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2013 ANNUAL REPORT Dear Friends,
Safe Jobs Save Lives
We are pleased to share with you our 2013 annual report. In spite of a difficult economic environment, our sales increased modestly in 2013 and we reported a small surplus. We were particularly pleased with an 8% increase in our catalog and direct-to-consumer sales. However, we do not measure our success solely by sales revenue. Our true success is in creating opportunity for low-income and marginalized artisans around the globe. The fair trade values we have espoused for over 60 years are increasingly embraced by the mainstream market, providing new opportunities for artisans and small farmers. Yet stronger efforts are necessary to ensure that artisans, farmers, workers, and consumers are treated fairly throughout the global supply chain. We are grateful for the support of our customers and donors as well as our highly dedicated board, staff and volunteers in our own facilities and stores, and in fair trade stores and religious institutions across the country, who go the extra mile to create a more just world.
In the 65 years since our modest beginning, SERRV has supported hundreds of thousands of artisans and their families across the globe. Each person employed by our partners is one fewer who could be exposed to exploitative and dangerous labor practices common in mainstream supply chains. In the spring of 2013, the world was overwhelmed with the tragedy of the Bangladesh garment factory collapse, where over 1,000 people lost their lives and thousands more were injured. The incident prompted many corporations to rethink their business ethics and brought public awareness to the importance of social responsibility, particularly in the fashion industry. Though tragic, the incident acted as a catalyst for change not only in Bangladesh, but in factories around the world. SERRV’s partners in 32 countries are changing the status quo by requiring safe working conditions for their employees. To expand the impact of fair trade, we work diligently to assist our
partners in growing their businesses. For example, we invest heavily in product development so our partners can learn to design for a Western market. Last September SERRV hosted a Design Camp in Madison, Wisconsin (see page 3), and in October held another in Dhaka, Bangladesh. Product Designer Anne Brady traveled with pro bono professional designer Dana Morales to Bangladesh to facilitate the three-day design camp. Despite civil unrest and protests of upcoming elections, participants from all four of our partners in Bangladesh attended safely and the event was a success. Dana shares, “I believe designers like myself should assume the responsibility of making a difference through meaningful design, and become instruments for social change.” Our partners in Bangladesh offer an alternative to dangerous sweatshops by giving artisans, especially women, an opportunity to safely and sustainably lift themselves out of poverty.
Thank you,
Bob Chase President/CEO
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Income Statement for 2013
Balance Sheet as of 12/31/13
REVENUE
ASSETS
Sales of fairly traded handcrafts and food Partial reimbursement of shipping costs Contributions Other non-operating income GROSS REVENUE
10,019,503 678,919 195,152 37,325 10,930,899
Credit card, bank fees, and other cost of sales Contract services Payments to producers for goods sold NET REVENUE
(181,852) (784,579) (3,684,996) $6,279,472
Program salaries and benefits Postage and outbound shipping costs Payment of international shipping for producers Promotion Occupancy including warehouse rent Program supplies Consultants to assist producers, other services Interest on advances to producers and inventory Donations to partner organizations Miscellaneous program expenses Volunteer expenses and contract labor Telephone Travel Grants to producers, producer development, and special projects
PROGRAM EXPENSES SUBTOTAL Administrative and fundraising TOTAL EXPENSES
1,900,678 1,288,326 464,192 464,948 399,578 333,316 176,477 119,954 69,022 6,957 147,868 31,043 46,583 47,134 5,496,076 753,729 $6,249,805
Inventory financing payable Accounts payable Accounts payable inventory Payable to partner organizations FASB 106 obligation Notes payable Miscellaneous liabilities TOTAL LIABILIIES
1,759,377 284,976 13,883 73,117 13,985 1,259,000 99,563 $3,503,901
FUND BALANCE
$1,043,075
For a complete copy of our audited financial statements, please contact us at 410.635.8755.
$29,667
“I didn’t go to school, yet I learned a job that I can do with my hands. I weave myself. I have my own income. I can help take care of my family and my three children can go to school. Fair trade has improved our community -- more children are in school and stay longer because we are able to afford to pay for primary and junior high school.”
-Apana Amyogpoka Trade Aid Integrated, Ghana
PHOTO: Alsy Acevedo, CRS
Jero Sandat and her husband own a workshop in Indonesia with SERRV partner Mitra Bali. Jero shares, “I have learned that there is no difference between men and women. Like all mothers in the world, I want my children to have a better life, health, and success with their careers. There is no reason for customers not to choose fair trade products -- it helps people like us and many others, and fair trade products can connect us for a better planet.” 2
1,964,651 674,685 (12,858) 1,380,117 (75,000) 255,489 243,791 116,101 $4,546,976
LIABILITIES
EXPENSES
CHANGES IN NET ASSETS
Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Inventories Reserve for obsolete inventory Advances to producers and partners Prepaid supplies and miscellaneous accounts Equipment and leasehold improvements TOTAL ASSETS
Development Highlights in 2013 ●● Donated funds on behalf of those affected by typhoon Haiyan in the Philippines. Working in cooperation with Preda, SERRV supported six months of advocacy work, community outreach, and training. ●● Donated funds to Kumbeshwar Technical School in Nepal, whose facilities experience chronic power shortages. Through SERRV’s investment in solar powered equipment, KTS has installed lighting in three of their workshops as well as in their on-site orphanage. ●● Provided funding to construct dormitories and toilets for women recovering from obstetric fistula surgery. Delta Survie, our partner in Mali, was forced to relocate and rebuild their center after civil unrest made their original location unsafe. ●● Hosted our second successful Fair Trade Retailer Retreat in Madison, Wisconsin, bringing store managers together to discuss best practices, offer practical support, and build the market for fair trade. ●● Hosted our 4th annual Design Camp in Madison, Wisconsin, where we were excited to welcome our first guest from Africa. Merchandising Directors from Kenya, Vietnam, and India joined us for peer and customer product critiques, competitive shopping, trend reports, homestays, and design workshops in Madison and Chicago. PHOTO: Joseph de Leo
●● Supported pro bono professional designer Jamie Hayes to develop new designs and create samples with artisan groups in China and Peru. ●● Introduced three new partner groups: Ojala in Nicaragua, Allpa in Peru, and Undugu in Kenya. ●● Facilitated a three-day Design Camp in Bangladesh. Participants from four local artisan groups attended and worked with pro bono professional designer Dana Morales and SERRV Product Designer Anne Brady. ●● Supported professional designer and SERRV board member Frank Millero’s volunteer trip to Nepal. During his stay, Frank collaborated with our artisan partners to develop new, unique products, including a holiday collection of felt ornaments.
Total 2013 Purchases Listed by Country
The amounts shown are the sums of spring and fall purchase orders and are not calendar-year based. Afghanistan 3,718 Madagascar Bangladesh 182,191 Mali Cambodia 58,807 Mexico Cameroon 39,999 Nepal Canada 64,517 Nicaragua Chile 21,922 Pakistan China 16,418 Palestine Ecuador 26,039 Peru El Salvador 7,452 Philippines Ghana & Germany 554,466 Rwanda Ghana 39,967 Sri Lanka Guatemala 6,483 Swaziland Haiti 91,342 Uganda India 601,585 USA Indonesia 212,543 Vietnam Kenya 74,130 GRAND TOTAL
1,580 18,349 33,760 119,827 7,235 20,468 107,136 126,941 114,688 6,140 9,702 60,315 22,055 156,768 175,898 $2,982,436
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Many Thanks
We cannot do our work alone and would like to express our sincere gratitude to those who have helped make 2013 a successful year.
OUR ARTISAN & FARMER PARTNERS Your creativity, product quality, enthusiasm, and resilience in the face of adversity is inspirational!
OUR CUSTOMERS Your continued support of our mission and our partners is what makes everything we do possible. Thank you for incorporating fair trade into your daily life.
INVESTORS Thank you to the Shared Interest Society of the UK and all of our SERRV Loan Fund investors for your investments which support our fair trade work.
OUR MISSION
to eradicate poverty wherever it resides速 by providing opportunity and support to artisans and farmers worldwide
DONORS We appreciate your
serrv.org 1.800.423.0071
willingness to give. Your support allows us to provide needed services to low income and marginalized people in areas where it is often difficult to do business.
CATHOLIC RELIEF SERVICES, LUTHERAN WORLD RELIEF, AND THE UNITED METHODIST COMMITTEE ON RELIEF Many thanks for your advocacy, your work to support economic empowerment, and your efforts to grow the demand for fairly traded handcrafts and food.
VOLUNTEERS Thanks to thousands of you for giving your time and dedication in our New Windsor and Madison facilities, and at stores and in churches across the country.
BOARD OF DIRECTORS & STAFF Thank you for the time and skill you put towards fulfilling our mission. Your energy and enthusiasm set the course for a better future!
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FOUNDING
MEMBER
SERRV International速 2013 Board of Directors Colin Crawford, Board Chair Julie Danis Cathy Dowdell Tom Greenwood Matt Greget William Gordon
OPERATIONS CENTER 500 Main Street PO Box 365 New Windsor, MD 21776 410.635.8750
Brad Hamrlik Jacqui MacDonald Tim McElwee Frank Millero Bob Chase (nonvoting member)
ADMINISTRATIVE OFFICE 122 State Street, Ste 600 Madison, WI 53703 608.251.3766