservation Farming programme produced enough food to feed their families all year round. This method of farming maximises the nutrients in the soil, and has consistently produced higher yields. We trialled a higher support level to 2,200 farmers, which took them beyond food security to being able to sell surplus stock and start rebuilding an asset base. Working in partnership with Accenture, in 2010 we extended Conservation Farming to Malawi and Zambia. In Malawi, we launched the scheme in Nkhotakota. Participating farmers saw their yields increase 2.5 times per hectare and almost all are now food secure. In Lao, ‘integrated upland farming’ is allowing farmers to produce crops year round and is preventing damaging ‘slash and burn’ agriculture, while a similar approach in North Korea has seen a 400% reduction in soil erosion. In Kenya, the re-introduction of Red Maasai sheep, a traditional breed, which is more adaptable to the changing climatic conditions, is helping preserve food and income during drought.
Higher Incomes In some parts of the remote Char area of Bangladesh, improved agricultural techniques and better linkages with government services have led to a doubling in household income from crop sales since 2007. For many people, this has meant that they have been able to save money for the first time ever. 97% of participants reported that they saved something in 2010; only 15% were able to put any money aside three years previously. The project has also generated employment opportunities, halving the short-term migration of workers. In Zimbabwe, prior to our conservation farming programme the poorest among our participants only had a tiny portion of their income available to spend on health and education; after the project they could afford to use 17% of their income on this vital expenditure. Our Cambodian programme has also positively impacted the wealth of households. Almost a third of the poorest have changed their wealth ranking since the programme started, taking them one or more steps up the income ladder. In Kenya, where the arid lands of the Maasai are being devastated by increasingly frequent droughts, we supported pastoralists to begin baling hay. One group of 24 people earned €10,000 from hay sales during a drought period in 2010. In Pakistan, skills training in mobile phone repair, beauty therapy and dressmaking contributed to higher incomes in urban areas.
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Our microfinance programmes made tens of thousands of small loans in 2010, enabling poor people, especially women, to set up small enterprises. In Bangladesh, the demand for credit is so great that we have facilitated a direct partnership between commercial banks and community lending groups. A second bank, Rupali, came on board with an injection of 7.9 million taka (â‚Ź74,900) credit across eight savings and credit groups. Banks would not previously have provided credit to those with no assets, but repayment rates of 100% are an attractive proposition. Bringing the indigenous private sector on board promises the project a long and fruitful life. In Mozambique, groups are also moving towards sustainability; a number of associations have presented their plans to their local authority and have received support from district development funds.
Markets for Produce Once farmers and small enterprises begin to succeed, it is imperative that they can find a market to sell their produce. This is often difficult in the remote regions where we work and can necessitate some creative thinking. In Burundi, Concern linked poor farmers, who were producing white sorghum, with Burundi Breweries. In 2010, we worked in partnership with the brewery to field test the suitability of various varieties of white sorghum for beer making. Farmers are now being supported to grow the most suitable variety and the involvement of the brewery from the start provides them a guaranteed market. We found an equally appropriate local solution in Rwanda. Gakenke is near the tourist hub for treks to the famous mountain gorillas. Hotels and guest houses have a demand for mushrooms and thus we supported the trial of a mushroom co-operative. Sixty-three families participated. Each family averaged an income of â‚Ź6 a week during the growing season, up to seven times the income of some households prior to the scheme. In Somalia, we supported the creation of local village markets in rural areas where farmers could buy and sell crops without having to travel huge distances.
Land and Resource Rights Land reform is a crucial tenet of development. Concern supports many communities to gain title to the lands and resources without which they cannot survive. In Lao, we worked with the government to categorise over 11,000 hectares of land in a manner that protects it for the good of the people currently living there. Villages now have rights over local forest and common land. Over 900 hectares were distributed in individual titles of three hectares per family. In India, we have been supporting the implementation of the 2006 Forest Rights Act. By September 2010, over one million people in Orissa, India’s poorest state, had received title to their land with 30,000 more titles ready for distribution. We also made good progress in Tanzania, where, in Iringa, 800 plots of land have been demarcated for allocation to poor farmers. Each will be protected through the receipt of a customary right of occupancy certificate. In Cambodia, our work focuses on gaining government recognition of community forests and fisheries. Fifty-two forestries received official recognition from the Ministry of Agriculture, Forest and Fisheries at the provincial level and nine at the national level in 2010.
Better Support for Farmers In Tanzania, where we supported the establishment of 309 Farmer Field Schools, over 80% of farmers adopted new skills to increase their yields. Four Farmer Resource Centres in Liberia provide services to 170 Farmer Field Schools, such as the teaching of new farming techniques trialled at the centres. In 2010, communities served by the local schools reported an improved food situation with most families eating two meals a day. In Angola, a notable achievement was the involvement of women in Farmer Field Schools. In a strongly male dominated environment, half of the participants were female. In Pakistan, poor farmers (half of whom were women) went on fact-finding visits to agricultural research and development institutions. Our conservation farming methods in our project farm in Sinyang, North Korea have been so successful that conservation farming has become Ministry of Agriculture policy, with all 16 co-operative farms in Sinyang now starting their own government supported trials. In Malawi, we engaged with the government to support the development of an effective agriculture strategy that incorporates the needs of small farmers. In Uganda, we involved the private sector in delivering training to farmers. Not only was quality training delivered speedily, but the company providing the training also has a commodities buying arm and has organised to purchase sesame seeds from the farmers in the area – a real incentive for farmers with the potential for significant results.
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Review of Progress and Lessons Learned In 2010, we evaluated 22 programmes, across 15 countries, within the Food, Income and Markets sector. While there were many positive outcomes, it is equally important to review where we need to improve. A key finding was the need to adopt the planned agricultural training structures we have in place in Sierra Leone, Somalia and Liberia across all our countries of operation, to ensure we provide the necessary level of ongoing support to farmers. Another area where improvement is required is the establishment of stronger systems to measure cost efficiency. For example, in Afghanistan, while some of the trades we support were making a profit, tailoring has suffered because of too much competition. Several programmes are supporting adult literacy, particularly for women. One issue raised in the Somalia evaluation was the need to develop standard indicators to measure when an acceptable level of literacy has been achieved and to compare the effectiveness of the different approaches in literacy. In Tanzania, the evaluation of the Rights Based Approach (RBA) programme reported significant improvements in the lives of poor people. It highlighted improved participation in village councils and local institutions, particularly by women. However, the evaluation also recommended there could be better follow-up on the issues raised at village councils. Evidence of Concern’s commitment to protecting the environment was highlighted in an evaluation in Pakistan. It reported a 50% decrease in the use of firewood following the distribution of 413 economy stoves and the installation of 52 biogas stalls. We will incorporate these findings into future programmes.
100%
Malawi now has 100% national coverage of CMAM (Community Management of Acute Malnutrition). Marey Kansanga and her family with some of her soya bean crop, Malawi. Photographer: Pieternella Pieterse.
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Health
In Niger we treated 34,389 moderately malnourished children and 4,585 pregnant and breast-feeding women.
Concern’s health programme reached 1.6 million people directly and 4.3 million indirectly in 2010. A total of 3.3 million beneficiaries were female. Our health programme focuses on three areas. Driven by the appalling fact that 3.5 million children under the age of five still die from insufficient nourishment every year, Concern has become a world leader in the treatment of malnutrition in children of this age group. The approach we developed with Valid International in 2002, now called Community Management of Acute Malnutrition (CMAM), has become the UN standard of best practice and has been responsible for saving millions of lives. Concern continues to treat thousands of children in our own programmes but increasingly we are assisting developing country governments to bring CMAM into national health policy and scale up treatment across whole countries. While treatment is vital to treat sick children, now we also seek to eradicate the need for it in the future. Thus 2010 saw us starting to ramp up prevention strategies. Improving overall maternal and child health is part of this, as well as being a second crucial plank of our health programme in its own right. Our community based approach to Child Survival has had a significant impact on health and mortality statistics in Bangladesh and is now being implemented in Rwanda, Burundi, Niger and Haiti. Finally without clean water, no health intervention will succeed, so water and sanitation continues as a vital underpinning platform of our health programme. Alongside this, we work to build awareness about basic hygiene and to encourage simple changes in behaviours, such as hand washing, that can save people’s lives.
Lives Saved Concern treated 23,709 severely malnourished children across 10 countries during the first nine months of 2010 through its CMAM programme. A number of these countries, such as Sudan, Niger, Somalia and Haiti presented challenging emergency situations; however across the organisation all our CMAM programmes met best practice (or Sphere) standards (under 10% mortality rate) for recovery. Even in Niger, where 50% of our programme areas were affected by severe food crises and we faced challenges of distance and difficult terrain to access semi-nomadic communities, we achieved international standards of care. Additionally, we treated 34,389 moderately malnourished children and 4,585 pregnant and breast feeding women. Community participation is huge y important in helping identify children at risk and ensuring they come for treatment in Somalia, for example, we discovered that involving male leaders and chiefs in discussions around malnutrition was a highly effective intervention, as it moved the issue from being purely a female concern, to one where the wider community viewed themselves as responsible for the health of their children.
Clean Water and Good Hygiene In Nepal, our water and sanitation programme reached over 40,000 people, and 95% of communities no longer practise open defecation thanks to latrine construction and education about health risks. In North Korea 166,000 people, in Liberia 124,000, in Sierra Leone 20,500 and in Democratic Republic of Congo 20,000 people now have access to safe drinking water. The Liberia programme reported that 99% of participants now wash their hands, and similar initiatives in Pakistan have seen both communities and clinical data record a reduction in water-borne diseases. Due to a number of factors, including climate change, the face of extreme poverty is becoming increasingly urbanised, with massive slums posing enormous health risks to those who dwell in them. In Quetta, Pakistan, more than 2,000 children who work in the slums visited Concern supported drop-in centres during the year. Visible changes such as hair combing and the wearing of shoes are clear signs that the children are adopting the personal hygiene behaviours promoted in the centres. In Kenya, Concern supported a campaign to close Dandora Dumpsite, a huge health risk to the dwellers of the Nairobi slums. In October, one of our partners notified the City Council of their intention to institute human rights proceedings; before the expiry of the notice, the council published, in the national newspapers, its intention to close the dump and convert the site to a recreational park. Concern will continue to monitor progress to ensure the council follows through on this commitment.
Healthy Mothers with Thriving Children Our Child Survival Programme (CSP) works through building knowledge and capacity at every touch point of child health; mothers, traditional healers, community and religious leaders, health workers and health departments. In the challenging environment in Haiti, we broadened CSP into the camps of earthquake survivors, teaching mothers to recognise the danger signs in sick children, as well as problems they need to look out for in pregnancy. In Rwanda’s CSP, the number of children who received oral hydration salts for diarrhoea rose from 19% to 31%. Children with respiratory difficulties who received correct first line treatment rose from 13% to 49% in 2010 while 97% of those suffering from fever were seen within 24 hours of onset. In Haiti, we ensured that almost 23,000 children under two with symptoms of pneumonia were seen by trained medical personnel. In Kenya, Concern collaborated with the Ministry of Health and a Kenyan NGO to run radio features targeting mothers on good child nutrition, while Sierra Leone ran radio slots on reproductive and sexual health aimed at adolescent girls. Sierra Leone’s Concern-supported Health Units saw 4,394 safe deliveries of babies, approaching a 100% success rate.
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New Ideas for Better Maternal and Child Health 2010 was the second full year of the five year programme run by Concern with the support of the Bill and Melinda Gates Foundation. The “Innovations� project supports the development and field testing of new ideas to overcome the barriers that prevent mothers and babies from receiving good healthcare in developing countries. The last 18 months has seen us launch the project in Malawi, India and Sierra Leone carrying out extensive primary research in each to determine the major barriers to service delivery. We invited people from all walks of life to send in their ideas as to how these barriers could be eliminated. Whoever submitted the winning idea would then be supported by Concern to develop and implement their solution. Across the three countries over 14,000 ideas were received. Each competition was judged by an independent panel, which included health specialists and private sector representatives. In Malawi, two winning ideas were chosen, both focusing on the use of information and communications technology to address delays in women and children accessing health services. In India, Dactar Mali, a 21-yearold male student, won with his idea to recruit and train male health workers to work in a traditionally female profession. In Sierra Leone three ideas were picked, all of which addressed ways to improve the quality of health staff. These ideas will be developed in 2011 for pilot testing.
An End to Stunted Lives 2010 saw the planning stages of an initiative which aims to have significant international impact on the prevention of stunting that results from childhood malnutrition. Development work in agriculture and in health tends to run in parallel streams; agriculture focuses on improving income and economic status, while nutrition takes a more medical approach, for example the development and distribution of special supplements or fortified foods. Simply increasing yields may provide a family with food, but not with the nutrients needed for healthy development. If a child does not receive the correct nourishment before its second birthday, he or she will be irreparably stunted, both mentally and physically. Concern has been working for a number of years to help farmers diversify production to include vegetables and other nutritious food and in Zambia, we have now embarked on a partnership with the International Food Policy Research Institute (IFPRI) and Irish Aid to build on this experience by designing and piloting a new cross sector approach: Realigning Agriculture to Improve Nutrition (RAIN). Essential components will include homestead production of nutritious crops, intensive promotion of better practices for feeding babies and toddlers and referrals to appropriate health care. A rigorous evaluation component will contribute to much-needed, but currently scant, evidence linking agricultural interventions to a reduction in childhood stunting. This will be used to improve global policy and practice, ultimately supporting the development of healthy, thriving children everywhere. Such a basic right cannot continue to be ignored.
Better National Responses Malawi now has 100% national coverage of CMAM, which is a milestone towards the institutionalisation of the approach developed by Concern and Valid. In 2010 two District Health Offices supported by Concern in Malawi took full responsibility for the programme, ensuring local sustainability. Our fiveyear National CMAM programme in Ethiopia, which aimed to institutionalise CMAM within the regular Ministry of Health services concluded this year. The programme has treated 41,233 children to date and Sphere standards were met by the final year. The technical capacity of the Ministry of Health has improved; there is a more effective and timely response to nutrition emergencies and most health facilities have included CMAM in their action plans and staff training modules. The Ministry of Health in Rwanda was so impressed by the effectiveness of the Care Group model within our Child Survival Programme that they have now incorporated our programme into the health system and have scaled it up significantly. By October 2010, the number of Care Groups had risen from 157 in 18 health centre zones to 660 groups – with over 12,000 members – in 85 zones. In Nepal, we supported Bardiya province District Health Office to integrate CMAM into the primary health care system, running a pilot with them prior to national roll out. The death rates were notably low at 0.34% and the district will roll out the full programme in 2011 with knowledgeable staff committed to the approach. UNICEF is now using the Bardiya pilot as a model district for CMAM across Nepal. In Sierra Leone, we provided technical assistance to the Human Resources department of the Ministry of Health to support fast track recruitment and deployment of staff needed to launch the country’s new Free Health Care Initiative.
International Learning The experience of the Haiti Child Survival Programme was disseminated at the International Urban Health Conference as, prior to the earthquake, the project had made significant progress towards its objectives. Concern worked as part of the Global Nutrition Cluster of the UN to develop strategy, made two presentations at the Irish Forum for Global Health conference and participated in a wide number of international conferences and working groups in order to share lessons learned from our practice in the field and advocate for wider change.
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Review of Progress and Lessons Learned In 2010, we evaluated 13 of our Health Programmes in 11 countries. As well as documenting much of the success we have detailed above, a hugely important part of these evaluations is to discover where we can make improvements. There were some common lessons from CMAM programmes particularly around sustainability. Strong and frequent communication with Ministries of Health is required and we need to improve our inputs into supervision of health staff and volunteers, community mobilisation and the transportation of ready to use food. In our water and sanitation work, while we are strong on the hardware side (providing wells, latrines and so on), we need to improve our hygiene promotion work, putting it at the core of our programming to ensure good health outcomes. Finally, we need to improve our Monitoring and Evaluation systems, ensuring we have strong baseline information. While most of our water and sanitation programmes reported an improvement in health status of the communities, this was based on anecdotal evidence and secondary sources. These recommendations will be brought into our health programming in 2011.
Chantal Mukarubuga is a Community Health Worker in the village of Nkima in Nyaraguru. Photographer: Noel Gavin/Allpix.
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87%
of people in Rwanda that Concern works with now know how the HIV virus is transmitted.
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HIV and AIDS HIV Our aim is to reduce HIV incidence and to minimise the impact of HIV and AIDS among people living in extreme poverty.
During 2010, Concern’s HIV and AIDS programme reached almost 360,000 people directly and 1.2 million people indirectly. A total of 775,000 beneficiaries were female. Tremendous strides have been made in the treatment of people with the HIV virus in African and other developing countries. Nearly four million people in Africa are now receiving HIV and AIDS medication, up from only 50,000 people in 2002. However, the extreme poor still suffer enormously from the effects of the virus. Many live in remote areas where health systems do not function so drugs are unavailable to them. Those who can get them are often undernourished and cannot stomach them, or the treatment regime is too complicated for them to manage, so the treatment is ineffective. The burden is hugely increased by the stigma that many still face; often they are outcasts from their communities, and even their families just when support is most needed. Cultural attitudes of men towards women leave women and girls particularly vulnerable. Concern’s HIV and AIDS programme has a number of goals: to prevent the transmission of HIV, to tackle stigma and discrimination against those affected, to support people to access care and treatment, and to ensure people living with the virus receive good nutrition and give them an opportunity to continue to earn their living. We also support and advocate for national and international strategies to tackle effectively the disease in developing countries.
Prevention Concern has found that involving community leaders in prevention efforts is a powerful tool. In Liberia, one of our partners in Montserrado made a breakthrough when they successfully engaged traditional, religious and local leaders to promote the campaign in schools, churches and mosques. Through their efforts HIV and AIDS messages are being heard and important prevention measures such as condoms are becoming increasingly acceptable in these traditionally conservative institutions. The Zimbabwe programme has also targeted community leaders, resulting in open discussions on safer sex and an uptake in the use of condoms. Training on the Zimbabwean legal framework was also given, with 14 cases of rape and 44 of child abuse reported to the police in 2010. Previously such cases would have been referred to traditional courts and settled with a small payment of livestock or cash. In Haiti over 65,000 condoms were distributed. Our programme in Rwanda has seen a massive surge in awareness about the disease; previously only a third of households could name three ways of contracting HIV but in 2010 over 87% of people displayed a comprehensive knowledge overall, and correctly identified how the virus is transmitted. This compares extremely positively with the Rwandan national average of 11.1% of 15 – 24-year-olds who know the transmission pathways. An important finding of the Rwandan programme has been the importance of targeting men, as it is culturally difficult for women to negotiate safer sexual practices.
Effective Treatment In Liberia, over 4,600 people benefited from counselling, testing, care and support provided by Concern through a local partner. In Rwanda, when we began our programme only 8.6% of 15 – 49-year-olds had been tested for HIV; now, in 2010, this has passed 96%. Numbers being tested also rose in Ethiopia by 20%, deaths due to AIDS have reduced and the quality of life for people living with the disease has improved due to better treatment and care services. In India, we worked with the Orissa State AIDS Control Society to pilot a tracking system for patients who left their Anti-Retroviral Therapy (ART) regime, so the health system can follow up and ensure they continue to receive treatment. The pilot has demonstrated evidence of initial success. In Uganda, we provide support to the Uganda National AIDS Service Organisation to build the capacity of four local networks to provide HIV and AIDS service delivery. All these networks have harmonised their advocacy positions giving them a more powerful voice, evidenced by a significant success this year in the shape of improved access to ARVs at sub-county level in Rakai. In Zambia, knowledge about treatment has increased from less than one third to three quarters of programme participants. 79% are now adhering to their regime as they understand the importance of consistency. Concern’s advocacy efforts contributed to the Zambian Government’s decision to increase the number of ART centres in two districts from five to 13, with two in remote areas.
Living without Stigma In Rwanda, the efforts of 46 local solidarity groups have borne fruit. During the 2010 programme review, over 95% of participants said that stigma was no longer a serious issue. Previous research from one district had indicated that 44% of people would not sit to share a meal with a HIV positive person. This year, anti-AIDS club members organised a community event where invitees from across the community happily ate together. In Zambia, we have observed an equally dramatic reduction in previously widespread behaviour that stigmatised and segregated people, for example, separate eating and washing facilities, isolation, divorce and loss of employment. The attitude of staff in health centres has also changed and this has contributed to an increased uptake of voluntary testing and counselling. In India, we tackled attitudes of Grade IV frontline staff in hospitals, i.e. receptionists, help desk personnel, hospital aides and security. Often these employees are the first point of interaction for patients. An assessment following training in 18 hospitals showed that their hesitancy to mix with HIV positive patients had drastically reduced; participants said they would now use the same bathroom as a person with HIV and accompany them as required within the hospital.
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An Assured Income In Zimbabwe, Concern-supported projects designed to boost the income of HIV infected women and girls consistently contributed 60 - 80% of household income during the year. The 1,700 plus participants spent an average of 31% of this income on education and 26% on food. In Rwanda, 72% of people with HIV or AIDS who receive support to farm or manage other small enterprises now have a monthly income of 10,000 RwF to 15,000 RwF, (€12 to €18) up from only 6,500 RwF (€7) in 2007. All of the participants are involved in savings and credit groups and are saving an average of 6,400 RwF (€7) per month. Vegetable and livestock production in Zambia has also boosted incomes, helping people pay transport costs to hospital, but equally importantly, people have reported that they have gained weight, and have fewer infections, thanks to better nourishment. In India, our livelihood support initiative for people living with HIV and AIDS has been documented as a case study in success by the Indian National AIDS Control Organisation and the United Nations Development Programme, and will be included in state sponsored initiatives across India.
Review of Progress and Lessons Learned In early 2010, a review of all recent HIV evaluations was completed and whilst overall it reflected positively on Concern’s work, it also noted potential improvements in some areas. While Concern’s response to the changing needs of People Living with HIV (PLHIV) was commended, more attention needs to be focused on the Greater Involvement of People Living with HIV and AIDS (GIPA) principles. The review reflected positively on our partnership approach but suggested that there needs to be greater clarity on roles and responsibilities around monitoring and evaluation. It also highlighted the need to improve the gender dimension in our programmes. The number of men taking part in programmes and groups remains low, thus increasing the burden on women and reducing the impact on changing male behaviours. These issues will be addressed in our 2011 programmes.
Precarious building in the St. Martin area Port-au-Prince, Haiti. Photographer: Brenda FItzimons, The Irish Times.
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400 families
in Haiti, are living in new homes that are tested to withstand hurricanes and are fire resistant.
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Emergency Response 55,000 In Haiti, we provided camp management services to 55,000 displaced people in 13 spontaneous and planned settlements.
In 2010 Concern responded to 41 emergencies in 16 countries, meeting the needs of 3.7 million people directly. 2010 was dominated by two of the largest and most complex emergencies that the international community has responded to in recent years. The earthquake that struck Haiti in January 2010 devastated much of an already desperately poor country. The sheer scale of the damage combined with the existing frailty of the Haitian state and the immense poverty of its people posed enormous challenges to the response and recovery effort. We lost one of our Haitian staff and many others suffered the trauma of losing homes and loved ones, but despite the immense difficulties, we had launched our response within 24 hours. Through our long-term presence in Haiti, we had become a trusted community partner in the poorest slums of Port-au-Prince and this enabled us to work with communities there to address immediate needs as well as help people to begin recovery over the longer-term. In Pakistan, we did not face just one emergency but a continuous series of floods over six weeks that ultimately covered an area the size of England, affecting 20 million people. However, we were also well placed to respond as we had spent the previous three years building up the emergency response capacity of 36 local NGOs. When the floods happened, we rapidly engaged the best placed of these partners and scaled up to our biggest ever emergency response in Pakistan, with a budget of â‚Ź16.9 million. Many emergencies fell outside the headlines; prolonged crises in Somalia, Sudan (Darfur), South Sudan and Chad were mostly related, directly or indirectly to conflict. Extreme weather also continued to be a major factor in 2010. We now recognise the cyclical and increasingly frequent nature of these emergencies and work with relevant authorities and other agencies to carry out preparedness activities such as pre-positioning stocks and developing early warning systems. In Niger, this preparedness resulted in an early response to the summer food crisis and significantly mitigated the effects in the areas where we work.
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Our Concern Works february 2010
Immediate Life-Saving Response In the immediate aftermath of the earthquake, Concern rapidly responded in the poverty-stricken areas of St Martin and Martissant in Port-au-Prince, on La Gonave Island and in Saut d’Eau. We began with the delivery of clean water, reaching 130,000 people, following which we distributed vital supplies – blankets, tarpaulins, tents, solar kits, rope, kitchen sets and emergency shelter sets – to 36,586 households, approximately 178,000 people.
62 yrs
59 y s
n he f r t mon h of our s x mo th ecove y pl n Con ern p ov ded wa er san ta i n a d s el er rea hing one hi d f the 150 000 ea thqu kea fe ted peop e we ar eted
Conce n p ov ded she ter or 58 000 peop e f er the ea thq ake Appro ima ely one mi l on peop e are s i l i ing n eme gency she ers
7.0
life expectancy of peop e in Hai i
Ha t s ar hquake magn tude
play, games & art We he ped over 7000 ch dren deal wi h t auma hro gh p ay gam s a d a t
28 schools
blankets
72% of Ha t s p pula on ve on ess than $2 a day
emerge cy res onse budget
2,300 tents
mosquito nets
5,000
w re re opened wi h our he p
96,000
Haiti
hygiene kits p egnant women r cei ed ext a food
D s r but d n the s x mon hs fo ow ng the ear hquake n Ha t in Janua y 2010
clean water n the immed ate a te m th of t e Ha t an ea thqu ke Con ern de i ered c ean wat r to 130 000 peop e
Healthy Mothers and Babies We expanded our nutrition programme to cover seven communes, treating 2,178 children for malnutrition, while over 96,000 children and pregnant women received extra food. Mortality rates at 2.5% were significantly below the generally accepted Sphere maximum tolerable rate of 10%. Initiatives in the nutrition programme included the establishment of private mother and baby tents because mothers felt intimidated to breast-feed in the open environment of the temporary camps, therefore the risk of malnutrition to their babies was much higher. We supported 8,193 mothers and babies in these tents and an encouraging development was seen during the year when 19% of mothers changed their babies from mixed feeding to exclusive breast-feeding. Psychologists were hired to provide post-trauma support to these mothers. The Concern nutrition programme was seen as a model of effectiveness by many other organisations in Haiti, and our staff provided training on baby tents and the management of acute malnutrition to a number of other NGOs.
Disease Prevention Since the earthquake, Concern has continued to provide crucial water, sanitation and hygiene services. In Port-au-Prince, we have met the needs of 75,000 displaced people, providing 6.5 litres of water per person per day, installing latrines and showers, carting away rubbish (12,000 m3 by the end of December 2010) and distributing over 100 metric tons of hygiene supplies (including soap, water containers, mosquito nets, and water purification tablets). The distribution of hygiene supplies was significantly increased during the cholera epidemic and accompanied by a campaign to educate people on the disease. In the rural areas, we also implemented water and sanitation activities, including collaborating on technical feasibility studies to develop the two largest springs in Haiti as clean water sources.
See pages 14-17 for more on Haiti
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Rebuilding Lives Across all programme areas, we ran a Cash for Work project, providing 81,000 people with a small income, contributing to post-earthquake recovery works and injecting 30 million gourds (€0.5 million) into the household economies of the poorest and most vulnerable people. We helped over 7,000 children deal with trauma through play, games and art. We trained teachers to provide classes in the camps where children could not yet return to regular school and we made it possible for 28 schools to re-open by replacing lost equipment. We provided camp management services to 55,000 displaced people in 13 spontaneous and planned settlements, prioritising safety and security of residents in some of the most dangerous slums in Haiti.
High Quality New Homes One of Concern’s major achievements has been the construction of Tabarre Issa, a resettlement site for families situated on the outskirts of Port-auPrince. Over 400 families are already living in new purpose-built homes. These have been tested to withstand a category four hurricane, are fire and termite resistant and are on raised platforms to guard against floods. Each has a cooking and indoor shower and toilet area. Erected by teams of artisans from the community, the structures have been praised by the UN Shelter Cluster as a model of Transitional Shelter excellence. By mid-2011, 1,500 families will have found a new home in Tabarre Issa, and surrounding communities. Our Emergency Response budget in Haiti was over €21 million in 2010 and the scale of the disaster necessitated an unprecedented expansion of the programme and staff. An independent, external evaluation of our response for the first eight months was positive, noting the timeliness of our response, the commitment to both rural and urban communities, the breadth of activities, our deep community links and the level of communication, consultation and participation with our work. However, with approximately one million people still living in emergency shelters in this country racked by poverty and political discord, the challenges are still huge. Right now over 110,000 people are depending upon us for survival and basic needs, and we will continue to support them and people across Haiti as we work together to rebuild their country. Our ability to deliver such a large scale programme in Haiti was dependent on the support of the public – who were very generous – and on many institutional donors including ECHO (the EU emergency programme), USAID, Irish Aid and the UN agencies.
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Floods in Pakistan and across the globe Concern responded to the needs of one million people affected by the July 2010 floods in Pakistan. We rapidly provided shelter, food, household supplies, hygiene kits, water and sanitation services, debris removal kits and emergency medical assistance in fifteen of the worst affected districts in all four provinces – Khyber Phaktunkhwa (KPK), Balochistan, Punjab and Sindh.
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Our Concern Works
continuous flooding a fe ted an a ea the s ze of En land
shelter Conce n rov ded t ans t onal she te to 105 000 peop e who e houses we e d st oyed in Pun ab Si dh and Ba uch stan
Concern’s experience in identifying and assessing local partners was a key factor in Concern Worldwide (US) Inc. securing the RAPID grant from the US Office for Overseas Disaster Assistance (OFDA). Under this grant, we are responsible for overseeing the disbursement of $18 million to organisations providing humanitarian assistance in Pakistan. RAPID aims to reach more than 1,150,000 people across the country. Concern is now moving to early recovery interventions in Pakistan. With the support of the UK Department for International Development, (DFID) and the Consortium of British Humanitarian Agencies (CBHA), in 2011 we will provide transitional shelter, water, sanitation and hygiene services, as well as grants and in-kind support to get agriculture and people’s livelihoods up and running again. In 2010 flooding also affected a wide geographical spread of other countries. In Bangladesh, we provided food assistance to 6,600 households in the aftermath of floods in the remote Haor area, while thousands of kilometres away 1,790 households in Aweil, South Sudan, received emergency supplies during floods there. Afghanistan’s cyclical spring flooding was exacerbated by heavy rains and heavy snow melt. We provided 1,000 Afghan families in 50 villages with shelter materials, hygiene kits and household supplies. Floods also hit the Amhara region of Ethiopia, and in Uganda, unusually high rainfall in the Amuria district caused water logging of land with attendant disruption to farming. In these countries we supported more than 5,000 families to withstand and recover from the emergency.
male 64% female 36%
peop e af ec ed by t e lo ding
over 3 hectares of arml nd was subme ged in the loo ing Li es ock c ops and seed banks we e wa hed away cr pp ing armers ab l ty to p oduce fo d
We were well placed to do so, as under our 2007 ‘Emergency Response Strategy’, Concern Pakistan identified local organisations in disaster-prone areas. We invited 36 of them to become ‘contingency partners’, training and supporting them on rapid needs assessments, disaster management, distributions and emergency response best practice. We also maintained permanent stocks of emergency supplies, such as plastic sheeting, hygiene kits and latrine slabs. This work proved to be hugely valuable when the 2010 floods hit. Our initial distributions came from these pre-positioned supplies and were implemented by eight of our contingency partners.
literacy levels
7 000 schools 8 000 kilometres of roads and rail and 400 health facilities were wash d away n he loods
20 million
1/5
Af er the f ood ng app ox ma e y one- i th of Pa is an s to al land a ea w s u derwa er
agricultural support we p ov ded suppo t for a me s af ec ed by the f ood ng th ough our ood ecur y nd a r cu tu al suppo t pr gramme
100%
67 y s
66 yrs
80% 60% 40% 20%
life expectancy of peop e in Pak s an
0 60% f the popu a ion ive on ess than $2 per day
See pages 52-55 for more on Pakistan
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Protracted Humanitarian Emergencies Democratic Republic of Congo remained highly insecure with accompanying large-scale population displacement. While we continued to distribute essential shelter and hygiene supplies, 1,770 displaced families also received cash vouchers which they spent at ‘closed markets,’ where pre-selected suppliers exchanged the vouchers for goods. This had the added benefit of helping traders and boosting the local economy. A Cash for Work initiative provided an important cash injection for vulnerable people, including women, for some of whom it was their first-ever income. The road rehabilitation work carried out resulted in a six-fold increase of mixed traffic, and local communities along the routes now have better access to both aid and market opportunities. South central Somalia was also characterised by continued civil conflict in 2010, with an estimated two million people in need of humanitarian assistance. During the year we reached over 300,000 Somalis with nutrition, water and sanitation, cash for work and emergency cash relief. In Chad, Concern continued to manage seven camps, where we coordinated efforts to meet the needs of 62,000 displaced people. There is a high level of participation by residents in the running of the camps, and they have told us that they feel safe in the camps and the services we provide are what they need. In West Darfur, Sudan, people’s lives improved significantly in 2010, with 52% having improved access to land, 60% engaging in agricultural cultivation and 83% reporting acceptable food consumption. In Zimbabwe, we supported 149,291 people with food assistance for the first three months of 2010, and 15,291 from October to December 2010.
A New Model of Early Response In Niger, during the height of the food crisis in July 2010, malnutrition levels in Concern’s programme area remained below emergency thresholds, thanks to an innovative integrated approach to mitigation. Recognising that a crisis was on the way in the early part of the year, we brought together a number of the skills that we have honed over time: agriculture, nutrition, and emergency cash payments using mobile phones. We involved myriad actors; communities, government, local market traders, the police and the private sector. Early warning systems such as FEWS Net were used to forecast risk, enabling us to identify early on which communities were likely to suffer most. We then developed a support package adapted to the specific needs and market access of the most vulnerable. We supported people to grow their own food by providing seed, fertilizer and tools. Those unable to grow produce could purchase food with the cash instead. The money was transferred through a mobile phone mechanism developed through a partnership with Zain Telecom. We worked with market traders to ensure supply was available to meet the demand generated by the cash transfers. Alongside this package, we scaled up treatment services for acute malnutrition in association with the Ministry of Health, while all children under two received food for four critical months.
During the project we reached 18,000 households with our distributions, and fed 30,000 children, which significantly reduced the effects of the drought-related food crisis that had huge consequences in many other parts of the country. The Boston based Tufts University is working with Concern to evaluate the impact of this project. In 2011, we look to build a rigorous evidence base as to the efficacy of this approach so other humanitarian actors can adopt the model.
Prepared for Disaster In Bangladesh, Concern supported local authorities to develop emergency plans. Thirty three plans were finalised in 2010. In Sierra Leone, we supported the national Disaster Management Department to review policy to ensure that the most vulnerable people are included. The revised version is now awaiting parliamentary approval. We also supported the department to set up a website and to conduct training across the country. The scenario of potential violence around the time of the independence referendum in South Sudan (held under the auspices of the Comprehensive Peace Agreement) led to Concern in late 2010 prepositioning emergency stocks, and making contacts with other agencies with whom we would work should the worst happen. Thankfully, the referendum itself passed off relatively peacefully. In North Korea, Concern participated in the development of an inter-agency plan to deal with quick onset flooding, as had happened in 2006 and 2007. In Somalia, a process of developing a seasonal calendar on health-related problems with the community was engaged in so people could prepare more effectively to cope with seasonal health risks. We pre-positioned oral rehydration salts in every village, and provided mosquito nets to pregnant women and children under five. Most importantly, people actively participated in educating and mobilising their communities to know when flooding or other health threats occur. In Burundi, schools have been the focus of our preparedness activities; these ranged from tree planting to fence construction to hygiene. The Burundian authorities took note of the success of the project and a group of representatives visited eight project-supported schools to interview and discuss issues with parents, teachers and children to develop a radio campaign which aired in December.
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Review of Progress and Lessons Learned In 2010 evaluations were conducted in four countries. An evaluation of the Haiti emergency conducted in October 2010 considered the breadth of the programme, the timeliness as well as the prioritisation of meeting needs, such as addressing clean water and sanitation, shelter and incomes in such a complex context and concluded that the response had been effective. It was further noted that progress was made in being accountable to the beneficiaries. The evaluation of the emergency response programme in Kenya considered the programme effective and appropriate. However, a lack of integration between the three programme components of nutrition, hygiene promotion and a voucher programme was noted, and this is an area we will need to bear in mind in future programme design. The emergency cash transfer programme in Zimbabwe was evaluated by Oxford Policy Management. It found that as a result of the programme, beneficiaries had sufficient staple food for the timespan involved and that the primary aim of the project was fully met. It noted that inputs had a positive impact on intra-household relations but that they needed to be carefully structured to avoid adverse effects on community interaction. This learning was taken on board in the ongoing programme. A more broadly based joint study conducted by Oxfam and Concern on cash transfers and gender recommended more explicit targeting of women and a greater focus on cash transfers allows women greater choice in what they will buy. We will build all these lessons into future programming.
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Financial Statements
2010
Koonj and Hazora, Thatta District Sindh, Pakistan. Photgrapher: Jennifer O’Gorman, Concern.
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â‚Ź16.9 million Emergency response budget
3,000,000 hectares of farmland submerged
six months after the onset of the floods, the majority of those affected have returned to their villages and many have begun rebuilding their homes.
Pakistan
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Our Concern Works
continuous flooding affected an area the size of England
shelter Concern provided transitional shelter to 105,000 people whose houses were destroyed in Punjab, Sindh, and Baluchistan
literacy levels
male 64% female 36%
people affected by the flooding
over 3 hectares of farmland was submerged in the flooding. Livestock, crops and seed banks were washed away, crippling farmers’ ability to produce food
7,000 schools, 8,000 kilometres of roads and rail and 400 health facilities were washed away in the floods
20 million
1/5
After the flooding approximately one-fifth of Pakistan's total land area was underwater
agricultural support we provided support for farmers affected by the flooding through our food security and agricultural support programme
100%
67 yrs
66 yrs
80% 60% 40% 20%
life expectancy of people in Pakistan
0 60% of the population live on less than $2 per day
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In Pakistan july 2010 Worst floods in 80 years kill at least 1,600 people and affect more than 20 million.
one million people our emergency response reached over one million people
79,000 In the aftermath of the flooding 79,000 people benefitted from the distribution of 11,300 food kits.
Concern’s food kits contain
40kg flour 10kg rice 2.5kg lentils 2.5kg sugar 2.5kg cooking oil 800g salt 450g tea 10 family packs of biscuits
In Pakistan, we did not face just one emergency but a continuous series of floods over six weeks that ultimately covered an area the size of England, affecting 20 million people. However, we were also well placed to respond as we had spent the previous three years building up the emergency response capacity of 36 local NGOs. When the floods happened, we rapidly engaged the best placed of these partners and scaled up to our biggest ever emergency response in Pakistan.
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Your Concern in 2010 Advocacy
Concern believes that inequality and injustice are the root causes of poverty. Concern also believes that advocacy is a key tool in persuading those with power and influence to adopt and implement policies intended to tackle these root causes. Concern’s advocacy takes many forms, engaging directly with policy makers at one end of the scale to public campaigning at the other. Our priority themes are Hunge , Emergencies and Humanitarian Crises, and Aid Effectiveness. The choice of themes reflects experience derived from our programmes throughout the world.
women can’t wait Over 10,000 signatures were collected as part of our “Women Can’t Wait” campaign, which called on world leaders to recognise the plight of poor women farmers.
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Towards an End to Global Hunger Concern was very active on the issue of hunger throughout 2010. Together with Irish Aid and the High Level Task Force on the Global Food Security Crisis appointed by the Secretary General of the United Nations, we co-hosted a dialogue in Dublin in May which brought together representatives of civil society, key multilateral bodies and national governments. The purpose of the dialogue was to help frame the Comprehensive Framework for Action (CFA), a series of policy recommendations to tackle the problem of food insecurity. The CFA was published later in the year and was widely welcomed. Concern also consulted with Irish Aid and the Irish Government’s Hunger Envoy in relation to the implementation of the recommendations of the 2008 Hunger Task Force report. The Envoy’s follow-up report was published in November.
Placing Nutrition at the Centre Concern, both independently and in association with the Nutrition Action Group, a small group of NGOs working in the area of health and nutrition, advocated intensively for greater focus on nutrition and nutrition outcomes in policy making. We endorsed the Framework for Action to Scale-Up Nutrition (SUN) published in April and were actively involved in the initiative taken by Dr David Nabarro, Special Representative of the UN Secretary General for Food Security and Nutrition, which led to the publication in September of the road map for implementation of the SUN. We are also an active supporter of the One Thousand Days Initiative, a movement launched by the Irish and US governments represented by Foreign Minister Micheál Martin, and Secretary of State Hillary Clinton at the MDG review summit in New York in September. The purpose of the movement is to promote interventions, both direct and indirect, in the first thousand days after conception, aimed at ensuring that a child is well nourished. Our Chief Executive, Tom Arnold, was one of two NGO representatives to address the launch of the movement and we undertook to co-host a conference in Washington DC in 2011 when progress will be assessed. In November Concern and AWEPA (Association of European Parliamentarians for Africa) co-hosted an important forum with Irish politicians, policy makers and peer NGO’s on the One Thousand Day Initiative.
Food Security for All For the fourth consecutive year we published the “Global Hunger Index” in co-operation with Welthungerhilfe, our German Alliance2015 partner and the International Food Policy Research Institute (IFPRI). The focus was on the crisis of child undernutrition and the index assessed the food security of countries based on a number of indicators. Concern’s work on nutrition in Bangladesh was featured in the publication.
Our “Unheard Voices” campaign continued to focus on the problems of female marginal farmers. Over 75% of the world’s poor are subsistence farmers, many of whom are women. Ironically they remain ‘farming but hungry,’ when there are many proven solutions to increasing productivity and enable them to feed themselves and their families. A meeting intended to promote awareness of the issue amongst politicians and policy makers was held in the Houses of Parliament in London to mark International Women’s Day. Concern directly lobbied the new British Government on the issue later in the year. A postcard petition entitled “Women Can’t Wait” was taken up in many of Concern’s countries of operation and the postcards were handed in to Dr David Nabarro of the High Level Task Force in New York in September.
Effective Emergency Response Concern’s advocacy on emergencies was focused on the two big humanitarian disasters of 2010 – the Haiti earthquake and the floods in Pakistan. In both cases the advocacy was led by the country teams and supported by the Advocacy Unit. Concern continued to use positions of influence with important networks, VOICE, ICVA, IASC and Interaction to advocate on issues which have come to attention through experience in responding to humanitarian crises in a number of different countries. At a time when the engagement of some donor governments appears to be unduly affected by security and economic considerations, Concern continues to make the argument that humanitarian interventions should be dictated first and foremost by the needs of the people, and aid should be delivered in a way that is consistent with the humanitarian principles of independence, impartiality and neutrality. We also worked closely with fellow International NGOs to advocate against UN structural integration in Somalia; in such a complex political environment it is more imperative than ever to ensure that we adhere to humanitarian principles in order to retain the space to respond to urgent need in this difficult context.
Aid that Works Concern co-operates with its colleagues in Alliance2015 on a number of projects related to aid effectiveness. Concern’s engagement reflects its understanding of the two-sided nature of aid effectiveness from the perspective of an INGO. On the one hand, Concern looks to make donors, in particular the European Commission and Irish Aid, accountable for their adherence to the Paris Principles and the Accra Agenda. On the other hand, Concern looks to demonstrate the effectiveness of its work by close collaboration in the field with the member organisations of Alliance2015. This collaboration includes the sharing of facilities, joint planning and co-operation in programme work, including advocacy. Concern is an active member of Concord, the umbrella body of European NGO platforms, and also of Eurostep, an NGO coalition based in Brussels, which engages with the European institutions on matters related to development.
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We lobbied extensively on the composition and mandate of the EEAS (European External Action Service) prior to its establishment at the end of 2010. Together with our sister organisations in Dochas, the Irish NGO platform, we sought to build support for Ireland’s overseas aid programme. In particular, we looked to persuade politicians and policy makers to continue to support the achievement of the Millennium Development Goals and to underpin that support with the necessary financial commitment.
Country Level Just as the humanitarian space in many countries has shrunk in recent years so too has the space for advocacy. Some countries, not all of them fragile states, have introduced laws or regulations with the avowed purpose of rendering it more difficult, if not impossible, to engage in advocacy. As a general rule, Concern’s advocacy strategies are closely linked to programme objectives and experience. In many countries advocacy is carried out by Concern’s local partners; in others, Concern has been instrumental in establishing networks or other bodies to facilitate advocacy.
Development Education Active Citizens Each year thousands of people raise their voices in support of the world’s poorest and most disadvantaged people. Through our Active Citizenship programme we provide a variety of ways through which these voices can be heard. In 2010 many continued to promote the rights of those worse off than us through campaigning, debating, writing letters and speaking out. We know that Concern is but one participant in the effort to defeat poverty, and it is encouraging to know that our supporters share our belief that everyone in the world deserves the right to a decent life and are prepared to help bring this about.
Imagining a Better World Our third annual Creative Writing Competition attracted entries from 28 countries around the world. In 2010 we invited entrants to send us the speech they would give to the General Assembly of the United Nations on one of the Millennium Development Goals. Winning and selected entries were published in a book entitled “Mr Secretary General, Ladies and Gentlemen,” a copy of which was presented to the Secretary General Mr Ban Ki-Moon.
School Support Our annual Concern Debates Competition celebrated its 25th year in 2010. The competition not only provides an important outlet for hundreds of students to research and debate critical global issues but it also engages hundreds of volunteer adjudicators and teachers, who generously give their time and expertise in helping to ensure the success of the competition. In 2010 our national champions, Athlone Community College, visited Concern’s work in Rwanda, while the National Final runners-up accompanied our schools’ programme officer on a visit to Brussels to meet Irish MEPs and to learn more about the European Union’s development programme. The Concern Campaign Academy for secondary school students continued to run in 2010 with nearly 30 students taking part in the programme.
Campaigning for Change Concern’s participation in campaign work is another means through which the voices of our supporters and beneficiaries can be heard. Our involvement in the Stop Climate Chaos coalition highlighted the need for additional technical and financial support to Developing World countries impacted by climate change. It was hoped that this support would be included in the Government’s Climate Change Bill, however an election was called before the bill was presented to the Dáil.
Concern Works with Information Technology Information and communication technology has revolutionised the way Concern Worldwide works. Fifteen years ago, communication with the field was a matter of faxes at best, and more often mail couriers. An exchange of information could take a long time to complete, and people had to travel for hours to the nearest pay phone in order to have a phone call. Now we use email and Skype for voice and video conferencing to communicate. We also use technology across all aspects of our work from how we manage our finances to the use of mobile phones to support cash transfers. Today, advances in cloud computing technologies have made it easier than ever to scale technological solutions. Cloud computing systems allow for growth and new features without requiring existing infrastructure to be rebuilt. During 2010 we moved from an in-house hosted email system to a system hosted by Microsoft on their cloud computing platform. We hope to use cloud based technology further over the coming years. Concern is always looking at ways to create new, practical and flexible technologies to address problems in healthcare, education, agriculture and finance. To make this happen, Concern has built strong partnerships with other International Non Government Organisations (INGOs) through its membership of NetHope, and also with technology providers. Concern believes that Innovation for Development (I4D) is critical to extending the impact, reach and scale of our humanitarian programmes in the developing world.
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4,683 We sold 4,683 piglets over the course of 2010.
Your Concern in 2010 Fundraising
2010 was not only a challenging year in the countries that we work in; it was a particularly difficult year across all sectors of society in Ireland (and indeed the UK) as people struggled to come to terms with the effects of the fall-out of economic crisis. A difficult fundraising year might have been anticipated, but, as always, when faced with the desperate plight of our fellow human beings in Haiti, Pakistan and elsewhere, our supporters continued to show extraordinary generosity. Despite all, the year saw us raise a staggering â‚Ź60.7 million in public donations.
Rising to the Challenge of Disaster When natural disasters struck this year with horrifying results in Haiti and Pakistan, Concern reacted quickly and effectively. The support of the public was no less swift. Haiti was the biggest fundraising response that Concern has ever experienced following a disaster. When disaster struck in Pakistan just six months later, Concern supporters again donated generously to help families affected by the floods. These campaigns were a great example of how we use old and new fundraising techniques alongside one another. Almost 20,000 people responded to our emergency mailings in 2010. For those looking for an instant way to donate we embraced the power of mobile technology. We appealed for funds for the first time through the RTE News app on the iPhone, and put up posters in cinemas, airports and bus shelters asking supporters to make a donation by simply sending us a text message. Meanwhile thousands of people got active in their fundraising; organising and participating in over 400 different kinds of fundraising events from concerts to sponsored sleep outs. Giovanni Trappatoni, Irish National Soccer team manager lent his support to a ‘’Football for Haiti” tournament which raised €70,000 over one long day of football. The management and staff of companies throughout Ireland responded with incredible generosity to the Haiti earthquake, donating almost €1.5 million to Concern’s appeal. In many cases, staff members initiated different fundraising activities including bake sales; coffee mornings and canteen collections, and in many other cases, companies made corporate donations or organised internal initiatives to support our campaign. We also received support from some unexpected quarters, with actor Johnny Depp and musicians Shane McGowan, Nick Cave and others releasing a song in aid of our Haiti appeal. The song was available for download online, and received a lot of attention on the web.
Best Practice The Charities Act 2009 adopted a three pronged approach to regulating charitable fundraising, including the development of Guiding Principles for Fundraising. Concern actively supported the process (which was led by the Irish Charities Tax Reform Group (ICTR)). The principles will provide clarity and assurances to donors about the organisation they support, will promote accountability and transparency and improve the way charities raise their funds. Concern has signed up to the guiding principles and has committed to ensuring that our fundraising activities comply with best practice.
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Fasts, Festivals and Running Shoes This year Concern used a fresh and innovative approach for our longest running fundraising campaign, the Concern Fast. By adding all the fun of a festival to the campaign and creating the Concern Fastival, we aimed to make the fasting experience more fun for our supporters and to appeal to new audiences. Thousands of school children and individuals around the country signed up to fast and also to enjoy some of the events that took place in Dublin, Belfast, Limerick, Cork and Galway. Some of Ireland’s up and coming talents gave their time and skills for free in aid of childhood malnutrition and to reward our supporters for going hungry for 24 hours. The Concern Fastival 2010 received lots of media attention and helped to highlight the issue of malnourishment in children under-five. This was supported in particular by our media partners: Today FM and the Irish Daily Star. We developed a new website to support the campaign which linked in with social networking to highlight the community feel of the Concern Fastival. Supporters all over the country shared their stories about what they were giving up and how they were coping through their fast. Hundreds of schools and individuals all joined forces to help us to tackle childhood malnutrition. We launched a new event this year with the Great Ethiopian Run. We sent a group of 22 people, led by Olympic medal winner John Treacy, to take part in this life-changing event both for the participants and the Ethiopian families who will benefit from the €70,000 raised. This event will now be a mainstay on the Concern calendar. We also sent participants to Tanzania, India and even had a few hardy souls who managed to scale the 14 highest peaks in Ireland in under 48 hours.
Corporate Commitment Corporate donations continued to be an extremely important source of income to Concern in 2010. By developing a range of partnerships with companies in specific sectors where there is an affinity with Concern’s programmes (for example the pharmaceutical business to support our health work or the food sector to support our nutrition projects) we are benefiting from a more strategic approach. In April 2010, The Accenture Foundations awarded Concern $1.5 million to fund a conservation agriculture project to train 6,400 farmers in Malawi and Zambia over a three year period. The award is part of Accenture’s corporate citizenship focus, Skills to Succeed, which educates people around the world, building skills that enable them to participate in and contribute to the economy. Accenture staff from their Dublin office have also supported Concern at home by volunteering their time and skills on a number of skills-based projects.
2010 marked the final year of the €500,000 international research initiative involving the Kerry Group, the Washington based International Food Policy Research Institute (IFPRI) and Concern Worldwide. Kerry Group and Concern are currently engaged in discussions with a view to using the lessons from this programme in a new collaborative project in Zambia, which aims to realign agricultural interventions to improve nutrition.
New Ways to Engage We are continuing to develop a range of new vehicles and different ways in which supporters can engage with us. Our Women of Concern initiative aims to raise awareness of the situation of women in developing countries and to provide funding for a number of projects that specifically support such women. A highlight of the year was the launch of our Women of Concern photography exhibition, featuring pictures by three of Ireland’s top female press photographers, Brenda Fitzsimons (The Irish Times), Marie McCallan (Press 22) and Kim Haughton (www.kimhaughton.com). Their stunning photographs of Haiti, Bangladesh and Ethiopia drew thousands of people to gallery venues throughout the country, raising awareness of the plight, resilience and importance of women in developing countries. Many other events took place throughout the year including concerts, cooking demonstrations with Neven Maguire and Rachel Allen, coffee mornings and dress swaps. We have re-launched our Harambee initiative which gives supporters the opportunity to contribute to a specific overseas project in Burundi, Chad, Democratic Republic of Congo or Haiti. Our Christmas Gifts Campaign has been consistently well supported since it started and in 2010 we expanded it into a year-round offering for the first time. We encouraged people to ‘treat the one they love to a meal on Valentine’s Day’ and to buy ‘someone special eggs for Easter.’ For the second year running, piglets were the most popular gift and we sold 4,683 piglets over the course of 2010.
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Increased Online Concern Social media is also an increasingly important way for us to hear the voices of those interested in development issues. In 2010 we joined the millions of people around the world on Twitter and Facebook. We are happy to report that we have a growing number of ‘followers’ on Twitter, and an increasing amount of people ‘like us’ on Facebook. During the Haiti and Pakistan emergencies, social media, especially Twitter, was an extremely effective way of communicating with the public about what was happening and what we were doing to help. In particular, we had key personnel from the emergency response team tweeting from Haiti, adding up-to-the-minute reports to our other online coverage on concern.net. We also used our YouTube channel to broadcast videos about the progress we made and Facebook to communicate to another wide audience. What was the result of all of this communication? Overall, the number of people visiting our website rose significantly and the donations to our Haiti appeal increased dramatically. In 2010, Concern was the recipient of the money raised through Twestival, a global festival, consisting of a series of events around the world organised and run by volunteers who are linked through Twitter. The 2010 theme was education, and the money raised by Twestival has helped change the lives of thousands of people in Liberia, Burundi, Haiti and Malawi.
Members and Volunteers In 2010 there were nearly 700 members of Concern. These members are eligible for election to Concern’s governing Council as well as forming a large constituency of activists across the country who support the organisation through volunteering and fundraising, as well as by attending talks, exhibitions and other events hosted by Concern. Our members’ newsletter, published three times in 2010, sought to keep the membership up to date on both governance and broader organisational events. Our members and long-term volunteers also work at the coalface each year, carrying out hundreds of country-wide collections. In December we had over 250 collections take place even with the worst snow that was seen in over 25 years. As collections had to be cancelled, new ones were organised to ensure that every opportunity would be given to raise as much income for our projects as possible. In a year that was challenging in so many ways, the goodwill and dedication of Concern’s many supporters shone through at every stage. Our work would not be possible without you.
Children playing in the Pavement Dweller’s Day Care Centre, Dhaka, Bangladesh. Photographer: Marie McCallan, Press 22.
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1 2 3
5 6 7
4
8
1
Ian Dempsey, Today FM and Dillon Shinbach launch the Concern Fastival 2010.
2.
Concern CEO, Tom Arnold, with US Secretary of State, Hillary Clinton, at 1,000 Days event in New York.
3.
Ronan Collins, RTE, Denis Kane, Druid’s Glen and John Treacy launch Concern’s Golf Classic.
4.
Debate winners Mark Roche, Michelle Mc Hugh, Sorcha Mc Manus and Gavin Ward from Athlone Community College with broadcaster Claire Byrne who chaired the Debate final.
5.
Amy Huberman, Women of Concern Ambassador.
6.
Brenda Fitzsimons, Marie McCallan and Kim Haughton at the launch of the Women of Concern exhibition March 2010.
7.
Rob Kearney, Concern Ambassador, promotes Concern Gifts.
8.
Mark Ryan, Country Managing Director, Accenture Ireland and Tom Arnold, CEO Concern, announce a grant from The Accenture Foundations.
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Review of financial outcome 2010
The financial outcome for 2010 is set out in the ‘Consolidated Statement of Financial Activities’. The organisation began 2010 amidst a continued difficult and uncertain global economic environment. Despite the difficult circumstances Concern’s income and expenditure increased during 2010 thus reversing the downward trend of the previous two years. This was in the main due to the phenomenal public response to the Haiti earthquake in January and the Pakistan floods in July 2010. A more detailed commentary on the financial results reflected in the 2010 Annual Report, is set out below.
Income The organisation’s total income in 2010 amounted to €167.2 million. This represents an increase of 29% from income levels in 2009 and is the net impact of a number of substantial movements across our main income sources.
Grants from governments and institutional donors Concern received a total of €96.5 million in grants from governments and institutional donors in 2010 – see note 2(a) to the financial statements for analysis by donor. This represents a 59% increase from our 2009 levels. The Irish Government remained the single largest donor providing €24.6m or 25% of total co-funding. Though this amount was marginally down on the 2009 results, it was considered to be a reasonable result given the difficult economic and fiscal situation. The most notable increases in co-funding were seen in funding from the European Union, the British Government, UN Agencies and Concern Worldwide (US) Inc. (which incorporates funding from OFDA and USAID). Income from these donors doubled in 2010, primarily as a result of the emergencies in Pakistan and Haiti. The organisation acknowledges and appreciates the support from governments and institutional donors particularly in the current difficult economic climate. It hopes that this commitment to the poorest populations in the world will be sustained through the coming years.
Donated commodities Commodities donated to the organisation and distributed as part of its relief programmes were valued at €9.3 million in 2010, a 36% decrease from 2009 – see note 2(b) to the financial statements for details. The main reason for the decrease was the reduced level of food distributions in Zimbabwe.
Public donations Income from public donations in Ireland and UK reached €60.7 million – see note 2(c) to the financial statements for additional analysis on voluntary income. This represents an increase of 36% when compared to 2009. As mentioned earlier, the increase – which largely arises on the Public appeals and events and in the Disasters Emergency Committee (DEC) lines – is mainly a result of the phenomenal public response to the two emergencies in Haiti and Pakistan. Outside of the income raised from emergency responses, public donations remained broadly consistent with 2009 levels. Our committed giving income – which represents roughly 50% of our non-emergency public donations – held up well throughout 2010 with normal levels of donor attrition being maintained. Income from committed giving is an important channel of income for the organisation because it represents a significant portion of our total income and also because it is a long-term, regular and reliable income stream. A significant level of thanks is due to all of the donors who have continued to support the organisation in the midst of a difficult recession.
Other incoming resources Income from other resources increased to €0.6 million in 2010. This increase is due to the increased deposit interest earned as a result of the higher cash balances held during the year because of the two emergency response appeals in 2010. In 2009, Concern Worldwide disposed of a 65.5% beneficial shareholding in its former subsidiary, AMK. The profit from the disposal was reflected in the incoming resources section of the 2009 consolidated statement of financial activities in accordance with the group’s accounting policy. There were no comparable transactions in 2010.
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Report of the Council_Review of Financial Outcome 2010
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Expenditure Our total expenditure for the year was €150.8 million, made up as follows:
Charitable expenditure Fundraising (including trading) Governance
€’m
%
138.6 11.4 0.8 150.8
91.9% 7.6% 0.5% 100%
Total expenditure at €150.8 million represents a 21% increase from the 2009 level of €124.6 million. As previously outlined this increase is mainly due to the increased expenditure incurred in both Haiti and Pakistan in response to the natural disasters that occurred in these countries in 2010. Total expenditure on charitable activities in 2010 totalled €138.6 million, a 23% increase from 2009 levels. Most of the increase resulted from expenditure on emergency response with non-emergency spend falling by approximately 3%. The decision made in late 2008 to exit four fields of operation by the end of 2010 namely Nepal, Angola, Timor Leste and Lao PDR contributed substantially to this reduction. The fluctuations in the currency markets continued to be a major concern during 2010. During the year we saw the appreciation of the US dollar versus the Euro. However things improved towards the end of the year with the US dollar reverting back to more affordable levels. With much of Concern’s overseas costs being denominated in US Dollars, this depreciation has made it less expensive to fund the same level of operations than would have been the case earlier in the year. The cost of generating funds totalled €11.4 million in 2010, which represents a 4% increase from 2009 levels. Given the significant increase seen in voluntary income levels from 2009, this increase is negligible. Continued emphasis was placed on ensuring that Concern’s returns on fundraising investment were maintained as well as possible. Governance costs for 2010 amounted to €0.8 million (2009: €0.6 million), or 0.5% of total expenditure. The increased expenditure is related primarily to the strategic planning process carried out in 2010. The total costs set out above in relation to charitable activities, fundraising and governance include attributable support costs. Our total support costs for the year amounted to €8.2 million (see note 7 to the financial statements) compared to €9.7 million in 2009, a 15% decrease. This reduction is primarily due to the cost saving measures introduced in 2009. Our support services are still able to provide services of a high quality and continue to aim to maximise efficiencies whilst at the same time maintaining and improving quality standards.
Key financial performance indicators There are a number of key financial performance indicators which, taken together, are used by management and Council as a measure of performance and financial strength. These are set out below:
Indicator Return on fundraising spend Government & institutional income as a percentage of charitable expenditure Support costs as a percentage of total costs Unrestricted reserves as a percentage of total income
2010
2009
5.3
4.0
70% 5.4% 19.4%
54% 7.8% 20.0%
! Return on fundraising spend essentially measures how much we get back for each Euro spent on fundraising. This figure, which has increased by 33% in 2010, is exceptionally high as a result of the two emergencies in 2010. We are expecting it to fall back to 2009 levels in 2011. ! Government & institutional income as a percentage of charitable expenditure indicates the proportion of our core work which we can get funded without reliance on public appeals. The 70% recorded in 2010 is 16% higher than the 2009 figure. This demonstrates that the organisation’s strategies to access new government and institutional funding, have been broadly successful. ! Support costs as a percentage of total costs illustrates how much of total expenditure is absorbed by essential but non-core activities and functions. The 5.4% achieved in 2010, a 2.4% improvement from 2009, reflects the impact of the cost cutting measures put in place by the organisation in 2009 and the high level of emergency spend in 2010. ! Unrestricted reserves as a percentage of total income indicates the resources on which the group can draw on in order to continue its work in the event of a downturn in income. This has fallen by 0.6% mainly because income was higher than expected (due to the factors outlined above). The level of unrestricted reserves obtained at the end of 2010 is however considered adequate and is in line with our reserves policy.
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Report of the Council_Review of Financial Outcome 2010
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With the exception of the unrestricted reserves as a percentage of total income, improvements can be seen in each of the target ratios above. While we are extremely satisfied with the financial performance for the year, especially given the extremely difficult operating conditions, we are aware that the emergency response income (and related expenditure), has slightly distorted these figures. We expect these figures to return to 2009 levels in 2011.
Reserves and Financial Position It is Concern’s policy to retain only sufficient reserves to safeguard the continuity of its overseas operations, thereby committing the maximum possible resources to its current programmes. The total reserves of €43.7 million at 31 December 2010 are detailed in note 20 to the financial statements and fall into two categories: ! Restricted funds (€11.3 million): these funds are tied to particular purposes, which arise because of restrictions on their use imposed by the donor at time of receipt or because the funds were collected in a public appeal to raise money for a particular purpose. It is the organisation’s policy to fully apply such funds for the purposes for which they were donated as quickly as possible. The majority of these funds relate to the emergency income for Haiti and Pakistan, which we intend to utilise as soon as possible. ! Unrestricted funds: these are of two types: »! Designated funds (€32.0 million); these are unrestricted funds which have been allocated by the Council for specific purposes and which are as a result, not available for general usage. At the end of 2010 funds had been designated for four specific purposes as follows: -
-
To cover the 2011 budgeted deficit. To recognise that a portion of reserves is invested in the charity’s fixed assets and is not therefore available for other purposes. To ensure the continuity of operations in the event of a temporary downturn in income. To finance the organisation’s financial fixed assets.
»! General unrestricted funds (€0.3 million): these represent funds which are available for the general purposes of the charity.
Council reviews the level of reserves held periodically. The last review was done in conjunction with the approval of the 2011 budget. At that time it was agreed that the restricted reserves should be utilised as soon as reasonably possible and that the 2011 expenditure plans were not expected to move the organisation’s unrestricted reserves from the 2010 levels which are felt to be optimal. Based on the results for the year and the year-end financial position the Council believes that the charity has adequate resources to continue in operational existence for the foreseeable future and for this reason the Council continues to adopt the ‘going concern’ basis in preparing the accounts.
Financial Results of Subsidiary Companies In addition to the parent company, during 2010 there were two active subsidiary companies within the group: ! Concern Worldwide (UK) engages in fundraising, development education and advocacy work in the United Kingdom. 2010 was a successful year for this company, producing substantial net income for group activities, notwithstanding the impact of the global recession. The year-end position of the company was satisfactory and it is expected to continue trading for the foreseeable future. ! Concern Charity Trading Limited, which conducted retail activities to generate income for Concern’s overseas work, ceased retail trading in September 2009 when the activities of the company were taken over by a local community group. Net proceeds generated by the group from the ongoing retail activities are now donated to Concern Worldwide and included in voluntary income. Since the transfer of its retail activities, the company has continued to provide support to the group fundraising activities. Any costs associated with such activity are borne by the parent company. As explained in note 25 to the financial statements, apart from the parent company and the above subsidiaries there are three other companies within the group. None of these companies was operational in 2010, nor did they have material assets or liabilities at the balance sheet date.
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Report of the Council_Review of Financial Outcome 2010
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Investment Policy The bulk of Concern’s liquid reserves are placed in short term interestbearing deposits, with maturity dates designed to satisfy Concern’s cash flow requirements. These deposits are placed with reputable financial institutions as authorised by Council, within set investment thresholds. In addition to its deposits, the organisation has maintained a long-term investment with Irish Life Investment Managers. The investment is mainly held in an equities fund. The investment managers are required to apply ethical screening when making investment decisions; for example they may not invest in companies with significant interests in armaments, gambling, tobacco or other activities, which are inconsistent with the values and objectives of the organisation. During 2010 €1.5 million was transferred from this investment fund to the defined benefit pension scheme (see note 19(c)).
Financial instruments, financial risk management policies, objectives and strategies The group finances its operations mainly from incoming resources and reserves. The financial instruments that arise from this activity comprise investments, cash and liquid resources. Other financial instruments such as debtors and creditors arise directly from normal operations. The group does not trade in derivatives or other financial instruments in the ordinary course of business. The group’s international operations expose it to different financial risks that include credit risks, interest rate risk, foreign exchange rate risk, and liquidity risk. Financial risk management policies are in place, which seek to limit the impact of these risks on the performance of the group. It is the aim of the group to manage these risks in a non-speculative manner. The group’s policies for managing each of its main financial risks are broadly as follows: Credit risk: Credit risk is the risk that the financial institutions in which liquid investments and cash at bank are held may default on the cash deposited and the risk that debtors of the group may default on their obligations. The risk of default by credit institutions is managed by the group by ensuring that cash at bank and short-term investments are held with institutions that have a rating of at least A3 as per Moody’s Ratings of financial institutions or with banks that are covered under the Irish Government Bank Guarantee Scheme.
The main group debtors are amounts due from co-funders, which represent amounts owed to the group by government and institutional funders for work that has been performed but for which the related funding has not been received by the year end. These are managed by the group by ensuring that all agreements with the funders are supported by signed contracts and that all reporting and project related requirements are fulfilled. There is not a significant concentration of risk and the history of defaults is negligible. The group has detailed procedures for monitoring and managing the credit risk in relation to other debtors and receivables. Interest rate risk: Interest rate risk exists when assets and liabilities attract interest rates set according to different bases or which are set at different times. The main companies in the group have interest bearing assets and liabilities. In general, rates on the majority of cash and short-term bank deposits are fixed only for relatively short periods in order to match funding requirements while being able to benefit from opportunities due to movements in longer-term rates. The main company in the group, namely Concern Worldwide, also has an interest bearing liability in the form of a bank loan. The loan currently attracts a variable interest rate charge, however the company has the ability to fix the whole or part of the interest rate in order to mitigate the risk of adverse interest rate fluctuations. Foreign exchange risk: Much of the group’s costs, particularly overseas costs, are denominated in US$ while most income is received in Euro and Sterling. A strengthening of the US Dollar against the Euro and Sterling could have a significant adverse effect on the group’s ability to deliver its planned programme of work. These currency risks are monitored on an ongoing basis and managed as deemed appropriate by utilising a combination of spot and forward foreign currency contracts. Liquidity risk: Liquidity risk is the risk that the group will be unable to meet financial commitments arising from the cash flows generated by its activities. The risk can arise from mismatches in the timing of cash flows relating to assets and liabilities. The group’s liquidity is managed by ensuring that sufficient cash and deposits are held on short notice, and by retaining sufficient reserves to cover short-term fluctuations in income.
Report of the Council_Review of Financial Outcome 2010
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Report of the Council_Governance
77
Governance
The Memorandum and Articles of Association signed on 29th May 1972 (most recently amended in 2010) represents the founding governance document of Concern. The Articles provide for a membership-based organisation limited by guarantee with a governing Council elected from the Concern membership base. The Council is committed to maintaining the highest standards of corporate governance and has determined that the organisation should comply with the basic principles outlined in the “Irish Development NGOs Code of Corporate Governance” (as produced by the Corporate Governance Association of Ireland; partnered with Dochas). As part of this policy an effective Council and a competent executive team head the organisation. Council members, all of whom are non-executive, are drawn from diverse backgrounds in business and the professions, and bring a broad range of experience and skills to Council deliberations. All new Council Members attend an induction course shortly after appointment in order to familiarise themselves with their statutory responsibilities, their role as Council members, the Concern governance framework, Concern’s humanitarian work and Concern’s risk environment. There are clear distinctions between the roles of Council and the Executive Management Team to which day-to-day management is delegated. Matters such as policy, strategic planning, and budgets are prepared by the Executive Management Team for consideration and approval by Council, who then monitor their implementation. The members of Council cannot under the governing documents, receive remuneration for services to Concern and may only be reimbursed for incidental expenses claimed. There are five sub-committees of Council; Officers who along with the Chairman, act on behalf of Council between Council meetings; Finance, which monitors the organisation’s financial results and policies; Audit and Risk, which monitors the control and risk management systems; Monitoring and Evaluation, which monitors the quality of Concern’s programme work, and Active Citizenship, which aims to ensure that the organisation builds public support for issues that impact the developing world. The membership of all Committees frequently includes specialists, who are not members of the Council, but who volunteer their expertise to assist the Committees on an ongoing basis.
Organisational risk management and internal control Concern Worldwide has a dedicated risk management function that is responsible for ensuring that a comprehensive process exists in order to identify and rank all of Concern’s significant organisational risks, how these are managed and how they are reported and monitored. As part of the ongoing risk management process, an annual risk review is presented to Council to provide confirmation that the organisation is not on an ongoing basis exposed to an unacceptable level of preventable risks. The major risks to which Concern is exposed as identified by Council have been ranked by likelihood and impact. Appropriate systems and procedures are in place to manage these risks and provide reasonable but not absolute assurance against occurrence. The major risks identified by the risk review are as follows: Economic instability: If Concern is to continue its work, it is entirely dependent on the goodwill of the public and on the relationships it builds with governments and institutional donors. In order to reduce the risk of significant fluctuations in income, the organisation aims to maintain geographically diverse sources of income, to foster public commitment to the developing world and to maintain good relations with institutional donors while maintaining appropriate reserves. Concern also continues to develop new fundraising activities and techniques in order to maximise its income. Staff security and well being: Concern operates in regions where the political and social circumstances make the personal security of staff a major potential hazard. The security of Concern’s staff is of paramount importance and in order to ensure that this risk is appropriately managed the organisation has comprehensive security management policies in place. Effectiveness of expenditure: In order that the organisation maximises the use of its resources to assist beneficiaries, the organisation needs to ensure and demonstrate that its resources are being used as effectively as possible. Systems have been put in place and continue to be developed in order to monitor the quality of programme work. IT security and continuity: In common with many organisations, Concern is dependent on information which is stored electronically. The loss or damage of these systems would severely disrupt operations. The organisation has developed IT policies and procedures designed to counter this risk. Staff related issues: Concern achieves its results through its staff. If the organisation is to succeed with its objectives it must build effective and lasting relationships with local communities and operate at all times within strict codes of conduct. The ability to attract and retain appropriate staff is a key ongoing challenge for the organisation. The organisation has developed and frequently reviews its human resources policies and procedures to address this risk.
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Report of the Council_Governance
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Major fraud & error: Significant errors or fraud could severely damage the organisation’s reputation as well as resulting in the loss of resources. The organisation has developed detailed financial management and reporting systems to mitigate this risk, which are reviewed on a regular basis. Working with partners: Concern has clear procedures in place to ensure that where the organisation works with and/or through partner organisations, that the partners chosen are appropriate, the partner organisation is supported and that the relationship with Concern is well managed. Implementation of strategic plan: The organisation has a new strategic plan (2011-15), and needs to implement it effectively, otherwise organisational objectives may not be achieved or resources may not be utilised in an optimal manner. The organisation has developed structures and processes to ensure that it can efficiently channel its resources towards delivery of the strategic plan. Overall, Council is satisfied that systems are in place to monitor, manage and mitigate Concern’s exposure to major risks.
Staff and volunteers Concern is dependent on a network of volunteers for many of its fundraising and development education activities. The organisation acknowledges with gratitude the work of its staff and that of its volunteers at home and overseas in 2010. The major achievements during the year are due to the dedication and belief of all of these people. Concern is an equal opportunities employer. The aim of its equal opportunities policy is to ensure that all people receive equality of opportunity regardless of gender, race, religion, disability, nationality, marital/family status and sexual orientation.
Political Contributions There were no political contributions in 2010, and as a result, no disclosures are required under the Electoral Act, 1997.
Post Balance Sheet Events There have been no events subsequent to the year-end that require any adjustment to or additional disclosure in the 2010 financial statements.
Accounting Records The Council members believe that they have complied with the requirements of Section 202 of the Companies Act, 1990 with regard to books of account by employing personnel with appropriate expertise and by providing adequate resources to the financial function. The books of account are maintained at the group’s registered office in 52-55 Lower Camden Street, Dublin 2.
Auditor The Auditors, KPMG, has agreed to continue in office under Section 160 of the Companies Act, 1963. A resolution proposing their re-appointment will be put to the Annual General Meeting.
Looking ahead Our vision for the next five years is contained in the strategic plan for 201115 ‘Greater impact in an increasingly vulnerable world’. Over the past five years Concern has been successful in increasing the level of income from the public, governmental co-funders, foundations and the corporate sector. Our success in raising funds has been based on being able to demonstrate that we spend resources effectively. We have invested in improving our financial accountability and governance systems. All of these initiatives aim to show that Concern is an organisation worthy of trust and support. We are committed to continuing on this path. Our strategic plan for 2011-15 is ambitious. We are committed to investing in improving our capacity and effectiveness in responding to emergencies, to developing additional specialisations in hunger and health, to investing in Concern UK and Concern US, and to improving our communications about our work and its impact. These investments will require resources and we intend to fund them in a strategic way, while adhering to a balanced budget within a multi-annual financial framework. We are confident that our financial monitoring and control systems are of good quality and we are committed to maintaining them. On behalf of Council
Frances O’Keeffe Chairperson
Report of the Council_Governance
80
Statement of Council Members’ Responsibilities
81
Statement of Council Members’ Responsibilities
The Council members are responsible for preparing the Council Report and the consolidated financial statements in accordance with applicable law and regulations. Company law requires the Council members to prepare financial statements for each financial period. Under that law, the Council members have elected to prepare the financial statements in accordance with Generally Accepted Accounting Practice in Ireland, comprising applicable Company Law and accounting standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland. The Company’s financial statements are required by law to give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for the period. In preparing the financial statements, the Council members are required to: ! select suitable accounting policies and then apply them consistently; ! make judgements and estimates that are reasonable and prudent; and ! prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Council members are responsible for keeping proper books of account, which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Acts, 1963 to 2009. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The Council members are also responsible for preparing a Council Report that complies with the requirements of the Companies’ Acts 1963 to 2009. They are also responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. On behalf of Council
Frances O’Keeffe Council Member
Sally-Anne Kinahan Council Member
Independent Auditors’ Report to the Members of Concern Worldwide We have audited the group and parent company financial statements (‘‘financial statements’’) of Concern Worldwide for the year ended 31 December 2010 which comprise the Consolidated Statement of Financial Activities, Consolidated and Company only Balance Sheet, the Consolidated Cash Flow Statement and the related notes on pages 90–120. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the company’s members, as a body, in accordance with section 193 of the Companies Act 1990. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Council Members and auditors The Council members’ responsibilities for preparing the Council Report and the financial statements in accordance with applicable law and the accounting standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland), are set out in the Statement of Council Members’ Responsibilities on page 81. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared in accordance with the Companies Acts 1963 to 2009. We also report to you, in our opinion whether proper books of account have been kept by the company; whether at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the company; and whether the information given in the Council Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit, and whether the parent company balance sheet is in agreement with the books of account. We also report to you if, in our opinion, any information specified by law regarding Council members’ remuneration and transactions is not disclosed and, where practicable, include such information in our report. We read the Council Report and consider implications for our report if we become aware of any apparent misstatements within it.
Statement of Council Members’ Responsibilities
82
Statement of Council Members’ Responsibilities
83
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Council in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s and company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations, which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion In our opinion: ! the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the group’s and parent company’s affairs as at 31 December 2010 and of the group’s surplus for the year then ended; and ! the financial statements have been properly prepared in accordance with the Companies Acts 1963 to 2009. Other matters We have obtained all the information and explanations, which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The company balance sheet is in agreement with the books of account. In our opinion the information given in the Council report is consistent with the financial statements.
KPMG 20 April 2011 Chartered Accountants Registered Auditors
3 4 1
Where our income came from
1 2 3 4
2
2
Grants from Governments and other Co-Funders Income from Fundraising Activities Donated Commodities Other Income
€’000
%
96,469 60,718 9,335 636
57.7 36.3 5.6 0.4
167,158
100
€’000
%
135,467 11,422 3,088 796
89.9 7.6 2 0.5
150,773
100
3 4 1
How your money was spent
1 2 3 4
Relief and Development Fundraising Development Education and Advocacy Governance
Ariema Benetala of Kathyothyo irrigation group, Nkhotakota, Malawi. Photographer: Pieternella Pieterse.
84
85
Financial Statements
2010
86 Consolidated Statement of Financial Activities for the year ended 31 December 2010
Notes
Restricted Funds €’000
Unrestricted Funds €’000
Total 2010 €’000
Total 2009 €’000
2(a) 2(b)
96,469 9,335
-
96,469 9,335
60,607 14,697
2(c) 6
24,728 -
35,990 -
60,718 -
44,791 155
12(b) 2(d)
153 130,685
483 36,473
636 167,158
8,759 412 129,421
3
118,245
20,310
138,555
112,846
4 6 5
1,645 119,890
9,777 796 30,883
11,422 796 150,773
11,036 135 618 124,635
8
10,795
5,590
16,385
4,786
Other recognised gains and losses Exchange gain on consolidation of foreign subsidiary
20(a)
-
45
45
80
Unrealised gain on revaluation of investments
15(b)
-
142
142
697
Actuarial gain on staff retirement liabilities
19(c)
-
697
697
209
Revaluation of financial fixed asset
12(a)
-
-
-
286
20
10,795
6,474
17,269
6,058
Incoming resources Incoming resources from charitable activities - grants from governments and other co-funders - donated commodities Incoming resources from generated funds - voluntary income - income from trading activities Other incoming resources - profit on disposal of subsidiary - other incoming resources Total incoming resources Resources expended Charitable activities Costs of generating funds - cost of generating voluntary income - cost of generating trading income Governance costs Total resources expended Net incoming resources before other recognised gains and losses
Net movement in funds for the year
The notes on pages 90 to 120 form an integral part of these financial statements. On behalf of Council
Frances O’Keeffe Council Member
Sally-Anne Kinahan Council Member
87 Consolidated Balance Sheet at 31 December 2010
Notes
2010 €’000
€’000
2009 €’000
€’000
Fixed assets Tangible fixed assets
11
17,310
18,073
Financial fixed assets
12
290
286
Current assets Stock Debtors and prepayments Investments Cash at bank and in hand
13 14 15 16
Total current assets Creditors: amounts falling due within one year
17
63 15,971 30,525 8,439
115 8,203 22,344 7,104
54,998
37,766
(18,900)
(16,750)
Net current assets Creditors: amounts falling due after more than one year
18
Net assets excluding staff retirement liabilities Staff retirement liabilities
19(a)
Net assets including staff retirement liabilities
Funded by: Restricted funds Unrestricted funds Total charity funds
20 20
36,098
21,016
(6,356)
(6,830)
47,342
32,545
(3,687)
(6,159)
43,655
26,386
11,308 32,347 43,655
513 25,873 26,386
The notes on pages 90 to 120 form an integral part of these financial statements. On behalf of Council
Frances O’Keeffe Council Member
Sally-Anne Kinahan Council Member
88 Company Balance Sheet at 31 December 2010
Notes
2010 €’000
€’000
2009 €’000
€’000
Fixed assets Tangible fixed assets
11
17,127
17,877
Financial fixed assets
12
290
286
Current assets Stock Debtors and prepayments Investments Cash at bank and in hand
13 14 15 16
Total current assets Creditors: amounts falling due within one year
17
63 14,564 30,524 6,227
115 6,864 22,338 6,459
51,378
35,776
(16,547)
(15,801)
Net current assets Creditors: amounts falling due after more than one year
18
Net assets excluding staff retirement liabilities Staff retirement liabilities
19(a)
Net assets including staff retirement liabilities
Funded by: Restricted funds Unrestricted funds Total company funds
20 20
34,831
19,975
(6,356)
(6,830)
45,892
31,308
(3,687)
(6,159)
42,205
25,149
11,308 30,897 42,205
485 24,664 25,149
The notes on pages 90 to 120 form an integral part of these financial statements. On behalf of Council
Frances O’Keeffe Council Member
Sally-Anne Kinahan Council Member
89 Consolidated Cash Flow Statement for the year ended 31 December 2010
Net cash inflow from operating activities
Notes
2010 €’000
2009 €’000
21
11,126
6,963
580
367
(49)
8,423
11,657
15,753
Return on investments (deposit interest received) Capital expenditure and financial investment
22
Net cash inflow before use of liquid resources and financing Financing - net decrease in debt
22
(591)
(6,658)
Management of liquid resources
22
(9,544)
(8,708)
1,522
387
Increase in cash and cash equivalents
Reconciliation of net cash flow to movement in net cash resources (including cash and liquid resources) Notes
Increase in cash and cash equivalents
2010 €’000
2009 €’000
1,522
387
Net decrease in debt
22
591
6,658
Cash flow from increase in liquid resources
22
9,544
8,708
Change in net funds resulting from cash flows
23
11,657
15,753
18,018
2,265
29,675
18,018
Net cash resources at beginning of year Net cash resources at end of year
23
90 Notes to the Financial Statements
1
ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s financial statements.
are transferred. Grants received from Concern Worldwide (US) Inc. to fund overseas projects are recognised in the same way as grants from other international co-funders.
a) BASIS OF PREPARATION The financial statements are prepared in accordance with generally accepted accounting principles under the historical cost convention and comply with financial reporting standards of the Accounting Standards Board, as promulgated by The Institute of Chartered Accountants in Ireland. The company has taken advantage of the exemption available to it under section 148(8) of the Companies Act 1963 which permits a company that publishes its company and group financial statements together not to present its own statement of financial activities and related notes that form part of the approved company financial statements.
c) INCOMING RESOURCES Incoming resources are recognised by inclusion in the consolidated statement of financial activities only when the group is legally entitled to the income, virtually certain of receipt and the amounts involved can be measured with sufficient reliability.
Compliance with the Accounting and Reporting by Charities - Statement of Recommended Practice (SORP 2005), is not mandatory for Irish charities, however the group has adopted a number of its disclosure requirements. b) BASIS OF CONSOLIDATION Group companies The consolidated financial statements include the financial statements of Concern Worldwide and its subsidiaries, drawn up to 31 December each year. Branches in the developing world The work of the organisation in the developing world is carried out through branches located in the countries of operation. Expenditure on goods and services made on behalf of local branches is expensed when the costs are incurred. Expenditure made directly by local branches is recognised by the group and included in resources expended on charitable activities when payments are made. The full cost of vehicles, equipment and other assets, incurred by branches is included in resources expended on charitable activities in the year of acquisition and are not reflected in the company or consolidated balance sheet. Cash balances of branches are included in the company and consolidated balance sheet. Affiliated US Organisation Concern Worldwide (US) Inc. is a related, though operationally independent, company based in New York, which supports the mission of Concern Worldwide by providing financial and human resources for programmes, recruiting staff and raising awareness of Concern Worldwide and its mission. Concern Worldwide (US) Inc. is not controlled by Concern Worldwide and, therefore, is not consolidated in the results of Concern Worldwide. Grants to meet operational costs of Concern Worldwide (US) Inc. are included in cost of charitable activities and costs of generating funds, and are expensed in the period when funds
Incoming resources from charitable activities (i) Grants from governments and other co-funders Grants from governments and institutional donors are recognised as income when the activities which they are intended to fund have been undertaken, the related expenditure incurred, and there is reasonable certainty of receipt. Income due to Concern Worldwide from governments and institutional sources but not yet received at year end is included in debtors in the balance sheet, and funds already received but not yet utilised are shown in creditors. (ii) Donated commodities Donated commodities distributed and donated services utilised by the organisation as part of programmes designed, implemented, and managed by Concern Worldwide are valued and included in incoming resources in the year in which they are distributed/utilised. Local food products and non-food donations are valued at the estimated market price in their country of origin at the time of receipt. Donations of food aid, which are sourced outside of the area in which they are distributed, are valued at values provided by the donor. Donated services are valued at values provided by the donor. Incoming resources from generated funds (i) Voluntary income Voluntary income – which consists of monetary donations from the public and from corporate and major donors, together with related tax refunds and legacies - is recognised in the period in which the organisation is entitled to the resource, receipt is virtually certain, and when the amount can be measured with sufficient reliability. In the case of monetary donations from the public this income is generally recognised when the donations are received; with legacies it is when we receive confirmation of unconditional entitlement to the bequest; whereas, with tax refunds it is when all legislative requirements have been met and the amounts can be measured with reasonable certainty.
91 Notes to the Financial Statements (continued)
1
ACCOUNTING POLICIES (continued)
Grants from corporate, trusts and major donors (including legacies) which are subject to significant restrictions or reporting requirements are recognised when the group is legally entitled to the income; virtually certain of receipt; the amounts can be measured with sufficient reliability; the activities which they are intended to fund have been undertaken, and the related expenditure incurred. (ii) Income from trading activities Income from trading activities represented income from sales of goods and from donations arising in the retail outlets managed by the group up to and including the prior year (Note 6). All trading income was recognised once the group was legally entitled to the income, virtually certain of receipt, and the amounts could be measured with sufficient reliability. Gifts donated for resale were valued at market value at the time of receipt, and were included as income when sold.
Costs of generating funds Costs of generating funds comprise the costs incurred in fundraising and in retail trading activities. Fundraising costs include the costs of advertising, producing publications, printing and mailing fundraising material, staff costs in these areas and an appropriate allocation of central overhead costs. Trading costs related to the costs of running the group’s retail outlets. All costs of generating funds are recognised on an accruals basis. Governance costs Governance costs represent the salaries, direct expenditure and overhead costs incurred on the strategic as opposed to day to day management of the charity, and on compliance with constitutional and statutory requirements. All governance costs are recognised on an accruals basis.
e) SAVINGS AND MICRO CREDIT SCHEMES d) RESOURCES EXPENDED Resources expended are analysed between costs of charitable activities, costs of generating funds and governance costs. The costs of each activity are separately accumulated and disclosed, and analysed according to their major components. Support costs, which cannot be attributed directly to one activity, are allocated to activities in proportion to estimated benefits received. The costs of public campaigns, together with related salary costs, which are undertaken to meet the dual purposes of raising funds and of promoting awareness of issues in the developing world, are split between costs of generating voluntary income and costs of charitable activities on the bases considered appropriate for each type of campaign. Costs of charitable activities Costs of charitable activities comprise costs of overseas programmes and of development education and advocacy work together with related support costs. The policy for recognising expenditure on overseas relief and development programmes is set out under Basis of Consolidation-Branches above. All other charitable expenditure is recognised on an accruals basis. Grants payable to partners in furtherance of the charity’s objects are recognised as monetary expenditure on charitable activities when payment is made to the partner organisation. Donated commodities, distributed by the organisation as part of programmes designed, implemented, and managed by Concern Worldwide are included as costs of charitable activities in the year in which they are distributed.
Community based schemes As part of its overseas activities the group provides funds for savings and micro credit schemes either directly to individual members of local communities or via local community groups. Responsibility for managing these schemes may be retained by the group until such time as it is possible to transfer the management of the schemes to the local community. The net cost of contributions to these schemes is included in resources expended on charitable activities. No asset relating to onward loans to community members is reflected in the group balance sheet as the proceeds from such loans are not considered recoverable from a group perspective and are expected to remain and be re-invested within the community. Microfinance organisations In certain, limited circumstances, generally where the banking system is severely underdeveloped, the group may establish organisations to ensure that savings and credit facilities are available to targeted populations. Ownership and the responsibility for managing these institutions are generally retained by the group until such time as it is possible to ensure that the services can either be independently provided or alternatively the group’s shareholding and level of control in the institution changes. Where the group controls such entities their results are reflected in the financial statements. Where the group has a shareholding but does not control the entity, the investment is reflected as a financial fixed asset of the group at its fair value on the balance sheet date.
92 Notes to the Financial Statements (continued)
1
ACCOUNTING POLICIES (continued)
f) FUND ACCOUNTING Concern maintains various types of funds as follows:
i) FOREIGN CURRENCIES The financial statements are prepared in Euro (€).
Restricted funds Restricted funds represent grants, donations and legacies received which can only be used for particular purposes specified by the donors. Such purposes are within the overall aims of the organisation.
Transactions in foreign currencies are recorded in Euro at the rate ruling on the date of the transaction or at a contracted rate. Monetary assets and liabilities denominated in foreign currencies are translated into Euro at the year-end rate of exchange. The resulting gains and losses are dealt with in the consolidated statement of financial activities.
Unrestricted funds Unrestricted funds consist of General funds and Designated funds. (i) General funds represent amounts which are expendable at the discretion of Council in furtherance of the objectives of the charity. (ii) Designated funds represent amounts that Concern has at its discretion set aside for specific purposes, which would otherwise form part of the general reserves of the organisation. Specifically, Concern sets aside funds so that it can protect its ongoing programme of work from unexpected variations in income, to finance fixed assets, both tangible and financial, for on-going use by the charity and to cover future planned deficits. g) TANGIBLE FIXED ASSETS Tangible fixed assets (except for assets of branches in the developing world), are stated at cost less accumulated depreciation. Depreciation is calculated to write off the original cost of the tangible fixed assets, less estimated residual value, over their expected useful lives, at the following annual rates: Freehold premises: Office furniture: Office equipment: Computer equipment: Motor vehicles:
3% 10% 20% 33% 20%
Depreciation is charged on a straight-line basis from the date on which fixed assets are put into use by the group. No depreciation is charged on assets under construction until construction is complete and the assets are ready for use. Provision is also made for any impairment of tangible fixed assets below their carrying amounts. h) FINANCIAL FIXED ASSETS Financial fixed assets of the group and company consist of investments undertaken to support the organisations charitable activities. All financial fixed assets are held for the long term and are stated at fair values.
The group’s net investment in its overseas subsidiary undertakings is translated at the rate ruling at the balance sheet date. The income and expenditure of overseas subsidiary undertakings are translated at the average exchange rate for the year. Exchange differences resulting from the retranslation of the opening balance sheets of the overseas subsidiary undertakings at closing rates, together with the differences on translation of the net income/ expenditure at average rates are included in Other recognised gains and losses in the consolidated statement of financial activities. j) STOCKS Stocks comprise relief supplies held for transfer to overseas operations. Stocks are stated at cost, less provisions for obsolescence and any other diminution in value. Cost is the purchase price, net of any trade discount, plus any additional costs associated with bringing the items to their current location and condition. k) SHORT TERM INVESTMENTS In accordance with the requirements of Accounting and Reporting by Charities – Statement of Recommended Practice (“SORP 2005”), short term investments (including donated shares) are stated at market value at the balance sheet date. Gains or losses arising on revaluation and disposals during the year are included in Other recognised gains and losses in the consolidated statement of financial activities. l) TAXATION No charge to current or deferred taxation arises as the group, with the exception of Concern Charity Trading Limited, has been granted exemption by the revenue authorities in Ireland and the UK. Irrecoverable value added tax arising in Ireland and the UK is expensed as incurred. Any taxes arising in, or as a result of overseas operations are included in the cost of direct charitable activities in the consolidated statement of financial activities.
93 Notes to the Financial Statements (continued)
1
ACCOUNTING POLICIES (continued)
m) LIQUID RESOURCES In the consolidated cash flow statement, liquid resources are the investments included in current assets and comprise cash on deposit at banks requiring more than 24 hours notice of withdrawal. n) PENSIONS AND OTHER RETIREMENT BENEFITS (i) Defined contribution pension schemes Pension contributions to defined contribution schemes are charged to the consolidated statement of financial activities as incurred. (ii) Defined benefit pension scheme For defined benefit pension schemes the amount charged to the consolidated statement of financial activities is the actuarially determined cost of pension benefits which have been promised to employees that were earned during the year plus any benefit enhancements granted to members during the year. The expected return on the pension scheme’s assets during the year and the increase in the scheme’s liabilities due to the unwinding of the discount during the year are included under the appropriate expenditure heading in the consolidated statement of financial activities. Any difference between the expected return on assets and that actually achieved due to changes in assumptions or because actual experience during the year was different to that assumed, are recognised as actuarial gains and losses in the consolidated statement of financial activities. The difference between the bid value of the scheme’s assets and the actuarially assessed present value of the schemes’ liabilities calculated using the projected unit method, is disclosed as an asset/liability in the balance sheet. For the liability in relation to incapacitated staff, the amount charged to the consolidated statement of financial activities is the actuarially determined cost of benefits to two ex-staff members for the year. The expected return of the investments made to cover the liability and the increase in these liabilities due to the unwinding of the discount during the year are included under the appropriate expenditure headings in the consolidated statement of financial activities. Any differences between the expected return on assets and that actually achieved due to changes in assumptions or because actual experience during the year was different to that assumed, are recognised as actuarial gains and losses in the consolidated statement of financial activities. The difference between the bid value of the assets and the actuarially assessed present value of the schemes’ liabilities calculated using the projected unit method, is disclosed as an asset/liability in the balance sheet.
(iii) Overseas local staff service payments In order to reflect the unfunded liability for retirement benefits for overseas staff, the actuarially determined present value of the liability is recorded in full in the balance sheet and it is increased for the cost of additional benefits earned during the year which is charged to the consolidated statement of financial activities. The unwinding of the discount on the liability is shown under the appropriate expenditure heading in the consolidated statement of financial activities. Changes to the liability as a result of changes in measurement assumptions or because actual experience is different to that assumed are considered to be an actuarial gain or loss and are included in the consolidated statement of financial activities. o) INTEREST BEARING BORROWINGS Interest bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost. p) LEASES Operating lease rentals are charged to the consolidated statement of financial activities on a straight line basis over the lease term. q) DERIVATIVE FINANCIAL INSTRUMENTS Derivatives are entered into by the group to economically hedge recognised foreign currency denominated monetary assets and liabilities. They are not accounted for under hedge accounting but rather any gains or losses arising are recognised in the consolidated statement of financial activities.
94 Notes to the Financial Statements (continued)
2
INCOMING RESOURCES
(a) Incoming resources from charitable activities - grants from governments and other co-funders
Irish Government Multi Annual Programme Scheme (MAPS) Other grants British Government European Union Concern Worldwide (US) Inc. UN Agencies Alliance 2015 Other Government Scottish Executive Swedish Government Norwegian Government Jersey Overseas Aid Other
2010 €’000
2009 €’000
20,800 3,772 5,876 23,859 21,932 10,481 2,105 901 867 395 356 239 4,886 96,469
20,800 6,007 2,447 11,297 9,786 4,278 1,373 207 894 204 193 275 2,846 60,607
(b) Incoming resources from charitable activities - donated commodities Donor
Commodity received
Donor origin
2010 €’000
2009 €’000
United Nations Children’s Fund World Food Programme United Nations High Commissioner for Refugees Irish Aid Save the Children German Agro Action International Organization for Migration Food and Agriculture Organisation United Nations Joint Logistics Centre British Government Other donors
Food & mosquito nets Foodstuffs Tents, blankets & jerry cans
United Nations United Nations United Nations
1,252 4,839 854
808 11,183 120
Tents, charters & staff Tents, mosquito nets & kitchen sets Plastic sheeting Tents, mosquito nets & kitchen sets Seeds & materials Jerry cans & plastic sheeting Fertiliser & seeds Various
Ireland UK Germany Switzerland United Nations United Nations UK Various
541 463 323 258 249 135 421 9,335
461 531 1,511 83 14,697
95 Notes to the Financial Statements (continued)
2
INCOMING RESOURCES (continued)
(c) Incoming resources from generated funds - voluntary income
Committed giving Legacy income Public appeals and events Corporates, major donors and trusts Disaster Emergency Committee (DEC)
2010 €’000
2009 €’000
23,103 3,251 26,173 4,585 3,606 60,718
23,023 2,671 14,301 4,171 625 44,791
Concern is a member of the Disaster Emergency Committee (DEC), which is an umbrella organisation for UK international NGOs. It conducts advertising and public appeals for funds on behalf of its members.
(d) Other incoming resources
Deposit interest Income from premises letting Profit on sale of tangible fixed assets
3
2010 €’000
2009 €’000
572 58 6 636
397 15 412
EXPENDITURE ON CHARITABLE ACTIVITIES
Expenditure on charitable activities can be analysed as shown below. Many of these programmes achieve results in more than one of these categories, but are analysed for this purpose under the principal category only. Programme
Health Education Food, income and markets HIV and AIDS Emergency Total overseas programme Development education and advocacy Total charitable expenditure
Own work
Grants to partners
Distribution of donated commodities
Total direct
Support (Note 7)
2010 Total
2009 Total
€’000
€’000
€’000
€’000
€’000
€’000
€’000
22,743 5,465 25,051 1,979 32,290 87,528
3,197 1,869 10,158 1,609 15,071 31,904
9,335 9,335
25,940 7,334 35,209 3,588 56,696 128,767
1,395 429 1,835 317 2,724 6,700
27,335 7,763 37,044 3,905 59,420 135,467
28,811 8,773 36,514 4,246 31,418 109,762
2,852
10
-
2,862
226
3,088
3,084
90,380
31,914
9,335
131,629
6,926
138,555
112,846
Full details of grants to partners are set out in Appendix 3.
96 Notes to the Financial Statements (continued)
4
COSTS OF GENERATING VOLUNTARY INCOME Campaigns
Staff
Occupancy & other direct
Total direct
Support (Note 7)
2010 Total
2009 Total
€’000
€’000
€’000
€’000
€’000
€’000
€’000
4,492 91 4,583
1,556 2,314 435 4,305
148 1,604 165 1,917
1,704 8,410 691 10,805
136 442 39 617
1,840 8,852 730 11,422
2,129 8,180 727 11,036
Committed giving Public appeals and events Corporates, major donors and trusts Total
5
GOVERNANCE COSTS 2010 €’000
2009 €’000
297 142 357 796
318 165 135 618
Staff costs Legal and professional fees Office and other costs
Included in the above is €673,000 (2009 : €447,000) of attributable support costs (see Note 7).
6
TRADING
Concern Charity Trading Limited, which conducted retail activities on behalf of the group, ceased trading in September 2009. The activities of the company were taken over by a local community group, Concern (Cork) Limited. Net proceeds generated by the local community group from the ongoing retail activities are donated to Concern Worldwide and included in voluntary income.
7
SUPPORT COSTS
Where support costs are attributable to a particular activity the costs are allocated directly to that activity. Where support costs are incurred to further more than one activity they are apportioned between the relevant activities based on the amount of staff time which each activity absorbs. The allocation of the main types of support costs is detailed below. Charitable Activities Overseas Development programmes education and advocacy €’000 €’000
Cost of generating voluntary income €’000
Governance
2010 Total
2009 Total
€’000
€’000
€’000
-
-
2,526
2,547
Overseas programme management
2,526
-
Overseas programme technical support
1,002
31
-
-
1,033
1,053
Finance Organisational services and ICT Human resources Other support costs Total support costs
215 1,073 707 1,177 6,700
67 128 226
157 214 81 165 617
87 184 16 386 673
459 1,538 804 1,856 8,216
1,511 1,913 1,064 1,612 9,700
97 Notes to the Financial Statements (continued)
8
OTHER INFORMATION
A. Group The net incoming resources for the year is stated after charging/ (crediting) the following items; Depreciation of tangible fixed assets Auditor’s remuneration - Group: Audit of the Group and subsidiary accounts * Other assurance services Profit on disposal of tangible fixed assets Income from premises letting Reimbursement of expenses claimed by members of Council Payments under operating leases for premises used by the group Interest payable on bank loan Costs incurred in country programmes closed by 31 December (Angola, Nepal and Timor Leste) B. Company Auditor’s remuneration - Company: Audit of Concern Worldwide Company only accounts * Other assurance services
2010 €’000
2009 €’000
814
931
82 14 (6) (58) 2 146 94 2,437
90 14 (16) 5 132 166 -
65 14
73 14
* Comparative information has been restated under Section 161D of the Companies Act 1963 by reference to Regulation 120 of Statutory Instrument 220 of 2010 (SI220).
9
TAXATION
There is no charge to taxation in respect of the parent company and its UK subsidiary, as these companies have been granted charitable exemption by the Revenue Authorities in Ireland and the UK. Concern Charity Trading Limited does not enjoy charitable exemption and is liable to corporation tax. A tax charge did not arise in this company in 2010 as the company ceased trading in 2009. During 2010 the group incurred irrecoverable VAT of €0.9m (2009: €0.8m), of which €0.8m was incurred in the Republic of Ireland and €0.1m was incurred in the UK.
10 STAFF (a) Numbers and costs The average weekly number of persons employed by the group during the year in Ireland and the UK was 294 (2009: 284). The aggregate payroll costs of these employees were as follows:
Wages and salaries Social welfare costs Other pension costs
2010 €’000
2009 €’000
10,584 1,014 873 12,471
10,996 1,031 981 13,008
98 Notes to the Financial Statements (continued)
10 STAFF (continued) (a) Numbers and costs (continued) Other pension costs include the current service cost of the defined benefit scheme, employer contributions to the defined contribution scheme (see Note 19), and the cost of insurance policies that provide benefits in the event of the death or ongoing incapacity of staff members. Remuneration, including pension contributions, paid to key management (the executive management team) in 2010 amounted to €583,152 (2009: €627,625). In addition to the above, the group employed a number of staff in its overseas operations. The cost of these staff members is included in the cost of charitable activities - see Note 3. The full staff profile is as follows:
Management & support staff (ROI &UK) Project staff in countries of operation
2010
2009
294 2,882 3,176
284 3,100 3,384
(b) Salary range A total of 2 employees (2009: 2), both of whom are based in Ireland and the UK, earned remuneration in excess of €95,000 per annum as follows:
€95,001 to €105,000 €125,001 to €135,000 €135,001 to €145,000
2010 No. employees
2009 No. employees
1 1 -
1 1
Remuneration includes salaries and benefits in kind but excludes employer pension scheme contributions. The number of employees whose remuneration was greater than €95,000 to whom retirement benefits were accruing under defined benefit schemes is 1 (2009: 1). Contributions of 7.5% of salary were made by the company to defined contribution schemes for 1 (2009: 1) member of staff who earned in excess of €95,000. (c) Remuneration of Council members None of the members of the Council received remuneration for their services. Expenses incurred in travelling to meetings, that were reimbursed to members amounted to €1,761 (2009: €5,152). During 2010 the organisation commenced a programme whereby the Council members visit a Concern field of operation on a triennial basis in order to ensure that that they are familiar with Concern’s work on the ground. The costs of these visits (which comprise medicals, visas, economy flights and basic accommodation), are generally borne by the organisation and in 2010 amounted to €12,160.
99 Notes to the Financial Statements (continued)
11 TANGIBLE FIXED ASSETS - GROUP Freehold premises €’000
Office furniture & equipment €’000
Computer equipment €’000
Motor vehicles €’000
€’000
18,830 (102) 8 18,736
1,519 55 7 1,581
3,633 95 12 3,740
67 6 (34) 39
24,049 156 (136) 27 24,096
Depreciation At beginning of year Charge for year Eliminated on disposals Exchange difference At end of year
1,680 292 2 1,974
1,048 127 15 1,190
3,181 394 13 3,588
67 1 (34) 34
5,976 814 (34) 30 6,786
Net book value At 31 December 2010
16,762
391
152
5
17,310
At 31 December 2009
17,150
471
452
-
18,073
Freehold premises €’000
Office furniture & equipment €’000
Computer equipment €’000
Motor vehicles €’000
Total €’000
Cost At beginning of year Additions in year Disposals in year Transfer to other group company At end of year
18,617 (102) 18,515
1,318 53 (10) 1,361
3,318 91 3,409
67 6 (33) 40
23,320 150 (135) (10) 23,325
Depreciation At beginning of year Charge for year Eliminated on disposals Transfer to other group company At end of year
1,575 284 1,859
935 121 (10) 1,046
2,866 392 3,258
67 1 (33) 35
5,443 798 (33) (10) 6,198
Net book value At 31 December 2010
16,656
315
151
5
17,127
At 31 December 2009
17,042
383
452
-
17,877
Cost At beginning of year Additions in year Disposals in year Exchange difference At end of year
Total
TANGIBLE FIXED ASSETS - COMPANY
Council is satisfied that the service potential of the assets held by the group has not diminished, and therefore no provision for impairment has been made at 31 December 2010. The Group received a VAT refund in 2010 against some of the purchase cost of assets capitalised in previous years - this is included in the disposals line under Premises.
100 Notes to the Financial Statements (continued)
12 FINANCIAL FIXED ASSETS Group
AMK Other investments
(a)
Company
2010 €’000
2009 €’000
2010 €’000
2009 €’000
286 4 290
286 286
286 4 290
286 286
(a) AMK Concern Worldwide holds a 10% shareholding in AMK, a microfinance institution in Cambodia and a former subsidiary (see below), which is valued at €286,000 (Note 24(e)). Profit on disposal of subsidiary On 30 November 2009, Concern Worldwide disposed of a 65.5% beneficial shareholding in its former subsidiary, AMK. The profit on disposal as set out below was reflected in the incoming resources section of the 2009 consolidated statement of financial activities in accordance with the group’s accounting policy. 2010 €’000 -
Proceeds received on sale of 65.5% shareholding in AMK Less: group share of net assets Profit on disposal
2009 €’000 9,364 (605) 8,759
The Cambodian Regulatory Authorities have not yet formally approved the legal transfer of the shareholding in AMK. Concern Worldwide and the acquirer have agreed to take all steps necessary to complete the legal transfer of shares as soon as reasonably possible. It is envisaged that the legal transfer of the shareholding will be completed in 2011. The group share of the deficit of AMK for the period ended 30 November 2009 which amounted to €63,000 is included as part of Direct Charitable Expenditure in the 2009 consolidated statement of financial activities. As AMK ceased to be a subsidiary company on 30 November 2009, there is no further requirement to consolidate its results or assets after that date.
13 STOCK - GROUP & COMPANY Stock is comprised of relief supplies held for transfer to fields. In the opinion of Council, the replacement cost of stock on hand at the year end did not differ significantly from the carrying value.
14 DEBTORS AND PREPAYMENTS Group 2010 €’000 Amounts due from co-funders Prepayments Sundry debtors Amounts due from subsidiaries Deposit interest receivable
14,206 9 1,729 27 15,971
2009 €’000 6,994 254 922 33 8,203
Company 2010 2009 €’000 €’000 11,852 4 296 2,385 27 14,564
6,389 248 194 33 6,864
All amounts included within debtors and prepayments fall due within one year. The group’s exposure to credit and currency risk is disclosed in Note 24.
101 Notes to the Financial Statements (continued)
15 INVESTMENTS Group 2010 €’000 Short term deposits Equity investments Donated shares
(a) (b) (c)
28,115 2,335 75 30,525
2009 €’000 18,571 3,678 95 22,344
Company 2010 2009 €’000 €’000 28,115 2,335 74 30,524
18,571 3,678 89 22,338
(a) Cash holdings which are not immediately required for operations are invested in short term interest bearing deposits which are maintained with financial institutions that have a rating of at least A3 as per Moody’s Ratings of financial institutions or banks that are covered under the Irish Government Bank Guarantee Scheme. All of these deposits are held at variable interest rates. There are no material differences between the fair value of these deposits and their carrying value owing to their short term duration. At 31 December 2010 the deposits were held in Euro €12,356,335 (2009 : €15,294,055), US Dollars US$8,675,276 (2009 : US$2,305,142) and Sterling £4,900,000 (2009 : Stg £1,504,143). The weighted average interest rates related to these deposits were 2.15% (2009 : 2.28%) on Euro deposits, 1.03% (2009 : 0.99%) on Sterling deposits and 0.76% (2009 : 0.57%) on US Dollar deposits. The risks arising from concentration of investments are reduced by limits on amounts held with individual banks or institutions at any one time. (b) The group’s equity investments mainly comprise a fund managed by Irish Life Investment Managers. The fund is primarily invested in equities, which are approximately 58% Euro based, with the balance being global equities. All equity investments are ethically screened. During 2010 €1.5 million of this investment was transferred to the defined benefit pension scheme - see Note 19(e). The market value of the remaining investment increased during the year resulting in an unrealised gain of €0.15 million (2009: €0.7m). This gain has been shown in the consolidated statement of financial activities thus reflecting the investment at market value, as permitted by “Accounting and Reporting by Charities - Statement of Recommended Practice (SORP 2005)”. (c) The market value of donated shares on hand at 31 December 2010 was €75,419 (2009 : €94,575). There were no acquisitions or disposals during the year. (d) As defined in the group accounting policies, restricted funds of €11.3 million (2009: €0.5 m) are included in the deposits set out above (see Note 20 (c)). (e) The disclosures required by FRS29 Financial Instruments: Disclosures are set out on Note 24 - Financial Risk Management.
16 CASH AT BANK AND IN HAND
Funds held in Ireland and the UK Funds held in countries of operation
Group 2010 €’000
2009 €’000
Company 2010 2009 €’000 €’000
3,040 5,399 8,439
1,851 5,253 7,104
828 5,399 6,227
1,206 5,253 6,459
All funds held in Ireland and the UK are held with banks that have a rating of at least A3 as per Moody’s Ratings of financial institutions or banks that are covered under the Irish Government Bank Guarantee Scheme. Funds held overseas are maintained in the most secure financial institutions available in fields of operation. All of the above funds are available for immediate use by the group/company. The disclosures required by FRS 29 Financial Instruments: Disclosures are set out in Note 24 - Financial Risk Management.
102 Notes to the Financial Statements (continued)
17 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group 2010 €’000 Trade creditors and accruals Bank overdraft Amounts received from co-funders but unspent Bank loan (see Note 18) Amount due to subsidiaries
1,902 43 16,475 480 18,900
2009 €’000 1,600 230 14,323 597 16,750
Company 2010 2009 €’000 €’000 1,266 30 14,771 480 16,547
1,013 220 12,813 597 1,158 15,801
The bank overdraft is repayable on demand.
18 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Bank loan
Group 2010 €’000
2009 €’000
Company 2010 2009 €’000 €’000
6,356
6,830
6,356
6,830
Concern currently has a loan agreement with its bankers for an original sum of €8 million in order to finance the purchase and renovation of a building adjacent to its existing head office. The building loan attracts an interest charge, based on the EURIBOR 3 month lending rate plus a fixed margin of 0.59% per annum. The average interest rate paid on the loan for 2010 was 1.18%. The loan is repayable over 240 months by way of monthly repayments, which commenced on 11 August 2008. This loan is secured by a fixed charge over the property at 23/25 Grantham Street, Dublin 8. The portion of the loan repayable within 1 year is disclosed under Note 17 - Creditors - Amounts falling due within one year. The disclosures required by FRS 29 Financial Instruments: Disclosures are set out in note 24 - Financial Risk Management.
19 STAFF RETIREMENT LIABILITIES The group and company operate a number of staff retirement benefit arrangements which are detailed in sections (a)-(g) below. (a) At the balance sheet date, the liabilities in relation to staff retirement arrangements are as follows: Group & Company 2010 2009 €’000 €’000 Deficit on defined benefit pension scheme (see (e) below) Liability for overseas local staff service payments (see (f) below) Liability for incapacitated staff (see (g) below)
383 3,025 279 3,687
2,787 3,116 256 6,159
103 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (b) The movement in the liabilities during the year was as follows:
Balance at beginning of year Current service costs Interest cost Expected return on assets Net actuarial gain/(loss) Contributions/benefits paid during the year Transfer from Investments to defined benefit pension scheme Curtailment gain Balance at end of year
Defined benefit pension scheme €’000
Overseas local staff service payments €’000
Liability for incapacitated staff
Total 2010
Total 2009
€’000
€’000
€’000
(2,787)
(3,116)
(256)
(6,159)
(7,466)
(477) 446 555 380
(730) (177) 177 821
(32) 18 (34) 25
(730) (686) 464 698 1,226
(860) (700) 359 209 1,966
1,500
-
-
1,500
-
-
-
-
-
333
(383)
(3,025)
(279)
(3,687)
(6,159)
(c) The movement in the liabilities during the year has been reflected in the consolidated statement of financial activities as follows: Defined benefit pension scheme
Overseas local staff service payments
Liability for incapacitated staff
Total 2010
Total 2009
€’000
€’000
€’000
€’000
€’000
Cost of charitable activities Cost of generating voluntary income Governance costs
28 2 -
907 -
14 -
949 2 -
825 43 -
Total of amounts included in resources expended in the consolidated statement of financial activities
30
907
14
951
868
(554)
(177)
34
(697)
(209)
Total of amounts included in the consolidated statement of financial activities
(524)
730
48
254
659
Contributions/benefits paid during the year
(380)
(821)
(25)
(1,226)
(1,966)
(1,500)
-
-
(1,500)
-
(2,404)
(91)
23
(2,472)
(1,307)
Other gains and losses: Actuarial (gain)/loss on the schemes
Transfer from Investments to defined benefit pension scheme Total decrease in liabilities during the year
104 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (d) Defined contribution pension schemes The company operates a defined contribution pension scheme for qualifying members of staff. The scheme provides for pension, life assurance and permanent health benefits based on annual salaries. The contributions are paid into a separate fund, the assets of which are vested in independent trustees. The defined contribution pension scheme charge for 2010 was €594,000 (2009 : €650,000) of which €586,000 (2009 : €647,000), related to employees in Ireland and the UK. At 31 December 2010 an accrual of €114,000 (2009 : €118,000), in respect of pension costs is included in creditors, of which €83,801 (2009 : €86,121) relates to the parent company. (e) Defined benefit pension scheme The company also operates a non-contributory defined benefit pension scheme for qualifying members of staff. The scheme, which has been closed to new members since 1993, provides for pension, life assurance and permanent health benefits based on annual salaries. The contributions are paid into a separate fund, the assets of which are vested in independent trustees. During 2009, the 11 remaining active members of the scheme elected to join Concern’s defined contribution pension scheme for their future service. As a result of this restructure, no future benefits will be accrued under the defined benefit pension scheme. The most recent full valuation of the scheme was as at 1 January 2010 and was updated for FRS 17 Retirement Benefits purposes to 31 December 2010 by a qualified independent actuary. i)
Financial assumptions The principal financial assumptions used to calculate the retirement benefit liabilities were as follows:
Valuation method Discount rate for scheme liabilities Inflation rate Salary increases Rate of increase to pensions in payment
2010 Projected unit method 5.40% 2.00% N/A 3.00%
2009 Projected unit method 5.40% 2.25% N/A 3.00%
The mortality assumptions allow for future improvements in longevity, the valuation uses 108% of PNXL00 (U2009) mortality table for current employees and retired members. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows: current pensioner aged 65 years and future retiree upon reaching 65 years of age : male - 22.1 years (2009: 22 years) and female - 23.6 years (2009: 23.5 years). The assumptions used by the actuary are chosen from a range of possible actuarial assumptions, which, due to the timescale covered, may not necessarily be borne out in practice. If the life expectancy of a member had been changed to assume all members of the fund lived for one year longer, the value of the reported liabilities at 31 December 2010 would have increased by €0.2 million (2009: €0.2million). Assumptions relating to future salary increases are not applicable in 2010 as, with effect from 31 March 2009, there are no future benefits accruing.
105 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (d) Defined benefit pension schemes (continued) (ii) Valuation The scheme assets are stated at their bid value at each balance sheet date. The present value of the liability to meet future pension payments is arrived at by applying a discount rate equivalent to the rate of return expected to be derived from a Class AA corporate bond. Using these bases, the valuation was as follows: Long term rate of return expected at 31 December 2010
Value at 31 December 2010 €’000
Long term rate of return expected at 31 December 2009
Value at 31 December 2009 €’000
7.40% 4.25% 6.40% 2.00%
5,978 1,959 142 486 8,565
7.50% 4.50% 6.50% 2.00%
4,099 1,441 138 437 6,115
Equities Bonds Property Cash Total fair value of pension scheme assets Present value of funded pension liabilities Net deficit in funded pension scheme
(8,948)
(8,902)
(383)
(2,787)
The organisation employs a building block approach in determining the rate of return on pension scheme assets. Historical markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles. The assumed rate of return on each asset class is set out above. The overall expected rate of return on assets is then derived by aggregating the expected return for each asset class over the actual asset allocation for the scheme at the balance sheet date. (iii) Movement in fair value of scheme assets 2010 €’000
2009 €’000
Opening fair value of scheme assets
6,115
4,944
Expected return on assets Employer contributions - cash Employer contributions - transfer from investments (Note 15(b)) Benefits paid Actuarial gains/(losses)
446 380 1,500 (162) 286
334 394 (161) 604
Closing fair value of scheme assets
8,565
6,115
Actual return on pension scheme assets
732
938
106 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (d) Defined benefit pension schemes (continued) (iv) Movement in present value of scheme liabilities 2010 €’000
2009 €’000
Opening present value of scheme liabilities
(8,902)
(8,361)
Current service costs Interest cost Net benefits paid Net actuarial loss/(gain) on liabilities Curtailments Closing present value of scheme liabilities
(477) 162 269 (8,948)
(33) (464) 161 (538) 333 (8,902)
(v) History of defined benefit pension scheme
Fair value of scheme assets Present value of funded scheme liabilities Deficit in scheme Experience gains/(losses) on scheme assets Expressed as a percentage of scheme assets Experience gains/(losses) on scheme liabilities Expressed as a percentage of scheme liabilities
2010 €’000
2009 €’000
2008 €’000
2007 €’000
2006 €’000
8,565 (8,948) (383)
6,115 (8,902) (2,787)
4,944 (8,361) (3,417)
6,721 (8,071) (1,350)
6,652 (7,791) (1,139)
286 3.34%
604 9.88%
(2,496) (50.49%)
(527) (7.84%)
341 5.13%
116 (1.30%)
(57) 0.64%
365 (4.37%)
(843) 10.44%
12 (0.15%)
(vi) Expected expense in 2011 Using the same assumptions as have been used in 2010, the expected charge to the consolidated statement of financial activities for 2011 is expected to be €67,000. (f) Overseas local staff service payments In some of its overseas operations, the company has legal or constructive obligations to pay lump sum benefits to national staff on cessation of their employment. While the precise obligation varies from country to country it typically requires that the amount payable be based on terminal salary and length of service. The schemes are not externally funded i.e. assets have not been placed in separately administered trusts to meet liabilities as they arise, instead the full value of likely future payments is recognised as a liability at each balance sheet date. As benefits payable under these schemes meet the definition of retirement benefits set out in FRS 17 Retirement Benefits, the company requested advice from independent professional actuaries, Hewitt Associates Limited, to review the methodology being utilised to determine liabilities in order to ensure that it would produce results in accordance with the standard. The actuarial assessment concluded that the methodology being used would produce calculations that materially meet the requirements of the standard, and in addition, it provided the below information in order to reflect the schemes in accordance with the requirements of FRS 17 Retirement Benefits.
107 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (f) Overseas local staff service payments (continued) (i) Financial assumptions The main financial assumptions used to calculate the retirement benefit liabilities were as follows:
Rate of general long-term increase in salaries - US$ linked liabilities Discount rate for liabilities - US$ Rate of general long-term increase in salaries - € linked liabilities Discount rate for liabilities - € Rate of general long-term increase in salaries - Stg£ linked liabilities Discount rate for liabilities - Stg£
2010
2009
5.50% 5.50% 5.40% 5.40% 5.50% 5.50%
6.00% 6.00% 5.40% 5.40% 5.70% 5.70%
(ii) Valuation Using these assumptions the unfunded liability was as follows: Value at 31 December 2010 €’000
Value at 31 December 2009 €’000
Present value of scheme liabilities
(3,025)
(3,116)
Unfunded scheme liability
(3,025)
(3,116)
2010 €’000
2009 €’000
Scheme liability at beginning of year
(3,116)
(3,838)
Current service costs Benefits paid during the year Interest cost Actuarial gain Unfunded scheme liability at end of year
(730) 821 (177) 177 (3,025)
(828) 1,550 (199) 199 (3,116)
(iii) Movements in unfunded scheme liabilities
(iv) History of unfunded scheme liability
Present value of unfunded scheme liabilities Experience gains on scheme liabilities Expressed as a percentage of scheme liabilities
2010 €’000
2009 €’000
2008 €’000
2007 €’000
2006 €’000
(3,025)
(3,116)
(3,838)
(3,128)
(2,806)
177 (5.85%)
199 (6.39%)
209 (5.45%)
152 (4.86%)
146 (5.20%)
(v) Expected expense in 2011 Using the same assumptions as have been used in 2010, the expected charge to the consolidated statement of financial activities for 2011 is expected to be €933,000
108 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (g) Liability for incapacitated staff The group pays ongoing benefits to two ex-staff members who became incapacitated while working overseas. The group believes that it has a moral and constructive obligation to continue to make these payments for as long as they are needed and as a result, it has recognised a liability for those payments. The group made investments to cover the liability to the incapacitated staff and these were transferred into a discretionary trust for the benefit of the relevant individuals in 2007. As required by FRS 17 Retirement Benefits, an updated actuarial assessment of the liabilities to incapacitated staff was carried out using the projected unit method at 31 December 2010 by Hewitt Associates Limited on behalf of the group. (i) Financial assumptions The main financial assumptions used to calculate the liability for incapacity benefits payable were as follows:
Rate of increase in benefits in payment Inflation rate Discount rate for liabilities - € Discount rate for liabilities - £
2010
2009
3.00% 2.00% 5.40% 5.50%
3.00% 2.25% 5.40% 5.70%
In addition it has been assumed that the beneficiaries will enjoy a normal lifespan of 89 years, they are currently aged forty-six and fifty-seven years. (ii) Valuation The assets are stated at their bid value at each balance sheet date. The present value of the liability to meet future payments is arrived at by applying a discount rate equivalent to the rate of return expected to be derived from a Class AA corporate bond. Using these bases the valuation was as follows: Long term rate of return expected at 31 December 2010
Value at 31 December 2010
Long term rate of return expected at 31 December 2009
€’000 Property Other Total market value of incapacitated staff arrangement assets Present value of funded pension liabilities Net deficit in incapacitated staff arrangement
6.40% 4.00%
210 113
Value at 31 December 2009
€’000 6.50% 4.20%
205 112
323
317
(602)
(573)
(279)
(256)
The organisation employs a building block approach in determining the rate of return on the incapacitated staff arrangement assets. Historical markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles. The assumed rate of return on each asset class is set out above. The overall expected rate of return on assets is then derived by aggregating the expected return for each asset class over the actual asset allocation for the arrangement at the balance sheet date.
109 Notes to the Financial Statements (continued)
19 STAFF RETIREMENT LIABILITIES (continued) (g) Liability for incapacitated staff (continued) (iii) Movement in fair value of scheme assets 2010 €’000
2009 €’000
Opening fair value of assets
317
402
Expected return on assets Employer contributions Benefits paid out Actuarial losses on assets
18 25 (24) (13)
25 22 (23) (109)
Closing fair value of assets
323
317
Actual return on scheme assets
5
(84)
2010 €’000
2009 €’000
(573)
(613)
(32) 24 (21)
(36) 23 53
(602)
(573)
(iv) Changes to the present value of liabilities
Opening present value of liabilities Interest cost Net benefits for the year Actuarial gains/(losses) on liabilities Closing present value of liabilities
(v) History of liability for incapacitated staff
Fair value of assets Present value of liabilities Deficit in scheme Experience losses on assets Expressed as a percentage of scheme assets Experience losses/(gains) on liabilities Expressed as a percentage of scheme liabilities
2010 €’000
2009 €’000
2008 €’000
2007 €’000
2006 €’000
323 (602) (279)
317 (573) (256)
402 (613) (211)
604 (650) (46)
(715) (715)
(13) (4.02%)
(109) (34.38%)
(240) 59.70%
(49) (8.11%)
-
(3)
88
9
3
(41)
0.50%
(15.36%)
(1.47%)
(0.46%)
5.73%
(vi) Expected expense in 2011 Using the same assumptions as have been used in 2010, the expected charge to the consolidated statement of financial activities in 2011 is expected to be €14,000.
110 Notes to the Financial Statements (continued)
20 FUNDS (a) Reconciliation of funds - group
Total funds at beginning of year Net incoming resources for the year before other recognised gains and losses Exchange gain on consolidation of foreign subsidiary Revaluation of financial fixed asset Unrealised gain on revaluation of investments Actuarial gain on staff retirement schemes Total funds at end of year
Restricted funds €’000
Unrestricted funds €’000
Total 2010 €’000
Total 2009 €’000
513
25,873
26,386
20,327
10,795
5,590
16,385
4,786
11,308
45 142 697 32,347
45 142 697 43,655
81 286 697 209 26,386
Restricted funds €’000
Unrestricted funds €’000
Total 2010 €’000
Total 2009 €’000
485
24,664
25,149
18,495
10,823
5,394
16,217
5,462
11,308
142 697 30,897
142 697 42,205
286 697 209 25,149
Company €’000
Subsidiaries €’000
Total €’000
11,308 30,897 42,205
1,450 1,450
11,308 32,347 43,655
(b) Reconciliation of funds - company
Total funds at beginning of year Net incoming resources for the year before other recognised gains and losses Revaluation of financial fixed asset Unrealised gain on revaluation of investments Actuarial gain on staff retirement schemes Total funds at end of year
The funds held by the group at 31 December 2010 are made up as follows:
Restricted funds Unrestricted funds
111 Notes to the Financial Statements (continued)
20 FUNDS (Continued) (c) Movements in funds The movements in funds classified in accordance with the group accounting policies are as follows: Notes
Balance at 1 January 2010 €’000
Income
Expenditure
Transfers
Exchange gain/(loss)
€’000
€’000
€’000
€’000
Balance at 31 December 2010 €’000
3,960 556 4,458 1,249 1,991 1,117 1,124 3,623 4,958 30,323 2,039 4,074 793 2,584 2,751 1,568 383 7,521 19,640 1,238 3,593 4,115 5,781 2,745 2,497 564 1,820 1,632 8,759 3,229 130,685
3,960 556 4,372 1,249 1,991 1,117 1,124 3,623 4,958 22,412 2,039 4,354 793 2,584 2,751 1,568 383 7,521 16,613 1,238 3,593 4,115 5,781 2,745 2,497 564 1,820 1,632 8,728 3,209 119,890
-
-
115 7,911 3,193 31 58 11,308
Restricted funds Afghanistan Angola Bangladesh Burundi Cambodia Chad DPR Korea DR Congo Ethiopia Haiti India Kenya Lao PDR Liberia Malawi Mozambique Nepal Niger Pakistan Rwanda Sierra Leone Somalia Sudan North Sudan South Tanzania Timor Leste Uganda Zambia Zimbabwe HQ Projects Total restricted funds
(i)
29 280 166 38 513
Unrestricted funds General funds
(ii)
243
36,473
30,044
(6,411)
45
306
Designated funds: Planned budget deficit Tangible fixed asset fund Programme continuity fund Financial fixed asset
(iii) (iv) (v) (vi)
588 9,933 14,823 286
-
-
312 579 5,516 4
-
900 10,512 20,339 290
25,873
36,473
30,044
-
45
32,347
26,386
167,158
149,934
-
45
43,655
Total unrestricted funds Total funds
(vii)
112 Notes to the Financial Statements (continued)
20 FUNDS (Continued) (c) Movements in funds (continued) The funds carried forward at 31 December 2010 represent: (i) Income from appeals and donations that are not yet applied for the purposes specified by the donor. (ii) Funds for use at the discretion of the Council to expand the activities of the charity. (iii) Funds set aside to cover the expected deficit on unrestricted funds in 2011. (iv) The net book amounts already invested in (net of bank debt) or contractually committed to tangible fixed assets for use by the charity. (v) The net amount that Council has agreed to be set aside to ensure that it can protect its ongoing programme of work from unexpected variances in income and at the same time retain an effective emergency response capacity. (vi) The fair market value of the organisation’s financial fixed assets. (vii) Analysis of group net assets between funds
Funds balances at 31 December 2010 are represented by: Tangible fixed assets Financial fixed assets Current assets Current liabilities Creditors: amounts falling due after more than one year Staff retirement liabilities
Restricted Funds €’000
Unrestricted Funds €’000
Total Funds €’000
27,783 (16,475) 11,308
17,310 290 27,215 (2,425) (6,356) (3,687) 32,347
17,310 290 54,998 (18,900) (6,356) (3,687) 43,655
Restricted Funds €’000
Unrestricted Funds €’000
Total Funds €’000
26,079 (14,771) 11,308
17,127 290 25,299 (1,776) (6,356) (3,687) 30,897
17,127 290 51,378 (16,547) (6,356) (3,687) 42,205
(viii) Analysis of company net assets between funds
Funds balances at 31 December 2010 are represented by: Tangible fixed assets Financial fixed asset Current assets Current liabilities Creditors: amounts falling due after more than one year Staff retirement liabilities
113 Notes to the Financial Statements (continued)
21 RECONCILIATION OF OPERATING SURPLUS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Net incoming/(outgoing) resources Deposit interest earned Depreciation Non cash defined benefit pension scheme charge Profit on disposal of tangible fixed assets Decrease in stocks (Increase)/decrease in debtors Increase in creditors Exchange movement Loss on revaluation of equity investments and donated shares Profit on disposal of subsidiary undertaking Net cash inflow from operating activities
2010 €’000
2009 €’000
16,385 (573) 814 (274) (6) 52 (7,775) 2,453 45 5 11,126
4,786 (397) 931 (1,099) 14 10,597 810 80 (8,759) 6,963
22 ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 2010 €’000
2009 €’000
(153) 102 6 (4) -
(335) 5 (6) 9,364 (605)
Net cash (outflow)/inflow from capital expenditure and financial investment
(49)
8,423
Financing Financing - net decrease in bank loan
591
6,658
Management of liquid resources Increase in short term deposits
9,544
8,708
Capital expenditure and financial investment Payments to acquire tangible fixed assets VAT reclaim on tangible fixed assets Proceeds on disposal of fixed assets Payments to acquire financial fixed assets Donated shares received in the year Proceeds on disposal of subsidiary undertaking Group share of net assets included in disposal of subsidiary undertaking
114 Notes to the Financial Statements (continued)
23 MOVEMENT IN CASH, LIQUID RESOURCES AND FINANCING Opening balance
Net cash flow
Foreign exchange difference
Closing balance
Short term deposits
2010 €’000 7,104 (230) 6,874 18,571
2010 €’000 1,316 187 1,503 9,544
2010 €’000 19 19 -
2010 €’000 8,439 (43) 8,396 28,115
Total cash resources
25,445
11,047
19
36,511
Cash at bank and in hand Bank overdrafts
Financing Proceeds from borrowings - bank loan due within one year
(597)
117
-
(480)
Proceeds from borrowings - bank loan due after one year
(6,830)
474
-
(6,356)
Total financing
(7,427)
591
-
(6,836)
Total movement in liquid resources and financing
18,018
11,638
19
29,675
24 FINANCIAL RISK MANAGEMENT The group’s international operations expose it to different financial risks that include credit risk, interest rate risk, foreign exchange rate risk and liquidity risk. The group has financial risk management policies in place as approved by Council which seek to limit the impact of these risks on the performance of the group. It is the aim of the group to manage these risks in a non-speculative manner. The group has provided the disclosures required by FRS 29 Financial Instruments: Disclosures, on the following assets and liabilities:
Financial fixed assets (Note 12) Amounts due from co-funders (Note 14) Sundry debtors and deposit interest receivable (Note 14) Short term and fixed deposits (Note 15) Equity investments and donated shares (Note 15) Cash at bank and in hand (Notes 16 and 17) Amounts received from co-funders but unspent (Note 17) Trade creditors and accruals (Note 17) Bank loan (Notes 17 and 18)
2010 €’000
2009 €’000
290 14,206 1,756 28,115 2,410 8,396 (16,475) (1,902) (6,836)
286 6,994 955 18,571 3,773 6,874 (14,323) (1,600) (7,427)
115 Notes to the Financial Statements (continued)
24 FINANCIAL RISK MANAGEMENT (continued) (a) Credit risk Credit risk arises where individuals or institutions are unable to repay amounts owed to the group. It could occur in the following forms: (i) The amounts due from co-funders represent amounts owed to the group by those government and institutional funders for work that has been performed but for which the related funding has not been received by the year end. This is managed by the group by ensuring that all agreements with these funders are supported by signed contracts and that all reporting and project related requirements are fulfilled to ensure receipt of funding. There is not a significant concentration of risk and the history of defaults is negligible. (ii) The financial institutions in which cash deposits, short term investments, cash at bank and equity investments are placed, may default on the amounts held. This is managed by the group by ensuring that cash at bank, short term investments and equity investments are invested with institutions that have a rating of at least A3 as per Moody’s Ratings of financial institutions or banks that are covered under the Irish Government Bank Guarantee Scheme. The group limits amounts held with individual banks to minimum operating levels. (iii) The group has detailed procedures for monitoring and managing the credit risk related to other receivables. The maximum exposure to credit risk is represented by the carrying amount of the financial assets in the balance sheet. The maximum credit exposure at the reporting date was:
Carrying amount of financial assets of the group: Amounts due from co-funders Financial fixed asset Short term and fixed deposits Equity investments and donated shares Cash at bank and in hand Sundry debtors and deposit interest receivable
2010 €’000
2009 €’000
14,206 290 28,115 2,410 8,396 1,756 55,173
6,994 286 18,571 3,773 6,874 955 37,453
2010 €’000
2009 €’000
3,116 6,376 4,714 14,206
2,040 1,729 3,225 6,994
The following table details the ageing of amounts due from co-funders: Within 1 month 1 to 3 months 3 to 12 months
(b) Interest rate risk Interest rate risk exists when assets and liabilities attract interest rates set according to different bases or which are set at different times. It impacts the group in two main ways: (i) The main companies in the group i.e. Concern Worldwide and its subsidiary Concern Worldwide (UK), have interest bearing financial assets. In general, rates on the short term bank deposits that they hold are fixed for relatively short periods in order to match funding requirements while being able to benefit from opportunities due to movements in longer term rates. (ii) The main company in the group, namely Concern Worldwide; also has an interest bearing liability in the form of a bank loan relating to the Grantham Street building. A loan of €8 million was secured to finance the purchase and renovation of a building adjacent to its existing head office. The bank loan attracts a variable interest charge, based on the EURIBOR 3 month lending rate plus a fixed margin of 0.59% per annum. The average interest rate paid on the loan for 2010 was 1.18%. (2009: 2.08%).
116 Notes to the Financial Statements (continued)
24 FINANCIAL RISK MANAGEMENT (continued) (b) Interest rate risk (continued) The interest rate profile of the group’s interest bearing financial instruments are as follows: 2010 €’000
2009 €’000
(6,836) 36,511 29,675
(7,427) 25,445 18,018
Variable rate: Bank loan Cash, short term and fixed deposits
An increase or decrease of 200 basis points in interest rates at the reporting date would have had the following effect on the surplus for the year:
Bank loan Short term and fixed deposits
2010 €’000
2009 €’000
151 399
162 371
(c) Foreign exchange risk Foreign exchange risk is the risk that the group’s operations or its investments will be affected by fluctuations in exchange rates. Much of the group’s costs, particularly overseas costs, are denominated in US Dollar while most income is received in Euro and Sterling. A strengthening of the US Dollar against the Euro and Sterling could have a significant adverse effect on the group’s ability to deliver its planned programme of work. These currency risks are monitored on an ongoing basis and managed as deemed appropriate by utilising a combination of spot and forward foreign currency contracts. The following table details the group’s exposure to foreign currency risk at the balance sheet date:
Other €’000
Euro €’000
2010 Sterling €’000
US Dollar €’000
Other €’000
Euro €’000
2009 Sterling €’000
US Dollar €’000
Financial fixed asset Amounts due from co-funders Sundry debtors and deposit interest receivable Short term and fixed deposits
-
290 5,723 317
2,354 1,439
6,129 -
-
286 3,575 221
605 735
2,814 -
-
15,942
5,681
6,492
-
15,294
1,680
1,597
Equity investments, donated shares and other Cash at bank and in hand (net) Amounts received from co-funders but unspent Trade creditors and accruals Bank loan
-
2,410
-
-
-
3,773
-
-
2,331 -
2,021 (13,630)
2,213 (1,705)
1,831 (1,140)
2,313 -
1,830 (8,714)
645 (1,510)
2,086 (4,099)
2,331
(1,266) (6,836) 4,971
(636) 9,346
13,312
2,313
(1,014) (7,427) 7,824
(588) 1,567
2,398
117 Notes to the Financial Statements (continued)
24 FINANCIAL RISK MANAGEMENT (continued) (c) Foreign exchange risk (continued) A 10% strengthening or weakening of the Euro against the US Dollar, Sterling and other currencies, based on outstanding assets and liabilities at 31 December 2010 would have had the following effect on the surplus for the year: 2010 €’000
2009 €’000
1,331 935 233
240 157 231
US Dollars Sterling Other currencies
(d) Liquidity risk Liquidity risk is the risk that the group will be unable to meet financial obligations as they fall due from cash flows generated by its activities. This risk can arise from mismatches in the timing of cash flows relating to assets and liabilities. The group’s liquidity is managed by ensuring that sufficient cash and deposits are held on short notice, and by retaining sufficient reserves to cover short term fluctuations in income. The following table reflects the contractual financial liabilities of the group, including estimated interest payments: 2010
Trade creditors and accruals Bank loan
2009
Trade creditors and accruals Bank loan
Carrying Amount €’000
Contractual Cash flows €’000
<6 Months €’000
6 - 12 Months €’000
1-2 Years €’000
2-5 Years €’000
>5 Years €’000
1,902 6,836 8,738
1,902 9,007 10,909
1,902 344 2,246
344 344
1,377 1,377
2,065 2,065
4,877 4,877
Carrying Amount €’000
Contractual Cash flows €’000
<6 Months €’000
6 - 12 Months €’000
1-2 Years €’000
2-5 Years €’000
>5 Years €’000
1,600 7,427 9,027
1,600 8,873 10,473
1,600 344 1,944
344 344
688 688
2,065 2,065
5,431 5,431
118 Notes to the Financial Statements (continued)
24 FINANCIAL RISK MANAGEMENT (continued) (e) Fair values of financial assets and liabilities The group adopted the amendment to FRS 29 effective 1 January 2009. This requires the group to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: - Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. - Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). - Level 3: Inputs for the assets or liability that are not based on observable market data (that is unobservable inputs). The determination of what constitutes “observable” requires significant judgement by the group. The group considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market. The following table analyses within the fair value hierarchy, the group’s financial assets and liabilities measured at fair value at 31 December 2010:
Donated shares Equity investments Financial fixed assets
Level 1 75 -
Level 2 2,335 -
Level 3 290
The financial instrument disclosed in Level 3 of the fair value hierarchy is primarily the group’s 10% shareholding in AMK. The key input in determining the fair value at 31 December 2010 was derived by Council from an external valuation in March 2009. This was discounted by 80% to take consideration of the following: - the shareholding held by the company is now a minority shareholding. - no actual market exists on which these shares are actively traded. Although the group believes that the estimate of fair value is appropriate, the use of different assumptions or valuation methods could lead to different measurements of fair value. In the opinion of the Council the value of the shareholding did not materially change during 2010.
25 SUBSIDIARIES The parent company, Concern Worldwide, has a beneficial and controlling interest in three subsidiaries, as follows: (a) Concern Worldwide (UK) which is registered as a company limited by guarantee and does not have a share capital. The subsidiary’s registered office is at Unit 13 & 14 Calico House, Clove Hitch Quay, Plantation Wharf, London. The wholly owned subsidiary commenced to trade on 1 January 2004. It operates in Northern Ireland and Great Britain, its main activities are to fundraise for, and otherwise support, programmes of work which relieve poverty, distress and suffering in the poorest countries of the world. (b) Concern Charity Trading Limited, which is registered at 52-55 Camden Street, Dublin 2 as a company limited by guarantee and does not have a share capital. The wholly owned subsidiary, which was incorporated in 2000, is registered, and operates in, the Republic of Ireland. The main activity of Concern Charity Trading Limited is to support specific fundraising activities on behalf of the parent company. (c) The holding company holds 92 out of a total of 99 issued ordinary shares in Africa Concern Limited. This company is registered at Camden Street, Dublin and is dormant. Concern Worldwide (UK) has 100% shareholding in the following: (a) Concern Worldwide (NI) which has its registered office at 47 Fredrick Street, Belfast, Northern Ireland and is dormant. (b) Trading for Concern Worldwide (UK) Charity Limited, which has its registered office at Unit 13 & 14 Calico House, Clove Hitch Quay, Plantation Wharf, London and is dormant.
119 Notes to the Financial Statements (continued)
26 CONCERN WORLDWIDE (US) INC. Concern Worldwide (US) Inc. is a not-for-profit organisation registered in the United States of America, and is an affiliate of Concern Worldwide. Concern Worldwide (US) Inc. is governed by an independent board of directors which retains full control over the financial and operating policies of the company. The principal activity of Concern Worldwide (US) Inc. is the raising of funds from the US government and the general public. Concern Worldwide (US) Inc. has entered into separate agreements with Concern Worldwide whereby it will provide sub-awards from these funds exclusively to Concern Worldwide for the period that the agreements remain in force. The total amount of cash grants received from Concern Worldwide (US) Inc. in 2010 was €21,932,000 (2009: €9,786,000). These grants are accounted for in the same way as grants from all other co-funders. Concern Worldwide provides funds to Concern Worldwide (US) Inc. to contribute towards its operational costs. The total amount transferred in 2010 was €947,000 (2009: €897,000); this amount is included in the expenditure of Concern Worldwide, analysed according to the purposes for which the funds were applied.
27 COMMITMENTS, CONTINGENCIES AND GUARANTEES (i) The 2011 Annual Plan, which was approved by Council on 11 December 2010, allows for overseas expenditure in 2011 of €107,768,433. Any increase over this amount requires the approval of Council. The group is also committed to assist certain overseas projects for periods in excess of one year. The group has entered agreements with partner agencies which commit it to expenditure of €6,153,444 over the next 3 years. (ii) Commitments under operating lease agreements at 31 December 2010 in respect of premises used by the group and company are as follows:
Payable on leases in which the commitment expires within : - one year - two to five years - more than five years
Group €’000
Company €’000
146 146
132 132
(iii) Future capital expenditure approved by Council but not provided for in these financial statements is as follows:
Contracted Authorised but not contracted
2010 €’000
2009 €’000
309 309
233 233
(iv) At the year end, the group had a contingent liability for taxes introduced by the government of one of the countries of operation. The maximum liability is estimated at €0.5m, however negotiations are ongoing and the group expects that the ultimate payment, if any, would be approximately 50% of this amount. In accordance with our accounting policy for overseas branches Basis of consolidation - Branches, the group has not made a provision in the consolidated statement of financial activities for any amounts that may ultimately become payable. (v) Concern has entered into a loan agreement with its bankers for the original sum of €8 million in order to finance the purchase and renovation of a building adjacent to its existing head office. This loan is secured by a fixed charge on the new building. The value of the loan at 31 December 2010 is €6.8 million.
120 Notes to the Financial Statements (continued)
28 LEGAL STATUS OF COMPANY In accordance with Section 24 of the Companies Act, 1963, the company is exempt from including the word ‘limited’ in its name. The company is limited by guarantee and has no share capital. At 31 December 2010, there were 697 members (2009: 685), whose guarantee is limited to €6.35 each. This guarantee continues for one year after individual membership ceases. The company, as a charity, is exempt from the reporting and disclosure requirements of the Companies (Amendment) Act, 1986. As permitted by the Companies Acts, the company has not presented its own statement of financial activities. As indicated in note 20(b) the surplus of the company for the financial year was €16.3 million.
29 POST BALANCE SHEET EVENTS No significant events have taken place since the year end that would result in adjustment to the 2010 financial information or inclusion of a note thereto.
30 RELATED PARTY DISCLOSURE The company is availing of the exemption under Financial Reporting Standard No. 8 “Related Party Disclosures” not to disclose details of transactions with companies within the group. Note 10 details key management costs. There are no other related party disclosures to be made.
31 APPROVAL OF FINANCIAL STATEMENTS These financial statements were approved by the Council of Concern on 15 April 2011.
121 APPENDIX 1 FIVE YEAR SUMMARY OF CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES
2010 €’000
2009 €’000
2008 €’000
2007 €’000
2006 €’000
60,718 24,572 5,876 23,859 21,932 20,230 9,335 636
44,791 26,807 2,447 11,297 8,280 11,776 8,759 155 14,697 412
53,610 32,642 2,026 12,576 8,343 10,701 232 11,211 957
55,632 30,203 2,987 10,252 6,232 6,309 229 3,778 749
64,111 27,170 3,610 5,593 6,480 4,616 235 8,876 1,029
167,158
129,421
132,298
116,371
121,720
Expenditure Afghanistan Angola Bangladesh Burundi Cambodia Cambodia microfinance (AMK) Chad DPR Korea DR Congo Eritrea Ethiopia Haiti India Indonesia Iran Kenya Lao PDR Liberia Malawi Mozambique Myanmar Nepal Niger Pakistan Rwanda Sierra Leone Somalia Sri Lanka Sudan North Sudan South Tanzania Timor Leste Uganda Zambia Zimbabwe Other countries & projects Overseas support costs Development education and advocacy
4,468 1,016 4,386 1,592 2,111 1,496 1,297 4,335 5,157 21,889 2,388 6 4,262 1,036 3,140 3,525 1,834 742 7,979 16,869 1,777 4,237 4,682 6,014 2,630 3,274 679 2,644 2,020 8,725 2,558 6,700 3,087
3,225 1,564 4,257 1,624 1,945 63 1,589 1,372 5,730 5,908 4,224 2,363 182 3,430 1,617 3,804 2,966 2,343 11 1,282 3,180 2,900 2,216 3,554 2,794 6,147 4,167 2,697 1,419 2,393 1,833 17,214 1,701 8,048 3,084
3,398 1,900 8,861 1,530 1,991 240 1,137 1,577 5,139 7,717 5,710 2,666 619 3,715 1,902 3,572 2,804 2,757 446 986 4,375 4,014 1,705 3,355 3,375 5,419 5,085 2,449 1,866 2,842 1,824 13,496 1,529 9,447 4,031
4,022 1,692 6,457 1,430 1,861 1,544 1,358 1,855 4,396 4,268 4,990 3,013 2,012 2,494 1,653 3,683 3,360 2,876 1,042 3,227 6,015 1,485 2,750 2,512 451 6,212 5,579 2,096 1,418 3,692 2,021 4,488 2,166 8,979 4,555
4,204 1,587 3,522 1,328 1,515 1,954 660 4,276 1,992 4,770 4,609 2,734 6,234 40 2,675 978 3,431 3,076 3,298 791 4,459 6,060 1,256 2,076 1,805 3,646 4,767 5,104 1,754 1,230 3,446 1,621 7,100 3,127 8,042 4,348
Total cost of charitable activities
138,555
112,846
123,479
111,652
113,515
11,422 796
11,036 135 618
12,295 200 797
13,227 164 750
13,619 395 663
150,773
124,635
136,771
125,793
128,192
16,385
4,786
(4,473)
(9,422)
(6,472)
Income Voluntary income Irish Government British Government European Union Concern Worldwide (US) Inc. Other international co-funding Income from sale of subsidiary undertaking Income from trading activities Donated commodities Deposit interest and sundry income Total Income
Cost of generating voluntary income Cost of generating trading income Governance costs Total expenditure Net incoming/(outgoing) resources for year
122 APPENDIX 2 MULTI ANNUAL PROGRAMME SCHEME (MAPS) FUNDED BY THE GOVERNMENT OF IRELAND THROUGH IRISH AID The 2010 MAPS funding was utilised as follows:
Programmes Organisational development and development education Head office cost Total
2010 €’000
2009 €’000
19,571 397 832 20,800
19,699 269 832 20,800
2010 €’000
2009 €’000
2,982 349 661 788 979 1,566 3,055 4,628 2,231 2,332 19,571
3,162 127 1,100 806 851 1,481 2,956 5,184 778 3,254 19,699
Details of the programme expenditure are as follows: Programme
Sub- Programme
Education
Primary Non-formal Reproductive and child health Nutrition Water and environmental health HIV and AIDS Natural Resource Management Food Production & Processing Market Interaction Strengthened Institutions and Policies
Health
HIV and AIDS Food, Income and Markets
Total programme expenditure
123 APPENDIX 3 GRANTS TO PARTNER AGENCIES FOR CHARITABLE ACTIVITIES
The top 50 grant recipients in 2010 are listed below. Name of partner institution
Country
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51.
Pakistan Pakistan Pakistan Pakistan Pakistan UK Pakistan Pakistan Pakistan North Sudan Pakistan Pakistan Kenya Pakistan Pakistan Pakistan Kenya Pakistan Pakistan Ethiopia Pakistan Pakistan Pakistan Pakistan Bangladesh Pakistan Pakistan India Mozambique Zambia Somalia Pakistan Nepal Pakistan Bangladesh Mozambique Pakistan Somalia Bangladesh Pakistan Nepal Sierra Leone India Pakistan Pakistan Bangladesh India Pakistan Somalia Haiti
Root Work Foundation Indus Resource Centre (IRC) Environmental Protection Society (EPS) Pakistan Fisher Folk Forum (PFF) Social Mobilization Advocacy Research & Training (SMART) VALID International Integrated Rural Support Programme (IRSP) Doaba Foundation Innovative Development Organization (IDO) Sudanese Environment Conservation Society (SECS) Water Enviroment and Sanitation Society (WESS) Haashar Association Neighbours Initiative Alliance (NIA) Awaz Foundation Pakistan Rural Development Programme (PRDP) Saibaan Development Organization Community Initiative Facilitation & Assistance (CIFA) National Rural Support Programme (NRSP) Veer Development Organization (VDO) Wolaita Development Association (WDA) Qatar Charity (QC) Rural Development Project (RDP) Partner Aid International (PAI) Tameer-e-Khalq Foundation (TKF) Voluntary Association for Rural Development (VARD) Pak Community Development Programme (PAK-CDP) Sukkur Blood and Drugs Donating Society (SBDDS) Assocation of Bengal Collaborators for Development (ABCD) Magariro Development Aid from People to People (DAPP) Bani Adam Save the Children Nepal Water for Health (NEWAH) AgriBusiness Support Fund (ASF) Shushilan Associacão Nacional para Desenvolvimento Autosustentado (ANDA) SABAWOON Lifeline Gedo Jagrata Juba Shangha (JJS) Oxfam GB Karnal Integrated Rural Development & Research Centre (KIRDARC) Association for Rural Development (ARD) Regional Centre for Development Cooperation (RCDC) Marvi Rural development Organization (MRDO) Research & Development Foundation (RDF) Pally Bikash Kendra (PBK) Foundation for Ecological Security (FES) World Vision Pakistan YouthLink Fondayson Kole Zepòl (FONKOZE) Other Partners
No. of grants
2010 €’000
2 3 3 2 2 1 2 3 4 1 2 2 3 3 1 2 4 1 2 2 1 1 1 1 3 1 1 2 2 1 2 1 1 1 6 1 1 1 3 1 1 1 3 1 1 2 3 1 2 1 407 500
1,625 1,525 786 779 764 636 631 620 597 563 490 484 483 471 379 379 338 334 333 325 312 298 269 267 245 241 239 236 233 227 223 220 215 201 194 194 193 193 192 180 178 177 176 171 170 167 166 157 153 151 13,134 31,914
Republic of Ireland 52-55 Lower Camden Street, Dublin 2. 00 353 1 417 77 00 info@concern.net Northern Ireland 47 Frederick Street, Belfast. BT1 2LW 00 44 28 9033 1100 belfastinfo@concern.net England and Wales 13/14 Calico House, Clove Hitch Quay, London. SW11 3TN 00 44 207 801 1850 londoninfo@concern.net Scotland 40 St. Enoch Square, Glasgow. G1 4DH 00 44 141 221 3610 glasgowinfo@concern.net USA 355 Lexington 19th Floor New York NY 10017 00 1 212 5578 000 info.usa@concern.net
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